What is design risk? To “design” is to create, fashion, execute or construct according to plan. The term design as used here refers to the entire scope of a project. A business system design is a collection of design documents and supporting materials which define the system functionality that supports one or more business processes and in the process, creates, retrieves, updates and deletes data.

In successful systems design, three main components must be considered and managed effectively. These are quality, timeliness and cost-effectiveness. In the diagram below, each of these components represents an angle of the triangle that may be increased or decreased as part of the design process, but only at the expense of the other components. For example, an increase in quality would mean a corresponding decrease in cost-effectiveness, timeliness or a combination thereof. An increase in quality would necessarily result in an increase in the duration of development time or total project cost.

This triangular approach aides both development teams, who become more aware of management’s priorities, and project managers, who are forced to take a more realistic view of the system design process in terms of quality, cost and meaningful deadlines.

A project can implement one or more system designs. The purpose of defining each system in this way is to provide a precise, manageable explanation of the work to be done during construction and testing. For example, a completed design for a website may include drawings of sample screenshots, flowcharts showing linking connections, or a Flash demo.

Another consideration for business system design is the linking of enterprise resource planning (ERP) systems or other intercompany systems through a business-to-business (B2B) application. Designing a B2B application, which allows various ERP systems to share information is crucial in many businesses today. This has become so common that ERP vendors are designing the B2B applications into their products. Products such as XYZ offer a B2B marketplace that is already designed to link businesses together, allowing organizations to receive or make payments and check inventory status.

Failure to manage design risk can have the following impact:

• Loss of or failure to attain consumer and customer interest (externally facing systems)
• Underutilization of business systems due to lack of interest
• Ineffective fraud awareness and management controls
• Ineffective representation of the brand, possibly damaging the businesses reputation
• Inability to offset costs incurred from the development of a business system
• Inability to offset costs from maintaining a business system

To learn more about this topic, you can download these tools on KnowledgeLeader:

• System Design Risk Key Performance Indicators (KPIs)
• Systems and Application Audit Work Program
• IT System Pre-Implementation Review Audit Report