CHAPTER 11
Acquiring Information
Systems and
Applications
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CHAPTER 11
ACQUIRING INFORMATION SYSTEMS
AND APPLICATIONS
11.1 Planning for and Justifying IT Applications
11.2 Strategies for Acquiring IT Applications
11.3 The Traditional Systems Development
Life Cycle
11.4 Alternative Methods and Tools for
Systems Development
11.5 Vendor and Software Selection
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LEARNING OBJECTIVES
1. Define an IT strategic plan. Identify three objectives it
must meet. Describe the four common approaches to
cost-benefit analysis.
2. Discuss the four business decisions that companies
must make when they acquire new applications.
3. Identify the six processes involved in the systems
development life cycle. Explain the primary tasks and
importance of each process.
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LEARNING OBJECTIVES
(CONTINUED)
4. Describe four alternative development methods and
four tools that augment development methods. Identify
at least one advantage and one disadvantage of each
method and tool.
5. Analyze the process of vendor and software selection.
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Case 11.1 GE HEALTHCARE SWITCHES FROM
SYSTEMS DEVELOPMENT LIFE CYCLE TO
AGILE DEVELOPMENT
The Business Problem
– GE Healthcare uses products developed by the company’s
Imaging Solutions, one unit was experiencing several SDLC
difficulties:
– traditional systems development life cycle was too long, taking
from 18 to 24 months.
– SDLC approach followed a long and regimented process.
– many communication barriers existed among the various
business functions, especially marketing and engineering.
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Case 11.1 GE HEALTHCARE SWITCHES FROM
SYSTEMS DEVELOPMENT LIFE CYCLE TO
AGILE DEVELOPMENT
The Solution
– To address these problems, Imaging Solutions replaced the
SDLC process with an approach to software and product
development called agile development. Agile is based on
iterations—frequent and incremental changes made through
collaboration at all stages—that usually result in shorter product
cycles. Imaging Solutions implemented a scrum initiative based
on agile development.
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Case 11.1 GE HEALTHCARE SWITCHES FROM
SYSTEMS DEVELOPMENT LIFE CYCLE TO
AGILE DEVELOPMENT
The Results
– The pilot project was delivered successfully with the correct
features and functionality. Imaging Solutions learned important
lessons from the pilot project. The products it makes are highly
regulated, meaning that engineers need to identify, plan for, and
meet many additional quality and regulatory steps.
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Case 11.1 GE HEALTHCARE SWITCHES FROM
SYSTEMS DEVELOPMENT LIFE CYCLE TO
AGILE DEVELOPMENT
What We Learned From This Case
– The GE Healthcare case highlights several problems with
systems development that employs the traditional systems
development life cycle.
– The case also emphasizes the importance of early, frequent user
input into the systems development process, which the agile
development methodology encourages.
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11.1 PLANNING FOR AND
JUSTIFYING IT APPLICATIONS
•
•
The need for information systems is usually related to
organizational planning and to the analysis of the
organization’s performance vis-à-vis its competitors.
The cost-benefit justification must determine whether
investing in a specific IT application is preferable to
spending the funds on alternative projects.
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11.1 IT’S ABOUT BUSINESS
•
ShopMyClothes: High Fashion Sales
– ShopMyClothes.com is a website so that people can post
clothes for sale without haggling. To ensure quality control over
the thousands of clothing items that are posted, each item is
individually checked before posting. The company had high
website development and maintenance costs, due to the
complexity of the platform it used, Microsoft’s .net framework.
They dealt with the high costs by moving from having totally local
programming to outsourcing much of its programming to India
and having local programming available on a standby basis. To
get a functioning website after many delays, the company had to
fire its previous contract programmer.
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FIGURE 11.1 THE INFORMATION
SYSTEMS PLANNING PROCESS
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IT STRATEGIC PLAN
•
The IT strategic plan must meet three objectives:
1.
2.
3.
aligned with the organization’s strategic plan.
provide for an IT architecture that seamlessly networks users,
applications, and databases
efficiently allocate IS development resources among
competing projects so that the projects can be completed on
time and within budget and still have the required functionality.
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IT STEERING COMMITTEE
•
One critical component in developing and implementing
the IT strategic plan is the [KT]IT steering committee.
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IS OPERATIONAL PLAN
•
A typical 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
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EVALUATING & JUSTIFYING IT
INVESTMENT: BENEFITS, COSTS &
ISSUES
•
•
Justifying IT investment involves:
Assessing the costs
– Fixed costs
– Future costs
•
Assessing the benefits
– Intangible benefits
•
Comparing the two
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CONDUCTING THE COST-BENEFIT
ANALYSIS
•
Four common approaches organizations use:
1.
2.
3.
4.
Net Present Value (NPV)
Return on Investment (ROI)
Breakeven Analysis
Business Case Approach
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11.2 STRATEGIES FOR ACQUIRING
IT APPLICATIONS
•
Companies must make a series of fundamental
business decisions:
–
–
–
–
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?
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STRATEGIES FOR ACQUIRING IT
APPLICATIONS
•
•
•
•
•
•
•
Purchase a Prewritten Application
Customize a Prewritten Application
Lease the Applications
Application Service Providers and Software-as-aService Vendors
Open-Source Software
Outsourcing
Custom Development
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ADVANTAGES AND LIMITATIONS
OF THE “BUY” OPTION
•
• Disadvantages:
Advantages:
–
–
–
–
–
–
Many choices
Test software
Save time
Familiar product
Many users
Eliminate need to hire
specialized personnel
–
–
–
–
–
–
May not meet needs
Difficult to modify
No control over content
Difficult to integrate
May be discontinued
Controlled by another
company
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FIGURE 11.2 OPERATION OF AN
APPLICATION SERVICE PROVIDER (ASP)
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FIGURE 11.3 OPERATION OF A
SOFTWARE-AS-A-SERVICE (SAAS) VENDOR
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11.3 Traditional Systems
Development Life Cycle (SDLC)
•
The SDLC is a structured framework that consists of
sequential processes:
–
–
–
–
–
–
Systems Investigation
Systems Analysis
Systems Design
Programming and Testing
Implementation
Operation and Maintenance
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SIX-STAGE SYSTEMS DEVELOPMENT
LIFE CYCLE (SDLC) WITH SUPPORTING
TOOLS
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FIGURE 11.5 COMPARISON OF USER
AND DEVELOPER INVOLVEMENT OVER
THE SDLC
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SDLC – Systems Investigation
•
The feasibility study is the main task of the Systems
Investigation phase. The feasibility study helps the
organization choose between 3 options:
1.
2.
3.
Do nothing and continue to use the existing system
unchanged.
Modify or enhance the existing system.
Develop a new system.
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FEASIBILITY STUDY
•
The Feasibility Study provides a rough assessment of
the project’s:
– Technical feasibility
– Economic feasibility
– Behavioral feasibility
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SDLC – SYSTEM ANALYSIS
•
•
•
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, also called
user requirements.
User requirements identify the specific requirements
that the system must satisfy.
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SDLC – SYSTEMS DESIGN
•
The deliverable is a set of technical system
specifications, which specifies the following:
– System outputs, inputs, calculations or processing, and user
interfaces
– Hardware, software, databases, telecommunications, personnel,
and procedures
– A blueprint of how these components are integrated
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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.
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SDLC – SYSTEMS
IMPLEMENTATION
•
Implementation involves three major conversion
strategies:
–
–
–
Direct Conversion
Pilot Conversion
Phased Conversion
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SLDC – OPERATION &
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
Updating
Adding new functions
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11.4 ALTERNATIVE METHODS AND
TOOLS FOR SYSTEMS
DEVELOPMENT
•
•
•
•
Joint application design (JAD)
Rapid application development (RAD)
Agile development
End-user development
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RAD VERSUS SDLC
•
The development process in RAD is iterative, similar to
prototyping; that is, requirements, designs, and the
system itself are developed and then undergo a series,
or sequence, of improvements. RAD uses ICASE tools
to quickly structure requirements and develop
prototypes. As the prototypes are developed and
refined, users review them in additional JAD sessions.
RAD produces the functional components of a final
system, rather than prototypes.
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AGILE DEVELOPMENT
•
The scrum approach contains sets of practices and
predefined roles. The primary roles are:
– The Scrum Master: maintains the processes (typically replaces a
project manager)
– The Product Owner: represents the business users and any
other stakeholders in the project
– The Team: a cross-functional group of about seven people who
perform the actual analysis, design, coding, implementation,
testing, etc.
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TOOLS FOR SYSTEMS
DEVELOPMENT
•
•
•
•
Prototyping
Integrated Computer-Assisted Software Engineering
Tools (ICASE)
Component-Based Development
Object-oriented Development
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VENDOR AND SOFTWARE
SELECTION
•
Steps in selecting a software vendor and an application
package:
–
–
–
–
–
–
identify potential vendors
determine evaluation criteria
evaluate vendors and packages
choose the vendor and package
negotiate a contract
establish service-level agreements
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13.5 VENDOR & SOFTWARE
SELECTION
•
•
•
•
•
•
Step 1: Identify potential vendors.
Step 2: Determine the evaluation criteria.
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.
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CHAPTER CLOSING
1. There are three objectives an IT strategic plan must
meet. There are four common approaches to costbenefit analysis.
2. There are four business decisions that companies must
make when they acquire new applications.
3. There are six processes involved in the systems
development life cycle: systems investigation, systems
analysis, systems design, programming and testing,
implementation, operation and maintenance.
4. There are four alternative development methods and
four tools that augment development methods.
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CHAPTER CLOSING (CONTINUED)
5. The process of vendor and software selection is
composed of six steps: identify potential vendors,
determine evaluation criteria, evaluate vendors and
packages, choose the vendor and package, negotiate a
contract, and establish service-level agreements.
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39
Copyright
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