CHAPTER THREE

THE SYSTEM DEVELOPMENT PROCESS

3.1. System Development and Documentation: Tools and Techniques
 System documentation is information about an as-built solution and acts as a reference for
future maintenance or update efforts.
 Common examples of system documentation include:
 Product requirements documents
 Software design documents
 User stories.
 Maintenance guides.
 System documentation represents documents that describe the system itself and its parts.
 Documentation explains how AISs operate and is therefore a vital part of any accounting
system.
 Documentation also describes the logical flow of data within a computer system and the
procedures that employees must follow to accomplish application tasks.
 Documentation describes:-
 the tasks for recording accounting data,
 the procedures that users must perform to operate computer applications,
 the processing steps that AISs follow, and
 Documentation includes the following types of tools:
 Narratives (written descriptions),
 Flowcharts,
 Diagrams, and
 Other written material
 Examples of System Developments
 Customer Relationship Management
 Supply Chain Management
 Enterprise Resource Planning
 Financial Management
 Feasibility Analysis
 Requirements Analysis
 Software Design
 Software Coding
3.2. Importance of documentation in System Development
 The reasons why documentation is important to AISs are;-
 Depicting how the system works: Documentation helps employees understand how
a system works, assists accountants in designing controls for it, and gives managers
confidence that it will meet their information needs.
 Training users: Documentation also includes the user guides, manuals, and similar
operating instructions that help people learn how an AIS operates.
 Designing new systems: Documentation helps system designers develop new systems
in much the same way that blueprints help architects design buildings.
 Controlling system development and maintenance costs: Personal computer
applications typically employ prewritten, off-the-shelf software that is relatively
reliable and inexpensive.
 Standardizing communications with others: The usefulness of narrative descriptions
can vary significantly, and a reader can interpret such descriptions differently from
what the writer intended.
 Auditing AISs: Documentation helps depict audit trails. When investigating an AIS,
for example, the auditors typically focus on internal controls.

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  Documenting business processes: Accounting systems automatically create a record
of some organization‘s processes because they capture financial data as they occur.
 Complying with the Sarbanes-Oxley Act: Section 404 of the Sarbanes-Oxley Act of
2002 (SOX) requires publicly-traded companies to identify the major sources of
business risks, document their internal control procedures
 Establishing accountability: Manual signatures on business and government
documents allow employees and government agents to execute their responsibilities,
create audit trails, and establish accountability for their actions.
3.3. Basic Documentation Tools
 The two of the most common and basic documentation tools are: Data Flow Diagrams
(DFDs) and Flow Charts.
1. Data Flow Diagrams (DFDs):
 Are graphical descriptions of the sources and destinations of data.
 Graphically describes the flow of data within an organization.
 Are primarily used in the systems development process as a tool for analyzing an existing
system.
 It is also used to plan and design new ones.
 DFD uses symbols to represent the entities, processes, data flows, and data stores that
pertain to a system. These four symbols are combined to show how data are processed.
i. Entity: Data Sources and Destinations A data source or data destination symbol on
the DFD represents an organization or individual that sends or receives data that
they system uses or produces. An entity can be both a source and a destination. .
ii. Data Flow: data flow represents the flow of data between processes, data stores and
data sources and destinations.
[Link] Process: A transformation process represents the transformations
of data.
[Link] Stores: A data store is a temporary or permanent repository of data.
3.4. Guideline for Drawing DFDs
 There is no ideal way to develop a DFD, because different problems call for different
methods.
 However, some general guidelines for developing DFDs can be used by system analysts.
 The following are the guidelines for drawing DFDs.
1. Understand the system 9. Identify all files or data stores:
2. Ignore certain aspects of the 10. Identify all data sources and
system: destinations:
3. Determine system boundaries: 11. Name all DFD elements:
4. Develop a context diagram: 12. Subdivide the DFD:
5. Identify data flows: 13. Give each process a sequential
6. Group data flows: number
7. Identify transformation 14. Repeat the process:
processes: 15. Prepare a final copy- the final
8. Group transformation processes: copy of the DFD shall be drawn.
2. Flow Charts:
 It is Analytical technique used to describe some aspect of an information system in a
clear, concise, and logical manner.
 Flowcharts use a standard set of symbols to pictorially describe transaction processing
procedures.
 Flowcharts can be used to represent manual activities, computer processing activities,
or both.
 There are three types of flow charts

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 i. Document Flow Chart:
 a graphical description of the flow of documents and information between
departments or areas of responsibility within an organization.
 It traces the physical flow of documents through an organization.
ii. System Flowchart: a graphical description of the relationship among the input,
processing, and output in an information system. It shows the electronic flow
of data and processing steps in AIS.
iii. Program Flowchart: a graphical description of the sequence of logical
operations that a computer performs as it executes a program.
3.5. Differences between DFDs and Flowcharts A.
 DFDs emphasize the flow of data and what is happening in a system, whereas a
flowchart emphasizes the flow of documents or records containing data.
 A DFD represents the logical flow of data, whereas a flowchart represents the physical
flow of data.
 Flowcharts are used primarily to document existing systems.
 DFDs, in contrast, are primarily used in the design of new systems and do not concern
themselves with the physical devices used to process, store, and transform data.
 DFDs make use of only four symbols. F. Flowcharts use many symbols and thus can
show more detail.
3.6. System Development
 Systems development is the process of defining, designing, testing, and
implementing a new software application or program.
3.7. Reasons for system development
a. Changes in user or business needs:
b. Technological change:
c. Improved business processes:
d. Competitive advantage:
e. Productivity gains:
f. Growth:
g. Downsizing:
3.8. The Systems Development Life Cycle (SDLC) .
 The systems development life cycle (SDLC) is a conceptual model that describes the
stages involved in an information system development project, from an initial
feasibility study through maintenance of the completed application.
 It is a logical process by which systems analysts, software engineers, programmers
and end-users build information systems and computer applications to solve business
problems and needs.
 Systems development methodology can be used as a synonym for the life cycle.
 Systems development methodology is a very formal and precise system development
process that defines a set of activities, methods, best practices, deliverables, and
automated tools that system developers and project managers are to use to develop
and maintain information systems and software.
 In general, an SDLC methodology follows the following steps:
1. The existing system is evaluated: deficiencies are identified.
2. The new system requirements are defined:
3. The proposed system is designed:
4. The new system is developed:
5. 5The system is put into use:
6. Evaluating the new system :
3.9. The Key Players in System Development Process

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  The Players refer to who are the people involved in developing and implementing AIS.
 Top Management
 Accountants
 The Information Systems Steering Committee
 The Project Development Team
 Systems Analysts
 Computer programmers
 External Players
3.10. The stages of system development cycle (SDLC)
 The SDLC model often has five phases. Phase 1: Systems Strategy, Phase 2: Project
Initiation, Phase 3: In-House Development, Phase 4: Commercial Packages and Phase 5:
Maintenance and Support.
1. Phase 1: Systems Strategy: The first step in the SDLC is to develop a systems
strategy, which requires understanding the strategic business needs of the
organization. This may be derived from the organization‘s mission statement, an
analysis of competitive pressures on the firm, and the nature of current and
anticipated market conditions.
2. Phase 2: Project Initiation: Project initiation involves obtaining a detailed
understanding of the user problem and proposing multiple alternative solutions. Each
of these proposals is assessed in terms of its feasibility and cost-benefit
characteristics.
3. Phase 3: In-House Systems Development: Many organizations require systems that
are highly tuned to their unique operations. These firms design their own information
systems through in-house systems development activities.
4. Phase 4: Commercial Packages: The majority of companies today, particularly
smaller firms and large firms with standardized information needs, employ prewritten
software systems rather than develop in-house systems from scratch.
5. Phase 5: Maintenance and support: Maintenance involves both implementing the
latest software versions of commercial packages and making in-house modifications
to existing systems to accommodate changing user needs.