Acquiring Information Systems &Applications 13 Acquiring Information Systems &Applications 40 slides

[ 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 the importance of each of the six processes involved in the systems development life cycle. Describe alternative development methods and the tools that augment development methods.

Planning for and Justifying IT Applications 13.1 Planning for and Justifying IT Applications IT Planning Evaluating and Justifying IT Investment: Benefits, Costs, and Issues One day, you’re going to be called upon to play a role in buying information technology

IT Planning Organizational Strategic Plan IT Architecture IT Strategic Plan You always have to keep the goals of the organization in deciding what equipment to buy. You don’t want to buy new stuff (the latest Apple products, for instance) because they’re cool. The stuff you buy doesn’t do anything if it doesn’t help your company do something that other companies like can’t do. (Competitive Advantage) The IT Plan should meet three or more of the company’s strategic plans…

Three Main Objectives of IT Strategic Plan It must be aligned with the organization’s strategic plan It must provide for an IT architecture that seamlessly networks users, applications, and databases It must efficiently allocate IS development resources among competing projects so the projects can be completed on time an within budget and still have the required functionality Have students read and copy into their notes.

A Typical IS Operational Plan Includes: Mission Statement IS environment Objectives of the IS Function Constraints of the IS Function The application portfolio Resource allocation and project management Have students read and copy into their notes.

Evaluating and Justifying IT Investment: Benefits, Costs, and Issues Assessing the Costs Assessing the Benefits Conducting the Cost-Benefit Analysis One of the major questions that you going to face when deciding to buy new IT is, “which projects do you allocate money to first?” The right way to do this is to allocate money to the projects that are expected to get the company the most profit first. Then you move on to projects that cut operating costs. You conduct a cost-benefit analysis. Remember, a lot of costs and benefits are difficult to put an actual dollar value on. For instance, if a manager can’t use his or her computer because new software is being installed on it, you can measure the value of the manager’s time. It’s tangible. On the other hand, measuring the amount of frustration that people are going to feel at having to learn to work a new system is more intangible or difficult to measure.

Four Common Approaches to Cost-Benefit Analysis Analysts use the net present value (NPV) Return on Investment (ROI) Breakeven analysis Business case approach Let me explain these Four Common Approaches for Cost-Benefit Analysis: Net Present Value: You take the amount of money you have to invest in the technology today and compare it to how that money is going to be worth in the future. (The $90,000 we invest today is going to be worth $91,000 five years from now.) Return on Investment (ROI): You take the amount of money you have to invest in the technology today and compare it to the amount of profit it’s going to make you. (The $90,000 we invest today is going to make us $100,000 in profits.) Breakeven Analysis: You look at the fixed and variable expenses. Then, you look at the revenue. You determine a point at which the revenue exceeds the expenses. Business Case Approach: Instead of numbers, you describe what goes on and explain how technology can better assist you.

Strategies for Acquiring IT Applications 13.2 Strategies for Acquiring IT Applications Purchase a Prewritten Application Purchase a Prewritten Application: You don’t have to re0invent the wheel. Many commercial software packages contain the standard features required by IT applications. Doing this can be a lot more cost-effective and time-saving strategy than-developing something in-house. (Vanilla)

Strategies for Acquiring IT Applications 13.2 Strategies for Acquiring IT Applications Purchase a Prewritten Application Customize a Prewritten Application Customize a Prewritten Application:

Strategies for Acquiring IT Applications 13.2 Strategies for Acquiring IT Applications Purchase a Prewritten Application Customize a Prewritten Application Lease the Application Lease the Application: Leasing can save a company both time and money. Leasing can be especially attractive to small and medium-sized enterprises (SMEs) that cannot afford major investments in IT software.

Strategies for Acquiring IT Applications 13.2 Strategies for Acquiring IT Applications Fundamental Decisions in Acquiring IT Applications Purchase a Prewritten Application Customize a Prewritten Application Lease the Application Application Service Providers and Software-as-a-Service Vendors

Application Service Providers and Software-as-a-Service Application service provider (ASP) Software-as-a-service (SaaS) Application Service Provider (ASP): is an agent or a vendor who assembles the software needed by enterprises and then packages it with services such as development, operations, and maintenance. The customer then accesses these applications via the Internet. Software-as-a-Service (SaaS): The software is delivered to you over the internet. You can then take the money that you would have invested on IT and invest it to do other things.

Strategies for Acquiring IT Applications (Continued) 13.2 Strategies for Acquiring IT Applications (Continued) Use Open-Source Software Outsourcing Continuous Development Employ Custom Development Use Open-Source Software: Organizations obtain a license to implement an open-source soft ware product and either use it as is, customize it, or develop applications with it. Outsourcing: This is when you acquiring IT applications from outside contractors or external organizations. Employ Custom Development: Sometimes, if nothing is available out there to do what you want to do, you have to custom-build an application. Your compay can either do this in-house or outsource the process.

Fundamental Decisions in Acquiring IT Applications How much computer code does the company want to write? How will the company pay for the application? Where will the application run? Where will the application originate? These are some questions you need to ask yourself before you go after an IT App: Have students read and copy and paste.

The Traditional Systems Development Life Cycle 13.3 The Traditional Systems Development Life Cycle Systems Development Life Cycle (SDLC) Systems Investigation Systems Analysis Systems Design Programming and Testing Implementation Operation and Maintenance Systems Development Life Cycle (SDLC): the traditional systems development method that organizations use for large-scale IT projects. The SDLC is a structured framework that consists of sequential processes by which information systems are developed.

The Traditional Systems Development Life Cycle (SDLC) People Systems analysts Systems Analysts: IS professionals who specialize in analyzing and designing information systems.

The Traditional Systems Development Life Cycle (SDLC) People Systems analysts Programmers Programmers: IS professionals who either modify existing computer programs or write new programs to satisfy user requirements.

The Traditional Systems Development Life Cycle (SDLC) People Systems analysts Programmers Technical Specialists Technical Specialists: experts on a certain type of technology, such as databases or telecommunications.

The Traditional Systems Development Life Cycle (SDLC) People Systems analysts Programmers Technical Specialists Stakeholders Systems Stakeholders: include everyone who is affected by changes in a company’s information systems—for example, users and managers. Anybody who comes into contact with the system had to sit side by side with the systems analysts, programmers, and tech specilaists.

Step 1: Systems Investigation Three Basic Solutions Systems Investigation: This is he initial stage in a traditional model I can do one of three things: (1) do nothing and continue to use the existing system unchanged (2) modify or enhance the existing system (3) develop a new system.

Step 1: Systems Investigation Three Basic Solutions Feasibility study Technical feasibility Economic feasibility Behavioral feasibility Go/No Go Decision Organizations have three basic solutions to any business problem relating to an information system: (1) do nothing and continue to use the existing system unchanged (2) modify or enhance the existing system (3) develop a new system. Feasibility Study: analyzes which of three basic solutions best fits the particular business problem. It also provides a rough assessment of the project’s technical, economic, and behavioral feasibility, as explained below. Technical Feasibility: determines whether the company can develop and/or acquire the hardware, soft ware, and communications components needed to solve the business problem. Technical feasibility also determines whether the organization can use its existing technology to achieve the project’s performance objectives. Economic Feasibility: determines whether the project is an acceptable financial risk and, if so, whether the organization has the necessary time and money to successfully complete the project. Behavioral Feasibility: addresses the human issues of the systems development project. Outcome of the Feasibility Study is a “go/no-go” decision

Step 1: Systems Investigation Three Basic Solutions Feasibility study Technical Economic Behavioral Feasibility Study: analyzes which of three basic solutions best fits the particular business problem from a technical, economic, and behavioral standpoint. Technical Feasibility: looks at the hardware, soft ware, and communications components Economic Feasibility: looks at the financial risk . Behavioral Feasibility: addresses the human issues.

Step 1: Systems Investigation Three Basic Solutions Feasibility study Technical Economic Behavioral Go/No Go Decision Outcome of the Feasibility Study is a “go/no-go” decision

Step 2: Systems Analysis The process whereby systems analysts examine the business problem that the organization plans to solve with an IS. Systems analysis: the process whereby systems analysts examine the business problem that the organization plans to solve with an information system. Systems analysis deliverable is a set of system requirements.

Step 2: Systems Design Describes how the system will resolve the business problem. Deliverable: a set of technical system specifications. The users tell the systems analyst the business requirements the system has to satisfy. The systems people then put out Technical Specifications include following: • System outputs, inputs, and user interfaces • Hardware, soft ware, databases, telecommunications, personnel, and procedures • A blueprint of how these components are integrated …to solve these problems. Scope Creep:

Step 2: Systems Design Describes how the system will resolve the business problem. Deliverable: a set of technical system specifications. Slope Creep Obviously, the users are going to think of things that they want after the discussion starts. (I want my 50-foot yacht to have central air conditioning.) When you start adding things to the initial project, it take longer for the project to complete and adds to the cost of completing it. This is called slope creep.

Step 3: Programming and Testing Programming: involves translating the design specifications into computer code. Testing: seeing whether the computer code produces the expected and desired results.

Step 4: Implementation Implementation Major Conversion Strategies Parallel Direct Phased Pilot Implementation (or deployment): the process of converting from an old computer system to a new one. Four Major Conversion Strategies:

Conversion Strategies This diagram should be copied and pasted into your notes. You should know the name and the definition of the four different ways…

User Training and Support Implementation also involves Training and support. When you’re training people remember that Self-paced training and tutorials are the least expensive. One-on-one training is the most costly. Ongoing education may be necessary as part of system support.

Step 5: Operations & Maintenance Systems Require Several Types of Maintenance: Debugging Updating Adding Once a new system’s operations are stabilized, the company performs audits to assess the system’s capabilities and to determine if it is being utilized correctly. Systems Require Several Types of Maintenance: Debugging: (the system) a process that continues throughout the life of the system. The system is always going to need patches. Updating: (the system) to accommodate changes in business conditions (e.g., adjusting to new governmental regulations). Adding: new functions added to the existing system without disturbing its operation

Alternative Methods and Tools for Systems Development 13.4 Alternative Methods and Tools for Systems Development Joint Application Design (JAD) Joint Application Design (JAD): a group-based tool for collecting user requirements and creating system designs. Everybody tells you what they want.

Alternative Methods and Tools for Systems Development 13.4 Alternative Methods and Tools for Systems Development Joint Application Design (JAD) Rapid Application Development (RAD) Rapid Application Development (RAD): You start putting the system together as one person or department or another tell you what they want.

Alternative Methods and Tools for Systems Development 13.4 Alternative Methods and Tools for Systems Development Joint Application Design (JAD) Rapid Application Development (RAD) Agile Development End-User Development End-User Development: a tech-savy manager knows how to develop their own data bases or spreadsheets. This is an approach in which the organization’s end users develop their own applications with little or no formal assistance from the IT department.

Tools for Systems Development Prototyping Prototyping: What’s the prototype of a car? Prototyping a development approach that defines an initial list of user requirements, builds a model of the system, and then refines the system in several iterations based on users’ feedback. Developers quickly develop a smaller version of the system.

Tools for Systems Development Prototyping Integrated Computer-Assisted Software Engineering Tools (CASE) Integrated Computer-Assisted Software Engineering Tools (CASE): There is software out there that will automate many of the tasks in the SDLC. …everything from systems investigation, analysis, and design to programming, testing, operation, and maintenance.

Tools for Systems Development Prototyping Integrated Computer-Assisted Software Engineering Tools (CASE) Component-Based Development Component-Based Development: uses standard reusable applications that generally have one specific function, such as a shopping cart, user authentication, or a catalog. You design a BUY NOW button using PayPal and then just copy and paste the code on to your web page.

Tools for Systems Development Prototyping Integrated Computer-Assisted Software Engineering Tools (CASE) Component-Based Development Object-Oriented Development Object-Oriented Development: When you have a new piece of equipment and you start by asking what you want that piece of equipment to do.

Acquiring Information Systems &Applications 13 Acquiring Information Systems &Applications The End