Designing Financial Information System Using Structured System Analysis and Design Method

International journal of Computer Networking and Communication (IJCNAC)Vol. 1, No. 2(November 2013)

23

Designing Financial Information System Using
Structured System Analysis and Design Method
Shohrehosadat Karimi Jahromi 1, Nikzad. Manteghi 2
1

Department of Management, Shiraz Branch , Islamic Azad University, Shiraz, Iran
1

2

karimish8@yahoo.com

Department of Management, Shiraz Branch , Islamic Azad University, Shiraz ,Iran
2

nik163r@yahoo.com

Abstract
In the following research, the financial information system for the studied company
which had various sub-systems of accounting, payment, storage, properties, salary and
wages systems were analyzed properties system is developed as one of the sub-systems
subsequent to sub-systems problems identification. In both stages of analysis and
designing, Structured System Analysis and Design Method methodology, which has a
Top-Down approach, is used. Based on the studied methodology in analysis stage, system
requirements including needs (determined through studying present system problems)
and obligations (determined by the designer and according to experiences obtained from
similar systems) were identified and considering such requirements, the proper
information system concept model was designed. Some suggestions are represented for
organizations use and information systems development fans, in the final part to the
article.

Keywords: Accounting Information System, Information System, Structured System
Analysis and Design Method
1. INTRODUCTION
Development in information technology has led to increase in information in organizations
and institutes life and movement. Ordinary individuals could not make decisions in reaching their
goals, without being influenced by information [1]. An information system includes a set of
individuals, data/information, methods, software, hardware and communications which are active
in a company to provide useful information to accelerate and ease the activities, create
coordination and control, assist with problems analysis, support decision making and reduce
uncertainty in decision-making [2]. Management information system is only considered as a part
to authenticate the organization in organizational charts in organizations. Moreover, organizations
don’t train their human resources in accordance with such technology [3]. Another point to
consider is the organizations structural problems. The organization structure and individuals must
be prepared for information circulation and absorption [4]. Also, the culture for demanding
decision-making should be changed and substituted with information based management [2].
Appropriate situation should be present to establish an appropriate information system and using
that optimally. Among such situations are clear explanations of the problem and objectives,
formulating appropriate strategies for system development and support changes, monitoring and
managing development processes, professional and scientific efficiency for the system users and
training them, appropriate position for information system, defining information systems
www.arpublication.org

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employers’, consulters’, supervisors and commissioners’ roles and duties, and finally the cultural
problems [5].
1.1 Accounting Information Systems
Kieso and Weygandt define accounting information systems as an element of the
organization which offers decision-making biases for users and fans through processing financial
events, warning information and other information [6]. Accounting information system could be
considered as a logical intersection between two broader issues of accounting and information
systems [7]. The thing which both majors of accounting and management information system
share in common is their regards on information. Accounting tends to the information while
management information system covers systems which create information. These three
environments are presented in Fig. 1[8].

MIS
Information Systems AIS
Designing and Establishing
,Usage and Management

Accounting
Providing Information
for Financial DecisionMakings

Fig. 1 Relation between Accounting, Management Information Systems and Accounting Information
Systems

2. Practical Method in Executing This Research
SSADM is one of the most popular and complete structured methods in Britain which
includes the superior ideas of other methods with the following characteristics [10]:
1It chops the system into smaller pieces and determines the order and the interaction
between activities.
2The method uses modeling techniques and diagrams to present a more accurate
(structured) and comprehensible definition to users and developers.
2.1 Why is SSADM fit for this project?
Among SSADM superiorities on other present methods is that the method defines and
combines techniques in a certain framework. Beside analysis techniques, it also provides
guidelines for analyzing time and usage of each one. SSADM separates the logical design from
physical design and the logical design is carried out independent of hardware/software. TopDown method approach is used in this method, since the Top - Down approach leads to the
following problems [11]:
12-

Information systems could be in no coordination with organization strategic objectives when
they are carried out in lower levels.
Political ideas may be applied.



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Although SSADM uses a prescriptive method, this method has a great flexibility and the
method should be prepared for certain projects situations. SSADM is used to develop the system,
but it doesn’t apply to whole system lifecycle. This method includes the following stages:
1. Present System Operation Analysis
2. Determining the Requirements
3.

Data Logical Designing

2.2 Advantages & Disadvantages of SSADM
One advantage of SSADM is its use of 3 techniques to determine information system
viability. Logical data modeling determines the entities--and relationships between them--in the
system. Data flow modeling determines the ways in which data changes from one form to
another, the holding areas for the data, the entities that send data into the system and the routes
through which the data flows. Entity event modeling documents how events within the business
affect the entities of the information system. When these 3 methodologies and viewpoints are
provided, the model is more accurate and complete[10].
2.2.1 Complex Understanding
By undertaking such a deep and through analysis of a system, there is a greatly reduced
chance of any information being misunderstood at the beginning stages of the project. This can
occur in systems that have inadequate analysis and poorly thought out design. Using a familiar
process prevents the need to train new staff and saves both money and time [11].
2.2.2 Control
The SSADM is a very structured method of creating information systems. It exercises control
over every aspect of the creation process [10].
2.2.3 Rigidity
This rigidity, however, can also lead to some difficulties. It is inevitable that the requirements
for the system will change at some point during development. SSADM is built on the analysis of
data. If this data changes after the SSADM analysis has already taken place, the system
recommended by the data may be incorrect [10].
2.2.4 Time and Money
The biggest problem with the SSADM system is that it takes a great deal of time. When a
business takes so much time to analyze the project, it may make it difficult to create the
information system by a desired end date. There is a large delay between the inception of the
project and the delivery of the system. If any employees of a company are not trained in the
SSADM techniques, the company will need to spend even more time and money training them in
this difficult system [10].
2.3 Related Work
Appropriate decision making as a way of capturing attractive opportunities is the most
important issue for success of a business. Most companies aim to acquire a worthwhile and
sustainable advantage in the market and also pass their competitors through diversification;

26

therefore cutting costs and improving efficiency are considered as important elements of
achieving more advantages in the competing environment. These features of a business become
realized when the business can obtain a comprehensive, integrated, and capable Information
System (IS) and utilize it. Furthermore implementing customer-oriented strategy requires
applying IS in different fields and divisions of work in organization such as marketing [12].
In similar study they analyzed Marketing Information System (MIS) of Sugar Cane and ByProduct Co. as a holding company. In the process of analysis, after identifying subsystems of
MIS, Sale Information System is developed as a one of subsystems. In both analyzing and
developing steps, Structured System Analysis and Design Method (SSADM) were applied.
According to SSADM in the analyzing step, contingencies of system (include needs and
requirements) wrer identified and then considering them, conceptual model of information system
was designed.

3. Case Study
In this section we use the SSADM method to analysis and design financial information
system for Fars Power Generation Management Company that is a subset of Tavanir holding
company. The headquarters for this company is located in Shiraz and its power plants are in
Kazerun, Bushehr, Kangan and Jahrom.
3. 1. Analysis and Design Financial Information System
In this phase the following stages will be closely scrutinized.
3.1.1 Identification Systems Problems
Reviewing reporting model, lack of access for users, lack of appropriate relation between
systems and considering changes created in commercial world show that this model has not been
able to keep its pace with these fast changes. Hence, considering the need for fast access to
information, and users and decision-makers expectations who like to have access to up to date
information, a review in relation between systems seems to be of essence.
3.1.2. Identified Problems in Financial Information System in S.F.P.G.M.C:
1.
Lack of access for the users (power plants managers) to the present integrated system in
headquarters (Shiraz) which has led to failure for the company informatics section to reach the
integrated systems creation objective. Hence, the company is sufficed with island systems.
2.
Lack of bilateral relation between present sub-systems. As an instance, there is a lateral
relation between accounting sub-system and wages and salary, storage, liquidities and properties.
3.
Company various parts geographical
communicative and information networks.

dispersion

and

difficulties

in

creating

4.
Duplications in registering personnel, product and services sales persons’ information
due to lack of integrity in sub-systems.
5.

Lack of appropriate usage of resources and time due to the duplication.

3.2. Determining System Requirements
For each of information requirements a set of systems which should provide the information is
listed in Table 1.


Information
Providing Systems

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Information Requirements

Accounting System - Bank Bills - Bank Statements - Temporary, Monthly and Annual Balance Sheets
- Accounts Turnover

- Opening and Closing Documents

- Financial Documents - Related Reports on Financial Year
Wages and Salary
System

- Salary and Net Income Payroll - Wages and Salary Financial Documents Draft
- Banks, Insurance, Taxes and Overtimes Working Lists
- Loan Installments Information and Other Country Separate Units
- Reports based on Specific Information Items - Statistical Reports and Diagrams

Payment System

- Related Documents to Organization Payments - Financial Documents
- Issued Checks

- Bank Accounts Reports - Check Information

- Issued, Missing, Reserved and Canceled Checks Reports - Cash and Non-Cash
Payments Reports
Property System

- Organization Properties
Change Report

- Organization Cars

- Properties and Assets Status

- Properties Value ( Categorizing Based on Properties Value) - Delivered Properties
Profile
- Present Properties and Assets Report - Non-Consumable/ Ruined Properties
Report
- Properties Depreciation Report - Financial Reports Related to Properties and
Assets
- Properties Physical Displacement and Deployment
Storage System

- Warehouses, Inventories, Storage Charge, Goods Enter and Exist Condition
- Issued Drafts of Warehouse Report
Stock Report

- Incoming Receipts to the Warehouse -

Table1. Systems- Information Requirements Matrix
3.3. Ideal Situation Entities List
In Table 2, organization entities are introduced in contrast with systems in ideal situation.
This list is determined in accordance with organization information requirements and used in
suggested Entity Relation Diagram.


28
System
Storage
Entity
Organizational Unit

Properties

Payment

Wages and Salary

Accounting

Financial Documents
Accounts
Wages and Salary
Function
Personnel Provisions
Personnel
Warehouse
Properties and
Equipment
Regulations and
Instructions
Units Performance
Report
Welfare
Payment

Table2. Systems-Entity Matrix
3.4. Suggested DFD (Data Flow Diagram)
He revised DFD for systems ideal situation (which could meet the determined requirements
as possible) is presented. The relation between identified functions in organization and macroentities is shown in Fig. 2 and Fig. 3.
Property Information
1

property

Product
Property

D1

Depreciation
Documents


various
Reports
2 Accounting

D2

Financial
Eepert

Accounting Information

Fig. 2 S.F.P.G.M.C Accounting System DFD (Level One) (Suggested)


29

4 Details of Vehicle

3 Sale of Property

View property vehicles
Sales
Summary
1


property

Product
Property

Depreciation
Documents

D1 Property Information

Financial
Expert

Various Reports
2 Accounting

D2

Accounting Information

Fig. 3 S.F.P.G.M.C Property System DFD (Level One) (Suggested)
3.5. Suggested ERD (Entity Relation Diagram)
ERD is the most significant diagram in an information system data model. There are some
places for Data Store in DFDs. While most system analyzers consider ERDs as an image of such
places and a dependent to DFDs, ERD models are more than a graphical image of a DFD Data
Store. They are independent of processes which are done on Data Stores.The main concept on
ERDs which should be considered is that such diagrams neither explain information fellows nor
the process fellow. Hence, they are not to be studied like DFDs or fellow charts. ERDs show the
data which is stored in a static manner. Such diagrams don’t have any details on data usage,
creation, updating or omission. ERDs are used in various phases in systems improvement cycle in
SSADM. (Fig. 4) [ ].

21

Fig. 4 S.F.P.G.M.C Financial of Systems ERD (Suggested)

30

4. Results or Conclusions
In general, the results of any practical work based on measurable goals are Usually the design
of information systems in each suite, same results conceivable. Speed of decision-making, the
accuracy of the exercise, increase efficiency and improve effectiveness to do the main part of the
results is possible for an information system [13].
This paper uses structured systems design methodology for analyzing and understanding the
information needs of managers of Fars Power Generation Management Company of Financial
Information discussed in the context of information systems.
In the design phase, it is tried to the needs of the management company must match exactly
with the information. In this context, inputs, outputs, data, processes and system documentation
such as data flow diagrams and entity relationship diagrams provide information in a manner and
form of the financial information system of case study.
Results to this research are represented in the following Table 3.
Subject

S.F.P.G.M.C
Information
Deficiencies

Results Review
Present Condition
Accounting Presence of Parallel Activities
System

Desired or Suggested Condition
Omitting Parallel Activities by DFD in
Desirable Condition (Fig. 4)

Presence of Redundant Information

Omitting Redundant Information
Forming a Database (Fig. 2)

by

Low Speed in Information Fellow

Designing Desirable Condition by DFD
(Fig. 3)

Existing
Administrative
Dispersion and Inconsistency

Systems Creating Common Entity for Sub-systems (
Organizational Unit Entity)
Managers Lack of Access to the Financial Creating Entity of Performance and
Reports and Information
Connection with Organizational Unit for
Quick Access
S.F.P.G.M.C Accounting Lack of Interaction between Property Creating Interaction by EDR in Desirable
Information Sub-systems System and Accounting System
Condition(Fig. 4)and Level One DFD in
Relation
Desirable Condition (Figure2, 3)
Lack of Interaction between Payment As Suggestions For Further Research are
Discussed
System and Accounting System
Lack of Interaction between Storage As Suggestions For Further Research are
Discussed
System and Accounting System
Lack of Interaction between Wages and As Suggestions For Further Research are
Discussed
Salary System and Accounting System

Table3. Results.

In order to make optimal use of financial information systems and the results of this research
and integrating financial systems desirable design and consider the required outputs, files and


31

data from the database via the network, and the outputs of the financial system administrators
need to be prepared to be online.
It is suggested to run the web so that managers and employees in any place without the
physical constraints of the network through an Internet connection and password information, to
make needed reports.

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