Chapter 13
Building Information Systems
Learning Objectives
1. How does building new systems produce organizational change?
Chapter Outline
13.1 Systems as Planned Organizational Change
13.2 Overview of Systems Development
Systems Analysis
13.3 Alternative Systems-Building Approaches
Traditional Systems Life Cycle
13.4 Application Development for the Digital Firm
Rapid Application Development (RAD)
Component-Based Development and Web Services
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, 530
Agile development, 544
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engineering (CASE), 536
Conversion, 530
Customization, 541
Data flow diagram (DFD), 533
Direct cutover strategy, 531
Object-oriented development, 534
Offshore outsourcing, 542
Paradigm shift, 521
Parallel strategy, 530
Phased approach strategy, 531
Request for Proposal (RFP), 541
Responsive Web design, 545
Six sigma, 521
Structure chart, 534
Structured, 532
Systems analysis, 528
Teaching Suggestions
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The opening case, “New Systems and Business Processes Put MoneyGram ‘On the
Money,’” highlights the importance of an organization continually assessing its business
processes and striving to improve them. The company’s old system relied on outdated
systems that used spreadsheets and manual processes that were too time-consuming and
error-prone. More importantly, there was no way for managers to glean data from the
system to help them make better decisions.
Section 13.1, “Systems as Planned 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 careful
management of the effects these changes have on people. Business process redesign
(BPR) has taken on a negative reputation over the years, mostly because it usually results
Interactive Session: Organizations: Burton Snowboards Speeds Ahead with Nimble
Business Processes
Case Study Questions
1. Analyze Burton using the value chain and competitive forces models.
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Burton uses the traditional competitor’s tactics of continuously devising new, more
efficient ways to produce new products and attracting new customers by further
2. Why are the business processes described in this case such an important source
of competitive advantage for Burton?
By decreasing the time involved with the available-to-promise process, dealers and
customers now have more precise information about the availability of products
3. Explain exactly how these process improvements enhance Burton’s operational
performance and decision making.
Burton wanted to speed up the available-to-promise process so that dealers and retail
customers would have more precise information about the company’s availability of
products not currently in stock. The process now takes 20 minutes.
“Section 13.2, Overview of Systems Development” 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
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requirements must be established at the beginning of the system analysis phase.
Otherwise, you may be building a system that doesn’t solve an organization’s problem.
Faulty requirements analysis is a leading cause of systems failure and high systems
development costs. Another major cause of system failure is attributed to insufficient user
involvement in the design effort. Too many times system analysis and design are left up
Section 13.3, “Alternative Systems–Building Approaches” 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.
Section 13.4, “Application Development for the Digital Firm” 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
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Interactive Session: Technology: What Does It Take to Go Mobile?
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
and support the idea that each Web site or process requires a different set of
2. How does user requirement definition for mobile applications differ from that in
traditional systems analysis?
Deckers Outdoor Corporation, the parent company of brands such as UGG Australia,
Teva, and Simple Shoes, compiled significant research about customer behavior on
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3. Describe the business processes changed by USAA’s mobile applications before
and after the applications were deployed.
USAA developed a smartphone accident report and claims app that enables customers
to snap a photo and submit a claim directly from the site of an accident. The app can
Review Questions
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
Define business process management and describe the steps required to carry it
out.
Business process management: Companies manage incremental process changes
that are required simultaneously in many areas. Organizations need to revise and
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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
Explain how information systems support process changes that promote quality
in an organization.
Total quality management (TQM) and Six Sigma are two quality improvement
programs that differ from business process redesign, which is based on radical one-
time redesigns of business processes. They are more incremental in their approach to
change than BPR. TQM requires a series of continuous improvements. Six Sigma
requires statistical analysis to detect flaws and make minor adjustments.
Information systems help achieve organizational goals in these two programs by:
• Helping companies simplify products or processes
• Making improvements based on customer demands
2. What are the core activities in the systems development process?
Distinguish between systems analysis and systems design. Describe the activities
for each.
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System analysis: Requires an organization to analyze problems it will try to solve
with information systems. It includes defining a problem, identifying its causes,
specifying the solution, and identifying information requirements that the system
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
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.
ensure it meets established requirements and that it’s ready for installation.
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.
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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
4. What are the alternative methods for building information systems?
Define the traditional systems lifecycle. Describe each of its steps and its
advantages and disadvantages for systems building.
The traditional systems lifecycle 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
hardware and software technologies for the solution. Business users approve the
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specifications.
The main advantages of using this method for building information systems are:
• it is highly structured.
• it has a rigorous and formal approach to requirements and specifications and
Disadvantages are:
• it is very costly and time-consuming.
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
quickly and inexpensively for demonstration and evaluation so that users can better
well-understood, or routine problems.
It is best suited for smaller applications oriented toward simple data manipulation.
Large systems with complex processing may only be able to have limited features
prototyped. The prototype may be built so rapidly that design is not well thought out
or must be reworked for a production environment. The problem arises when the
Define an application software package. Explain the advantages and
disadvantages of developing information systems based on software packages.