What is System Testing and How Does It Work? [Technical, Integration and User Acceptance Testing]

Written By: Eric Kimberling
Date: October 18, 2023

System testing is frequently viewed as one of the most significant milestones and essential success factors in any digital transformation. But what is system testing, and how is it incorporated into our digital transformation strategy?

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System testing stands out as a pivotal component of any project. This phase marks the juncture where one determines the software's functionality, not just technically, but also in terms of business processes and organizational human perspectives. Today, I aim to elucidate the various facets of system testing, emphasizing its importance and providing guidance on its effective implementation within a digital transformation strategy and plan.

Overview of System Testing

Before delving into the individual components of system testing, it's essential to understand its various aspects and iterations. The primary objective of system testing, as often misconstrued, isn't merely to rectify software bugs. While that is a crucial element, the overarching reason for multiple iterations of system testing is to ensure the technology is not only technically sound but also aligns with business needs, processes, and the workforce. An integral aspect often neglected during system testing is verifying that the software aligns with the specified requirements. The omission of this step can lead organizations to mistakenly believe their systems are ready, only to discover issues upon implementation.

Several components are evaluated during system testing. These include the alignment of the software with expected business processes and requirements traceability. It's pivotal to determine whether the constructed software resonates with anticipated business operations and meets all requisite business criteria. Another dimension of assessment is the software's organizational impact. This pertains to the potential changes employees might experience due to new processes or workflows introduced by the software.

A paramount recommendation concerning system testing is the emphasis on thorough documentation. It's vital to maintain detailed records of the outcomes observed during testing, pinpointing errors and noting subsequent action items. This ensures clarity as different stakeholders engage with the process.

Subsequently, it's crucial to explore the various stages involved in the system testing process and understand how stakeholders, end-users, and employees can participate effectively in these testing endeavors.

Technical Unit Testing

The initial and most foundational phase of system testing is termed "technical unit testing." In this stage, software developers and technical experts assess the software's configuration and customization to ensure individual transactions function correctly. For instance, in testing a function like creating a purchase order, the system is evaluated to ascertain whether it captures the intended fields and data accurately. However, this testing is limited; it doesn't evaluate the entire end-to-end cycle but focuses on a singular aspect of the process to confirm the software's operation.

It's pertinent to understand that system testing commences with evaluations of fundamental components, gradually transitioning to a more holistic, integrated testing perspective. This foundational testing is generally executed by the software vendor or system integrator, drawing upon their technical expertise. Once this phase reaches completion, the process progresses to subsequent stages of system testing.

End-to-End Testing

The subsequent phase in system testing, while retaining a technical focus, begins to incorporate elements related to business processes. In this phase, there's an emphasis on evaluating the end-to-end business process. For instance, instead of merely examining the creation of a purchase order as previously discussed, this stage considers the entire lifecycle of that order. It delves into subsequent actions like the approval of the purchase order, the receipt of goods, inventory, or services against the order, and the payment processes based on the order.

This comprehensive approach ensures that not only are individual components functioning correctly, but that the data flows seamlessly, and all integration points are operational within the broader scope of end-to-end workflows and processes. It contrasts with the narrow focus of technical unit testing that emphasizes singular process steps.

This comprehensive, end-to-end process evaluation is vital. Unfortunately, it is a stage that some technical implementers or system integrators might neglect or underestimate. There is a misconception that if the technical unit testing phase has been executed without issues, the software is fully functional. However, it's imperative to ascertain that beyond the individual units, the comprehensive sequence of processes operates efficiently.

Integration Testing

Up to this point, our discussion has centered on the testing of a specific application, emphasizing unit testing and the end-to-end process within that singular application. However, another crucial step necessitates attention to third-party add-on systems. Most organizations deploying technologies have integration requirements. Rarely are they implementing only one technology in isolation; more often, they are either deploying multiple technologies or integrating a singular technology with existing systems.

The focus now shifts to evaluating how data flows and integrates across these different systems. While this mirrors the end-to-end testing discussed earlier, the distinction lies in extending the scope beyond the primary system that had been the focus to date. Now, the emphasis is on comprehensive system integration.

This stage underscores the significance of reporting, data management, and the seamless end-to-end process across various applications. During integration testing, common challenges may arise, such as integration process failures, data corruption during system handoffs, or data not flowing as intended. Identifying and rectifying these issues is the primary objective of integration testing.

User Acceptance Testing

The final significant phase in the testing process is User Acceptance Testing (UAT), sometimes referred to as Conference Room Pilots. This phase signifies a transition from technically-centered testing to business-centered testing. At this juncture, stakeholders, business owners, and process owners should take the lead in the testing process. Although the preceding technical aspects of the testing process are assumed to have been successfully addressed, the focus now pivots to the system's alignment with the business needs.

In UAT, business representatives actively engage with the system by executing different scenarios, critically evaluating not just the technology's functionality but also its adherence to the business processes and workflows. Common challenges identified during UAT include issues with requirements traceability. For instance, if 100 requirements are set for a particular process, but only 80 are demonstrable within the system, the discrepancy needs addressing.

Furthermore, UAT highlights any unique or exceptional business processes that may require manual workarounds. Decisions must be made regarding how to adapt the software to these exceptions or whether to rely on alternate manual procedures. The overarching objective during UAT is to identify any potential issues with the system, as addressing them pre-implementation is considerably more efficient than post-deployment.

A pivotal recommendation during UAT is to simulate real-world scenarios. This involves inputting as much actual data as possible – from master data to transactional data – allowing for comprehensive system interactions that mimic day-to-day operations.

However, a crucial advisory regarding UAT is its significance and the common pitfalls associated with it. While the technical aspects of testing are undeniably important, ensuring that the technology aligns with business operations is paramount. A common oversight by system integrators and software vendors is inadequate time allocation for UAT, primarily because their primary objective is ensuring technological functionality rather than business compatibility.

For optimal results, it's advisable to undergo multiple UAT iterations. A typical recommendation would be a minimum of three comprehensive testing cycles. Especially for larger organizations, more iterations may be required.

Another fundamental output from UAT, besides technological and process assurance, is the insight it provides into the impending changes that employees will face. This insight is instrumental for formulating effective change management strategies, ensuring that the workforce is well-prepared and trained for the transition.

In summary, system testing plays a pivotal role in digital transformation, ensuring not just technological functionality but also alignment with business objectives and processes.

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I would enjoy brainstorming ideas with you if you are looking to strategize an upcoming transformation or are looking at selecting an ERP system, so please feel free to contact me at eric.kimberling@thirdstage-consulting.com. I am happy to be a sounding board as you continue your digital transformation journey.

Be sure to download the newly released 2024 Digital Transformation Report to garner additional industry insight and project best practices.

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Eric Kimberling

Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.

Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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