What is the difference between defining the system boundary and defining the context boundary?

The system boundary separates what you build from its environment; the context boundary separates the relevant environment from the irrelevant rest of the world.

* Two nested boundaries — the system boundary divides the system from its context; the context boundary divides the relevant context from the irrelevant environment. *

• System Boundary: Determines which aspects pertain to the system to be developed and which belong in the system context
• Context Boundary: Determines which aspects pertain to the system context and which are part of the irrelevant environment

Example: For an e-commerce website:

• Inside system boundary: Shopping cart, checkout, product catalog
• In system context: Payment gateway, shipping provider, customer
• Irrelevant environment: Competitor websites, unrelated government regulations