MIS
4/8/15
Chapter 9
Developing and Acquiring Information Systems
Building business case for using IT
 Make vs. Buy
 Commercial Off the Shelf vs. customized software
Options
1) Build Info system from scratch
2) Prepackaged
a. COTS
3) Third party
a. Hire someone else
4) End Use development
a. Letting the user do there own creating of software
b. Example, Linux
The Business Case
The reason for initiating the project
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Benefit?
Revenue?
Cost?
Profit outweighs development costs?
How do we measure this?
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Productivity Paradox
 No correlation between IT investment and productivity has ever been
found
 Actual use of the product needed
 IT system’s use must be aligned with the goal of firm
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Managing the paradox
 Measurement
 Time lags- realization of benefits not obvious immediately
 Wealth Distribution
 Mismanagement
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Productivity business case- Cost vs Productivity
Must either reduce costs, or increase productivity
1) Faith
 Argument based on belief
2) Fear
 “if we don’t do this, competitors will beat us”
3) Fact
 Based on data
 Need cost/benefit analysis
Faith and Fear can be good to use in business, but works best when
Facts are used in addition.
Steps in Process
1) System Identification
 Pre-planning, planning
2) Systems Analysis
 Figure out what the system does
 Figure out system requirements
 Model organizational data- figure our flow of data
 Model organization processes and logics
3) System Design
 Designing forms and reports
 Designing interfaces and dialogues. Database, Files
 Designing Processes
4) System Implementation
 Testing
 Developmental- Test Correctness- Done by programmers
 Alpha Testing – test overall system- Software tester
 Beta testing- has actual users test capabilities
 System Conversion
 Parallel
o Run old and new systems with an overlap
o Safe but can be expensive, can be hard to manage
 Direct
o End old, immediately start up the new
o Can be risky if there are errors, can cost in lost revenue
 Phased
o Bring new system in steps
o Seen often
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Pilot
o Use in only one location to root out issues before full adoption
o Used often
Success Factors
o Top Management Buy-In
o Firm makes more money
o Perceived Ease of Use
o Perceived Usefulness
System Maintenance
Software Development Life Cycle (SDLC)
 A Circle
 Planning-Analysis-Design-Implementation-Acceptance-Maintenanceagain
Why not build own system
Unless that is what your business does, someone else must do it better
External Acquisition
o Competitive bid Process
 Request for Proposal(RFP)
 Summary of existing system
 Performance and feature needs
 Reliability and service requirements
 Evaluation criteria
 Timetable
 Budget
o Proposal Evaluation
 Benchmarking
 Standardized tests to compare different proposed systems
o Vendor Selection
 Rank systems, often multiple systems will meet criteria
 Determine the best fit
 Application Service Provider (ASP) (provide SAAS, Software as Service)
 Bring in when facing problems
 Managing software is complex task
 High operating costs
 Scalability issues
 Outsourcing Systems Development
 Hire someone external to company- have them do the IS
 They can house the IS solution, on their computers
 Why Outsource
 Cost & Quality concerns
 High quality at lower cost available elsewhere
 Need more performance
 Supplier Pressure
 Simplifying, downsizing, reengineering
 Focus on core competency, have someone else do IS solutions
 Managing the IS outsourcing Relationship
 Need management of alliance
 Need active staff, good CIO
 Realistic performance measures
 Multiple levels of interface
 Full time relationship manager should be assigned