1. Acquiring Information Systems and Applications
CHAPTER 14
Acquiring Information Systems and Applications

2. CHAPTER OUTLINE
14.1 Planning for and Justifying IT Applications 14.2 Strategies for Acquiring IT Applications 14.3 The Traditional Systems Development Life Cycle 14.4 Alternative Methods and Tools for Systems Development 14.5 Vendor and Software Selection

3. LEARNING OBJECTIVES
Discuss the different cost/benefit analyses that companies must take into account when formulating an IT strategic plan
Discuss the four business decisions that companies must make when they acquire new applications
Enumerate the primary tasks and importance of each of the six processes involved in the systems development life cycle
Describe alternative development methods and tools that augment development methods
Analyze the process of vendor and soft ware selection

4. 14.1 Planning for and Justifying IT Applications

5. 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.
The application portfolio

6. IS 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

7. 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

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

9. 14.2 Strategies for Acquiring IT Applications

10. Strategies for Acquiring IT Applications
Four fundamental business decisions to make before choosing a strategy: (1) How much computer code does the company want to write? (2) How will the company pay for the application? (3) Where will the application run? (4) Where will the application originate?

11. Strategies for Acquiring IT Applications
Purchase a Prewritten Application Customize a Prewritten Application Lease the applications Application Service Providers and Software- as-a-Service Vendors Use Open-Source Software Outsourcing Custom Development

12. 14.3 Traditional Systems Development Life Cycle

13. Traditional Systems Development Life Cycle
Software Development Life Cycle (SDLC)
Systems Investigation
Systems Analysis
Systems Design
Programming and Testing
Implementation
Operation and Maintenance

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

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

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

17. SDLC – System Analysis
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, also called user requirements.

18. SDLC – System Analysis
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.

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.

20. SDLC – Systems Implementation
Implementation involves three major conversion strategies:
Direct Conversion
Pilot Conversion
Phased Conversion
Parallel Conversion (not used much today)

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

22. 14.4 Alternative Methods and Tools for Systems Development

23. Alternative Methods and Tools for Systems Development
Joint application design (JAD)
Rapid application development (RAD)
Agile development
End-user development

24. 14.5 Vendor & Software Selection

25. 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.

26. Closing Case #1 Tweak or Trash?
The Problem
The Solution
The Results

27. Closing Case #2 Putting IT All Together
The Problem
The Solution
The Results