Chapter 3

Theoretical Framework
This chapter provides theories where the researchers base their assumptions about
the relationship of business and technology. It also presents the conceptual framework of
the proposed inventory and sales system.
The advancements in the field of technology over the years have changed our
everyday living. In the business field however, one cannot undermine the importance of
these assets contributions in business relations and transactions. One of the most useful
technology available nowadays is a database system. Whether it be simply for inventory
count or sales update, which for our study will be both done, the help database systems
offers will be of great use for a business.
Resource-Based Theory
A business consists of a number of resources. These resources may be physical,
financial, human or intangible assets. This theory is contingent on the fact that a
companys resources are not homogenous. A business can exploit these resources into a
strategic advantage if they are utilized properly.
Intangible assets such as software and databases make labor more efficient and
less time-consuming. By using the advantages offered by these technologies, a business
will have a firmer competitive edge over its competitors.
(http://pitt.libguides.com/c.php?g=12116&p=64795, 2015)
System Thinking Theory
This theory by Ludwig von Bertalanffy during the 1940s emerged from the old
way of business decision-making where the system is broken down into parts and these

parts are analyzed independently. People think that this way is inadequate because the old
perspective of business decision making has changed over the decades. But, from
analyzing each part separately, professionals have come to realize that there is better
conclusion or decision to be drawn if the parts are analyzed by the way they interact with
one another, creating a reality of the situation and giving the observer a pattern.
With the pattern drawn from the interaction of the different parts of a system, we
can start to clearly understand how the system works which in turn can help us improve
the system by making some changes and improvements to it. If the systems pattern
shows that something can be added to improve it, then we can include other useful parts.
However , if there is something wrong with some parts of the system, we can change
these particular parts or otherwise revise the system to make a better system.
Business Model Innovation
Too often, businesses define their affairs in terms of what they make or sell. This
thinking limits their ability to avoid commoditization, fend off disruptive competitive
threats or enter new markets successfully. Achieving transformational growth often
means changing how you engage with customers.
The term "business model" means the design of a business. Business model
innovation (BMI) refers to a business's attempt to reinvent itself in order to obtain a
competitive edge and stimulate business growth. An important element of business
design involves customer satisfaction. According to Oliver Wyman, a global management
consultancy firm, the need to consider customer satisfaction in business design has
evolved with technology. During the 1950s and 1960s, before an increase in technology

use took place, businesses had the advantage over consumers in the marketplace.
However, technology changed that by giving consumers more accessible options.
(http://www.ehow.com/facts_6910710_definition-business-model-innovation.html)
PESTLE/PEST Analysis
PESTLE or PEST Analysis is a marketing principle that highlights crucial
backbones of the business industry and defines them. Although factors may affect
industries differently from one another, it is imperative for a company to account how all
these factors may string its business to the market.
Particularly, the T in PEST represents Technology. This factor in the business
pertains to improvements in technology that affect operations of a company may it be
favorably or unfavorably. It also analyses shifts in the business setting and accounts how
direct these innovations affect the business. This may refer to automations such as
databases, improvement in research and the knowledge of the market of technological
advancements. The diagram shown in the next page shows in full form the factors
involved in a business setting as described in PESTLE.( http://pestleanalysis.com/,2015)

Enviro
nmenta
l
Factor
s

Legal
Factor
s

Politic
al
Factor
s

Business
Sector

Econo
-mic
Factor
s

Figure 3.1
PESTLE Analysis Diagram

Social
Factor
s
Techn
ologica
l
Factor
s

Software Development Life Cycle (SDLC)

Software Development Life Cycle or SDLC lays down the steps or phases in
managing and executing a software. By using a lifecycle for development of systems,
SDLC helps in making a high quality, efficient and effective end-product.
(

http://istqbexamcertification.com/what-are-the-software-development-life-cycle-sdlc-

phases/)

Analysis

This phase is where purpose of the system is determined considering end-user

requirements. Here user requirements are assessed thoroughly to see if these requirements
are feasible in creating a system without compromising their needs. Towards the end of
this phase, a Requirement Specification document is created to guide the next phase.

Design

In this phase, with the help from guidelines provided, specification of system
requirements is done for the systems architectural structure. Determination of the logical
design through data processed and mock physical design such as a mock user-interface is
also done here.

Implementation/Coding

The longest phase in SDLC, here actual coding is started. Developers at this stage
execute the blueprint done in the design phase. Since, in this phase codes are generated,
developers process and refine codes repeatedly making it the developers primary focus.

Testing

Here, the codes are tested with regards to end-user requirements in order to make

sure that the needs and requirements laid down in earlier phases are met and addressed.

Deployment and Maintenance

After testing, the end product is sent to the specific user for use. Once they
personally uses the developed system, problem or glitches may arise. Here is where
maintenance takes place.
The diagram below is a waterfall model that illustrates phases specified in SDLC.

Analysis
Design
Coding
Testing
Maintenance
Figure 3.2
SDLC Waterfall Model
Conceptual Framework
The New Navotas Lumber for many years have served countless number of
customers not only within the vicinity but also neighboring cities. The nature of the
business the researchers chose makes use of various different records pertaining to
supplier transactions, inventory updates and sales count
Given the shifts in technology over the past decades, most businesses nowadays
have taken the initiative to automate their business activities by using databases. With
this, the researchers are proposing an inventory updating and sales counting database type

for our chosen business. The system would act as an inventory counter, updating when
supplies are deliveres or sold, and as a sales counter, counting the amount of transaction.
The conceptual model shown below illustrates the Input-Process-Output Model of
the researchers proposed system.

Input
Data
gathered
from ocular
visit and
interview

Process
Analysis of
data
Establishing
relationships
Designing a
database
Formulating
codes
Testing for
appropriaten
ess
Generating
reports

Output
New
Navotas
Lumber and
Construction
Supplies
Inventory
and Sales
Sysytem

Figure 3.3
Input-Process-Output Model
Input
The researchers will make use of the gathered information from their ocular visit
and conducted interview. The researchers will also make use of the current situation of

the business in order to assess what is needed to produce a database system fit for their
requirements.
Process
To fully utilize the gathered data, the researchers will first analyze them. After
which, they would deduce relationships in order to establish components that affect one
another. The logical and physical design of the proposed system will be next and it will
be followed by the formulation of the codes. The researchers will then test and assess if
the system is working properly and if it meets end-user requirements to make further
adjustments. After assessing all factors, the researchers will then have to try generating
reports about the feasibility of the system.
Output
The finished output will be the proposed inventory and sales system fit with the
requirements of the chosen business.