CHAPTER 13
Acquiring Information Systems and
Applications
CHAPTER OUTLINE
13.1 Planning for and Justifying IT
Applications
13.2 Strategies for Acquiring IT Applications
13.3 The Traditional Systems Development Life
Cycle
13.4 Alternative Methods and Tools for
Systems Development
13.5 Vendor and Software Selection
LEARNING OBJECTIVES
1. Define an IT strategic plan, identify three objectives
it must meet, and 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, and explain the primary tasks
and importance of each process.
LEARNING OBJECTIVES
4. Describe four alternative development methods and
four tools that augment development methods, and
identify at least one advantage and one disadvantage of
each method and tool.
5. Analyze the process of vendor and software
selection.
13.1 Planning for and Justifying
IT Applications
Planning for 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.
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
Evaluating & Justifying IT Investment: Benefits,
Costs & Issues
Assessing the costs
Fixed costs
Total cost of ownership (TCO)
Assessing the benefits (Values)
Intangible benefits: Benefits from IT that may be
very desirable but difficult to place an accurate
monetary value on.
Comparing the two
Conducting the Cost-Benefit Analysis
•Using Net Present Value (NPV)
•Return on investment
•Breakeven analysis
•The business case approach
13.2 Strategies for Acquiring IT
Applications
Strategies for Acquiring IT
Applications
Four fundamental business decisions to make
before choosing a strategy:
(1) How much computer code does the
company want to write?
(2) How will the company pay for the
application?
(3) Where will the application run?
(4) Where will the application originate?
Strategies for Acquiring IT
Applications
Purchase a Prewritten Application
Customize a Prewritten Application
Lease the applications
Application Service Providers and Softwareas-a-Service Vendors
Use Open-Source Software
Outsourcing
Custom Development
13.3 Traditional Systems
Development Life Cycle
Traditional Systems Development
Life Cycle
Software Development Life Cycle (SDLC)
Systems Investigation
Systems Analysis
Systems Design
Programming and Testing
Implementation
Operation and Maintenance
The SDLC
Major advantages
Control
Accountability
Error detection
Major drawbacks
Relatively inflexible
Time-consuming and expensive
Discourages changes once user requirements are
gathered
SDLC – Systems Investigation
Begins with the business problem (or
opportunity) followed by the feasibility analysis.
Feasibility study
Deliverable: Go/No-Go Decision
Feasibility Study
• Technical feasibility
•Economic feasibility
•Organizational feasibility
•Behavioral feasibility
SDLC – System Analysis
The examination of the business problem that
the organization plans to solve with an
information system.
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.
SDLC – System Analysis
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.
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.
SDLC – Systems Implementation
Implementation involves three major
conversion strategies:
Direct Conversion
Pilot Conversion
Phased Conversion
Parallel Conversion (not used much today)
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
Maintenance
13.4 Alternative Methods and Tools
for Systems Development
Alternative Methods and Tools
for Systems Development
•Joint application design (JAD)
•Rapid application development (RAD)
•Agile development
•End-user development
Closing Case
• The Problem
• The Solution
• The Results