Presentation on theme: "Acquiring Information Systems and Applications"— Presentation transcript:
1 Acquiring Information Systems and Applications CHAPTER 14Acquiring Information Systems and Applications
2 CHAPTER OUTLINE14.1 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 OBJECTIVESDiscuss the different cost/benefit analyses that companies must take into account when formulating an IT strategic planDiscuss the four business decisions that companies must make when they acquire new applicationsEnumerate the primary tasks and importance of each of the six processes involved in the systems development life cycleDescribe alternative development methods and tools that augment development methodsAnalyze 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 environmentObjectives of the IT functionConstraints of the IT functionApplication portfolioResource allocation and project management
7 Evaluating & Justifying IT Investment: Benefits, Costs & Issues Assessing the costsFixed costsTotal 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 investmentBreakeven analysisThe business case approach
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 InvestigationSystems AnalysisSystems DesignProgramming and TestingImplementationOperation and Maintenance
14 The SDLC Major advantages Major drawbacks Control Accountability Error detectionMajor drawbacksRelatively inflexibleTime-consuming and expensiveDiscourages changes once user requirements are gathered
15 SDLC – Systems Investigation Begins with the business problem (or opportunity) followed by the feasibility analysis.Feasibility studyDeliverable: Go/No-Go Decision
16 Feasibility Study Technical feasibility Economic feasibility Organizational feasibilityBehavioral feasibility
17 SDLC – System AnalysisThe 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 AnalysisDescribes 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 ConversionPilot ConversionPhased ConversionParallel 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.DebuggingUpdatingMaintenance
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 developmentEnd-user development
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 packageStep 5: Negotiate a contract.Step 6: Establish a service level agreement.
26 Closing Case #1 Tweak or Trash? The ProblemThe SolutionThe Results
27 Closing Case #2 Putting IT All Together The ProblemThe SolutionThe Results