Acquiring Information Systems and Applications CHAPTER 13 Acquiring Information Systems and Applications

Announcements Wednesday Final Exam Schedule Final Exam Review 10:00 AM Class (Section 001): Mon., 12/9 (8:00 – 11:00) 11:00 AM Class (Section 002): Weds., 12/11 (11:30 – 2:30)

CHAPTER OUTLINE 13.1 Planning for and Justifying IT Applications 13.2 Strategies for Acquiring IT Applications 13.3 The Traditional Systems Development Life Cycle 13.4 Alternative Methods and Tools for Systems Development 13.5 Vendor and Software Selection

13.1 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.

Information Systems Planning

the firm’s overall mission Information Systems Planning: Organization Strategic Plan and Current IT Architecture the firm’s overall mission how the org should use info resources to accomplish mission Includes: Technical Aspects Managerial aspects

Information Systems Planning: IS Strategic Plan Long range goals that describe the IT infrastructure and identify IT initiatives. Must meet three objectives: Alignment with organizational strategic plan Architecture must seamlessly network users and applications Efficiently allocate IS development resources

IT Steering Committee © Image Source/Age Fotostock America, Inc.

Information Systems Planning: 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

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. COST VS. BENEFITS

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

13.2 Strategies for Acquiring IT Applications Four fundamental business decisions to make before choosing a strategy: 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?

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

13.3 Traditional Systems Development Life Cycle Software Development Life Cycle (SDLC) Systems Investigation Systems Analysis Systems Design Programming and Testing Implementation Operation and Maintenance Investigation Analysis Design Programming/Testing Implementation Operation & Maintenance

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

SDLC – Systems Investigation Begins with the business problem (or opportunity) followed by the feasibility analysis. Feasibility study Deliverable: Go/No-Go Decision Investigation Analysis Design Programming/Testing Implementation Operation & Maintenance

SDLC – Systems Investigation (cont.) Feasibility Study Technical feasibility Economic feasibility Organizational feasibility Behavioral feasibility

Operation & Maintenance SDLC – System Analysis The examination of the business problem that the organization plans to solve with an information system. Main purpose: requirements determination Deliverable: set of system requirements Investigation Analysis Design Programming/Testing Existing System New/Improved System Implementation Operation & Maintenance

Operation & Maintenance SDLC – Systems Design Describes how the system will accomplish this task. Deliverable: technical design specifying: System outputs, inputs, user interfaces. Hardware/software, database, telecommunications, personnel & procedures. Blueprint of how these components are integrated. Investigation Analysis Design Programming/Testing Implementation Operation & Maintenance

SDLC – System Design (continued) Scope creep is caused by adding functions after the project has been initiated.

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. Investigation Analysis Design Programming/Testing Implementation Operation & Maintenance

SDLC – Systems Implementation The process of converting from the old to the new system Major conversion strategies: Direct Pilot Phased Parallel (not used much today) Investigation Analysis Design Programming/Testing Implementation Operation & Maintenance

SLDC – Operation & Maintenance Audits are performed to assess the system’s capabilities and to determine if it is being used correctly. Types of maintenance: Debugging Updating Maintenance Investigation Analysis Design Programming/Testing Implementation Operation & Maintenance

Six-Stage Systems Development Life Cycle (SDLC) with Supporting Tools Prototyping Business Need Systems Investigation Deliverable: Go/No Go Decision Systems Analysis Deliverable: User Requirement Systems Design Deliverable: Technical Specification Programming and Testing Implement The System Operation and Maintenance Upper CASE Tools Joint Application Design (JAD) Lower CASE Tools

Tools for Systems Development Prototyping Integrated computer-assisted software engineering (ICASE) Component-based development Object-oriented development

13.4 Alternative Methods and Tools for Systems Development Joint application design (JAD) Rapid application development (RAD) Agile development

13.5 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.

LEARNING OBJECTIVES Define an IS strategic plan, identify three objectives it must meet, and describe one common approach to cost-benefit analysis.

LEARNING OBJECTIVES Discuss the four business decisions that companies must make when they acquire new applications.

LEARNING OBJECTIVES Identify the six processes involved in the systems development life cycle, and explain the primary tasks and importance of each process.

LEARNING OBJECTIVES (continued) Analyze the process of vendor and software selection.

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