Lesson 6

Overview of Business and

SDLC

Management Information Systems

Mrs. Rosemarie M. Coronejo
Math-IT Dept, IAS, FEU
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 Learning Objectives:
Define business
Identify the objectives and benefits of business.
Enumerate the steps in putting up a business.
Identify the different types and legal forms of
business
Define SDLC
Identify the objectives of SDLC
Enumerate the steps of SDLC
Identify the different tools used in SDLC
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 Definition of Business
The occupation, work or trade in which a
person is engaged the wholesale food
business

Specific occupation or pursuit the best

designer in the business

- The American Heritage Dictionary

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 Objectives of Business
PROFIT
The driving force behind most business
endeavor and enterprise
All business planning, feasibility studies,
and business operations are geared towards
bringing in the dough

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 Objective of Business

Profit motive

Business Project Put up the Operate the

Idea Study Business Business

Process in Setting Up a Business

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 Benefits of Business to Society
Fills a certain need of the community (e.g.
A restaurant or food store)
Provides opportunities and employment
(e.g. Salaries paid to employees)
Creates social consciousness and awareness
(e.g. Donations to health institutions)
Creates environmental concern (e.g.
Contributions to reforestation projects)
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 Factors in Putting Up a Business
Product or service
Computer hardware, apparel/garments, food, banking,
groceries, programming services
Market
Universal, institutional or industrial, geographic
Finance
Initial expenses for setting up, capital expenditure, sources
of income, operational expenses
Organization
Positions to be filled, qualification required, salary
structure, job descriptions, duties and responsibilities of each
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position
 Business Types Based on
Activity
Manufacturing or production
Distribution or marketing
Service

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 Manufacturing or Production
Engaged in the process of converting raw
materials into finished products
Each stage has itsown inventory costing and
evaluation
Examples: San Miguel Corporation, Nissin

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 Distribution or Marketing
Engaged in acquiring goods and selling then
in exactly the same form
Activities associated with the movement of
materials, usually finished goods or parts,
from the supplier to the customer
Examples: Avon, 7-11

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 Service
Engaged in providing intangible goods or
services to customers
Work performed by an individual or
organization that benefits or provides
advantage to a customer.
Example: Globe telecom, ACCRA Law
Office

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 Legal Forms of Business
Single Proprietorship
Partnership
Corporation

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 Single Proprietorship
The simplest (and most popular) form of
business organization
The individual is personally liable for all
debts of the business to the full extent of his
property.
On the other hand, the owner has a
complete control of the business

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 Partnership
A syndicate, joint venture, group or other
arrangement in which two or more investors
join theur money and skills to carry out a
business as co-owners and to earn a profit
General partners are responsible for the
day-to-day operations of hte business and
are personally liable for the partnerships
liabilities.
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 Corporation
The most common form of organizing a
business the organizations total worth is
divided into shares of stock, and each share
represents a unit of ownership and is sold to
stock holders.
Considered as a separate entity from the
stockholders for legal and tax purposes.
Examples: Pepsi Cola, Intel, San Miguel
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 Organizational Chart
Used in representing the different positions
in an organization and how they relate to
one another.

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 Organizational Chart
(An IT Organizational Chart)
IT Manager

Systems and Operations

Programming Manager Manager

Computer
Operations Operator
Systems Programming
Supervisor
Supervisor Supervisor
Data Encoder
Librarian
Systems
Programmers Data Control
Analyst
Clerk
Document
Control Quality
Supervisor Control Clerk
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Systems Development Life Cycle
Common methodology for systems
develoment used in many organizations
Features several stages or phases, each
marking the progress of the systems
analysis and design effort within the
organization

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 Objectives of SDLC
Reduce the risk of project failure
Consider system and data requirements throughout the
entire life of the system
Identify technical and management issues early
Disclose all life cycle costs to guide business decisions
Foster realistic expectations of what the systems will and
will not provide
Provide information to better balance programmatic,
technical, management and cost aspects of proposed
system development or modification
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 Objectives of SDLC
Encourage periodic evaluations to identify
systems that are no loner effective
Measure progress and status for effective
corrective action
Support effective resource management and
budget planning
Consider meeting current and future business
requrements.

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Systems Development Life Cycle
Phases include:
Project identification and selection
Project initiation and planning
Analysis
Logical design
Physical design
Implementation
Maintenance
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 Project Identification and
Selection
A person in the organization identifies the need for
a new or enhanced system.
Information needs of the organization as a whole
are examined, and projects to meet these need are
identified.
The organizations information needs are
prioritized and translated into a plan for the
information systems department, including a
schedule for developing new major systems.
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 Project Initiation and Planning
Includes two major activities:
o Investigation of the system problem or opportunity at
hand.
o The presentation of reasons why the system should or
should not be developed by the organization.
The project leader and initial team of systems
analysts also produce a specific plan for the
proposed project that the team will follow using
the remaining SDLC steps.
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 Systems Analysis
The analyst thoroughly studies the
organizations current procedures and the
information systems used to perform
organizational tasks.
Has several sub-phases:
o Requiremetns determination
o Requirements study and structuring
o Alternative generation and selection
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 Logical Design
Devoted to designing a new or enhanced
system
Not tied toany specific hardware or systems
software platform
Some life cycles call this phase business
design because it concentrates on the
business aspect of the system

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 Physical Design
Devoted to designing a new or enhanced system
wherein analysts convert the description of the
recommended alternative solution, from logical, into
physical or technical specifications.
The team of analysts decides which programming
language the instructions will be written in, which
database systems and file structures will be used for
the data, and which hardware platform, operating
system and network environment the system will run
under.
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 Implementation
The analyst turns system specifications into
a working system that is tested and then put
into use
Includes the following;
Coding
Testing
Installation

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 Maintenance
Programmers make the changes that users ask for
and modify the system to reflect changing
business conditions
Not a separate phase but a repetition of other life
cycle phases required to study and implement the
needed changes.
When problems such as the systems failure to
operate or maintenance costs become prohibitive,
designing the systems replacement becomes
inevitable. 28
 Determining Requirements
Once the development of a new system has been
granted by management, the systems analyst must
begin determining what thisnew system should do.
To be effective and efficient in this sub-phase, the
analyst must possess the following attitudes:
Impertinence relax constraints
Impartiality attention to details
Refraining

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 SDLC Tools
Gantt Chart
Flowchart
Entity-Relationship Diagram (ERD)
Data Flow Diagram (DFD)

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 GANTT Chart
Named after Henry Laurence
Gantt
Graphical representation of the
main stages or activities in a
project work plan over time.
Popular tool used to plan and
schedule large, complex projects
Are not an ideal tool for
controlling a complex project
Length of the bar represents the
duration of the activity
Shows the start and end dates
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 Flowchart
A process modeling tool
can quickly help identify bottlenecks or
inefficiencies where the process can be
streamlined or improved.
Types of flowchart:
System Flowchart
Program Flowchart
Document Flowchart

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Basic Flowcharting Symbols

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Basic Flowcharting Symbols

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 System Flowchart
Systems flowcharts are graphic illustrations of the
physical flow of information through the entire
accounting system.
A systems flowchart is commonly used in analysis
and design.
Accountants use system flowcharts to describe the
computerized processes, manual operations, and
inputs and outputs of an application system.
Auditors use system flowcharts to identify key
control points in an accounting systems internal
control structure.
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System Flowchart
Example of System Flowchart
of Sales Transaction System

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 Program Flowchart
Program flowcharts illustrate how
individual computer programs work.
That is, a program flowchart will show in
detail each processing step of a computer
program.

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 Program Example of Program
Flowchart of Master File
Flowchart Update Process

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 Document Flowchart
A document flowchart displays the flow of
documents between organizational units.
The chart is divided into several columns
separated by vertical lines. Each column
represents an organizational unit, such as a
department, section, or employee.
The flowchart shows the movement of a document
from one department to another by a flowline
connecting the document symbol in each
department.
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 Document
Flowchart

Example of a
Document
Flowchart for Sales
Order Processing

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 Entity-Relationship Diagram
(ERD)
Data modelling tool used to illustrate the logical components of
databases and a database schema (complete enterprise level
data) or subschema (application view of the data).
Detailed, logical and graphical representation of the entities,
associations, and data elements for an organization or business
area
Peter Chen developed ERDs in 1976.
James Martin have added some slight refinements to the basic
ERD principles.
Main components:
Entity Relationship
Cardinality Attributes
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 Entity-Relationship Diagram
(ERD)
Entity

Relationships

Attribute ( ),

Cardinality (1:1, 1:m, m:1)

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 Entity-Relationship Diagram
(ERD)
Entities are objects (persons, places, things, or events) which
comprise the data of the database. Entities must be unique, such
as a vendor.
Relationships are links or association that exist between or
among entities. An example of a relationship between vendors
and invoices is inclusion (e.g., vendors include invoices with
shipments). The vendors are entities, and the invoices are
entities, and include describes the relationship between
vendors and invoices.
Attributes modify or describe both entities and
relationships. Attributes are the information about an entity that
we are interested in capturing and processing. Examples of
attributes of a vendor include: name, address, account number,
accounts payable balance due. An example of an attribute of the
include relationship is date of shipment.
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 Entity-Relationship Diagram
(ERD)
Cardinality is the
degree of instance
the relationship
occurs between
entities

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Entity-Relationship Diagram
(ERD)

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Entity-Relationship Diagram

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Entity-Relationship Diagram

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 ERD

Generic ERD
for Banks

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 Steps in creating ERD:
Identify the identities
Determine all the relationships between
these entities.
Decide what are the attributes the entities
have
Draw the ERD

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 Data Flow Diagram (DFD)
Process modeling tool that shows how a
system is divided into subsystems and
highlights the flow of data between the
processes and subsystems.
Displays processes, external entities,files
and data flows
Represents a functional decomposition of a
system
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Demarco and Yourdon Symbols

Process Data Store

Entity Data Flow

(Source/Sink)

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 Levels of DFD
Context diagram

Level-0 diagram (system diagram)

Level-n diagram

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 Content Diagram
defines the scope of the system by
identifying the system boundary
contains:
one process (which represents the entire
system)
all sources/sinks (external entities)
data flows linking the process to the
sources and sinks (external entities)

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 Content Diagram
identify and list sources/sinks
(external entities)
identify and list inputs to and
outputs from sources/sinks
(external entities)
create context diagram

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Example of a Context Diagram

course
student selections

Registration
schedule Registration details
System

business
office

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 Level 0 Diagram
describes the overall processing of the system
show one process for each major processing
step or functional requirement
data flows from the context appear on system
diagram also (level balancing)
can show a single data store to represent all
data in aggregate at this level
can draw duplicate sources, sinks and data
stores to increase legibilit

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 Steps in creating Level 0 DFD
list the major data stores
list major business steps
draw a segment for each business
step
assemble into single DFD
re-organize until satisfied
number processes
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 Sample of Level 0 DFD
course
student selections Register
Course

schedule Registration details

Pay fees business

office

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 Lower Level DFD
explode the processes shown on the level-0
diagram
each process is represented by its own DFD
balance data
data flows on upper level appear on lower
level, or
data flows on upper level are broken into
component pieces with components shown
on lower level
each lower level shows greater and greater
detail
follow numbering convention 60
 Rules in Creating DFD
All processes must have at least one data
flow in and one data flow out
All processes should modify the incoming
data, producing new forms or outgoing data.
Each data store must ne involved with at
least one data flow.
Each external entity must be

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