1. Alternatives to Systems Development Chapter 11

2. Chapter Objectives Understand the factors and situations where building a system in-house is not feasible Explain three alternative systems development options: external acquisition, outsourcing, and end-user development

3. System Development Options

4. The Importance of Finding Alternatives to Building Systems Yourself Four situations in which you might consider alternative development –Limited IS staff –IS staff has limited skill set –IS staff is overworked –Problems with performance of IS Staff

5. Common Alternatives to Building a System Yourself External Acquisition Outsourcing End-user Development

6. External Acquisition Purchasing an existing system from an outside vendor –Do analysis of your needs –Ask vendors to provide information about their systems –Select most promising vendors to give a demonstration of their system

7. Steps in External Acquisition Identification, selection, and planning Analysis Development of a Request for Proposal (RFP) Proposal evaluation Vendor selection

8. Development of a Request for Proposal (RFP) An RFP covers these areas –Summary of existing systems and applications –Reliability, backup, and service requirements –Required system performance and features –Criteria used to evaluate proposals –Timetable and budget constraints –Deadline for submitting bids

9. Proposal Evaluation View demonstrations Evaluate performance with systems benchmarking –Sample programs or jobs that simulate the buyer’s computer workload Compare to criteria for system requirements

10. Vendor Selection Create a scoring system –Assign different scores to each of the evaluation criteria –Weigh more important criteria more heavily –Sum scores to give an overall score for each vendor Less formal approaches –Simple checklist –Subjective criteria

11. Outsourcing Turn over some or all information system responsibilities to an outside firm Variety of relationships with outsourcer –Develop your information systems –House your information systems –Run your information systems

12. Why Outsourcing? Cost and quality concerns Problems in IS performance Supplier pressures Simplifying, downsizing, and re- engineering Financial factors Organizational culture Internal irritants

13. Managing the IS Outsourcing Relationship Strong, active CIO and staff should continually monitor the relationship Have clear, realistic performance measurements of the system Have multiple levels of interface between the firms –Policy and relationship issues –Operational and tactical issues

14. Not All Outsourcing Relationships Are the Same Basic relationship –Purchase services on an as-needed basis Preferred relationship –Set preferences and prices that benefit both Strategic relationship –Both sides share risks and rewards

15. End-User Development People who are going to use the systems develop those systems Speeds up application development without relying on external entities

16. Benefits of End-User Development Reduces problems associated with IS staff –High cost of labor –Long development time –Slow in modifying or updating existing systems –Work overload

17. Rising Software Costs vs Declining Hardware Costs

18. Encouraging End-User Development Provide fourth-generation language tools –Personal computer tools –Query languages/report generators –Graphics generators –Decision support or modeling tools –Application generators

19. End-User Development Pitfalls Users not aware of software development standards User turnover provides lack of continuity Can misuse time of employees who have other responsibilities