Transcript Slide 1

Acquiring Information Systems and
Applications
CHAPTER OUTLINE
 Planning for and Justifying IT Applications
 Strategies for acquiring IT Applications
 Traditional Systems Development Life Cycle
 Alternative Methods and Tools for
Systems Development
 Outsourcing and Application Service
Providers
 Vendor and Software Selection
LEARNING OBJECTIVES
 Describe the IT planning process.
 Describe the IT justification process and
methods.
 Describe the SDLC and its advantages and
limitations.
 Describe the major alternative methods and
tools for building information systems.
LEARNING OBJECTIVES (continued)
 List the major IT acquisition options and the
criteria for option selection.
 Describe the roles of hosting vendors.
 Describe the process of vendor and software
selection.
Chapter Opening Case
11.1 Planning of and Justifying IT
Applications
 Organizations must analyze the need for the
IT application.
 Each IT application must be justified in terms
of costs and benefits.
 The application portfolio is a prioritized list
of both existing and potential IT applications
of a company.
Information Systems Planning Process
Information Systems Planning (continued)
 Organizational strategic plan states the
firm’s overall mission, the goals that follow
from that mission, and the broad steps
necessary to reach these goals.
 IT architecture delineates the way an
organization’s information resources should
be used to accomplish its mission.
 Both are inputs in developing the IT strategic
plan.
IT Strategic Plan
 IT strategic plan is a set of long-range goals
that describe the IT infrastructure and major
IT initiatives needed to achieve the goals of
the organization.
IT Steering Committee
 The IT Steering Committee, comprised of
managers and staff representing various
organizational units, establishes IT priorities
and ensures that the MIS function meets the
needs of the enterprise.
IT Operational Plan
 Consists of a clear set of projects that the IT
department and functional area managers will
execute in support of the IT strategic plan
 Contains the following elements:
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Mission
IT environment
Objectives of the IT function
Constraints of the IT function
Application portfolio
Resource allocation and project management
Evaluating & Justifying IT Investment:
Benefits, Costs & Issues
 Assessing the costs
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Fixed costs
Total cost of ownership (TCO)
 Assessing the benefits (Values)
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Intangible benefits: Benefits from IT that may
be very desirable but difficult to place an
accurate monetary value on.
 Comparing the two
Conducting the Cost-Benefit Analysis
 Using Net Present Value (NPV)
 Return on investment
 Breakeven analysis
 The business case approach
11.2 Strategies for Acquiring IT
Applications
 Buy the applications (off-the-shelf approach)
 Lease the applications
 Use Open-Source Software
 Software-as-a-service
 Developing the applications in-house
11.3 Traditional Systems Development
Life Cycle
 Software Development Life Cycle (SDLC)
is the traditional systems development
method that organizations use for large-scale
IT projects.
 SDLC processes are systems investigation,
systems analysis, systems design,
programming, testing, implementation,
operation and maintenance.
 Waterfall approach is when tasks in one
phase are completed before the work
proceeds to the next stage.
Traditional Systems Development Life
Cycle (SDLC)
The SDLC
 Major advantages
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Control
Accountability
Error detection
 Major drawbacks
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Relatively inflexible
Time-consuming and expensive
Discourages changes once user requirements
are done
SDLC – Systems Investigation
 Begins with the business problem (or
opportunity) followed by the feasibility
analysis.
 Feasibility study
 Go/No-Go Decision
Feasibility Study
 Technical feasibility
 Economic feasibility
 Organizational feasibility
 Behavioral feasibility
SDLC – System Analysis
 Is the examination of the business problem
that the organization plans to solve with an
information system.
 Main purpose is to gather information about
existing system to determine requirements for
the new or improved system.
 Deliverable is a set of system requirements.
SDLC – Systems Design
 Describes how the system will accomplish
this task.
 Deliverable is the technical design that
specifies:
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System outputs, inputs, user interfaces.
Hardware, software, databases,
telecommunications, personnel & procedures.
Blueprint of how these components are
integrated.
SDLC – System Design (continued)
 Logical system design states what the
system will do, using abstract specifications.
 Physical system design states how the
system will perform its functions, with actual
physical specifications.
 Scope creep is caused by adding functions
after the project has been initiated.
SDLC – Programming & Testing
 Programming involves the translation of a system’s
design specification into computer code.
 Testing checks to see if the computer code will
produce the expected and desired results under
certain conditions.
 Testing is designed to delete errors (bugs) in the
computer code. These errors are of two types:
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Syntax errors ( e.g., misspelled word or a misplaced
comma)
Logic errors that permit the program to run but result
in incorrect output.
SDLC – Systems Implementation
 Implementation or deployment is the
process of converting from the old system to
the new system. Four major conversion
strategies ;
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Direct Conversion
Pilot Conversion
Phased Conversion
Parallel Conversion
SLDC – Operation & Maintenance
 Audits are performed to assess the system’s
capabilities and to determine if it is being
used correctly.
 Systems need several types of maintenance.
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Debugging
Updating
Maintenance
11.4 Alternative Methods & Tools for
Systems Development
 Prototyping
 Joint application design (JAD)
 Integrated computer-assisted software
engineering tools
 Rapid application development (RAD)
 Agile development
 End-user development
 Component-based development
RAD versus SDLC
11.5 Outsourcing & Application
Service Providers
 Outsourcing is when an organization
acquires IT applications or services from
outside contractors or external organizations.
 Application Service Provider (ASP) is an
agent or vendor who assembles the software
needed by enterprises and packages the
software with services such as development,
operations and maintenance.
11.6 Vendor & Software Selection
 Step 1: Identify potential vendors.
 Step 2: Determine the evaluation criteria.
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Request for proposal (RFP) is a document
sent to potential vendors to submit a proposal
describing their software package and explain
how it would meet the company’s needs.
 Step 3: Evaluate vendors and packages.
Vendor & Software Selection
(continued)
 Step 4: Choose the vendor and package
 Step 5: Negotiate a contract.
 Step 6: Establish a service level agreement.
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Service Level Agreements (SLAs) are
formal agreements that specify how work is to
be divided between the company and its
vendors.
Chapter Closing Case
Northeast
Northwest
Eastern
London
Southern