Chapter 13 - Acquiring Information Systems and Applications

Introduction to
Information Systems
Fifth Edition
R. Kelly Rainer Brad Prince Casey Cegielski
Chapter 13
Acquiring Information Systems And
Applications
Copyright © 2014 John Wiley & Sons, Inc. All rights reserved.
13-2
Introduction
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.
13-3
Introduction
Learning Objectives
 Describe alternative development methods and the tools
that augment development methods.
 Analyze the process of vendor and software selection.
13-4
Introduction
Chapter Outline
 Planning for and Justifying IT Applications
 Strategies for Acquiring IT Applications
 The Traditional Systems Development Life Cycle
 Alternative Methods and Tools for Systems
Development
13-5
Introduction
What’s in IT for Me?
Misuse of IS Global Focus Focus on Ethics
13-6
Tweak or Trash
The Problem
 When the time comes to upgrade information
technology equipment and systems, which is the better
strategy
 To repair what you already have by patching and
tweaking systems
 software to keep them operating, or to replace (a.k.a.
trash) your old technology
 Start with an entirely new system
13-7
Tweak or Trash
The IT Solution
 The process of revamping its IT infrastructure
 Kicked off the replacement process;
 Establishing a coherent IT strategy
 Building its own independent IT capabilities
 Shifted its focus to cloud computing
13-8
Tweak or Trash
The Results
 To trash not tweak and then to employ cloud computing
13-9
Tweak or Trash
What We Learned from This Case
 Competitive organizations move as quickly as they can
to acquire new information technologies or modify
existing ones when they need to improve efficiencies
and gain strategic advantage
 Acquisition goes beyond building new systems in-house
 IT resources involve far more than software and
hardware
13-10
Planning for and Justifying IT Applications

 Organizations must analyze the need;
 Applications
 Then justify each purchase in terms of costs and benefit
 The need for information systems;
 Related to organizational planning
 The analysis of its performance vis-à-vis its competitors
 Application portfolio
 Examines its needs and performance,
 Generates a prioritized list of both existing and potential IT
applications
13-11

IT Planning
 Organizational strategic plan;
 The planning process for new IT applications begins with an
analysis
 Identifies the firm’s overall mission
 The goals that follow from that mission
 The broad steps required to reach these goals
 Process modifies the organization’s objectives and
resources to match its changing markets and
opportunities
13-12

IT Planning
 Organizational
strategic plan;
Fig_13-1
13-13

IT Planning
 IT architecture;
 The way an organization should utilize its information
resources to accomplish its mission
 Encompasses both the technical and the managerial aspects
 The technical aspects include hardware and operating
systems, networking, data management systems, and
applications software
 The managerial aspects specify how the IT department will
be managed, how the functional area managers will be
involved, and how IT decisions will be made.
13-14

IT Planning
 IT strategic plan;
 A set of long-range goals that describe the IT infrastructure
 Identify the major IT initiatives needed to achieve the
organization’s goals
 Three objectives
 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 and
within budget and still have the required functionality
13-15

IT Planning
 IS operational plan.;
 Mission
 The mission of the IS function
 IS environment
 Information needs of the functional areas and organization
 Objectives of the IS function
 The best current estimate of the goals of the IS function
13-16

IT Planning
 IS operational plan.;
 Constraints on the IS function
 Technological, financial, personnel, and other resource limitations
 The application portfolio
 A prioritized inventory of present applications and a detailed plan
 Resource allocation and project management
 A listing of how and when who is going to do what
13-17

Evaluating and Justifying IT Investment: Benefits,
Costs, and Issues
 Assessing the Costs
 Calculating the dollar value of IT investments is not as simple
 Fixed costs
 Those costs that remain the same regardless of any change in the
company’s activity level
 Fixed IT costs
 Infrastructure costs and
 The costs associated with IT services and IT management
13-18

Costs, and Issues
 Assessing the Benefits
 Evaluating the benefits of IT projects is typically even more
complex than calculating their costs
 Benefits may be more difficult to quantify specially intangible
 Multiple purposes further complicates benefit analysis
 To obtain a return from an IT investment;
 Must implement the technology successfully
13-19

Costs, and Issues
 Conducting the Cost–Benefit Analysis
 After assessed, it must compare
 There is no uniform strategy for conducting a cost–benefit
analysis
 Four common approaches
 Analysts use the net present value (NPV)
 Return on investment (ROI)
 Breakeven analysis
 The business case approach Copyright © 20113 John Wiley & Sons, Inc. All rights reserved.
13-20
Strategies for Acquiring IT Applications

 The fundamental decisions are;
 How much computer code does the company want to write?
 A totally prewritten application (to write no computer code),
 Customize a prewritten application (to write some computer code), or
 Custom-write an entire application (write all new computer code).
 How will the company pay for the application?
 Decide how to pay for it
 Where will the application run?
 Whether to run the application in-house or SAAS
 Where will the application originate?
 Can be open-source software or they can come from a vendor
13-21

Purchase a Prewritten Application  Commercial
software packages
 Standard features
 Can be a cost-
effective
 Time-saving
 Can quickly
become obsolete
 Rarely satisfy all of
an organization’s
needs
Table_13-1
13-22

Lease the Application
 Can save a company both time and money
 May not exactly fit the company’s requirements
 Generally includes most commonly needed features
 Attractive to small-to medium-size enterprises (SMEs)
 Executing leased application;
 In-house
 At vendor premises
 SAAS
13-23

Application Service Providers and SAAS Vendors
 An application service
provider (ASP)
 An agent or a vendor who
assembles
 The software needed by
enterprises
 Packages it with services;
 Development
 Operations
 Maintenance
 Accesses via the Internet
Fig_13-2
13-24

Application Service Providers and SAAS Vendors
 Software-as-a-service (SaaS)
 A method of delivering software in
which a vendor
 Hosts the applications
 Provides the over a network
 Customers do not own the
software
 Pay for using it
 Eliminates to install and run on their
own computers
 Save expense (money, time, IT staff);
 Buying, Operating, and Maintaining
Fig_13-3
13-25

Use Open-Source Software
 Obtain a license;
 Implement an open-source software product
 Either use it as is
 Customize it
 Develop applications with it
13-26

Outsourcing
 Acquiring IT applications from outside contractors or external
organizations
 Disadvantage – frequently placing corporate data under the
control of vendor
 Offshoring
 Relocate operations to oversea
 Can save money
 But it includes risks
 Poor communication between users and developers
 Reverse outsourcing, or insourcing
 Bringing outsourced job back In-house Copyright © 20113 John Wiley & Sons, Inc. All rights reserved.
13-27

Employ Custom Development
 Custom-build an application
 Operation in-house
 Outsource the process
 Backbone methodology for custom development
 The systems development life cycle (SDLC)
 Prototyping
 Joint application development
 Integrated computer-assisted systems development tools
 Rapid application development
The Traditional Systems Development 13-28
Life Cycle
 Systems development life cycle (SDLC)
 The traditional systems development method
 That organizations use for large-scale IT projects
 Structured framework that consists of sequential processes
 Systems investigation
 Systems analysis
 Systems design
 Programming and testing
 Implementation
 Operation and maintenance
Fig_13-4
Life Cycle
 Development teams typically;
 Users
 Employees from all functional areas and levels who interact with the
system directly or indirectly
 Systems analysts
 IS professionals who specialize in analyzing and designing
 Programmers
 IS professionals who modify existing computer programs or write new
programs
 Technical specialists
 Experts on a certain type of technology
 Systems stakeholders
 Everyone who is affected by changes of IS Copyright © 20113 John Wiley & Sons, Inc. All rights reserved.
Life Cycle
 Early
stages of
SDLC
Fig_13-5
Life Cycle
 Advantages and
disadvantages;
 SDLC
 Prototyping
 JAD
 Integrated CASE
 Rapid Application
Development
 End-user Development
 Object-oriented
Development
Table_13-2
Life Cycle
Systems Investigation
 Initial stage in a traditional SDLC;
 Understanding the business problem to be solved
 Specifying the technical options for the systems
 Anticipating the problems
 Addresses the business problem (or business opportunity) by
means of;
 Feasibility study
 The main task in the systems investigation stage
Life Cycle
 Three basic solutions
 Do nothing and continue to use the existing system
unchanged
 Modify or enhance the existing system
 Develop a new system
 Provides a rough assessment of the project’s are;
 Technical
 Economic
 Behavioral feasibility
Life Cycle
 Technical feasibility
 Determines to develop and/or acquire
 Hardware, Software, and Communications components
 Economic feasibility
 Determines whether the project is an acceptable
 Financial risk, and The necessary time and money
 Behavioral feasibility
 Addresses the human issues
 A “go/no-go” decision is reached
Life Cycle
Systems Analysis
 The process where systems analysts examine the
business problem
 The main purpose
 To gather information about the existing system in order to
determine the requirements
Life Cycle
Systems Design
 Describes how the system will resolve the business
problem
 Deliverable of the systems design phase is the set of
technical system specifications;
 System outputs, inputs, and user interfaces
 Hardware, software, databases, telecommunications,
personnel, and procedures
 A blueprint of how these components are integrated
 Scope creep
 Endangers the project’s budget and schedule
Life Cycle
Programming and Testing
 Programming
 Involves translating the design specifications into computer
code
 Testing
 The process that assesses whether the computer code will
produce the expected and desired results
 Intended to detect errors, or bugs, in the computer code
Life Cycle
Implementation
 The process of converting from an old computer system
to a new one
 Direct conversion
 The old system is cut off
 The new system is turned on
 Least expensive
 The most risky
 The new system does not work
 There is no support from the old system
Life Cycle
Implementation
 Pilot conversion
 Introduces the new system in one part
 If the assessment confirms
 Then the system is implemented in other parts
 Phased conversion
 Introduces components or phase of the new system
 Parallel conversion
 The old and new systems operate simultaneously
Life Cycle
Operation and Maintenance
 Debugging
 A process that continues throughout the life of the system
 Updating
 The system to accommodate changes in business conditions
 Adds new functions
 The existing system without disturbing its operation
Alternative Methods and Tools for 13-41
Systems Development
Joint Application Design  A group-based tool for
collecting user
requirements and
creating system designs
 Used within the systems
analysis and systems
design stages of the
SDLC
 This process saves a
tremendous amount of
time
Systems Development
Rapid Application Development
 A systems-
development
method that can
combine JAD,
prototyping, and
integrated
computer-
assisted software
engineering
(ICASE) tools
Fig_13-6
Systems Development
Rapid Application Development
 Developers use JAD
sessions
 Uses ICASE tools to
quickly structure
requirements and
develop prototypes
 The prototypes are
developed and
refined
Systems Development
Agile Development
 A software-development methodology that delivers
functionality in rapid iterations
 Focuses on
 Rapid development
 Frequent user contact
 Uses scrum approach
 Users can change their minds about what they want and need
 Acknowledges development problem cannot be fully understood
 Maximizing the team’s ability to deliver quickly and effectively
Systems Development
Agile Development
 The primary roles of Scrum;
 The Scrum Master – maintains the processes
 The Product Owner – represents the business stakeholders
 The Team – cross-funtional
 During each sprint
 Typically a 2- to 4-week period
 Planning meeting determines which backlog items
 No one is allowed to change the sprint backlog
Systems Development
End-User Development  An approach in
which the
organization’s end
users develop their
own applications
with little or no
formal assistance
from the IT
department
Systems Development
Tools for Systems Development
 Prototyping approach
defines
 An initial list of user
requirements
 Builds a model of the
system
 Refines the system in
several iterations based
on users’ feedback
Systems Development
 Integrated CASE Tools
 Computer-aided software
engineering (CASE)
 A group of tools that
automate many of the tasks
in the SDLC
 Upper CASE tools
 Used to automate the early
stages of the SDLC
 Lower CASE tools
 Used to automate later
stages in the SDLC
Systems Development
 Component-Based Development
 Uses standard components to build applications
 Reusable applications that generally have one specific
function;
 A shopping cart
 User authentication
 A catalog
Systems Development
 Object-Oriented Development (OO)
 Based on a different view of computer systems than the
perception that characterizes traditional development
approaches
 Development process for an OO system
 A feasibility study and an analysis of the existing system
 Objects have properties or data values
 Operations are also referred to as behaviors
Systems Development
 Object-Oriented
Development
 Approach enables
OO analysts
 Define all the relevant
objects needed for the
new system
 Including their
properties and
operations
13-52
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Chapter 13 - Acquiring Information Systems and Applications

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Introduction to

R. Kelly Rainer Brad Prince Casey Cegielski

Misuse of IS Global Focus Focus on Ethics

Planning for and Justifying IT Applications

Planning for and Justifying IT Applications

Planning for and Justifying IT Applications

Planning for and Justifying IT Applications

Planning for and Justifying IT Applications

Planning for and Justifying IT Applications

Planning for and Justifying IT Applications

Planning for and Justifying IT Applications

Planning for and Justifying IT Applications

Planning for and Justifying IT Applications

Strategies for Acquiring IT Applications

Strategies for Acquiring IT Applications

Strategies for Acquiring IT Applications

Strategies for Acquiring IT Applications

Strategies for Acquiring IT Applications

Strategies for Acquiring IT Applications

Strategies for Acquiring IT Applications

Strategies for Acquiring IT Applications

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