Information System Management

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Unit-1
Value chain analysis
The value chain concept was developed by Michael Porter . It views a firm as a series, chain, or network of basic
activities that add value to its products and services, and thus add a margin of value both to the firm and its customers.
In the value chain conceptual framework, some business activities are primary processes, others are support processes.
A value chain is a chain of activities that a firm operating in a specific industry performs in order to deliver a valuable
product or service for the market.
Six business functions of the value chain:
 Research and development
 Design of products, services, or processes
 Production
 Marketing and sales
 Distribution
 Customer service
Importance:-
 Value chain mapping and analysis are the keys to unlocking process gridlock and achieving maximum process
effectiveness.
 Create value that exceeds the cost of providing the product or service and generates a profit margin
 Assessment of competency in core areas
 Assist the primary activities to gain the competitive advantage
 Enhance efficiency and to optimize profits, multinational enterprises locate research, development, design,
assembly, production of parts, marketing and branding" activities in different countries around the globe

 Through global value chains, there has been growth in interconnectedness as MNEs play an increasingly larger
role in the internationalisation of business
 Show how work selection, work planning, work scheduling and finally work execution can (when considered as
elements of chains) help drive lean approaches to maintenance
Primary Business Processes
• Inbound Logistics - Automated Just-in-Time Warehousing, The receiving and warehousing of raw materials
Distribution of raw materials to manufacturing and operations
• Operations - Computer-Aided Flexible Manufacturing, Process of transforming inputs into finished goods and
services
• Outbond Logistics – Online Point-of-Sale and Order Processing, Warehousing of finished goods
Distribution of those finished goods to customers or retail stores
• Marketing & Sales - Targeted Marketing
• Customer Service - Customer Relationship Management
Support Processes
 Procurement-- The purchasing of raw materials and inputs needed to create the product
 Technology Development-- Technology developments that support value chain activities.Ex.sap
 Human Resource Management- Activities associated with recruiting, training, hiring, and compensation
 Firm Infrastructure-- Includes general and planning management, legal, finance, accounting, public affairs, and
quality management
Ex. A firm’s legal team consisting of lawyers to aid in lawsuits
Accounting department to keep track of financial figures
COMPETITIVE STRATEGY CONCEPTS

The strategic role of information system involves using information technology to develop products, services,
and capabitlities that give a company major advantages over the competitive forces if faces in the global marketplace.
This is accomplished through a strategic information architecture-the collection of strategic information systems that
support or shape the competitive position and strategies of a business enterprise. So a strategic information system can
be any kind of information system (TPS, MIS, DSS etc.) that uses information technology to help an organization gain a
competitive advantage, reduce a competitive disadvantage, or meet other strategic enterprise objectives.
COMPETITIVE FORCES AND STRATEGIES
A compnay can service and succeed in the long run only if it successfully develops strategies to confront five
competitive forces that shape the structure of competition in its industry. In Michael Porter’s classic model of
competitive strategy, any business that wants to survive and succeed must develop and implement strategies to
effectively counter (1) the rivalry of competitors within its industry. (2) the threat of new entrants into an industry and
its markets, (3) the threat posed by substitute products which might capture market share (4) the bargaining power of
customers, and (5) the bargaining power of suppliers.
Figure 2.1 also illustrates that business can counter the threats of competitive forces that they face by implementing
five basic competitive strategies.
Cost Leadership Strategy : Becoming a low-cost products and services in the industry.
Differentiation Strategy : Developing ways to differentiate a firm’s products and services from its competitors’ or reduce
the differentiation advantages of competitors.
Innovation Strategy :Finding new way of doing business.
Growth Strategies : Significantly expanding a company’s capacity to produce goods and services.
Alliance Strategies : Establishing new business linkages and alliances with customers, suppliers, competitors consultants,
and other companies.

Other strategies
• Locking customers by building new relationship with them
• Building switching cost so that a firm’s customers are reluctant to pay cost in terms of time, money, effort and
inconvenience that it would take to switch to company’s competitors.
• Raising barriers to entry that would discourage or delay other companies from entering the market
• Invest in IT for new products and services.
Figure 2.2 A summary of how information technology can be used to implement the five basic competitive strategies.
Strategic Information Systems (SIS)
Ans: Strategic Information System is a system that helps companies alter or change their business goals, processes,
products, services, strategy or structure. It is used to accelerate the reaction time to environmental changes and aid the
company in achieving a competitive advantage through its contribution to the strategic goals of organization.

In simple words, Strategic information systems is a computer system that implement business strategies; they are those
systems where information services resources are applied to strategic business opportunities in such a way that the
computer systems have an impact on the organization’s products and business operations.
A strategic IS of an organization hastens the ability to significantly increase performance and productivity. They may
deliver a product or service that is at a lower cost, that is differentiated, that focuses on a particular market segment, or
is innovative.
Characteristics of strategic Information Systems (SIS)
 Automation: IT professionals design strategic information management systems to automate the management
of incoming and outgoing information to the greatest possible degree. While each company has its own unique
IT needs, strategic information management systems typically include built-in controls that filter, sort,
categorize and store information in easy-to-manage categories.
 Customization: Strategic information management systems are typically customized to meet the unique needs
of each individual company. Incoming and outgoing data can be sorted and cross-referenced according to a
wide range of individually specified controls and parameters, which include the company's business verticals
and horizontals, individual clients, demographics, geographic location and business function.
 Organization and Access: Strategic information systems are extensively categorized, allowing for an optimal
level of organization. Access controls can be as strict or as lax as the client wants, allowing for company-wide
access to information databases or limiting information accessibility to key personnel. User-specific controls can
also be set, in case employees need access to certain information but management wants to limit their access to
sensitive data.
 Benefits: The benefits of strategic information system can be felt from the executive level right down to the
functional staff level. It can help businesses expand their operations into new areas, set goals, measure
performance and improve overall productivity.
 Risks: Some of the risks involved with strategic information management systems include implementation
challenges, incompatibility with client databases and human error. As with other IT management techniques,
data protection and information security is also an ongoing concern.
Some of the common Strategies for gaining competitive advantage are:
1. Cost leadership strategy: Produce products and/or services at the lowest cost in the industry. A firm achieves
cost leadership in its industry by thrifty buying practices, efficient business processes, forcing up the prices paid
by competitors, and helping customers or suppliers reduce their costs.

2. Differentiation strategy: Offer different products, services, or product features. By offering different, “better”
products companies can charge higher prices; sell more products, or both.
3. Niche strategy: Select a narrow-scope segment (niche market) and be the best in quality, speed, or cost in that
market.
4. Growth strategy: Increase market share, acquire more customers, or sell more products. Such a strategy
strengthens a company and increases profitability in the long run. Web-based selling can facilitate growth by
creating new marketing channels, such as electronic auctions.
5. Alliance strategy: Work with business partners in partnerships, alliances, joint ventures, or virtual companies.
This strategy creates synergy, allows companies to concentrate on their core business, and provides
opportunities for growth.
6. Innovation strategy: Introduce new products and services, put new features in existing products and services,
or develop new ways to produce them. Innovation is similar to differentiation except that the impact is much
more dramatic. Examples of this are automatic credit card handing at service stations, and automatic teller
machines at banks.
7. Operational effectiveness strategy: Improve the manner in which internal business processes are executed so
that a firm performs similar activities better than rivals. Such improvements increase employee and customer
satisfaction, quality, and productivity while decreasing time to market. Improved decision making and
management activities also contribute to improved efficiency.
8. Customer-orientation strategy: Concentrate on making customers happy. Strong competition and the
realization that the customer is king (queen) is the basis of this strategy. Web-based systems that support
customer relationship management are especially effective in this area because they can provide a
personalized, one-to-one relationship with each customer.
9. Time strategy: Treat time as a resource, then manage it and use it to the firm’s advantage. “Time is money,”,
first-mover advantage, just-in-time delivery or manufacturing, competing in time and other time-based
competitive concepts emphasize the importance of time as an asset and a source of competitive advantage.
 One of the driving forces behind time as a competitive strategy is the need for firms to be immediately
responsive to customers, markets, and changing market conditions.
 A second factor is the time-to-market race. By introducing innovative products or using IT to provide
exceptional service, companies can create barriers to entry from new entrants.

10. Lock in customers or suppliers strategy: Encourage customers or suppliers to stay with you rather than going to
competitors. Locking in customers has the effect of reducing their bargaining power.
11. Increase switching costs strategy: Discourage customers or suppliers from going to competitors for economic
reasons.
Strategic role of IS in business
Strategic information systems is a computer system that implement business strategies; They are those systems
where information services resources are applied to strategic business opportunities in such a way that the
computer systems have an impact on the organization’s products and business operations. Strategic information
systems are always systems that are developed in response to corporate business initiative. The ideas in several
well-known cases came from information Services people, but they were directed at specific corporate business
thrusts. In other cases, the ideas came from business operational people, and Information Services supplied the
technological capabilities to realize profitable results.
Strategic information systems become an integral and necessary part of the business, and they affect the
profitability and growth of a company. They open up new markets and new businesses. They directly affect the
competitive stance of the organization, giving it an advantage against the competitors.
The following are the ways through which it helps the firm in attaining competitive advantage:-
 Deliver a product or a service at a lower cost. This does not necessarily mean the lowest cost, but simply a
cost related to the quality of the product or service that will be both attractive in the marketplace and will
yield sufficient return on investment. The cost considered is not simply the data processing cost, but is the
overall cost of all corporate activities for the delivery of that product or service. There are many operational
computer systems that have given internal cost saving and other internal advantages, but they cannot be
thought of as strategic until those savings can be translated to a better competitive position in the market.
 Deliver a product or service that us differentiated. Differentiation means the addition of unique features to a
product or service that are competitive attractive in the market. Generally such features will cost something
to produce, and so they will be the setting point, rather than the cost itself. Seldom does a lowest cost
product also have the best differentiation. A strategic system helps customers to perceive that they are
getting some extras for witch they will willingly pat.

 Focus on a specific market segment. The idea is to identify and create market niches that have not been
adequately filled. Information technology is frequently able to provide the capabilities of defining,
expanding, and filling a particular niche or segment. The application would be quite specific to the industry.
 Innovation. Develop products or services through the use of computers that are new and appreciably from
other available offerings. Examples of this are automatic credit card handing at service stations, and
automatic teller machines at banks. Such innovative approaches not only give new opportunities to attract
customers, but also open up entirely new fields of business so that their use has very elastic demand.
Strategic Information Systems Frameworks
• Porter and Millar’s framework
• Wiseman and MacMillan framework
• Bakos and Treacy framework
• Customer resource life cycle framework
Porter and Millar Framework
• Industry structure has changed
• Rules of competition have changed
• Organizations have outperformed competition using IT
Porter and Millar
Five-Step Process
• Access information intensity
• Determine the role of IT in the industry structure
• Identify and rank the ways in which IT can create competitive advantage
• Investigate how IT might spawn new businesses
• Develop a plan for taking advantage of IT
Wiseman and MacMillan Framework
• Based on Porter’s strategies
• Innovation
• Growth
• Alliance
• Time
Bakos and Treacy Framework

• Bargaining power and comparative efficiency
• Search related costs
• Unique product features
• Switching costs
• Internal efficiency
• Interorganizational efficiency
Customer Resource Life Cycle Framework
• Ives and Learmouth, 1984
• Customer relationship key to strategic advantage?
• Thirteen fundamental stages of the customer relationship
Framework for Global Competition
• Apply IT through global business drivers
• Quality
• Risk reduction
• Suppliers
Unit-2
Planning for Information System
• The complexity of the information resources environment suggests that planning is vital to success.
• The plan describes the structure and content of the information system and how it is to be developed.
• The organization’s strategic plan should be the basis for the ISM strategic plan.
• The overall responsibility of IS planning is the responsibility of Chief Information Officer (CIO)
Planning terminology
 mission: it is a broad enduring statement giving the organizations “reason for being”.
 objectives-:are desired future positions and destinations the organizations intends to reach in order to fulfill its
mission.
 Strategies-it’s a general direction in which an objective is to be sought .
 Policies-is a general guideline that directs and constraints decision –making within an organization.
Information systems planning should be an integral part of business planning

 Business planning – the process of identifying the firm’s goals, objectives, and priorities + developing
action plans for accomplishing them.
 Information systems planning – the part of business planning concerned with developing the firm’s
information systems resources
Information system plan
 An Information system plan, usually, contains the following four sections :
 Information system objectives and architectures(objectives, strategies, external & internal environment,
assumptions)
 Inventory of existing information systems( analysis of current system)
 Forecast of developments affecting the plan( technology, govt. regulations etc)
 Specific plan(in parts)
Determining information requirements
 For IS Planning an organization need to determine requirements.
 Such requirements must be defined for organization as a whole as well as for its different subsystems.
 A strategic approach for determining information requirements takes into accounts the following factors:
1. Critical success factors
2. Competitive forces--Explain Porter Competitive force model in detail.
3. Value chain
Critical Success Factor
 Information requirements determined by small number of critical success factors.
 CSF’s are those characteristics conditions or variables which when maintained and sustained can have
significant impact on success of organization.
 CSF vary from industry to industry for example CSF in tooth paste industry would be: quality, promotion, brand
loyalty, distribution network, whereas in Courier Service CSF would be: speedy dispatch, reliability and price.
Identifying CSF
 On the basis of logic, heuristics or rule of thumb (intuition, judgment, hunch)
 By brain storming, interviewing managers.
 Deduced from other organization statements, expert opinions, organizational success stories.

Advantages of CSF
 Minimizes the dataset to be analyzed.
 Can be tailored to the structure of each industry.
 Adaptable to changing environment.

 Brings consensus among top level managers.
Limitations
 Difficult to indentify CSFs.
 Focuses on managers rather than organization as whole.
 Mostly useful for higher level IS.
Techniques of ISP
 Each of these techniques tries to identify flow of activities for developing a long range IS plan. The techniques
are:
1. Derivation of IS plan from organizational plan
2. Strategic grid
3. Strategy set transformation
Derivation of IS plan from organizational plan

Capacity planning
 Capacity Planning is the process of determining the production capacity needed by an organization to meet
changing demands for its products.
 Capacity is the maximum amount of work that an organizations capable of completing in a given period of time.
 Capacity= (number of machines or workers) x (number of shifts) x (utilization) x (efficiency)
CAPACITY MANAGEMENT
 A discrepancy between the Capacity of an organization and the demands of its customers. The goal of Capacity
Planning is to minimize this discrepancy
STEPS IN THE CAPACITY PLANNING PROCESS
 Estimate future capacity requirements
 Evaluate existing capacity and facilities and identify gaps

 Identify alternatives for meeting requirements
 Conduct financial analyses of each alternative
 Assess key qualitative issues for each alternative
 Select the alternative to pursue that will be best in the long-term
 Implement the selected alternative
 Monitor results
CAPACITY STRATEGIES
Lead capacity strategy
 Lead strategy is adding capacity in anticipation of an increase in demand.
 The possible disadvantage to this strategy is that it often results in excess inventory, which is costly and often
wasteful.
Lag capacity strategy
 This is the opposite of Lead Strategy. With the Lag capacity strategy the company will ramp up capacity only
after the demand has occur.
There are some advantages of this method:-
 It reduces a company’s risk
 The company will enjoy a more stable relationship with their bank and investors
 It reduces the risk of wastes
Match capacity strategy
 Match strategy is also known as tracking strategy. In this strategy we add capacity in small amounts in response
to changing demand in the market. Although this method tries to minimize the over and under capacity of the
other two methods.
Outsourcing Information System
 An Organization does not want to develop & operate its own ISM.
 Hires an external agency that specialize in these services to do work.
 The decision of outsourcing is like a “makes or buy decision”.
 To do so we have 2 types of factors
 1. Cost Factor

 2. Non Cost Factor
 Cost Factor- Organization compares cost of making & cost of buying.
 If cost of making > cost of buying then it can go for buying from outside.
 Non Cost Factor- are quality, regularity of supply, reliability of supply etc.
 Must be considered in making decision about outsourcing IS
When to Outsource ?
Criticality of IS -- Some application may be critical to the organization while others may not be so.
 System that have limited potential for the organization to generate competition advantage, may be considered
as non-critical.
 Eg. Payroll, Cafeteria Accounting etc.
Interruption in IS
 When interruption in IS are not critical to the organisation, these can be outsourced.
 Example- Critical elements like banking etc shouldn’t be outsourced.
Capabilities of Existing IS
 When organization existing IS have limited capabilities, or they are ineffective or technically inferior,
outsourcing may be better alternative. Some organization use outsourcing to use these IS technology.
 Eg. Outsourcing to make the transition from traditional mainframe computing to client sever computing.
Advantage of Outsourcing
 Economy: Sometimes it is difficult and expensive to build something in-house
 Flexibility: Changes can be incorporated easily
 Cost Predictability: Minimal chances of going overboard in expenses
 Making Fixed Cost Variable: cost of h/w, s/w is fixed even if they are not in use incase of inhouse
 Freeing up financial resources
Disadvantage
 Loss of Control
 Vulnerability of Strategic information
 Dependency
UNIT- 3

Approaches to Designing and Building Systems
 SDLC
 Prototyping/Iterative method
 Spiral method
 End User Development
 Incremental method
 Joint Application Design (JAD)
 Rapid Application Development (RAD)
SDLC :System development life cycle
The systems development life cycle (SDLC), also referred to as the application development life-cycle, is a term used in
systems engineering, information systems and software engineering to describe a process for planning, creating, testing,
and deploying an information system.[1] The systems development life-cycle concept applies to a range of hardware
and software configurations, as a system can be composed of hardware only, software only, or a combination of both.

The SDLC adheres to important phases that are essential for developers, such as planning, analysis, design,
and implementation, and are explained in the section below. It includes evaluation of present system, information
gathering, feasibility study and request approval. A number of SDLC models have been created: waterfall, fountain, spiral,
build and fix, rapid prototyping, incremental, and synchronize and stabilize. The oldest of these, and the best known, is
the waterfall model: a sequence of stages in which the output of each stage becomes the input for the next. These stages
can be characterized and divided up in different ways, including the following
 Preliminary analysis: The objective of phase 1 is to conduct a preliminary analysis, propose alternative
solutions, describe costs and benefits and submit a preliminary plan with recommendations.
Conduct the preliminary analysis: in this step, you need to find out the organization's objectives and the nature and
scope of the problem under study. Even if a problem refers only to a small segment of the organization itself then you
need to find out what the objectives of the organization itself are. Then you need to see how the problem being studied
fits in with them.
System investigation
The system investigation stage addresses the needs or opportunities that can be achieved by a sponsor or IT proposal.
During this step, we must consider all current priorities that would be affected and how they should be handled. Before
any system planning is done, a feasibility study should be conducted to determine if creating a new or improved system
is a viable solution. This will help to determine the costs, benefits, resource requirements, and specific user needs
required for completion. The development process can only continue once management approves of the
recommendations from the feasibility study.[10]
Following are different components of the feasibility study:
Operational feasibility
Economic feasibility
Technical feasibility
Human factors feasibility

Legal/Political feasibility
Describe the costs and benefits.
 Systems analysis, requirements definition: Defines project goals into defined functions and operation of the
intended application. Analyzes end-user information needs.
 Systems design: Describes desired features and operations in detail, including screen layouts, business
rules, process diagrams, pseudocode and other documentation.
 Development: The real code is written here.
 Integration and testing: Brings all the pieces together into a special testing environment, then checks for errors,
bugs and interoperability.
Following are the types of testing:
 Defect testing the failed scenarios, including defect tracking
 Path testing
 Data set testing
 Unit testing
 System testing
 Integration testing
 Black-box testing
 White-box testing
 Regression testing
 Automation testing
 User acceptance testing
 Software performance testing
Training and transition
Once a system has been stabilized through adequate testing, the SDLC ensures that proper training on the system is
performed or documented before transitioning the system to its support staff and end users.
Training usually covers operational training for those people who will be responsible for supporting the system as well
as training for those end users who will be using the system after its delivery to a production operating environment.
After training has been successfully completed, systems engineers and developers transition the system to its final
production environment, where it is intended to be used by its end users and supported by its support and operations
staff.
 Acceptance, installation, deployment: The final stage of initial development, where the software is put into
production and runs actual business.
 Maintenance: During the maintenance stage of the SDLC, the system is assessed to ensure it does not become
obsolete. This is also where changes are made to initial software. It involves continuous evaluation of the
system in terms of its performance.
 Evaluation: Some companies do not view this as an official stage of the SDLC, but is it an important part of the
life cycle. Evaluation step is an extension of the Maintenance stage, and may be referred to in some circles as

Post-implementation Review. This is where the system that was developed, as well as the entire process, is
evaluated. Some of the questions that need to be answered include: does the newly implemented system meet
the initial business requirements and objectives? Is the system reliable and fault-tolerant? Does the system
function according to the approved functional requirements. In addition to evaluating the software that was
released, it is important to assess the effectiveness of the development process. If there are any aspects of the
entire process, or certain stages,that management is not satisfied with, this is the time to improve. Evaluation
and assessment is a difficult issue. However, the company must reflect on the process and address weaknesses.
 Disposal: In this phase, plans are developed for discarding system information, hardware and software in
making the transition to a new system. The purpose here is to properly move, archive, discard or destroy
information, hardware and software that is being replaced, in a matter that prevents any possibility of
unauthorized disclosure of sensitive data. The disposal activities ensure proper migration to a new system.
Particular emphasis is given to proper preservation and archival of data processed by the previous system. All of
this should be done in accordance with the organization's security requirements
Strength and Weaknesses of SDLC [14]
Strengths Weaknesses
Control. Increased development time.
Monitor large projects. Increased development cost.
Detailed steps. Systems must be defined up front.
Evaluate costs and completion targets. Rigidity.
Documentation. Hard to estimate costs, project overruns.

Well defined user input. User input is sometimes limited.
Ease of maintenance.
Development and design standards.
Tolerates changes in MIS staffing.
Software prototyping,
refers to the activity of creating prototypes of software applications, i.e., incomplete versions of the software
program being developed. It is an activity that can occur in software development and is comparable to prototyping as
known from other fields, such as mechanical engineering or manufacturing.
A prototype typically simulates only a few aspects of, and may be completely different from, the final product.
Prototyping has several benefits: The software designer and implementer can get valuable feedback from the users
early in the project. The client and the contractor can compare if the software made matches the software specification,
according to which the software program is built. It also allows the software engineer some insight into the accuracy of
initial project estimates and whether the deadlines and milestones proposed can be successfully met.
The process of prototyping involves the following steps
1. Identify basic requirements
Determine basic requirements including the input and output information desired. Details, such as security, can typically
be ignored.
2. Develop Initial Prototype
The initial prototype is developed that includes only user interfaces. (See Horizontal Prototype, below)
3. Review
The customers, including end-users, examine the prototype and provide feedback on additions or changes.
4. Revise and Enhance the Prototype
Using the feedback both the specifications and the prototype can be improved. Negotiation about what is within the
scope of the contract/product may be necessary. If changes are introduced then a repeat of steps #3 and #4 may be
needed.
Dimensions of prototypes
Horizontal Prototype[edit]
A common term for a user interface prototype is the horizontal prototype. It provides a broad view of an entire system
or subsystem, focusing on user interaction more than low-level system functionality, such as database access.
Horizontal prototypes are useful for:
 Confirmation of user interface requirements and system scope
 Demonstration version of the system to obtain buy-in from the business

 Develop preliminary estimates of development time, cost and effort.
Vertical Prototype[edit]
A vertical prototype is a more complete elaboration of a single subsystem or function. It is useful for obtaining detailed
requirements for a given function, with the following benefits:
 Refinement database design
 Obtain information on data volumes and system interface needs, for network sizing and performance
engineering
 Clarifies complex requirements by drilling down to actual system functionality
Types of prototyping
Throwaway prototyping[edit]
Also called close-ended prototyping.Throwaway or Rapid Prototyping refers to the creation of a model that will
eventually be discarded rather than becoming part of the final delivered software. After preliminary requirements
gathering is accomplished, a simple working model of the system is constructed to visually show the users what their
requirements may look like when they are implemented into a finished system.
In this approach the prototype is constructed with the idea that it will be discarded and the final system will be built
from scratch. The steps in this approach are:
1. Write preliminary requirements
2. Design the prototype
3. User experiences/uses the prototype, specifies new requirements
4. Repeat if necessary
5. Write the final requirements
6. Develop the real products
Evolutionary prototyping
Evolutionary Prototyping (also known as breadboard prototyping) is quite different from Throwaway Prototyping. The
main goal when using Evolutionary Prototyping is to build a very robust prototype in a structured manner and
constantly refine it. The reason for this is that the Evolutionary prototype, when built, forms the heart of the new
system, and the improvements and further requirements will be built. Evolutionary Prototypes have an advantage over
Throwaway Prototypes in that they are functional systems. Although they may not have all the features the users have
planned, they may be used on an interim basis until the final system is delivered.
Incremental prototyping[edit]
The final product is built as separate prototypes. At the end the separate prototypes are merged in an overall design.
Extreme prototyping[edit]
Extreme Prototyping as a development process is used especially for developing web applications. Basically, it breaks
down web development into three phases, each one based on the preceding one. The first phase is a static prototype

that consists mainly of HTML pages. In the second phase, the screens are programmed and fully functional using a
simulated services layer. In the third phase, the services are implemented. The process is called Extreme Prototyping to
draw attention to the second phase of the process, where a fully functional UI is developed with very little regard to the
services other than their contract
Advantages of prototyping
There are many advantages to using prototyping in software development – some tangible, some abstract.[11]
Reduced time and costs: Prototyping can improve the quality of requirements and specifications provided to
developers. Because changes cost exponentially more to implement as they are detected later in development, the
early determination of what the user really wants can result in faster and less expensive software.[8]
Improved and increased user involvement: Prototyping requires user involvement and allows them to see and interact
with a prototype allowing them to provide better and more complete feedback and specifications.[7]
The presence of the
prototype being examined by the user prevents many misunderstandings and miscommunications that occur when each
side believe the other understands what they said. Since users know the problem domain better than anyone on the
development team does, increased interaction can result in final product that has greater tangible and intangible
quality. The final product is more likely to satisfy the users desire for look, feel and performance
Disadvantages of prototyping
Insufficient analysis: The focus on a limited prototype can distract developers from properly analyzing the complete
project. This can lead to overlooking better solutions, preparation of incomplete specifications or the conversion of
limited prototypes into poorly engineered final projects that are hard to maintain
User confusion of prototype and finished system: Users can begin to think that a prototype, intended to be thrown
away, is actually a final system that merely needs to be finished or polished. (They are, for example, often unaware of
the effort needed to add error-checking and security features which a prototype may not have.)
Developer misunderstanding of user objectives: Developers may assume that users share their objectives (e.g. to
deliver core functionality on time and within budget), without understanding wider commercial issues. For example,
user representatives attending Enterprise software (e.g. PeopleSoft) events may have seen demonstrations of
"transaction auditing" (where changes are logged and displayed in a difference grid view) without being told that this
feature demands additional coding and often requires more hardware to handle extra database accesses
Developer attachment to prototype: Developers can also become attached to prototypes they have spent a great deal
of effort producing; this can lead to problems like attempting to convert a limited prototype into a final system when it
does not have an appropriate underlying architecture. (This may suggest that throwaway prototyping, rather than
evolutionary prototyping, should be used.)
Excessive development time of the prototype
Expense of implementing prototyping: the start up costs for building a development team focused on prototyping may
be high. Many companies have development methodologies in place, and changing them can mean retraining,
retooling, or both. Many companies tend to just jump into the prototyping without bothering to retrain their workers as
much as they should.
A common problem with adopting prototyping technology is high expectations for productivity with insufficient effort
behind the learning curve. In addition to training for the use of a prototyping technique, there is an often overlooked
need for developing corporate and project specific underlying structure to support the technology. When this
underlying structure is omitted, lower productivity can often result

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