Acquiring Information Systems and Applications

1. Acquiring Information Systems and Applications

2. 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

3. 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.

4. 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.

5. Chapter Opening Case

6. 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 portfoliois a prioritized list of both existing and potential IT applications of a company.

7. Information Systems Planning Process

8. Information Systems Planning (continued) • Organizational strategic planstates the firm’s overall mission, the goals that follow from that mission, and the broad steps necessary to reach these goals. • IT architecturedelineates the way an organization’s information resources should be used to accomplish its mission. • Both are inputs in developing the IT strategic plan.

9. IT Strategic Plan • IT strategic planis a set of long-range goals that describe the IT infrastructure and major IT initiatives needed to achieve the goals of the organization.

10. 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.

11. 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: • Mission • IT environment • Objectives of the IT function • Constraints of the IT function • Application portfolio • Resource allocation and project management

12. Evaluating & Justifying IT Investment: Benefits, Costs & Issues • Assessing the costs • Fixed costs • Total 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

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

14. 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

15. 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 approachis when tasks in one phase are completed before the work proceeds to the next stage.

16. Traditional Systems Development Life Cycle (SDLC)

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

18. SDLC – Systems Investigation • Begins with the business problem (or opportunity) followed by the feasibility analysis. • Feasibility study • Go/No-Go Decision

19. Feasibility Study • Technical feasibility • Economic feasibility • Organizational feasibility • Behavioral feasibility

20. 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.

21. SDLC – Systems Design • 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.

22. SDLC – System Design (continued) • Logical system designstates what the system will do, using abstract specifications. • Physical system designstates how the system will perform its functions, with actual physical specifications. • Scope creepis caused by adding functions after the project has been initiated.

23. 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: • Syntax errors( e.g., misspelled word or a misplaced comma) • Logic errors that permit the program to run but result in incorrect output.

24. SDLC – Systems Implementation • Implementation or deployment is the process of converting from the old system to the new system. Four major conversion strategies ; • Direct Conversion • Pilot Conversion • Phased Conversion • Parallel Conversion

25. 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

26. 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

27. RAD versus SDLC

28. 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.

29. 11.6 Vendor & Software Selection • Step 1: Identify potential vendors. • Step 2: Determine the evaluation criteria. • 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.

30. Vendor & Software Selection (continued) • Step 4: Choose the vendor and package • Step 5: Negotiate a contract. • Step 6: Establish a service level agreement. • Service Level Agreements (SLAs)are formal agreements that specify how work is to be divided between the company and its vendors.

31. Chapter Closing Case Northeast Northwest Eastern London Southern