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Introduction
1. External financial reporting decisions
2. Planning, budgeting, and forecasting
3. Performance management
4. Cost management
5. Internal control
6. Technology and analytics
Wrapping up
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6.2.1.1 System development life cycle
Achievable CMA Part 1
6. Technology and analytics
6.2. Data governance
6.2.1. Technology-enabled finance transformation
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System development life cycle

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Learning outcome statements

The learning outcome statements relevant for this section are:

  1. define the system development life cycle, including systems analysis, conceptual design, physical design, implementation and conversion, and operations and maintenance

The system development life cycle

Definitions
System Development Life Cycle (SDLC)
A structured methodology used in information system and software development.

The SDLC is important because it provides a structured approach to designing, developing, testing, and deploying systems - skipping it risks inefficient processes, security vulnerabilities, and costly failures.

Stages of the system development life cycle

The CMA exam’s learning outcome identifies five stages of the SDLC: systems analysis, conceptual design, physical design, implementation and conversion, and operations and maintenance. Stage labels vary across frameworks - many general IT texts describe a seven-stage model (planning, analysis, design, development, testing, deployment, maintenance) that maps onto these same five phases: planning and analysis fall within systems analysis; design spans conceptual and physical design; development, testing, and deployment make up implementation and conversion; and maintenance corresponds to operations and maintenance.

System development life cycle (SDLC)
System development life cycle (SDLC)
Achievable

1. Systems analysis

This initial stage involves identifying the need for a new system or an upgrade and defining project objectives. A feasibility study is conducted to assess technical, operational, and financial viability.

The system’s functional and non-functional requirements are gathered, and a comprehensive analysis of business needs is performed. This stage ensures that the new system aligns with business goals.

Key activities:

  • Defining project scope and objectives
  • Conducting feasibility studies
  • Estimating costs and resources
  • Establishing a project timeline
  • Gathering user and stakeholder requirements
  • Identifying current system inefficiencies
  • Documenting functional and technical requirements
  • Conducting risk assessments

Example: a retail company evaluates the feasibility, budget, and expected benefits of a new e-commerce website, then surveys potential users to determine required features such as a shopping cart and secure payment integration.

2. Conceptual design

Conceptual design focuses on what the new system needs to do. Teams develop general design alternatives that describe the system’s capabilities independent of specific technology, then evaluate those alternatives for cost, benefit, and feasibility before selecting an overall approach.

Key activities:

  • Developing general design alternatives
  • Evaluating design alternatives for cost and feasibility
  • Selecting the overall system approach

Exam tip: conceptual design decides what the system must do; physical design (next) decides how it will be built - the files, inputs, outputs, programs, and controls.

3. Physical design

This stage focuses on developing a high-level and detailed system blueprint, outlining system architecture, data flow, and security protocols.

Key activities:

  • Creating system models and wireframes
  • Designing database structures and workflows
  • Establishing security protocols
  • Selecting technology stack (hardware and software)

Example: the company designs the website’s user interface, database structure, and navigation flow.

4. Implementation and conversion

The system is built based on the design specifications. Developers write code, configure databases, and integrate different components.

The system undergoes rigorous testing to detect and fix bugs, ensure functionality, and validate performance before deployment.

The system is launched for end-users. The transition may involve phased implementation or direct system replacement.

Key activities:

  • Writing and testing code
  • Setting up databases and servers
  • Integrating third-party services
  • Ensuring compliance with security and regulatory standards
  • Conducting unit, integration, and user acceptance testing
  • Migrating data from the old system
  • Training employees and stakeholders

Example: developers build the e-commerce website with a product catalog, customer login, and secure checkout, test its payment processing and mobile responsiveness, then migrate data and train customer service representatives before launch.

Conversion typically follows one of four approaches:

  • Direct (plunge): the old system is shut off and the new one goes live immediately - cheapest, but riskiest if the new system fails.
  • Parallel: old and new systems run side by side for a period - safest, but the most costly since both operate at once.
  • Pilot: the new system is rolled out to one location or unit first, limiting risk before a full rollout.
  • Phased: the new system is introduced module by module over time, spreading risk and cost across stages.

Business process analysis, covered in the next chapter, often shapes this stage since existing processes may need redesigning before conversion rather than simply automating them as-is.

5. Operations and maintenance

Post-deployment, the system requires continuous monitoring, updates, and enhancements to ensure its longevity and optimal performance.

Key activities:

  • Monitoring system performance and resolving issues
  • Applying security patches and software updates
  • Enhancing features based on user feedback
  • Scaling the system as business needs evolve

Example: the company updates the website with new payment options, enhances search functionality, and addresses customer-reported issues.

Roles in the system development life cycle

Successful system development requires collaboration among multiple professionals, each responsible for different aspects of the project. The key roles involved in the SDLC include:

  • System analyst: conducts feasibility studies and analyzes requirements to design functional specifications that guide development.
  • Information system architect: defines system architecture, selects technologies, and establishes security protocols and data structures.
  • Project manager: plans timelines and resources, coordinates cross-functional teams, and manages risk.
  • Software developer: writes, tests, and debugs code, and integrates software components and databases.
  • Tester (QA): performs functional, integration, and performance testing, and documents defects.
  • DevOps engineer: automates deployment and monitoring, and manages cloud infrastructure for reliability.

System Development Life Cycle (SDLC) overview

  • Structured methodology for designing, developing, testing, deploying systems
  • Skipping it risks inefficiency, security gaps, costly failures
  • CMA exam uses 5-stage model; maps to common 7-stage IT model (planning/analysis → systems analysis; design → conceptual/physical design; development/testing/deployment → implementation and conversion; maintenance → operations and maintenance)

Systems analysis

  • Identifies need for new/upgraded system, defines objectives
  • Includes feasibility study (technical, operational, financial) and requirements gathering
  • Key outputs: project scope, cost/resource estimates, timeline, documented functional/technical requirements, risk assessment

Conceptual design vs. physical design

  • Conceptual design = what system must do; develops/evaluates general design alternatives, selects overall approach
  • Physical design = how it’s built; creates system models, database structures, security protocols, selects tech stack
  • Exam tip: remember the what/how distinction between these two stages

Implementation and conversion

  • Involves coding, database/server setup, integration, testing (unit, integration, user acceptance), data migration, training
  • Four conversion approaches:
    • Direct (plunge): immediate switch, cheapest but riskiest
    • Parallel: old and new run together, safest but costliest
    • Pilot: new system tested at one location/unit first
    • Phased: rolled out module-by-module, spreads risk/cost
  • Business process redesign may be needed before conversion rather than just automating old processes

Operations and maintenance

  • Ongoing monitoring, patching, updating, and feature enhancement post-deployment
  • Ensures system longevity, performance, and scalability as needs evolve

Key SDLC roles

  • System analyst: feasibility studies, functional specifications
  • Information system architect: architecture, tech selection, security/data design
  • Project manager: timelines, resources, cross-team coordination, risk management
  • Software developer: coding, debugging, integration
  • Tester (QA): functional/integration/performance testing, defect documentation
  • DevOps engineer: deployment automation, cloud infrastructure monitoring

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System development life cycle

Learning outcome statements

The learning outcome statements relevant for this section are:

  1. define the system development life cycle, including systems analysis, conceptual design, physical design, implementation and conversion, and operations and maintenance

The system development life cycle

Definitions
System Development Life Cycle (SDLC)
A structured methodology used in information system and software development.

The SDLC is important because it provides a structured approach to designing, developing, testing, and deploying systems - skipping it risks inefficient processes, security vulnerabilities, and costly failures.

Stages of the system development life cycle

The CMA exam’s learning outcome identifies five stages of the SDLC: systems analysis, conceptual design, physical design, implementation and conversion, and operations and maintenance. Stage labels vary across frameworks - many general IT texts describe a seven-stage model (planning, analysis, design, development, testing, deployment, maintenance) that maps onto these same five phases: planning and analysis fall within systems analysis; design spans conceptual and physical design; development, testing, and deployment make up implementation and conversion; and maintenance corresponds to operations and maintenance.

1. Systems analysis

This initial stage involves identifying the need for a new system or an upgrade and defining project objectives. A feasibility study is conducted to assess technical, operational, and financial viability.

The system’s functional and non-functional requirements are gathered, and a comprehensive analysis of business needs is performed. This stage ensures that the new system aligns with business goals.

Key activities:

  • Defining project scope and objectives
  • Conducting feasibility studies
  • Estimating costs and resources
  • Establishing a project timeline
  • Gathering user and stakeholder requirements
  • Identifying current system inefficiencies
  • Documenting functional and technical requirements
  • Conducting risk assessments

Example: a retail company evaluates the feasibility, budget, and expected benefits of a new e-commerce website, then surveys potential users to determine required features such as a shopping cart and secure payment integration.

2. Conceptual design

Conceptual design focuses on what the new system needs to do. Teams develop general design alternatives that describe the system’s capabilities independent of specific technology, then evaluate those alternatives for cost, benefit, and feasibility before selecting an overall approach.

Key activities:

  • Developing general design alternatives
  • Evaluating design alternatives for cost and feasibility
  • Selecting the overall system approach

Exam tip: conceptual design decides what the system must do; physical design (next) decides how it will be built - the files, inputs, outputs, programs, and controls.

3. Physical design

This stage focuses on developing a high-level and detailed system blueprint, outlining system architecture, data flow, and security protocols.

Key activities:

  • Creating system models and wireframes
  • Designing database structures and workflows
  • Establishing security protocols
  • Selecting technology stack (hardware and software)

Example: the company designs the website’s user interface, database structure, and navigation flow.

4. Implementation and conversion

The system is built based on the design specifications. Developers write code, configure databases, and integrate different components.

The system undergoes rigorous testing to detect and fix bugs, ensure functionality, and validate performance before deployment.

The system is launched for end-users. The transition may involve phased implementation or direct system replacement.

Key activities:

  • Writing and testing code
  • Setting up databases and servers
  • Integrating third-party services
  • Ensuring compliance with security and regulatory standards
  • Conducting unit, integration, and user acceptance testing
  • Migrating data from the old system
  • Training employees and stakeholders

Example: developers build the e-commerce website with a product catalog, customer login, and secure checkout, test its payment processing and mobile responsiveness, then migrate data and train customer service representatives before launch.

Conversion typically follows one of four approaches:

  • Direct (plunge): the old system is shut off and the new one goes live immediately - cheapest, but riskiest if the new system fails.
  • Parallel: old and new systems run side by side for a period - safest, but the most costly since both operate at once.
  • Pilot: the new system is rolled out to one location or unit first, limiting risk before a full rollout.
  • Phased: the new system is introduced module by module over time, spreading risk and cost across stages.

Business process analysis, covered in the next chapter, often shapes this stage since existing processes may need redesigning before conversion rather than simply automating them as-is.

5. Operations and maintenance

Post-deployment, the system requires continuous monitoring, updates, and enhancements to ensure its longevity and optimal performance.

Key activities:

  • Monitoring system performance and resolving issues
  • Applying security patches and software updates
  • Enhancing features based on user feedback
  • Scaling the system as business needs evolve

Example: the company updates the website with new payment options, enhances search functionality, and addresses customer-reported issues.

Roles in the system development life cycle

Successful system development requires collaboration among multiple professionals, each responsible for different aspects of the project. The key roles involved in the SDLC include:

  • System analyst: conducts feasibility studies and analyzes requirements to design functional specifications that guide development.
  • Information system architect: defines system architecture, selects technologies, and establishes security protocols and data structures.
  • Project manager: plans timelines and resources, coordinates cross-functional teams, and manages risk.
  • Software developer: writes, tests, and debugs code, and integrates software components and databases.
  • Tester (QA): performs functional, integration, and performance testing, and documents defects.
  • DevOps engineer: automates deployment and monitoring, and manages cloud infrastructure for reliability.
Key points

System Development Life Cycle (SDLC) overview

  • Structured methodology for designing, developing, testing, deploying systems
  • Skipping it risks inefficiency, security gaps, costly failures
  • CMA exam uses 5-stage model; maps to common 7-stage IT model (planning/analysis → systems analysis; design → conceptual/physical design; development/testing/deployment → implementation and conversion; maintenance → operations and maintenance)

Systems analysis

  • Identifies need for new/upgraded system, defines objectives
  • Includes feasibility study (technical, operational, financial) and requirements gathering
  • Key outputs: project scope, cost/resource estimates, timeline, documented functional/technical requirements, risk assessment

Conceptual design vs. physical design

  • Conceptual design = what system must do; develops/evaluates general design alternatives, selects overall approach
  • Physical design = how it’s built; creates system models, database structures, security protocols, selects tech stack
  • Exam tip: remember the what/how distinction between these two stages

Implementation and conversion

  • Involves coding, database/server setup, integration, testing (unit, integration, user acceptance), data migration, training
  • Four conversion approaches:
    • Direct (plunge): immediate switch, cheapest but riskiest
    • Parallel: old and new run together, safest but costliest
    • Pilot: new system tested at one location/unit first
    • Phased: rolled out module-by-module, spreads risk/cost
  • Business process redesign may be needed before conversion rather than just automating old processes

Operations and maintenance

  • Ongoing monitoring, patching, updating, and feature enhancement post-deployment
  • Ensures system longevity, performance, and scalability as needs evolve

Key SDLC roles

  • System analyst: feasibility studies, functional specifications
  • Information system architect: architecture, tech selection, security/data design
  • Project manager: timelines, resources, cross-team coordination, risk management
  • Software developer: coding, debugging, integration
  • Tester (QA): functional/integration/performance testing, defect documentation
  • DevOps engineer: deployment automation, cloud infrastructure monitoring

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