chapter 14 acquiring information systems and applications
TRANSCRIPT
CHAPTER 14
Acquiring Information Systems and Applications
CHAPTER OUTLINE
14.1 Planning for and Justifying IT Applications14.2 Strategies for Acquiring IT Applications14.3 The Traditional Systems Development Life Cycle14.4 Alternative Methods and Tools for Systems Development14.5 Vendor and Software Selection
LEARNING OBJECTIVES1. Discuss the different cost/benefit analyses that
companies must take into account when formulating an IT strategic plan
2. Discuss the four business decisions that companies must make when they acquire new applications
3. Enumerate the primary tasks and importance of each of the six processes involved in the systems development life cycle
4. Describe alternative development methods and tools that augment development methods
5. Analyze the process of vendor and soft ware selection
14.1 Planning for and Justifying IT Applications
Planning for 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 Operational Plan
Contains the following elements:MissionIT environmentObjectives of the IT functionConstraints of the IT functionApplication portfolioResource allocation and project management
Evaluating & Justifying IT Investment: Benefits, Costs & Issues
Assessing the costsFixed costsTotal cost of ownership (TCO)
Assessing the benefits (Values)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
14.2 Strategies for Acquiring IT Applications
Strategies for Acquiring IT Applications
Four fundamental business decisions to make before choosing a strategy: (1) How much computer code does the company want to write? (2) How will the company pay for the application? (3) Where will the application run? (4) Where will the application originate?
Strategies for Acquiring IT Applications
Purchase a Prewritten ApplicationCustomize a Prewritten ApplicationLease the applicationsApplication Service Providers and Software-
as-a-Service VendorsUse Open-Source SoftwareOutsourcingCustom Development
14.3 Traditional Systems Development Life Cycle
Traditional Systems Development Life Cycle
Software Development Life Cycle (SDLC) Systems InvestigationSystems AnalysisSystems DesignProgramming and TestingImplementationOperation and Maintenance
The SDLC
Major advantagesControlAccountabilityError detection
Major drawbacksRelatively inflexibleTime-consuming and expensiveDiscourages changes once user requirements are gathered
SDLC – Systems Investigation
Begins with the business problem (or opportunity) followed by the feasibility analysis.
Feasibility studyDeliverable: Go/No-Go Decision
Feasibility Study
• Technical feasibility
•Economic feasibility
•Organizational feasibility
•Behavioral feasibility
SDLC – System Analysis 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, also called user requirements.
SDLC – System Analysis Describes how the system will accomplish this task.
Deliverable is the technical design that specifies:
System outputs, inputs, user interfaces.Hardware, software, databases,
telecommunications, personnel & procedures.Blueprint of how these components are
integrated.
SDLC – Programming & TestingProgramming 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.
SDLC – Systems Implementation
Implementation involves three major conversion strategies:
Direct Conversion Pilot Conversion Phased Conversion Parallel Conversion (not used much today)
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.
Debugging Updating Maintenance
14.4 Alternative Methods and Tools for Systems Development
Alternative Methods and Tools for Systems Development
•Joint application design (JAD)
•Rapid application development (RAD)
•Agile development
•End-user development
14.5 Vendor & Software Selection
Vendor & Software Selection
Step 1: Identify potential vendors.Step 2: Determine the evaluation criteria.
Request for proposal (RFP)
Step 3: Evaluate vendors and packages.Step 4: Choose the vendor and packageStep 5: Negotiate a contract.Step 6: Establish a service level agreement.
Closing Case #1Tweak or Trash?
• The Problem
• The Solution
• The Results
Closing Case #2 Putting IT All Together
• The Problem
• The Solution
• The Results