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The acquisition of information systems: Issues, choices, activities MBA 501 Week 5.

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Presentation on theme: "The acquisition of information systems: Issues, choices, activities MBA 501 Week 5."— Presentation transcript:

1 The acquisition of information systems: Issues, choices, activities MBA 501 Week 5

2 Objectives of todays class... To distinguish between the typical stages involved in the development of a BIS (the SDLC) and explain their purpose and main deliverables To examine the management issues related to how BIS are acquired To examine some of the management issues related to the use of open source software To examine some of the management issues related to the real time enterprise

3 Stages of the Systems Development Life Cycle Initiation Input: evaluation of IT problems/needs Output: Ideas for new system Requirement (systems) analysis Input: Terms of reference from feasibility report Output: Detailed requirements / system specification. DFDs, ERDs etc System design Input: Requirements specification Output: Detailed design specification (database, interface, data capture and storage etc) System build Input: Requirements and design specifications Output: working software, manuals, documentation Feasibility study Input: Ideas for new system Output: feasibility report and go/no go recommendation Implementation Input: Working system not tested by users Output: signed-off operational system installed in all locations Maintenance Post implementation review System improvement Kill

4 The sequence of phases in the SDLC Structured analysis and design provides a systematic approach to developing systems: – The model indicates that each step should be satisfactorily completed before the next begins Each step also has a link back to the previous stage, to correct errors/problems (eg. at the build stage, design errors or oversights may need to be corrected Analysis and design errors detected in the later phases of the SDLC cost more to fix than if detected in earlier phases Problems with highly structured methodologies has given rise to alternative models of systems development eg. – Rapid Application Development and Extreme Programming – also known as Agile methods

5 Failure points for traditional structured methods of systems development Gap of understanding between users and developers Tendency of developers to isolate themselves from users Quality measured by closeness of product to specification rather than comparing deliverables to requirements Long development times Business needs change during the development process What users get isnt necessarily what they want

6 Reasons for the development of Rapid Application Development (RAD) / Agile RAD was launched in the early 90s in response to 2 conditions – increased speed and turbulence of doing business – the ready availability of high-powered, computer-based tools to support systems development and maintenance Problems with traditional waterfall method – long cycles - system may be obsolete before it is built RAD and similar systems based on prototyping became increasingly legitimate and are widely used in the mainstream – Flavours of RAD: Agile, Extreme Programming (XP), Joint Application Development (JAD), Scrum, Lean Software Development

7 Business Information Systems. Bocij et al. Prentice Hall Initiation Feasibility analysis, project planning, Change and Risk Management PROTOTYPING (analysis and design) ANALYSIS DESIGN DEVELOP TEST AND REVIEW Design, test, specification Prototype produced Requirements specification Change requests Final implementation System and acceptance testing Data migration and changeover Maintenance Monitoring and enhancing The role of prototyping within the SDLC

8 MANAGEMENT ISSUES RELATED TO HOW BUSINESS INFORMATION SYSTEMS ARE ACQUIRED

9 So you need some new software? Drivers for information systems acquisition Information system needs (requirements) Business strategy and policies External business environment Internal business processes

10 Typical software acquisition alternatives that must be evaluated Bespoke development In-houseOutsourced Off-the-shelf (on-premise or SaaS) StandardTailored User-developed

11 Bespoke development Where an information system is developed from scratch by an IS professional (or team) to suit the business requirements of the application – Can be either in-house or outsourced Benefits – Can be tailored to the precise business need – Proprietary system – may be a core business asset that competitors cannot match Difficulties – Cost - the most expensive way to develop a new BIS – Time - notorious for time overruns, especially when using formal structured methodologies (but Agile methodologies help to mitigate this problem) – Quality – may be buggy (insufficient testing) or may not meet business requirements - often due to poor analysis of system requirements

12 Purchasing off-the-shelf software (can be on-premise or SaaS) Direct purchase of a pre-written application used by more than one company – written to offer broad functionality to suit a wide range of businesses – Fewer bugs because software developed for commercial market – Cheaper than bespoke Difficulties – May offer features not needed – Requires business processes to be organized in a particular way – May have inflexible/unsuitable features (eg. specified # of characters for customer code) Some packaged software can be tailored to some extent to suit particular business requirements (usually done by the vendor)

13 End-user developed software Written by non-IS professionals - ie. the business users themselves for end-user applications These apps are personal or departmental in nature and tend to be output or report-oriented Examples: spreadsheets, small databases, websites Advantage is that there will be good fit between the users requirements and the system Disadvantages – there may be the use of inappropriate software tools – hard to maintain (didnt work to standards) – buggy software because of lack of knowledge little or no design, planning or documentation

14 Factors affecting software acquisition: evaluation of alternatives Acquisition option Delivery time CostQuality: Bugs Quality: Fits business need Bespoke in- house Poor Good Bespoke software house GoodVery poorMedium End-user development PoorMediumPoorGood Tailored - off the shelf Good Medium Standard - off the shelf Very good Poor

15 Other factors affecting software acquisition Where the software is generic (such as office productivity packages) organizations will purchase off-the-shelf Where the function of the software is at the Unique stage of the Software Maturity Model – more likely to be acquired via bespoke development Where niche software is needed for particular purposes or to create business advantage, then the bespoke approach is more common Organization size In-house IS/IT expertise IS/IT expertise among end-users Linkages with existing applications software - amount of integration required Complexity of the required system Uniqueness of the required system

16 Application complexity versus uniqueness HIGH LOW Complexity of application Off-the-shelf package Bespoke development Off-the-shelf package or end-user development Bespoke or end-user development Uniqueness of application High complexity Low uniqueness Low complexity Low uniqueness High complexity High uniqueness Low complexity High uniqueness

17 Business Information Systems. Bocij et al. Prentice Hall In-class exercise: Decision model for selecting a method of information system acquisition

18 Software trends that impact the acquisition decision Open source software Real-time enterprise software Software is becoming much more network- centric. – Cloud computing and Software-as-a- Service (We will look at these next week)

19 OPEN SOURCE SOFTWARE

20 Open source software A definition (from the Open Source Initiative (OSI)) "Open source promotes software reliability and quality by supporting independent peer review and rapid evolution of source code. To be OSI certified, the software must be distributed under a license that guarantees the right to read, redistribute, modify, and use the software freely." Open source software is developed through public collaboration between programmers

21 Videos – What is Open Source UpStart Workshop - Episode 23 - What is Open Source Software? – UpStart Workshop - Episode 24 - What does it mean for open source software to be viral? – Two other videos by Computer Floss on the same topic – –

22 Open Source Software Open Source is about how software is developed, enhanced, and managed The detailed Open Source definition (Open Source Initiative)Open Source definition – The complete (uncompiled) source code must be distributed with any and all distributions – Anyone can modify and redistribute the code for anyone else to use – Licensed for these purposes (eg. under a GPL)GPL – It is the opposite of proprietary software, which is sold only in its compiled state – that is indecipherable by humans

23 So, is it free? It depends…… UpStart Workshop - Episode 27 - Is Open Source Software Cost-Free? – Definition of free software Customization, integration, installation, support, maintenance, training – Definitely not free – Red Hats revenue stream comes from subscriptions to services that support the use of Linux (Open Source OS)Red Hats

24 Drivers towards Open Source adoption – Report from The Standish Group (registration needed) Report The Standish Group 1.Fashion 2.Community 3.Security 4.Quality and reliability 5.Initial cost 6.Development speed 7.Vendor initiative 8.Support 9.Skills 10.Ongoing costs

25 What are the risks and benefits of using open source software? UpStart Workshop - Episode 25 - What are the risks and benefits of using open source software?

26 Business issues re Open Source Now seen as disruptive technology Viability was underestimated – Stats showing Server OS (Netcraft, January 2014 survey) Stats showing Server OS – Stats for browsers and desktop OS (W3Counter, December 2013) Stats for browsers and desktop OS Microsoft underestimated the threat – normal rules of competition dont apply – Not possible to undercut the price – Not possible to buy the company to get rid of competition – Probably not possible to buy the people – Negotiations / arguments are all done in public forums Better way is to find ways to work together and co-operate – IBM is a prime example of an established company working within the open source movement IBM Forresters 5 stages of open source adoption (Video of CodePlex panel) 6mVideo of CodePlex panel

27 THE REAL-TIME ENTERPRISE

28 The Real-Time Enterprise The essence of the real-time enterprise is that organizations can know what they are doing at the moment, rather than waiting days, weeks or months for the information, as has been the case Without a real-time feedback loop it is like driving a car without being able to see the road McNurlin, Sprague & Bui. Information Systems Management in Practice. Pearson. 2008

29 Some uses of real-time technology Enterprise nervous systems: to coordinate company operations eg. A car arrives on a dealers lot – data is instantly available Straight-through processing: to reduce distortion in supply chains Communicating objects: to gain real-time data about the physical world (rg. RFID) Vigilant information systems: to move to a sense- and-respond culture (not just receiving, but acting) Real time customer relationship management: to automate decision making about customers McNurlin, Sprague & Bui. Information Systems Management in Practice. Pearson. 2008

30 Real-time CRM Real-time response between a firm and its customer eg. – Via web site Collaborative filtering (automated) – amazon.comamazon.com Sense and respond (automated) Customer service (two-way, always-on) Advertising networks – Via call centre Information needs to be available in real-time to call- centre workers (HUDS etc) McNurlin, Sprague & Bui. Information Systems Management in Practice. Pearson. 2008

31 So why dont all organization go real-time? Getting closer... But not so easy to achieve – Expensive: sophisticated technology and a seamless integrated platform needed – Assessment needed to decide what really needs to be real- time and what metrics should be used to help make automated decisions – Needs care and attention from employees – real-time expectations – Privacy considerations McNurlin, Sprague & Bui. Information Systems Management in Practice. Pearson. 2008


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