System Analysis and Design, Chapter 1

Chapter I
SYSTEM: An Overview
1.1. System Analysis and Design
System Analysis and Design refers to the process of examining a business situation with the
intent of improving it through better procedures and methods.
System analysis and design relates to shaping organizations, improving performance and
achieving objectives for profitability and growth. The emphasis is on systems in action, the
relationships among subsystems and their contribution to meeting a common goal. And System
analysis and design focus on systems, processes and technology. Systems development can
generally be thought of as having two major components: Systems analysis and Systems design.
System design is the process of planning a new business system or one to replace or complement
an existing system. But before this planning can be done, we must thoroughly understand the old
system and determine how computers can best be used to make its operation more effective.
System analysis, then, is the process of gathering and interpreting facts, diagnosing problems,
and using the information to recommend improvements to the system.
1.2. System and its Components
System may be referred to any set of components, which function in interrelated manner for a
common cause or objective.
A system is an orderly grouping of interdependent components linked together according to a
plan to achieve a specific objective. The word component may refer to physical parts (engines,
wings of aircraft, car), managerial steps (planning, organizing and controlling), or a system in a
multi level structure.

In most cases, systems analysts operate in a dynamic environment where change is a way of life.
The environment may be a business firm, a business application, or a Computer system. To
reconstruct a system, the following key elements must be considered:
1. Outputs and Inputs
A major objective of a system is to produce an output that has value to its user.
Whatever the nature of the output (goods, services, or information), it must be in line with the
expectations of the intended user. Inputs are the elements (material, human resources, and
information) that enter the system for processing. Output is the outcome of processing. A system
feeds on input to produce output in much the same way that a business brings in human,
financial, and material resources to produce goods and services. It is important to point out here
that determining the output is a first step in specifying the nature, amount, and regularity of the
input needed to operate a system. For example, in systems analysis, the first concern is to
determine the user’s requirements of a proposed computer system – that is, specification of the
output that the computer is expected to provide for meeting user requirements.
2. Processor(s)
The processor is the element of a system that involves the actual transformation of input into
output. It is the operational component of a system. Processors may modify the input totally or
partially, depending on the specifications of the output. This means that as the output
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specifications change so does the processing. In some cases, input is also modified to enable the
processor to handle the transformation.
3. Control
The control element guides the system. It is the decision – making subsystem that controls the
pattern of activities governing input, processing, and output. In an organizational context,
management as a decision – making body controls the inflow, handling and outflow of activities
that affect the welfare of the business. In a computer system, the operating system and
accompanying software influence the behavior of the system. Output specifications determine
what and how much input is needed to keep the system in balance.
In systems analysis, knowing the attitudes of the individual who controls the area for which a
computer is being considered can make a difference between the success and failure of the
installation. Management support is required for securing control and supporting the objective of
the proposed change.
4. Feedback
Control in a dynamic system is achieved by feedback. Feedback measures output against a
standard in some form of cybernetic procedure that includes communication and control. Output
information is fed back to the input and / or to management (Controller) for deliberation. After
the output is compared against performance standards, changes can result in the input or
processing and consequently, the output.
Feedback may be positive or negative, routing or informational. Positive feedback reinforces the
performance of the system. It is routine in nature. Negative feedback generally provides the
controller with information for action. In systems analysis, feedback is important in different
ways. During analysis, the user may be told that the problems in a given application verify the
initial concerns and justify the need for change.
Another form of feedback comes after the system is implemented. The user informs the analyst
about the performance of the new installation. This feedback often results in enhancements to
meet the user’s requirements.
5. Environment
The environment is the “suprasystem” within which an organization operates. It is the source of
external elements that impinge on the system. In fact, it often determines how a system must
function. For example, the organization’s environment, consisting of vendors, competitors, and
others, may provide constraints and, consequently, influence the actual performance of the
business.
6. Boundaries and interface
A system should be defined by its boundaries – the limits that identify its components, processes
and interrelationship when it interfaces with another system. For example, a teller system in a
commercial bank is restricted to the deposits, withdrawals and related activities of customers
checking and savings accounts. It may exclude mortgage foreclosures, trust activities, and the
like. Each system has boundaries that determine its sphere of influence and control.
For example, in an integrated banking – wide computer system design, a customer who has a
mortgage and a checking account with the same bank may write a check through the “teller
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system” to pay the premium that is later processed by the “mortgage loan system.” Recently,
system design has been successful in allowing the automatic transfer of funds form a bank
account to pay bills and other obligations to creditors, regardless of distance or location. This
means that in systems analysis, knowledge of the boundaries of a given system is crucial in
determining the nature of its interface with other systems for successful design.
Characteristics of a System
Our definition of a system suggests some characteristics that are present in all systems:
Organization (order) implies structure and order. It is the arrangement of components that helps
to achieve objectives.
Interaction refers to the manner in which each component functions with other components of
the system.
Interdependence means that parts of the organization or computer system depend on one
another. The output of one subsystem is the required input for another subsystem.
Integration refers to the holism of systems. Synthesis follows analysis to achieve the central
objective of the organization. Integration is concerned with how a system is tied together.
Central objective Objectives may be real or stated.
1.3. System Concepts
The study of systems concepts has three basic implications:
1. A system must be designed to achieve a predetermined objective.
2. Interrelationships and interdependence must exist among the components.
3. The objectives of the organization as a whole have a higher priority than the objectives of its
subsystems. For example, computerizing personnel applications must conform to the
organization’s policy on privacy, confidentiality and security, as well as making selected data
(e.g. payroll) available to the accounting division on request.
These are some important concepts about systems that a Systems Analyst needs to understand.

 Decomposition – is the process of breaking down a system into its smaller components,
decomposing a system also allows us to focus on one particular part of a system, making it
easier to think of how to modify that one part independently of the entire system.
 Modularity is a direct result of decomposition which divides a system into modules of a
relatively uniform size. This makes it easier to understand the system.
 Coupling means that subsystems are dependent on each other, messages are passed between
subsystems. A good system will have very independent subsystems with minimal flows of
data between them. This makes the system simpler and easier to change just one part of the
system without affecting the other parts.
 Cohesion is the extent to which a subsystem performs a single function. Generally coupling
must be reduced and cohesion increased, so that it performs only one function.

1.4. Type of Systems

The frame of reference within which one views a system is related to the use of the systems
approach for analysis. Systems have been classified in different ways.

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Common classifications are: (1) physical or abstract, (2) open or closed, and (3) “man – made”
information systems.
1. Physical or abstract systems
Physical systems are tangible entities that may be static or dynamic in operation. For example,
the physical parts of the computer center are the officers, desks, and chairs that facilitate
operation of the computer. They can be seen and counted; they are static. In contrast, a
programmed computer is a dynamic system. Data, programs, output, and applications change as
the user’s demands or the priority of the information requested changes.
Abstract systems are conceptual or non-physical entities. They may be as straightforward as
formulas of relationships among sets of variables or models – the abstract conceptualization of
physical situations. A model is a representation of a real or a planned system. The use of models
makes it easier for the analyst to visualize relationships in the system under study. The objective
is to point out the significant elements and the key interrelationships of a complex system.
2. Open or Closed Systems
Another classification of systems is based on their degree of independence. An open system has
many interfaces with its environment. It permits interaction across its boundary; it receives
inputs from and delivers outputs to the outside. An information system falls into this category,
since it must adapt to the changing demands of the user. In contrast, a closed system is isolated
from environmental influences. In reality, a completely closed system is rare. In systems
analysis, organizations, applications and computers are invariably open, dynamic systems
influenced by their environment.

3. Man – Made Information Systems

Ideally, information reduces uncertainty about a state or event. For example, information that the
wind is calm reduces the uncertainty that the boat trip will be pleasant. An information system is
the basis for interaction between the user and the analyst. It provides instruction, commands and
feedback. It determines the nature of the relationships among decision-makers. In fact, it may be
viewed as a decision center for personnel at all levels. From this basis, an information system
may be defined as a set of devices, procedures and operating systems designed around user based
criteria to produce information and communicate it to the user for planning, control and
performance. In systems analysis, it is important to keep in mind that considering an alternative
system means improving one or more of these criteria. Many practitioners fail to recognize that a
business has several information systems; each is designed for a purpose and works to
accommodate data flow, communications, decision making, control and effectiveness. The major
information systems are formal, informal and computer based.

1.5. Fundamentals of Information Systems

An Information System is an arrangement of people, data, processes, interfaces, networks and
technology that interact for the purpose of supporting and improving both day-to-day operations
in a business (data processing) as well as supporting the problem solving and decision making
needs of management (information services).
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The Information System includes: -

 Hardware – Computers, servers and printers

 Software- System software and application software
 Documentation and training materials – The materials created by Systems Analyst to
help users to use the software
 Specific job roles – The roles associated with the overall system, such as the people who
run the computers and the software operating.
 Controls- which are the parts of the software written to prevent fraud and theft
 People- Who uses the software in order to do their job.
 Data- facts about things e.g. for a product – colour, size, price (remember Information is
data in a useful format);
 Processing logic- – steps that transform (change) data and events that trigger these steps
(cause these steps to happen). In other words, these are ‘business rules’
 Data flows- groups of data that move and flow through a system.
1.6 Types of Information System
There are actually several different types of classes of information systems. These classes are
distinguished from each other on the basis of what the system does or by the technology used to construct
the system. As a system analyst working as part of a team, you will work with at least four classes of
information system.

1. Decision support system (for individuals, groups, and executives).

2. Management information system (Business support system).
3. Expert systems (Knowledge management System).
4. Transaction processing system.
1. Decision Support System
A decision support system (DSS) is designed to help decision makers with decisions. Whereas an MIS
produces a report, a DSS provides an interactive environment in which decision makers can quickly
manipulate data and models of business operations.

 Help decision-makers with decisions, by allowing them to analyze data.

 Interactive environment to allow data to be manipulated (viewed in different ways) and to
change different factors.
 Data extracted from a TPS or MIS, and combined with models of business processes.
 Help user to find problems or decide a course of action in the business.
 Requires a user interface to allow decision-maker to input criteria, answer questions etc.
A DSS has three parts:

 The first part is composed of a database (which may be extracted from a TPS or MIS).
 The second part consists of mathematical or graphical models of business process.
 The third part is made up of a user interface (or dialog module) that provides a way for the decision
maker to communicate with the DSS.

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A DSS is characterized by less structured and predictable use. DSS software supports certain decision
making activities (from problem finding to choosing a course of action). The system analysis and design
for a DSS often concentrates on the three main DSS components: database, model base and user interface
(dialog).

2. Management Information System (Business Support Systems)

A management information system (MIS) is a computer based information system that takes the raw data
available through a TPS and converts them into a meaningful aggregated form. These systems can analyze
transactional data, generate information needed to manage and control business process, and provide
information that leads to better decision making.

For example, whereas a transaction processing system keeps track of sales, a management information
system can pinpoint which items are selling slowly and which are selling quickly. The MIS system can
therefore direct the manufacturing department on what to produce and when.

An important feature of an MIS is decision support capability to conduct a what – if analysis. Decision
support helps users make decisions by creating business model and applying a set of variables.

 Take the raw data from a system such as a TPS, and convert into a more meaningful
form, where the data is aggregated (combined).
 Provide reports of this information to Managers.
3. Expert System (Knowledge Management System)
An expert system (ES) is different from any of the other classes of information systems. The ES
replicates the decision making process rather than manipulating information.

Typically users communicate with an ES through an interactive dialog. The ES asks question (which an
expert would ask) and the user supplies the answers. The answers are then used to determine which rules
apply, and the ES provides a recommendation based on the rules.

 Replicate the decision-making process, by applying rules to information in the way that an
expert would.
 An ES is developed for a particular domain/area of knowledge & problems e.g. medical.
 The knowledge of a human expert and how they apply that knowledge to make decisions
needs to be written into the system.
 More recently, expert systems include data warehousing and data mining:
o Data warehousing is the storage of large volumes of data for organizational use
o Data mining is the process of looking for patterns in the data stored in databases, in order to
uncover undiscovered information.
4. Transaction Processing System
A transaction processing system (TPS) automates the handling of data about business activities or
transaction. For example, a bank TPS would capture information’s about withdrawals from and deposits
to customers accounts.

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The goal of TPS development is to improve transaction processing by speeding it up, using fewer
people, improving efficiency and accuracy, integrating it with other organizational information systems,
or providing information not previously available.

 Automate the handling & capture of data about transactions or business activities.
 For each transaction, the system must capture the data, verify that it is a valid transaction and
accept or reject it.
 Accepted transactions are stored in the system database.
 Reporting provides summaries of transactions (e.g. daily, weekly).
 A transaction may be passed from one process to another to reflect all steps in the business
process e.g. take a credit card order over the phone, authorise with the credit card company,
and then place the order with the inventory system.
 Produce a data base record as out put
1.7. System and System Analyst- A key resource
Systems analysis and design is a systematic approach to identifying problems, opportunities, and
objectives to analyzing the information flows in organizations and to designing computerized
information systems to solve a problem. The person involve here is the systems analyst who has
three primary roles: (1) an outside consultant to business, (2) supporting expert within a business,
and (3) agent of change in both external and internal situations.
Role of the System Analyst
 A system analyst bridges the communication gap between those who need the information
system and those who understand the technology
 A system analyst facilitates the study of the problems and needs of a business to determine
how the business systems and information technology can best solve the problem and
accomplish improvements for the business.
 Involving End users – it is important to include the people (users or end users) who are
involved in the system. Since,
- They use the system, or will use the new system
- They know about the data and / or processes in the system
- They require reports from the system
 Involving mangers – managers in the business also need to be considered, since
- They define the business goals for projects
- They need to know what resources are required for a project
- They need to know how long the project will take
- They make the decisions
 To succeed as a systems analyst, the skills needed are analytical, technical, managerial and
interpersonal
 Analytical skill enables to understand the organization and its functions, to identify
opportunities and problems and to analyze and solve problems
 Technical skill helps to understand the potential and the limitations of information
technology. Must be able to work with programming languages and operating systems.

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 Managerial skill helps to manage project, resources, risk and changes.

 Interpersonal skill enables to work with end users as well as other analysts and
programmers. Effective written and oral communication skills: a system analyst plays a
major role as liaison among users, programmers and other analyst. Hence effective written
and oral communication skill, including competence in leading meetings, interviewing end
users, and listening are very much required.

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