Chapter Objectives

2. Chapter Objectives • Describe software trends, including the concept of software as a service • Explain software acquisition alternatives, including traditional versus Web-based software development strategies • Describe software outsourcing options, including the role of service providers • Explain advantages and disadvantages of developing software in-house versus other alternatives

3. Chapter Objectives • Explain cost-benefit analysis and financial analysis tools • Explain the differences between a request for proposal (RFP) and a request for quotation (RFQ) • Describe the contents of the system requirements document

4. Chapter Objectives • Explain the transition from systems analysis to systems design, and the difference between logical and physical design • Explain the transition to systems design and the importance of prototyping • Discuss guidelines for system design, and explain the importance of codes

5. Introduction • Chapter 5 describes the remaining activities in the systems analysis phase • The chapter also describes the transition to systems design, prototyping, design guidelines, and using codes to represent values and simplify data entry

6. Development Strategies Overview • Selecting the best development path is an important decision that requires companies to consider three key issues • In-house software development alternatives • Software outsourcing options • Web-based software trends

7. Web-Based Software Trends • Software as a Service • The Software and Information Industry Association (SIIA) is an industry group that focuses on the digital economy • SIIA believes that the concept of software as a service is redefining the way that companies develop and deploy their information systems Figure5-2 Figure5-3

8. Web-Based Software Trends • The Changing Software Marketplace • In the traditional model, software vendors develop and sell application packages to customers • In addition to traditional vendors, the marketplace now includes many forms of outsourcing, including application service providers and firms that offer Internet business services

9. Web-Based Software Trends • The Impact of the Internet on Systems Development • Developers will focus on Web-based application development, which builds the Web into the application, rather than the other way around • IBM’s WebSphere • Microsoft’s .NET • Sun Microsystem’s J2EE

10. Web-Based Software Trends • The Impact of the Internet on Systems Development • Traditional development • System design is influenced by compatibility issues • Systems are designed to run on local and wide-area company networks • Web-based features are treated as enhancements rather than core elements of the design

11. Web-Based Software Trends • The Impact of the Internet on Systems Development • Web-based development • Systems are developed and delivered in an Internet-based framework such as .NET or WebSphere • Internet-based development treats the Web as the platform, rather than just a communication channel • Web-based software usually requires additional layers, called middleware

12. Software Outsourcing Options • Outsourcing is the transfer of information systems development, operation, or maintenance to an outside firm that provides these services, for a fee, on a temporary or long-term basis • Can refer to relatively minor programming tasks or the handling of a company’s entire IT function

13. Software Outsourcing Options • The Growth of Outsourcing • Traditionally, firms outsourced IT tasks as a way of controlling costs and dealing with rapid technological change • Today, outsourcing is a vital business issue that shapes a company’s overall IT strategy • the most important factor is the potential saving in operating costs Figure5-5 Figure5-6

14. Software Outsourcing Options • The Growth of Outsourcing • A firm that offers outsourcing solutions is called a service provider • Application service providers (ASP) • Online software rental • Internet business services (IBS) • Also called managed hosting • Provide Web-based support for business transactions (order processing, billing, CRM, etc)

15. Software Outsourcing Options • Outsourcing Fees • A fixed fee model uses a set fee based on a specified level of service and user support • A subscription model has a variable fee based on the number of users or workstations that have access • A usage model or transaction model charges a variable fee based on the volume of transactions or operations

16. Software Outsourcing Options • Outsourcing Issues and Concerns • Mission-critical IT systems should be out-sourced only if the result is a cost-attractive, reliable, business solution that fits the company’s long-term business strategy • out-sourcing can also affect day-to-day company operations and can raise some concerns • A major disadvantage of outsourcing is that it raises employee concerns about job security

17. In-House Software Development Options • A company can choose to develop its own systems, or purchase, possibly customize, and implement a software package • The most important consideration is total cost of ownership (TCO) • Companies also develop user applications designed around commercial software packages

18. In-House Software Development Options • Make or Buy Decision • The choice between developing versus purchasing software often is called a make or buy, or build or buydecision • The company’s IT department makes, builds, and develops in-house software • A software packageis obtained from a vendor or application service provider.

19. In-House Software Development Options • Make or Buy Decision • Companies that develop software for sale are called software vendors • Value-added reseller (VAR) • Vertical application • Horizontal application

20. In-House Software Development Options • Reasons for In-House development • Satisfy unique business requirements • Minimize changes in business procedures and policies • Meet constraints of existing systems • Meet constraints of existing technology • Develop internal resources and capabilities

21. In-House Software Development Options • Reasons for Purchasing a Software Package • Lower costs • Requires less time to implement • Proven reliability and performance benchmarks • Requires less technical development staff • Future upgrades provided by the vendor • Input from other companies

22. In-House Software Development Options • Customizing a Software Package • You can purchase a basic package that vendors will customize to suit your needs • You can negotiate directly with the software vendor to make enhancements to meet your needs by paying for the changes • You can purchase the package and make your own modifications, if this is permissible under the terms of the software license

23. In-House Software Development Options • Creating User Applications • A user application utilizes standard business software • Help desk or information center (IC) • Screen generators • Report generators • Read-only properties Figure5-13

24. Role of the Systems Analyst • When selecting hardware and software, systems analysts often work as an evaluation and selection team • A team approach ensures that critical factors are not overlooked and that a sound choice is made

25. Role of the Systems Analyst • The primary objective of the evaluation and selection team is to eliminate system alternatives that will not work, rank the system alternatives that will work, and present the viable alternatives to management for a final decision

26. Cost-Benefit Analysis • Now, at the end of the systems analysis phase of the SDLC, you must apply financial analysis tools and techniques to evaluate development strategies and decide how the project will move forward Figure5-14

27. Cost-Benefit Analysis • Financial Analysis Tools • Payback Analysis • How long will it take for IS to pay for itself • Return on investment (ROI) • Compares net benefits (return) to total cost • Net present value (NPV) • Total benefits – total cost

28. A Software Acquisition Example • Step 1: Evaluate the Information System Requirements • Identify key features • Consider network and web-related issues • Estimate volume and future growth • Specify hardware, software, or personnel constraints

29. A Software Acquisition Example • Step 1: Evaluate the Information System Requirements • Prepare a request for proposal or quotation • Request for proposal (RFP) • Document to vendors who decide whether they have a product that meets your needs • Evaluation model • Request for quotation (RFQ) • More specific than RFP

30. A Software Acquisition Example • Step 2: Identify Potential Vendors or Outsourcing Options • The Internet is a primary marketplace • newsgroups • Another approach is to work with a consulting firm

31. A Software Acquisition Example • Step 3: Evaluate the Alternatives • Existing users • Application testing • Benchmarks • Match each package against the RFP features and rank the choices

32. A Software Acquisition Example • Step 4: Perform Cost-Benefit Analysis • Identify and calculate TCO for each option you are considering • When you purchase software, what you are buying is a software license • If you purchase a software package, consider a maintenance agreement

33. A Software Acquisition Example • Step 5: Prepare a Recommendation • You should prepare a recommendation that contains your recommendation and lists the alternatives, together with the costs, benefits, advantages, and disadvantages of each option • At this point, you may be required to submit a formal system requirements document and deliver a presentation

34. A Software Acquisition Example • Step 6: Implement the Solution • Implementation tasks will depend on the solution selected • Before the new software becomes operational, you must complete all implementation steps, including loading, configuring, and testing the software; training users; and converting data files to the new system’s format

35. Completion of Systems Analysis Tasks • To complete the systems analysis phase, you must prepare the system requirements document and your presentation to management

36. Completion of Systems Analysis Tasks • Presentation to Management • Based on their decision, your next task will be one of the following • Implement an outsourcing alternative • Develop an in-house system • Purchase or customize a software package • Perform additional systems analysis work • Stop all further work

37. The Transition to System Design • If management decides to develop the system in-house, then the transition to the systems design phase begins • Preparing for Systems Design Tasks • It is essential to have an accurate and understandable system requirements document

38. The Transition to System Design • The Relationship between Logical and Physical Design • The logical design defines the functions and features of the system and the relationships among its components • The physical design of an information system is a plan for the actual implementation of the system

39. Systems Design Guidelines • The systems analyst must understand the logical design of the system before beginning the physical design of any one component • Data design • User interface • System design specification Figure5-24

40. Systems Design Guidelines • System Design Objectives • The goal of systems design is to build a system that is effective, reliable, and maintainable • A system is reliable if it adequately handles errors • A system is maintainable if it is well designed, flexible, and developed with future modifications in mind

41. Systems Design Guidelines • System Design Objectives • User considerations • Carefully consider any point where users receive output from, or provide input to, the system • Anticipate future needs of the users, the system, and the organization • Provide flexibility Figure5-25

42. Systems Design Guidelines • System Design Objectives • Data Considerations • Data should be entered into the system where and when it occurs because delays cause errors • Data should be verified when entered to catch errors immediately • Automated methods of data entry should be used whenever possible Figure5-26

43. Systems Design Guidelines • System Design Objectives • Data Considerations • Access for data entry should be controlled and all entries or changes to critical data values should be reported – audit trails • Every instance of entry and change to data should be logged • Data should be entered into a system only once • Data duplication should be avoided

44. Systems Design Guidelines • System Design Objectives • Architecture considerations • Use a modular design • Design modules that perform a single function are easier to understand, implement, and maintain

45. Systems Design Guidelines • Design Trade-Offs • Design goals often conflict with each other • Most design trade-off decisions that you will face come down to the basic conflict of quality versus cost • Avoid decisions that achieve short-term savings but might mean higher costs later

46. Prototyping • Prototyping produces an early, rapidly constructed working version of the proposed information system, called a prototype • Prototyping allows users to examine a model that accurately represents system outputs, inputs, interfaces, and processes Figure5-27

47. Prototyping • Prototyping Methods • System prototyping • Design /Throwaway prototyping

48. Prototyping • Prototyping Tools • Systems analysts can use powerful tools to develop prototypes

49. Prototyping • Other Modeling Tools • Systems flowchart • American National Standards Institute (ANSI)

50. Prototyping • Limitations of Prototypes • A prototype is a functioning system, but it is less efficient than a fully developed system • Systems developers can upgrade the prototype into the final information system by adding the necessary capability • Otherwise, the prototype is discarded