Information Technology Foundations-BIT 112
CHAPTER 10
Acquiring Information
Systems and Applications
Information Technology Foundations-BIT 112
Chapter Outline
• 10.1 Planning for and Justifying IT Applications
• 10.2 Strategies for acquiring IT Applications
• 10.3 Traditional Systems Development Life Cycle
• 10.4 Alternative Methods and Tools for Systems
Development
• 10.5 Outsourcing and Application Service Providers
• 10.6 Vendor and Software Selection
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Learning Objectives
• Describe the IT planning process.
• Describe the IT justification process and methods.
• Describe the SDLC and its advantages and limitations.
• Describe the major alternative methods and tools for
building information systems.
• List the major IT acquisition options and the criteria
for option selection.
• Describe the roles of hosting vendors.
• Describe the process of vendor and software selection.
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10.1 Planning of 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.
• The application portfolio is a prioritized list of both
existing and potential IT applications of a company.
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Information Systems Planning
Process
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Information Systems Planning
• Organizational strategic plan states the firm’s overall
mission, the goals that follow from that mission, and
the broad steps necessary to reach these goals.
• IT architecture delineates the way an organization’s
information resources should be used to accomplish
its mission.
• Both are inputs in developing the IT Strategic Plan.
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IT Strategic Plan
• IT Strategic Plan is a set of long-range goals that
describe the IT infrastructure and major IT initiatives
needed to achieve the goals of the organization.
– It must be aligned with the organization’s strategic plan.
– It must provide for an IT architecture that enables users,
applications and databases to be seamlessly networked and
integrated.
– It must efficiently allocate IT development resources among
competing projects, so that projects can be completed on
time and within budget and the have the required
functionality.
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IT Operational Plan
• Consists of a clear set of projects that the IT department
and functional area managers will execute in support of
the IT strategic plan.
• Contains the following elements:
– Mission : derived from IT strategy.
– IT environment : summary of information needs of the functional
areas and of the organization as a whole.
– Objectives of the IT function : best current estimate of the goals.
– Constraints of the IT function : technological, financial,
personnel and other resource limitations.
– Application portfolio : prioritized inventory of present
applications and a detailed plan of projects to be developed or
continued.
– Resource allocation and project management : listing of who is
going to do what, how and when.
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Evaluating & Justifying IT Investment:
Benefits, Costs & Issues
• Assessing the costs
– Fixed costs: are those costs that remain the same regardless
of change in the activity level. For IT, fixed costs include
infrastructure cost, cost of IT services, and IT management
cost
– Total cost of ownership (TCO): Formula for calculating cost
of acquiring, operating and controlling an IT system.
• Assessing the benefits (Values)
– Intangible benefits: Benefits from IT that may be very
desirable but difficult to place an accurate monetary value
on.
• Compare and identify issues
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10.2 Strategies for Acquiring IT
Applications
• Buy the applications (off-the-shelf approach)
• Lease the applications
• Use Open-Source Software
• Software-as-a-Service
• Developing the applications in-house
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Software-as-a-service
• A method of delivering software, in which a vendor
hosts the applications, and customers access these
applications over the Internet.
• Cloud Computing
• e.g., Google Maps
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10.3 Traditional Systems Development
Life Cycle
• Software Development Life Cycle (SDLC) is the
traditional systems development method that
organizations use for large-scale IT projects.
• SDLC processes are: systems investigation, systems
analysis, systems design, programming, testing,
implementation, operation and maintenance.
• Waterfall approach is when tasks in one phase are
completed before the work proceeds to the next stage.
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Traditional Systems Development
Life Cycle (SDLC)
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The Systems Development Life Cycle
(SDLC)
• Major advantages
– Control
– Accountability
– Error detection
• Major drawbacks
– Relatively inflexible
– Time-consuming and expensive
– Discourages changes once user requirements are done
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SDLC – 1) Systems Investigation
• Begins with the business problem (or opportunity)
followed by the feasibility analysis.
• Feasibility study
– The main task of the Systems Investigation phase.
– The feasibility study helps the organization choose between
3 options:
• (1) Do nothing and continue to use the existing system
unchanged.
• (2) Modify or enhance the existing system.
• (3) Develop a new system.
• Go/No-Go Decision
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SDLC – 2) System Analysis
• Is the examination of the business problem that the
organization plans to solve with an information
system.
– Users prefer information systems that are oriented toward
facilitating organizational tasks and solving business
problems
• Main purpose is to gather information about existing
system to determine requirements for the new or
improved system.
• Deliverable is a set of system requirements.
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SDLC – 3) Systems Design
• Describes how the system will accomplish this task.
• Deliverable is the Technical Design that specifies:
– System outputs, inputs, user interfaces.
– Hardware, software, databases, telecommunications, personnel &
procedures.
– Blueprint of how these components are integrated.
• Logical system design states what the system will do,
using abstract specifications.
• Physical system design states how the system will perform
its functions, with actual physical specifications.
• Scope creep is caused by adding functions after the project
has been initiated.
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SDLC – 4) Programming & 5) 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. These errors are of two types:
– Syntax errors ( e.g., misspelled word or a misplaced
comma)
– Logic errors that permit the program to run but result in
incorrect output.
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SDLC – 6) Systems Implementation
• Implementation or deployment is the process of
converting from the old system to the new system.
• There are four major conversion strategies.
– Direct Conversion. Implementation process in which the old
system is cut-off and the new system turned on at a certain point
in time.
– Pilot Conversion. Implementation process that introduces the new
system in one part of the organization on a trial basis, when new
system is working property, it is introduced in other parts of the
organization.
– Phased Conversion. Implementation process that introduces
components of the new system in stages, until the entire new
system is operational.
– Parallel Conversion. Implementation process in which the old
system and the new system operate simultaneously for a period of
time. Rarely used today if at all.
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SLDC – 7) Operation & 8) Maintenance
• Audits are performed to assess the system’s
capabilities and to determine if it is being used
correctly.
• Systems need several types of maintenance.
– Debugging: A process that continues throughout the life of
the system.
– Updating: Updating the system to accommodate changes in
business conditions (a.k.a., minor requirement changes)
– New Functionally to the system: Adding new features to the
existing system without disturbing its operation.
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10.4 Alternative Methods & Tools for
Systems Development
•
•
•
•
•
•
•
•
Prototyping
–
Approach that defines an initial list of user requirements, builds a prototype system and then
improves the system in several iterations based on users’ feedback.
Joint application design (JAD)
–
A group–based tool for collecting user requirements and creating system designs.
Computer-Assisted Software Engineering (CASE)
–
Development approach that uses specialized tools to automate many of the tasks in the SDLC;
upper CASE tools in SDLC automate the early stages of the SDLC, and lower case tools
automate the later stages.
Integrated Computer-Assisted Software Engineering (ICASE) Tools
–
CASE tools that provide links between upper CASE and lower CASE tools.
Rapid Application Development (RAD)
–
Development method that uses special tools and an iterative approach to rapidly produce a highquality system.
Agile Development
–
Development method that delivers functionality in rapid iterations requiring frequent
communication, development, testing, and delivery.
End-User Development
–
Development method that has the actual user develop their own application(s) for use.
Component-Based Development
–
Uses standard components to build applications.
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Prototyping
• Helps clarify user requirements, promotes genuine
user participation, and may produce part of the final
system?
• But, it may encourage inadequate problem analysis, is
not practical with large numbers of users, and may
result in a system with lower quality.
• Order of steps to follow in the project
–
–
–
–
Identify user requirements;
develop the prototype;
use the prototype; revise and
enhance the prototype
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Rapid Application Development (RAD)
versus SDLC
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10.5 Outsourcing & Application Service
Providers
• Outsourcing is when an organization acquires IT
applications or services from outside contractors or
external organizations.
• Application Service Provider (ASP) is an agent or
vendor who assembles the software needed by
enterprises and packages the software with services
such as development, operations and maintenance.
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10.6 Vendor & Software Selection
• Step 1: Identify potential vendors.
• Step 2: Determine the evaluation criteria.
– This is the most difficult and crucial task .
– Request for proposal (RFP) is a document sent to potential
vendors to submit a proposal describing their software
package and explain how it would meet the company’s
needs.
• Step 3: Evaluate vendors and packages.
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Vendor & Software Selection (continued)
• Step 4: Choose the vendor and package.
• Step 5: Negotiate a contract.
• Step 6: Establish a service level agreement.
– Service Level Agreements (SLAs) are formal agreements
that specify how work is to be divided between the
company and its vendors.
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