Alternatives to Systems Development

1. Alternatives to Systems Development Chapter 11

2. Chapter Objectives • Understand the factors and situations where building a system in-house is not feasible • Explain three alternative systems development options: external acquisition, outsourcing, and end-user development

3. System Development Options

4. The Importance of Finding Alternatives to Building Systems Yourself • Four situations in which you might consider alternative development • Limited IS staff • IS staff has limited skill set • IS staff is overworked • Problems with performance of IS Staff

5. Common Alternatives to Building a System Yourself • External Acquisition • Outsourcing • End-user Development

6. External Acquisition • Purchasing an existing system from an outside vendor • Do analysis of your needs • Ask vendors to provide information about their systems • Select most promising vendors to give a demonstration of their system

7. Steps in External Acquisition • Identification, selection, and planning • Analysis • Development of a Request for Proposal (RFP) • Proposal evaluation • Vendor selection

8. Development of a Request for Proposal (RFP) • An RFP covers these areas • Summary of existing systems and applications • Reliability, backup, and service requirements • Required system performance and features • Criteria used to evaluate proposals • Timetable and budget constraints • Deadline for submitting bids

9. Proposal Evaluation • View demonstrations • Evaluate performance with systems benchmarking • Sample programs or jobs that simulate the buyer’s computer workload • Compare to criteria for system requirements

10. Vendor Selection • Create a scoring system • Assign different scores to each of the evaluation criteria • Weigh more important criteria more heavily • Sum scores to give an overall score for each vendor • Less formal approaches • Simple checklist • Subjective criteria

11. Outsourcing • Turn over some or all information system responsibilities to an outside firm • Variety of relationships with outsourcer • Develop your information systems • House your information systems • Run your information systems

12. Why Outsourcing? • Cost and quality concerns • Problems in IS performance • Supplier pressures • Simplifying, downsizing, and re-engineering • Financial factors • Organizational culture • Internal irritants

13. Managing the IS Outsourcing Relationship • Strong, active CIO and staff should continually monitor the relationship • Have clear, realistic performance measurements of the system • Have multiple levels of interface between the firms • Policy and relationship issues • Operational and tactical issues

14. Not All Outsourcing Relationships Are the Same • Basic relationship • Purchase services on an as-needed basis • Preferred relationship • Set preferences and prices that benefit both • Strategic relationship • Both sides share risks and rewards

15. End-User Development • People who are going to use the systems develop those systems • Speeds up application development without relying on external entities

16. Benefits of End-User Development • Reduces problems associated with IS staff • High cost of labor • Long development time • Slow in modifying or updating existing systems • Work overload

17. Rising Software Costs vs Declining Hardware Costs

18. Encouraging End-User Development • Provide fourth-generation language tools • Personal computer tools • Query languages/report generators • Graphics generators • Decision support or modeling tools • Application generators

19. End-User Development Pitfalls • Users not aware of software development standards • User turnover provides lack of continuity • Can misuse time of employees who have other responsibilities