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Chapter 13
Building Information Systems
Student Learning Objectives
1. How does building new systems produce organizational change?
2. What are the core activities in the systems development process?
3. What are the principal methodologies for modeling and designing systems?
4. What are the alternative methods for building information systems?
5. What are new approaches for system building in the digital firm era?
Learning Catalytics is a “bring your own device” student engagement, assessment, and
classroom intelligence system. It allows instructors to engage students in class with real-
Key Terms
The following alphabetical list identifies the key terms discussed in this chapter. The
page number for each key term is provided.
Acceptance testing, 514
Parallel strategy, 514
Agile development, 527
Phased approach strategy, 515
Automation, 504
Pilot study strategy, 515
Business process management, 505
Postimplementation audit, 515
Business process redesign, 505
Process specifications, 517
Component-based development, 527
Production, 515
Computer-aided software engineering
(CASE), 519
Programming, 513
Conversion, 514
Prototype, 521
Customization, 524
Prototyping, 521
Data flow diagram (DFD), 516
Query languages, 523
Direct cutover strategy, 514
Rapid application development (RAD), 527
Documentation, 515
Rationalization of procedures, 504
End-user development, 523
Request for Proposal (RFP), 524
End-user interface, 523
Responsive Web design, 529
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Iterative, 522
Structured, 515
Joint application design (JAD), 527
System testing, 514
Maintenance, 515
Systems analysis, 509
Mobile Web site, 528
Systems design, 512
Mobile Web app, 528
Systems development, 509
Native app, 528
Systems life cycle, 520
Object, 518
Test plan, 514
Object-oriented development, 518
Testing, 513
Offshore outsourcing, 525
Total quality management (TQM), 504
Paradigm shift, 505
Unit testing, 513
Teaching Suggestions
The opening case, “New Systems Help Work Flow More Smoothly at Moen’” highlights
the importance of an organization continually assessing its business processes and
striving to improve them. The company had implemented a single instance of the SAP
enterprise resource planning (ERP) system throughout its business lines with one glaring
exception—initiating a capital expense request.
The old process, based on manual paper-based forms, was very inefficient and uncertain.
Documents could be easily lost or misplaced with people along the approval chain
completely unaware of the initial request. Other requests had to be mailed to corporate
Section 13.1, “How does building new systems produce organizational change?” This
section discusses different ways to manage organizational change. It begins with Figure
13.1 that illustrates four common forms of organizational change and the risk/reward of
each one. From simple automation to the more drastic paradigm shift, each one requires
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You may want to try using Figures 13.2 and 13.3 that show how the processes for
purchasing a book from a physical bookstore were redesigned into one for purchasing a
Interactive Session: Organizations: Datacard Group Redesigns the Way It Works
Case Study Questions
1. How did Datacard Group’s previous business processes affect operations and
decision making?
In the past, Datacard’s information systems were built around its various lines of
2. What management, organization, and technology factors contributed to Datacard
Group’s problems with its business processes?
Management: Each business unit manager was allowed to create separate information
systems designed and built to meet the needs of that unit without regard for the company
needs as a whole.
Organization: Information silos were created within the organization that did not allow
for a free flow of information among units. Employees had to spend extra time and effort
to manually input data in one system that already existed in a different system. Changing
Technology: Business units would request their own system solutions from the
company’s information systems department, with approval from the chief financial
officer. Over time, this approach created many fragmented information systems. The
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3. Diagram Datacard Group’s old and redesigned business process for pricing.
Datacard distributed pricing for its secure identification and card issuance products to
approximately 250 partners quarterly by e-mailing them a price book made up of multiple
spreadsheets. To create this price book, people in marketing and sales had to spend many
hours inputting data manually and the Datacard partners that received the price books had
to manually type their data into their own systems and check their accuracy, a process
4. Describe the role of technology in Datacard Group’s business process changes.
At the heart of Datacard’s redesigned processes are Oracle technology solutions, which
make it possible to tightly integrate applications and support cross-departmental business
processes. These Oracle tools include Oracle E-Business Suite (an integrated collection
of enterprise resource planning, customer relationship management, and supply chain
5. How did Datacard Group’s redesigned business processes change the way the
company worked? What was their business impact? Explain.
CRM on Demand is integrated with Oracle E-Business Suite so that data on sales
opportunities and quotes automatically flow between the two applications. This tight
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Section 13.2, “What are the core activities in the systems development process?” This
section breaks down the systems development process into six separate activities: system
analysis, system design, programming, testing, conversion, and production and
maintenance. Specific information requirements must be established at the beginning of
Section 13.3, “What are the principal methodologies for modeling and designing
systems?” If you used the exercise in Section 13.1 that had students redesign a process,
continue it here by working through the system development process shown in Figure
Section 13.4, “What are the alternative methods for building information systems?”
The traditional systems lifecycle methodology is usually only used for very large,
complex systems. The SDLC is the oldest method for building information systems. It is
inflexible and does not easily allow changes at any step along the way. However, it can
be effective for highly-structured systems such as accounting, payroll, or complex
manufacturing systems. Government defense or space systems often are mandated to use
the system life cycle methodology because of the rigorous milestones generated by the
method.
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Section 13.5 “What are new approaches for system building in the digital firm era?”
Businesses today are often required to build e-commerce and e-business applications very
rapidly to remain competitive. New systems are likely to have more interorganizational
requirements and processes than in the past.
Companies are turning to rapid application design, joint application design (JAD), and
agile development to improve the systems development process. Rapid application
development (RAD) uses object-oriented software, visual programming, prototyping, and
fourth-generation tools for very rapid creation of systems.
Interactive Session: Technology: The Challenge of Mobile Application Development
Case Study Questions
1. What management, organization, and technology issues need to be addressed
when building mobile applications?
Management: You can’t just port a Web site or desktop application to a smartphone
or tablet. It’s a different systems development process. Managers need to understand
Organization: A mobile strategy involves more than selecting mobile devices,
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Technology: Developing mobile apps or a mobile Web site has some special
challenges. The user experience on a mobile device is fundamentally different from
2. How does user requirement definition for mobile applications differ from that in
traditional systems analysis?
Mobile apps should not be built for the sake of going mobile but for genuinely
helping the company become more successful. The mobile app will need to be
connected in a meaningful way to the systems that power the business. It’s important
to understand how, why, and where customers use mobile devices and how these
3. Describe Alex and Ani’s sales process before and after the mobile application
was deployed.
Alex and Ani, founded in 2004, designs, produces, and sells high-quality, eco-
friendly jewelry in the United States using artisanal techniques, and is dedicated to
helping its customers find inner peace and positive energy. Having customers in Alex
and Ani stores wait on long checkout lines ran counter to the company’s philosophy
and brand image.
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Step one was to identify the mobile moments where a mobile app would be helpful.
The second step was to design the mobile engagement—that moment when sales staff
Review Questions
13-1 How does building new systems produce organizational change?
Describe each of the four kinds of organizational change that can be promoted
with information technology.
Figure 13.1 shows four kinds of organizational change and the risks and rewards of
each:
• Automation: Low risk, low reward. Employees perform tasks more
efficiently and effectively.
• Rationalization: Medium risk, medium reward. Involves streamlining
Define business process management and describe the steps required to carry it
out.
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Business process management: Companies manage incremental process changes
that are required simultaneously in many areas. Organizations need to revise and
Steps required for effective BPM:
• Identify processes for change: A business first needs to understand what
business processes need improvement. Improving the wrong processes simply
allows a business to continue doing what it shouldn’t do in the first place.
• Analyze existing processes: An organization must understand and measure
the performance of existing processes as a baseline including inputs, outputs,
13-2 What are the core activities in the systems development process?
Distinguish between systems analysis and systems design. Describe the activities
for each.
System analysis: Requires an organization to analyze problems it will try to solve
with information systems. It includes defining a problem, identifying its causes,
System design: Shows how the system will fulfill the objective of the system
analysis. It’s the overall plan or model for the system that serves as a blueprint and
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Define information requirements and explain why they are difficult to determine
correctly.
Information requirements involve identifying who needs what information, where,
when, and how. They define the objectives of the new or modified system and contain
a detailed description of the functions the new system must perform. Gathering
information requirements is perhaps the most difficult task of the systems analyst, and
Explain why the testing stage of systems development is so important. Name and
describe the three stages of testing for an information system.
Testing is critical to the success of a system because it is the only way to ascertain
whether the system will produce the right results. Three stages of information system
testing are:
• Unit testing: Refers to separately testing or checking the individual programs.
Describe the role of programming, conversion, production, and maintenance in
systems development.
• Programming: Specifications that were prepared during the design stage are
translated into software program code.
• Conversion: The process of changing from the old system to the new system.
• Production: The operation of the system once it has been installed and
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13-3 What are the principal methodologies for modeling and designing systems?
Compare object-oriented and traditional structured approaches for modeling
and designing systems.
Structured methods for designing systems separate processes from data in the
modeling process. System analysis is separated from system design. Object-oriented
development (OOD) combines processes and data into an object that becomes the
basic unit of system analysis and design. Data encapsulated in an object is accessed
13-4 What are the alternative methods for building information systems?
Define the traditional systems life cycle. Describe each of its steps and its
advantages and disadvantages for systems building.
The traditional systems life cycle is a formal methodology for managing the
development of systems and is still the principal methodology for large projects. The
overall development process is partitioned into distinct stages, each of which consists
of activities that must be performed in a certain order. The stages are usually
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The main advantages of using this method for building information systems are:
• It is highly structured.
Disadvantages are:
• It is very costly and time-consuming.
• It is inflexible and discourages change even though requirements will change
Define information system prototyping. Describe its benefits and limitations. List
and describe the steps in the prototyping process.
Information system prototyping is an explicitly interactive system design
methodology that builds an experimental model of a system as a means of
determining information requirements. Prototyping builds an experimental system