CHAPTER 13

1. CHAPTER 13 Acquiring Information Systems and Applications

2. 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. • An application portfolio is a prioritized list of both existing and potential IT applications of a company.

3. Information Systems Planning Process

4. Information Systems Planning (continued) • Organizationalstrategicplan • ITarchitecture • Both are inputs in developing the ITstrategicplan. • IT steering committee

5. IT Operational Plan Contains the following elements: • Mission • IT environment • Objectives of the IT function • Constraints of the IT function • Application portfolio • Resource allocation and project management

6. Evaluating & Justifying IT Investment: Benefits, Costs & Issues • Assessing the costs • Fixed costs • Total cost of ownership (TCO) • Assessing the benefits (Values) • Intangiblebenefits: Benefits from IT that may be very desirable but difficult to place an accurate monetary value on. • Comparing the two (cost-benefit analysis)

7. Conducting the Cost-Benefit Analysis • Using Net Present Value (NPV) • Return on investment • Breakeven analysis • The business case approach

8. Strategies for Acquiring IT Applications • Buy the applications (off-the-shelf approach) • Lease the applications • Application Service Provider (ASP) • Software-as-a-Service (SaaS) • Use Open-Source Software • Developing via outsourcing • Developing the applications in-house

9. Operation of an Application Service Provider (ASP) Customer A Customer B Customer C Application Application Application Database Database Database ASP Data Center

10. Operation of a Software-as-a-Service (SaaS) Vendor Customer A Customer B Customer C Application Customer A Customer B Customer C SaaS Vendor Data Center

11. Traditional Systems Development Life Cycle • Software Development Life Cycle (SDLC) is the traditional systems development method that organizations use for large-scale IT projects.

12. Six-Stage Systems Development Life Cycle (SDLC) with Supporting Tools Business Need Systems Investigation Deliverable: Go/No Go Decision Systems Analysis Deliverable: User Requirement Systems Design Deliverable: Technical Specification Programming and Testing Deliverable: Error-free System Implement System Deliverable: Use of the System Operation & Maintenance Deliverable: Continued System Use

13. Traditional SDLC Processes • Systems investigation • Systems analysis • Systems design • Programming and testing • Implementation • Operation and maintenance

14. The SDLC • Major advantages • Control • Accountability • Error detection • Major drawbacks • Relatively inflexible • Time-consuming and expensive • Discourages changes once user requirements are done

15. SDLC – Systems Investigation • Begins with the business problem (or opportunity) • Main action: feasibility analysis/study • Deliverable: Go/No-Go Decision • OPTION 1: Do nothing and continue to use the existing system unchanged. • OPTION 2: Modify or enhance the existing system. • OPTION 3: Develop a new system.

16. Feasibility Study • Technical feasibility • Economic feasibility • Behavioral feasibility

17. SDLC – System Analysis • Examination of the business problem found during System Investigation. • Main action: gather information about the existing system or methods and to determine requirements for a new or improved system. • Deliverable: a set of system requirements, also called user requirements.

18. SDLC – Systems Design • Describes how the system will accomplish this task. • Deliverable: technical design that specifies: • System outputs, inputs, user interfaces. • Hardware, software, databases, telecommunications, personnel & procedures. • Blueprint of how these components are integrated. • Danger: scope creep (adding functions after the project has been initiated)

19. 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. • Deliverable: an error-free System that solves the business problem at hand.

20. SDLC – Systems Implementation • Implementation or deployment is the process of converting from the old system to the new system. • Involves three major conversion strategies: • Direct Conversion • Pilot Conversion • Phased Conversion • Parallel Conversion • Deliverable:organization-wide use of the new System

21. 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 • Deliverable:continued use of the new System.

22. Alternative Methods & Tools for Systems Development • Prototyping • Rapid application development (RAD) • End-user development • Component-based development • Object-oriented development

23. 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 package • Step 5: Negotiate a contract. • Step 6: Establish a Service Level Agreement (SLA).