General Systems Theory and Systems Analysis

Lecture 1. Introduction to System Analysis. Basic Concepts.

I. General Systems Theory 1. System Concept Def. A System is a set of components that interact with one another and serve for a common purpose or goal. Systems may by (1) abstract or (2) physical. • An abstract system is conceptual, a product of a human mind. That is, it cannot be seen or pointed to as an existing entity. Social, theological, cultural systems are abstract systems. None of them can be photographed, drawn or otherwise physically pictured. However, they do exist and can be discussed, studied and analyzed. • A physical system , in contrast, has a material nature. It is based on material basis rather than on ideas or theoretical notions. • Either system has nine main characteristics: Components. 6. Input. Interrelationships. 7. Output. Boundary. 8. Interface. Purpose. 9. Constraints. Environment. They are shown in Figure 1-1.

FIGURE 1-1 Characteristics of a system

2. System’s Characteristics • A component is either an irreducible part or an aggregate of parts, also called a subsystem . The simple concept of a component is very powerful. For example, in case of an automobile we can repair or upgrade the system by changing individual components without having to make changes the entire system. • The components are interrelated ; that is, the function of one is somehow tied to the function of the others. For example, in the Store system the work of one component, such as producing a daily report of customer orders, may not progress successfully until the work of another component is finished, such as sorting customer orders by date of receipt. • A system has a boundary , within which all of its components are contained and which establishes the limits of a system, separating it from other systems. • All of the components work together to achieve some overall purpose : the system’s reason for existing. • A system operates within an environment – everything outside the system’s boundary . The environment surrounds the system, both affecting it and being affected by it. For example, the environment of a university includes prospective students, foundations, funding agencies and the new media. Usually the system interacts with its environment. A university interacts with prospective students by having open houses and recruiting from local high schools. • The point at which the system meets its environment are called interface . • A system must face constraints in its functioning because there are limits to what it

can do and how it can achieve its purpose within its environment.Some of these constraints are imposed inside the system (e.g., a limited number of staff available). Others are imposed by the environment (e.g., due to regulations). • A system interact with the environment by means of input and output. Input is anything entering the system from the environment; output is anything leaving the system crossing the boundary to the environment . Information, energy, and material can be both input and output in relation to the environment. People, for example, take in food, oxygen, and water from the environment as input. An electrical utility takes on input from the environment in the form of raw materials (coal, oil, water power, etc), requests for electricity from customers. It provides for output to the environment in the form of electricity. 3. Feedback and Control in a System Very often output’s data are returned to the input of the system, as shown in Fig. 1-2, and used to regulate the system’s activity. Large hotels and motels, for instance, ask FIGURE 1-2 Regulation of activity

guests to fill out cards evaluating the services. Such a process is called feedback . It helps to adjust the system to changes so that the system operates in a balanced state , or equilibrium . This feature of a system is used in control. Def. Control is the process that measures current performance and guides it toward a predetermined goal. Two types of feedback are related to system control. • Negative feedback is corrective feedback that helps maintain the system within a critical operating range and reduces performance fluctuations around the norm or standard. Negative feedback is transmitted in feedback control loops. As shown in Figure 1-3, a sensor detects the effect of output on the external environment; this information is returned to the system as an input, and necessary adjustments are made according to predetermined goal. FIGURE 1-3 Feedback control loops • In contrast to negative feedback, which is corrective, positive feedback reinforces the operation of a system by causing it to continue its performance and activities without changes.

4. Methods of system’s study There are several important system’s concepts that help to study a system and understand its functioning: • Decomposition • Modularity • Coupling • Cohesion • Decomposition is the process of breaking down a system into its smaller components. These components may themselves be systems (subsystems) and can be broken down into their components as well. How does decomposition aid understanding of a system? It results in smaller and less complex pieces that are easier to understand than larger, complicated pieces. • Modularity is a direct result of decomposition. It refers to dividing a system into chunks or modules of a relatively uniform size. Modules can represent a system simply, making it easier to redesign and rebuild. For instance, a portable CD player, as a system, accepts CDs and settings of volume and tone as inputs and produces music as output. It includes the separate systems as its subsystems: 1) read the digital signals from CDs; 2) amplify the signals; 3) turn the signals into sound waves; and 4) control the volume and tone of the sound (see Figure 1-4).

FIGURE 1-4 Decomposing a CD system • Coupling means that subsystems are dependent on each other. But they should be as independent as possible. If one subsystem fails and other subsystems are highly dependent on it, the others will either fail themselves or have problems functioning. • Cohesion is the extend to which a subsystem performs a single function. In the CD player example, signal reading is a single function.

5. “Systems” Thinking Being able to identify something as a system Involves being able to identify subsystems Identifying system characteristics and functions Identifying where the boundaries are (or should be) Identifying inputs and outputs to systems Identifying relationships among subsystems

II. Information Systems 1. Information System, Subsystem and Supersystem Both control and management have an informational nature, that is among all the possible inputs and outputs (information, energy, and material) they use the only one – the information. Information is the central core of all resources in feedback loops while regulating the system activities. Any organization as a system could not survive without information. That’s why, it is often necessary to develop a special subsystem for processing and handling the information resource alone. This information system should be able to provide management with information for making the many decisions necessary in a competitive environment. It’s possible to give the following definition. Def. An Information System (IS) is a collection of interrelated components that collect, process, store, and provide as output the information needed to complete a business task. A payroll system, for example, collects information on employees and their work, processes and stores that information, and than produces paychecks and payroll reports for the organization. Then information is provided to manufacturing so the department can schedule production. What are the interrelated components or subsystems(according to general definition of a system) of an IS? For example, a customer support system might have an order entry

subsystem that creates new orders for customers. Another subsystem might handle fulfilling the orders, including shipping and back orders. A third subsystem might maintain the product catalog database. Every system, in turn, is a part of a larger system, called a supersystem . So the customer support system is really just a subsystem FIGURE 1-5 Information systems and subsystems of the production system. The production system, as it is shown in Figure 1-5, includes other systems, such as inventory management and manufacturing.

On the other hand we can consider an information system as a list of types of its components: hardware, software, inputs, outputs,data,people, and procedures (Fig.1-6). FIGURE 1-6 Information system and components parts

2. Concepts of Separation Separating Data and Processes That Handle Data We can consider every IS as a three-component system: • data • data flows • processing logic Data are raw facts that describe people, objects and events in organization (e.g. name, age, customer’s account number). Data is used in an IS to produce information. Information is data organized in a form that human can interpret Data flows are group of data that move and flow through a system. They include a description of the sources and destinations for each data flow Processing logic describes the steps that transform the data and events that trigger these steps. Figure 1-7 shows three components of an IS.

FIGURE 1-7 Data, Data Flow and Processing Logic.

There are two approaches to ISs design: • Process-oriented • Data-oriented • The process-oriented approach is based on what the system is supposed to do. The focus is on output and processing logic. Although the data are important, they are secondary to the application. Each application contains its own files and data storage capacity. Figure 1-8(A) illustrates this situation: “personnel data” appears in two separate systems – payroll system and the project management system. If a single element changes, it has to be changed in each of the data files. This approach involves creating graphical presentations (data flow diagram and charts). • The data-oriented approach is a strategy that focuses on the ideal organization of data, independent of where and how data are used within the system (see Figure 1-8(B)). This approach uses data model that describes the kinds of data needed in the system and the business relationships among the data (i.e. business rules). Figure 1-9 summarizes the differences between two approaches.

FIGURE 1-8 The Relationship Between Data and Applications: Process-Oriented Approach Data-Oriented Approach

FIGURE 1-9 Key Differences Between The Process-Oriented and Data-Oriented Approaches. Separating Databases and Applications When the data-oriented approach is applied, databases are designed around subjects, such as customers, suppliers and parts. It allows to use and to revise databases for many different independent applications, what creates the principle of application independence (i.e. separation of data and definition of data from applications).

3. Types of Information Systems As far as organizations perform many different types of activity, they require several different types of information systems to support all of information needs. The information systems found in most businesses include transaction processing systems, management information systems, executive information systems,decision support systems, expert systems, communication support systems, and office support systems (Figure 1-10): FIGURE 1-10 Types of Information systems

• Transaction processing systems (TPS) capture and record information about the transactions that affect the organization. A transaction occurs each time a sale is made, supplies are ordered, an interest payment is made. Usually these transactions create credit or debit entries in accounting ledgers. This kind of ISs were among the first to be automated by computers. The modern TPS use state-of-the-art technology, for instance, in the form of on-line TPS. • Management information systems (MIS) are systems that take information captured by TPS and produce reports that management needs for planning and controlling the business. MIS are possible because the information has been captured by the TPS and placed in organizational databases. • Executive information systems (EIS) provide information for executives to use in strategic planning. Some of the information comes from the organizational databases, but much of the information comes from external sources – news about competitors,stock market reports, economic forecasts, and so on. • Decision support systems (DSS) allow a user to explore the impact of available options or decisions. Whereas an MIS produce reports, DSS provide an interactive environment in which decision makers can quickly manipulate data and models of business operations. A DSS has three parts. The first part is composed of a database (which may be extracted from TPS or MIS). The second part consists of mathematical or graphical models of business processes. The third part is made up of a user interface (or dialogue module) that provides a way for the decision makers to communicate with

the DSS. An EIS is a DSS that allows senior management to explore data starting at a high level of aggregation and selectively drill down into specific areas where more detailed information and analysis are required. • Expert systems (ES) replicate the decision-making process rather than manipulating information. If-then-else rules or other knowledge representation forms describe the way a real expert would approach situations in a specific domain of problems. Typically, users communicate with an ES through an interactive dialogue. The ES asks questions (which an expert would ask) and the end user supplies the answers. Those answers are then used to determine which rules apply, and the ES provides a recommendation based on the rules. • Communication support systems (CSS) allow employees to communicate with each other and with customers and suppliers. Communication support now includes e-mail, fax, Internet access, and video conferencing. • Office support systems (OSS) help employees create and share documents, including reports, proposals, and memos. OSS also help to maintain information about work schedule and meetings.

III. Systems Analysis and Design. Systems Analyst ISs are crucial to the success of modern business organization, and new systems are constantly being developed to make businesses more competitive. The key to successful system development is thorough systems analysis and design. Def. System Analysis (SA) is the process of understanding and specifying in detail what the information system should do. System Design (SD) is the process of specifying in detail how the many components of the information system should be physically implemented. Systems Analyst (SAn) is a business professional who uses analysis and design techniques to solve business problems using information technology and who develops ISs . • Developing ISs is not just about writing programs. ISs are developed to solve problems for organizations, and systems analyst is often thought of as a problem solver rather than a programmer (see Figure 1-11). • To thoroughly understand the problem, the analyst must learn everything possible about it – who is involved, what business processes come into play, what data need to be stored and used, what other systems would be affected when solving this problem. • Then the analyst needs to confirm for management that the benefits of solving the problem outweigh the cost. • If solving the problem is feasible, the analyst develops a set of possible solutions and decides, in consultation with management, which possible solution is the best alternative overall.

FIGURE 1-11 The analyst’s approach to problem solving.

• Once the systems analyst has decided which alternative to recommend and management has approved the recommendation, the details must be worked out. These details include databases, user interface, networks, operating procedures, conversion plans, and, of course, program modules. After that, the actual construction of the system can begin. • Systems analysts need a great variety of special skills. First, they need to be able to understand how to build ISs, and this requires quite a bit of technical knowledge. Then, they have to understand business they are working for. Finally, the analyst needs to understand quite a bit about people and the way they work. Technical Knowledge and Skills No one person can be an expert at all types of technology; there are technical specialist to consult for the details. But a systems analyst should understand the fundamentals about: • Computers and how they work • Devices that interact with computers, including input devices, storage devices, and output devices • Communications networks that connect computers • Databases and database management systems • Programming languages • Operating systems and utilities

A systems analyst also needs to know a lot about tools and techniques for developing systems. (1) Tools are software products that help develop analysis or design specifications and completed systems components. Some tools used in system development include: • Software packages such as Microsoft Access and PowerBuilder that can be used to develop systems • Integrated development environment (IDEs) for specific programming languages, such as Sun Java Workshop or Microsoft C++ • Computer-aided system engineering (CASE) tools that store information about system specifications created by analyst and sometimes generate program code • Program code generators, testing tools,configuration management tools, software library management tools, documentation support tools, project management tools, and so on. (2)Techniques are used to complete specific system development activities. They include: • Project planning techniques • System analysis techniques • System design techniques • Systems construction and implementation techniques • System support techniques.

Business Knowledge and Skills An analyst should understand business organization in general. It may include the following examples: • What activities and processes do organizations perform? • How are organizations structured? • How are organizations managed? • What type of work goes on in organization – finance, manufacturing, marketing, customer service, and so on? It is also important to understand a specific company, that is: • What the specific organization does? • What makes it successful? • What its strategies and plans are? • What its traditions and values are? People Knowledge and Skills An analyst spends a lot of time working with people. It is critical that analyst understand: • How people think? • How people learn? • How people react to changes?

• How people communicate? • How people work? Integrity and Ethics A systems analyst gets an access to information in many different parts of an organization. It might be • very private information, such as salary, health, job performance. • confidential corporate information about products, strategic plans or tactics • top-secret information involving government, police, army, etc . A systems analyst is expected to have the integrity to keep this information and to uphold the highest ethical standards. Any appearance of impropriety can destroy an analyst’s career. The Environment Surrounding the Analyst Types of Technology Encountered Most students are familiar with personal computers. But not all businesses functions can be realized with desktop. ISs in the “real-world” range from small desktop systems to huge database systems with thousands of users spread over hundreds of locations. We could mark out the following types of ISs:

• Desktop systems • Networked desktop systems that share data • Client-server systems • Large-scale centralized mainframe systems • Systems using Internet, intranet, and extranet technology The changes in technology are very rapidly. Thus, it is so important to upgrade knowledge and skills continually. Typical Job Titles and Places of Employment In fact, many different people do systems analysis and design work. They may have various job titles: • Programmer analyst • Business systems analyst • End-user analyst • Business consultant • Systems consultant • System support analyst • System designer • Software engineer • System architect

Sometimes systems analysts might also be called project leader or project manager. Places of Employment Not all analysts work directly for the company. It may be different work arrangements, including: • Programmer analysts working for the company • Systems analysts working for the company • Independent contractors • Outsource provider employees • Consultants • Software development firm employees Typical Job Ad: Systems Analyst – Distribution Centre We are the world’s leading manufacturer of women’s apparel products. Our organization in the Far East has openings for a Systems Analyst Requirements: • Bachelor’s degree in Computer Science, Business Administration or closely related field with 5 (+) years of working experience • In-depth understanding of Distribution and Manufacturing concepts (Allocation, Replenishment, Floor Control, Production Scheduling)

Job Ad (continued) • Working knowledge of project management and all phases of the software development life cycle • Experience with CASE tools, PC and Bar Code equipment • Working knowledge of AS/400 and/or UNIX environment with the languages C, RPG400 and/or COBOL are desirable The successful candidate will provide primary interface for all user problems, answer technical questions and requests within the applications development group; work with user areas to establish priorities; and provide recommendations and directions for process improvement through automation. We offer an attractive compensation package, relocation assistance and the technical and analytical challenges you would expect in a state-of-the-art environment. The position will report to Senior Management. Please forward your resume, along with salary expectations to: The Analyst’s Role in Strategic Planning A systems analyst is not only someone who solves specific business problems by developing or maintaining ISs. The analyst might also be involved alone with senior managers in strategic management problems. It happens in several ways: Special Projects – The analyst may be working to solve a problem that affects executives (e.g. designing an executive information system)

– The analyst may be involved in business process reengineering – a technique that seeks to alter the nature of work done in a business function with the objective of radically improving performance. Therefore, the analyst might be asked to participate in a study of existing business processes and procedures and then to propose IS solution that can have a radical impact. Strategic Planning Processes A strategic plan typically covers five or more years in the future. It serves to answer fundamental questions about the company (e.g. where is it now, where does it want to be, what does it have to do to get there) – A typical strategic planning process can take months or years and involve many people in the company – Once set, the strategic plan drives all the organization’s processes Information Systems Strategic Planning – The information systems strategic planning is one of the major components of the strategic plan . In most organizations today, nearly all planned changes involve new or improved information systems. Very often, the ISs themselves drive the strategic plan. In the Internet era, many new companies have come to existence (Amazon.com, eToys.com, etc ) and many others have changed the way they compete. Usually at the recommendation of the chief information systems executive, top management will authorize a major project to plan the ISs for the entire organization.

– A consulting firm might be called to help with the project. Consultants can offer experience with strategic planning techniques and train managers and analysts to complete the planning project. – Many documents and existing systems are reviewed to create a model of the organization in terms of the business functions it performs alone with another model that shows the types of data the organization uses. – Based on these two models, an application architecture plan is created: • a description of the integrated information systems needed for the organization to carry out its business functions. After that, the team outlines the sequence of steps needed to implement the required systems. – Then, the team creates a technology architecture plan : • A description of the hardware, software and communications networks required to implement planned IS. Enterprise Resource Planning (ERP) - an increasing number of organizations are applying an approach called enterprise resource planning by which an organization commits to using an integrated set of software packages for key information processing (e.g. PeopleSoft). Software vendors such as PeopleSoft offer package solutions for companies in specific industries. To adopt an ERP solution, the company must carefully study its existing processes and information needs and then determine which ERP vendor provides the best match.

IV. Running Case Study: Rocky Mountains Outfitters (RMO) We will use a system development project for a company named Rocky Mountain Outfitters (RMO) as a continuing example. Overview of the RMO • Began in 1978 as dream of John and Liz Blankens of Park City, Utah • First started as direct mail-order sales to customers • By late 1990s had grown to a large regional sports clothing distributor in the Rocky Mountain and Western states • RMO now employs over 600 people and has almost $100 million annually in sales • Mail order is major source of revenue at $70 million • Recently completed an information systems strategic planning project (with help of consultants) Organization and location • The RMO is managed on a daily basis by John (as president) and Liz (as vice president of merchandising and distribution) • Other top managers are William McDougal, vice president of marketing and sales, and JoAnn, vice president of finance and systems. The systems department reports to JoAnn Figure 1-12 shows the RMO’s organizational structure.

FIGURE 1-12 Organizational Structure of the RMO.

Figure 1-13 shows the location of the RMO’s facilities. Information Systems Department at RMO • Headed by Mac Preston, an assistant vice president • Includes nearly 50 employees (see Figure 1-14) • Organized into two areas: FIGURE 1-13 RMO’s location.

– System support (director Ann Hamilton) Includes telecommunications, database administration, operations and user support – System development (director John MacMurty) 4 project managers, 6 systems analysts and 10 programmer analysts. FIGURE 1-14 RMO’s IS Department staffing.

Existing Systems – Small mainframe computer runs various tasks . The existing information technology includes: • Retail store system • Office systems • Merchandising/Distribution • Mail Order • Phone Order • Human resources • Accounting/Finance The Information Systems Strategic Plan at RMO The strategic thrust of RMO is to build more direct customer contact. One strategy is to expand the phone-order capability, and the another one is to add direct customer access through the Internet. This strategic plan resulted in the following decisions: • Technology Architecture Plan – Move business applications to client-server architecture – Move towards conducting business via the Internet (start with web site, then move to transaction processing over the Web) – Eventually move to intranet

• Application Architecture Plan - Accounting/finance: purchase a package solution with the client-server architecture - Human resources: purchase a package solution as intranet application - Customer Support System: new development integrating direct customer access via the Internet - Inventory Management System: a merchandizing and inventory system that integrates with customer support - Retail store system: integrates store management system with the inventory management system • Time frames for implementing application architecture plan - - First: implement the customer support system (CSS) - Se cond: implement the inventory management system - Third: integrate retail store management system with the inventory management system - Finally: upgrade the human resources system and the accounting/finance system. Time frames are presented in Figure 1-15.

FIGURE 1-15 RMO’s application architecture plan.

Readings • Chapter 1 – The World of the Modern Systems Analyst (covered today) • Next lecture: Chapter 2 – The Analyst as Project Manager • Lecture texts available at class web site (downloadable as PowerPoint slides)

General Systems Theory and Systems Analysis

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General Systems Theory and Systems Analysis