1. Chapter 5 DEVELOPMENT STRATEGIES

2. Chapter Objectives Describe the concept of Software as a Service
Define Web 2.0 and cloud computing
Explain software acquisition alternatives, including traditional and Web-based software development strategies
Describe software outsourcing options, including offshore outsourcing and the role of service providers 3

3. Chapter Objectives
Explain advantages and disadvantages of in- house software development
Explain cost-benefit analysis and financial analysis tools
Explain the differences between a request for proposal (RFP) and a request for quotation (RFQ)
Describe the system requirements document 3

4. Chapter Objectives
Explain the transition from systems analysis to systems design, and the importance of prototyping
Discuss guidelines for systems design
Describe software development trends

5. Introduction
Chapter 7 describes the remaining activities in the systems analysis phase
The chapter also describes the transition to systems design, prototyping, and systems design guidelines
The chapter concludes with a discussion of trends in software development 4

6. Development Strategies Overview
Selecting the best development path is an important decision that requires companies to consider three key topics
The impact of the Internet
Software outsourcing options
In-house software development alternatives

7. The Impact of the Internet
The Internet has triggered enormous changes in business methods and operations, and software acquisition is no exception
This section examines a trend that views Software as a Service, the changing market-place for software, and how Web-based development compares to traditional methods

8. The Impact of the Internet
Software as a Service
Software as a Service (SaaS)
25% of all new business software will be deployed as a service by 2011, while the value of the SaaS industry will grow to $40 billion

9. The Impact of the Internet
Traditional vs. Web-Based Systems Development
As a systems analyst, you must consider whether development will take place in a Web-centric framework, or in a traditional environment
In an Internet-based system, the Web becomes an integral part of the application, rather than just a communication channel

10. The Impact of the Internet
Traditional vs. Web-Based Systems Development
Two major Web-based development environments are IBM’s WebSphere and Microsoft’s .NET
Although there is a major trend toward Web- based systems, many firms rely on traditional systems

11. The Impact of the Internet
Traditional vs. Web-Based Systems Development
Traditional development
System design is influenced by compatibility issues
Systems are designed to run on local and wide-area company networks
Systems often utilize Internet links and resources, but Web- based features are treated as enhancements rather than core elements of the design

12. The Impact of the Internet
Traditional vs. Web-Based Systems Development
Web-based development
Systems are developed and delivered in an Internet- based framework such as .NET or WebSphere
Internet-based development treats the Web as the platform, rather than just a communication channel
Web-based software usually requires additional layers, called middleware

13. The Impact of the Internet
Looking to the Future: Web 2.0 and Cloud Computing
The Web 2.0 platform will enhance interactive experiences including wikis and blogs, and social networking applications
Cloud computing could bring enormous computing power to business and personal Internet users

14. Outsourcing
Outsourcing - a company that contracts with another company to provide services, saves cost
Can refer to relatively minor programming tasks, the rental of software from a service provider, the outsourcing of a basic business process (often called business process outsourcing, or BPO), or the handling of a company’s entire IT function

15. Outsourcing India and China. Why? Government’s support and promotion
Japan’s decision to move most of its software development processes to China
some large foreign organizations set u R&D centers in China
English speaking
Affordable
Highly skilled
Educated

16. Outsourcing India and China. Why?
World class Information Technology and networking facilities
Friendly laws
Well paid taxes
Stable political environment
World class certified software companies.

17. Outsourcing The Growth of Outsourcing
Traditionally, firms outsourced IT tasks as a way of controlling costs and dealing with rapid technological change
Outsourcing has become part of an overall IT strategy for many organizations

18. Outsourcing The Growth of Outsourcing
A firm that offers outsourcing solutions is called a service provider
Application service providers (ASP)
Internet business services (IBS)
Also called managed hosting

19. Outsourcing Outsourcing Fees
A fixed fee model (flat rate) uses a set fee based on a specified level of service and user support
A subscription model has a variable fee based on the number of users or workstations that have access to the application
A usage model or transaction model charges a variable fee based on the volume of transactions or operations performed by the application

20. Outsourcing Outsourcing Issues and Concerns
Mission-critical IT systems should be out-sourced only if the result is a cost-attractive, reliable, business solution that fits the company’s long-term business strategy
Outsourcing also can affect day-to-day company operations and can raise some concerns

21. Outsourcing Outsourcing Issues and Concerns
A company must review carefully issues relating to insurance, potential liability, licensing and information ownership, warranties, and disaster recovery
Outsourcing can be especially attractive to a company whose volume fluctuates widely, such as a defense contractor

22. Outsourcing Offshore Outsourcing
Offshore outsourcing – global outsourcing
Many firms are sending IT work overseas at an increasing rate
The main reason for offshore outsourcing is the same as domestic outsourcing: lower bottom-line costs
Offshore outsourcing, however, involves some unique risks and concerns

23. In-House Software Development Options
A company can choose to develop its own systems, or purchase, possibly customize, and implement a software package
The most important consideration is total cost of ownership (TCO)
Companies also develop user applications designed around commercial software packages

24. In-House Software Development Options
Make or Buy Decision
The choice between developing versus purchasing software often is called a make or buy, or build or buy decision
The company’s IT department makes, builds, and develops in-house software
A software package is obtained from a vendor or application service provider.

25. In-House Software Development Options
Make or Buy Decision
Companies that develop software for sale are called software vendors
Value-added reseller (VAR)
Horizontal application
Vertical application

26. In-House Software Development Options
Developing Software In-House
Satisfy unique business requirements
Minimize changes in business procedures and policies
Meet constraints of existing systems
Meet constraints of existing technology
Develop internal resources and capabilities

27. In-House Software Development Options
Purchasing a Software Package
Lower costs
Requires less time to implement
Proven reliability and performance benchmarks
Require less technical development staff
Future upgrades provided by the vendor
Input from other companies

28. In-House Software Development Options
Customizing a Software Package
You can purchase a basic package that vendors will customize to suit your needs
You can negotiate directly with the software vendor to make enhancements to meet your needs by paying for the changes
You can purchase the package and make your own modifications, if this is permissible under the terms of the software license

29. In-House Software Development Options
Creating User Applications
User application
User interface
Help desk or information center (IC)
Screen generators
Report generators
Read-only properties

30. Role of the Systems Analyst
The company must decide whether to use an outsourcing option, develop software in-house, acquire a software package, develop user applications, or select some combination of these solutions
The decision will affect the remaining SDLC phases and your involvement as a systems analyst
When selecting hardware and software, systems analysts often work as an evaluation and selection team

31. Role of the Systems Analyst
A team approach ensures that critical factors are not overlooked and that a sound choice is made
The primary objective of the evaluation and selection team is to eliminate system alternatives that will not meet requirements, rank the system alternatives that are feasible, and present the viable alternatives to management for a final decision

32. Analyzing Cost and Benefits
Now, at the end of the systems analysis phase of the SDLC, you must apply financial analysis tools and techniques to evaluate development strategies and decide how the project will move forward
An accurate forecast of TCO is critical, because nearly 80 percent of total IT costs occur after the purchase of hardware and software

33. Analyzing Cost and Benefits
Financial Analysis Tools
Payback Analysis
Return on investment (ROI)
Net present value (NPV)

34. Analyzing Cost and Benefits
Cost-Benefit Analysis Checklist
List each development strategy being considered
Identify all costs and benefits for each alternative. Be sure to indicate when costs will be incurred and benefits realized
Consider future growth and the need for scalability
Include support costs for hardware and software

35. Analyzing Cost and Benefits
Cost-Benefit Analysis Checklist
Analyze various software licensing options, including fixed fees and formulas based on the number of users or transactions
Apply the financial analysis tools to each alternative
Study the results and prepare a report to management

36. The Software Acquisition Process
Step 1: Evaluate the Information System Requirements
Identify key features
Consider network and web-related issues
Estimate volume and future growth
Specify hardware, software, or personnel constraints

37. The Software Acquisition Process
Step 1: Evaluate the Information System Requirements
Prepare a request for proposal or quotation
Request for proposal (RFP)
Evaluation model
Request for quotation (RFQ)

38. The Software Acquisition Process
Step 2: Identify Potential Vendors or Outsourcing Options
The Internet is a primary marketplace
Another approach is to work with a consulting firm
Another valuable resource is the Internet bulletin board system that contains thousands of forums, called newsgroups

39. The Software Acquisition Process
Step 3: Evaluate the Alternatives
Existing users
Application testing
Benchmarking - benchmark
Match each package against the RFP features and rank the choices

40. The Software Acquisition Process
Step 4: Perform Cost-Benefit Analysis
Identify and calculate TCO for each option you are considering
When you purchase software, what you are buying is a software license
If you purchase a software package, consider a supplemental maintenance agreement

41. The Software Acquisition Process
Step 5: Prepare a Recommendation
You should prepare a recommendation that evaluates and describes the alternatives, together with the costs, benefits, advantages, and disadvantages of each option
At this point, you may be required to submit a formal system requirements document and deliver a presentation

42. The Software Acquisition Process
Step 6: Implement the Solution
Implementation tasks will depend on the solution selected
Before the new software becomes operational, you must complete all implementation steps, including loading, configuring, and testing the software; training users; and converting data files to the new system’s format

43. Completion of Systems Analysis Tasks
To complete the systems analysis phase, you must prepare the system requirements document and your presentation to management

44. Completion of Systems Analysis Tasks
System Requirements Document
The system requirements document, or software requirements specification, contains the requirements for the new system, describes the alternatives that were considered, and makes a specific recommendation to management
Like a contract
Format and organize it so it is easy to read and use

45. Completion of Systems Analysis Tasks
Presentation to Management
Begin your presentation with a brief overview of the purpose and primary objectives of the system project, the objectives of this presentation, and what decisions need to be made
Summarize the primary viable alternatives. For each alternative, describe the costs, advantages, and disadvantages

46. Completion of Systems Analysis Tasks
Presentation to Management
Explain why the evaluation and selection team chose the recommended alternative
Allow time for discussion and for questions and answers
Obtain a final decision from management or agree on a timetable for the next step in the process

47. Completion of Systems Analysis Tasks
Presentation to Management
Depending on their decision, your next task as a systems analyst will be one of the following
Implement an outsourcing alternative
Develop an in-house system
Purchase or customize a software package
Perform additional systems analysis work
Stop all further work

48. The Transition to Systems Design
If management decides to develop the system in- house, then the transition to the systems design phase begins
Preparing for Systems Design Tasks
It is essential to have an accurate and understandable system requirements document

49. The Transition to Systems Design
The Relationship between Logical and Physical Design
The logical design defines the functions and features of the system and the relationships among its components
The physical design of an information system is a plan for the actual implementation of the system

50. Systems Design Guidelines
The systems analyst must understand the logical design of the system before beginning the physical design of any one component
Data design
User interface
Architecture
System design specification

51. Systems Design Guidelines
Systems Design Objectives
The goal of systems design is to build a system that is effective, reliable, and maintainable
A system is reliable if it adequately handles errors
A system is maintainable if it is well designed, flexible, and developed with future modifications in mind

52. Systems Design Guidelines
Systems Design Objectives
User Considerations
Carefully consider any point where users receive output from, or provide input to, the system
Anticipate future needs of the users, the system, and the organization – hard-coded
Provide flexibility
Parameter, default

53. Systems Design Guidelines
Systems Design Objectives
Data Considerations
Data should be entered into the system where and when it occurs because delays cause data errors
Data should be verified when it is entered, to catch errors immediately
Automated methods of data entry should be used whenever possible

54. Systems Design Guidelines
Systems Design Objectives
Data Considerations
Access for data entry should be controlled and all entries or changes to critical data values should be reported – audit trail
Every instance of entry and change to data should be logged

55. Systems Design Guidelines
Systems Design Objectives
Data Considerations
Data should be entered into a system only once
Data duplication should be avoided

56. Systems Design Guidelines
Systems Design Objectives
Architecture considerations
Use a modular design
Design modules that perform a single function are easier to understand, implement, and maintain

57. Systems Design Guidelines
Design Trade-Offs
Design goals often conflict with each other
Most design trade-off decisions that you will face come down to the basic conflict of quality versus cost
Avoid decisions that achieve short-term savings but might mean higher costs later

58. Prototyping
Prototyping produces an early, rapidly constructed working version of the proposed information system, called a prototype
Prototyping allows users to examine a model that accurately represents system outputs, inputs, interfaces, and processes

59. Prototyping Prototyping Methods System prototyping Design prototyping
Throwaway prototyping

60. Prototyping Prototyping Methods Prototyping offers many benefits
Users and systems developers can avoid misunderstandings
Managers can evaluate a working model more effectively than a paper specification
Consider potential problems
The rapid pace of development can create quality problems
In very complex systems, the prototype becomes unwieldy and difficult to manage

61. Prototyping Prototyping Tools
Systems analysts can use powerful tools to develop prototypes
CASE tools
Application generators
Report generators
Screen generators
Fourth-generation language (4GL)
Fourth-generation environment

62. Prototyping Limitations of Prototypes
A prototype is a functioning system, but it is less efficient than a fully developed system
Systems developers can upgrade the prototype into the final information system by adding the necessary capability
Otherwise, the prototype is discarded

63. Software Development Trends
A review of current online topics being discussed in the IT community
Software quality will be more important than ever
Project management will be a major focus of IT managers

64. Software Development Trends
Many software development tools and technologies are in transition
Service-oriented architecture (SOA)
Loose coupling
Growth in open-source software
Web services
Programmers will continue to use dynamic languages

65. Chapter Summary
This chapter describes system development strategies, the preparation and presentation of the system requirements document, and the transition to the systems design phase of the SDLC
An important trend that views software as a service, rather than a product, has created new software acquisition options
Systems analysts must consider Web-based development environments 49

66. Chapter Summary
The systems analyst’s role in the software development process depends on the specific development strategy
The most important factor in choosing a development strategy is total cost of ownership (TCO)
The process of acquiring software involves a series of steps
A prototype is a working model of the proposed system 49