IS Test #5

It Steering Committee

A committee, comprised of a group of managers and staff representing various organizational units, set up to establish IT priorities and to ensure that the MIS function is meeting the needs of the enterprise.

the Year 2000 (Y2K) reprogramming projects, which cost organizations worldwide billions of dollars.

A dramatic example of unanticipated expenses was the

feasible acquisition methods in light of its business requirements.

A good rule of thumb is that an organization should consider all

Resource Allocation and Project Management

A listing of who is going to do what, how, and when.

Software-as-a-service (SaaS)

A method of delivering software in which a vendor hosts the applications and provides them as a service to customers over a network, typically the Internet.

Containers

A method of developing applications that run independently of the base operating system of the server.

The Application Portfolio

A prioritized inventory of present applications and a detailed plan of projects to be developed or continued during the current year.

Virtual Machine

A self-contained operating environment that behaves as if it were a separate physical computer.

IS Environment

A summary of the information needs of the individual functional areas and of the organization as a whole.

Mission IS Environment Objectives of the IS Function Constraints on the IS Function The Application Portfolio Resource Allocation and Project Management

A typical IS operational plan contains the following elements:

Outsourcing

Acquiring IT applications from outside contractors or external organizations.

Chapter 14

Acquiring Information Systems and Applications

Purchase a prewritten application. Customize a prewritten application. Lease the application. Use application service providers and software-as-a-service vendors. Use open-source software. Use outsourcing. Employ continuous development. Employ custom development.

Acquisition methods:

Bypasses the IS department and avoids delays. User controls the application and can change it as needed. Directly meets user requirements. Promotes increased user acceptance of new system. Frees up IT resources.

Advantages of End-User Development

Can produce systems with a longer effective operational life. Can produce systems that closely meet user requirements. Can speed up the development process. Can produce systems that are more flexible and adaptable to changing business conditions. Can produce excellent documentation.

Advantages of Integrated Computer-Assisted Software Engineer

Involves many users in the development process. Saves time. Generates greater user support for the new system. Improves the quality of the new system. The new system is easier to implement. The new system has lower training costs.

Advantages of Joint Application Design

Objects model real-world entities. New systems may be able to reuse some computer code.

Advantages of Object-Oriented Development

Helps clarify user requirements. Helps verify the feasibility of the design. Promotes genuine user participation. Promotes close working relationship between systems developers and users. Works well for ill-defined problems. May produce part of the final system.

Advantages of Prototyping

Many different types of off-the-shelf software are available. The company can try out the software before purchasing it. The company can save much time by buying rather than building. The company can know what it is getting before it invests in the product. Purchased software may eliminate the need to hire personnel specifically dedicated to a project.

Advantages of Purchasing a Prewritten Application

Can speed up systems development. Users are intensively involved from the start. Improves the process of rewriting legacy applications.

Advantages of Rapid Application Development

Forces staff to systematically go through every step in a structured process. Enforces quality by maintaining standards. Has lower probability of missing important issues in collecting user requirements.

Advantages of Traditional Systems Development (SDLC)

IS Operational Plan

After a company has agreed on an IT strategic plan, it next develops the

Application Service Provider (ASP)

An agent or a vendor who assembles the software needed by enterprises and then packages it with services such as development, operations, and maintenance.

Containers

Application developers have always been plagued with platform challenges. If a developer built an application in a Windows environment, then it might not run properly if it were deployed after a Windows update. One solution for this problem is to build and test applications on a virtual machine and then implement them on an identical virtual machine for customers. Containers are not new; in fact, they have been tested since 2005. However, they were not widely embraced by mainstream IT leaders until 2014. By late 2015, there were several open-source projects providing this type of container technology available. Containers are another step in the development of virtual technology. They might, for example, enable SaaS and ASP vendors to deliver products to their clients much more quickly and efficiently.

Peoples State Bank Transforms Its Information Techonology

Banks were very slow to respond to online business models because their business processes were built on legacy systems that were not designed to engage customers online. Leif Christianson, PSB's Chief Operating Officer, spearheaded a complete technology overhaul that moved the bank away from their legacy systems.

addresses the human issues of the systems development project. You will be heavily involved in this aspect of the feasibility study.

Behavioral feasibility

installation on the end user's hardware.

Both ASP and SaaS deliver software packages without requiring an

Legacy Systems

Businesses this old often have information systems that have become outdated and no longer meet their needs. These systems, referred to as (blank), often hinder modern business operations.

gain strategic advantage.

Competitive organizations move as quickly as they can to acquire new information technologies or modify existing ones when they need to improve efficiencies and

IS Operational Plan

Consists of a clear set of projects that the IS department and the functional area managers will execute in support of the IT strategic plan.

to develop, test, and deploy technology that will always run in practice exactly like it does in testing. This would allow software to be developed more rapidly.

Containers allow application providers to

Although custom development is usually more time consuming and costly than buying or leasing, it often produces a better fit with the organization's specific requirements.

Custom Development

Customizing existing software is an especially attractive option if the software vendor allows the company to modify the application to meet its needs. However, this option may not be attractive in cases where customization is the only method of providing the necessary flexibility to address the company's needs. It also is not the best strategy when the software is either very expensive or likely to become obsolete in a short time. Further, customizing a prewritten application can be extremely difficult, particularly for large, complex applications.

Customize a Prewritten Application

acquisition process.

Developing an IT plan is the first step in the

users, systems analysts, programmers, and technical specialists.

Development teams typically include

May eventually require maintenance from IS department. Documentation may be inadequate. Leads to poor quality control. System may not have adequate interfaces to existing systems. May create lower-quality systems.

Disadvantages of End-User Development

Systems are often more expensive to build and maintain. The process requires more extensive and accurate definition of user requirements. It is difficult to customize the end product.

Disadvantages of Integrated Computer-Assisted Software Engineer

It is difficult to get all users to attend the JAD meeting. The JAD approach is subject to all of the problems associated with any group meeting.

Disadvantages of Joint Application Design

Works best with systems of more limited scope (i.e., with systems that do not have huge numbers of objects).

Disadvantages of Object-Oriented Programming

May encourage inadequate problem analysis. Is not practical with large number of users. User may not want to give up the prototype when the system is completed. May generate confusion about whether the system is complete and maintainable. System may be built quickly, which can result in lower quality.

Disadvantages of Prototyping

Software may not exactly meet the company's needs. Software may be difficult or impossible to modify, or it may require huge business process changes to implement. The company will not have control over software improvements and new versions. Purchased software can be difficult to integrate with existing systems. Vendors may discontinue a product or go out of business. Software is controlled by another company with its own priorities and business considerations. The purchasing company lacks intimate knowledge about how and why the software functions as it does.

Disadvantages of Purchasing a Prewritten Application

Produces functional components of final systems, but not the final systems themselves.

Disadvantages of Rapid Application Development

May produce excessive documentation. Users may be unwilling or unable to study the approved specifications. Takes too long to progress from the original ideas to a working system. Users have trouble describing requirements for a proposed system.

Disadvantages of Traditional Systems Development (SDLC)

determines whether the project is an acceptable financial risk and, if so, whether the organization has the necessary time and money to successfully complete the project. You have already learned about the commonly used methods to determine economic feasibility: NPV, ROI, breakeven analysis, and the business case approach.

Economic feasibility

calculating the costs, assessing the benefits (values), and comparing the two.

Essentially, justifying IT investment involves

calculating their costs.

Evaluating the benefits of IT projects is typically even more complex than

Investigation that gauges the probability of success of a proposed project and provides a rough assessment of the project's feasibility.

Feasibility Study

Programmers

IS professionals who either modify existing computer programs or write new programs to satisfy user requirements.

Systems Analysts

IS professionals who specialize in analyzing and designing information systems.

organizational strategic plan

Identifies the firm's overall mission, the goals that follow from that mission, and the broad steps required to reach these goals. Modifies the organization's objectives and resources to match its changing markets and opportunities.

rarely satisfy all of an organization's needs.

In reality, a single software package can

reverse outsourcing, or insourcing.

In response to these risks, some companies are bringing outsourced jobs back in-house, a process called

Compared with the buy option and the option to develop applications in-house, the lease option can save a company both time and money. Leased packages (like purchased packages) may not exactly fit the company's application requirements. However, as noted, vendor software generally includes the features that are most commonly needed by organizations in a given industry. Again, the company will decide which features are necessary. Interested companies commonly apply the 80/20 rule when they evaluate vendor software.

Lease the Application

small and medium-sized enterprises (SMEs) that cannot afford major investments in IT software.

Leasing can be especially attractive to

The first way is to lease the application from a software developer, install it, and run it on the company's platform. The vendor can assist with the installation and frequently will offer to contract for the support and maintenance of the system. Many conventional applications are leased this way. The other two options involve leasing an application and running it on the vendor's platform. Organizations can accomplish this process by using an application service provider or a software-as-a-service vendor.

Leasing can be executed in one of three ways.

can save money, but it includes risks as well. The risks depend on which services are being offshored. If a company is offshoring application development, then the major risk is poor communication between users and developers.

Offshoring

IT Steering Committee

One critical component in developing and implementing the IT strategic plan is the

that companies frequently must place their valuable corporate data under the control of the outsourcing vendor.

One disadvantage of outsourcing is

Unless the company is one of the few that want to tinker with their source code, open-source applications are, basically, the same as a proprietary application except for licensing, payment, and support. Open-source software is really an alternative source of applications rather than a conceptually different development option.

Open-Source Software

(1) do nothing and continue to use the existing system unchanged, (2) modify or enhance the existing system, and (3) develop a new system.

Organizations have three basic solutions to any business problem relating to an information system:

Section 14.1

Planning for and Justifying IT Applications

A small-scale working model of an entire system or a model that contains only the components of the new system that are of most interest to the users.

Prototype

save the expense (money, time, IT staff) of buying, operating, and maintaining the software. Ex. Salesforce.com

SaaS eliminates the need for customers to install and run the application on their own computers. Therefore, SaaS customers

Systems Investigation System Analysis System Design Programming and Testing Implementation Operation and Maitenance

Stages of SDLC

Section 14.2

Strategies for Acquiring IT Applications

(1) understanding the business problem to be solved, (2) specifying the technical options for the systems, and (3) anticipating the problems they are likely to encounter during development, the greater the chances of success.

Systems development professionals agree that the more time they invest in

business problem (or business opportunity) by means of the feasibility study.

Systems investigation addresses the

determines whether the company can develop and/or acquire the hardware, software, and communications components needed to solve the business problem. Technical feasibility also determines whether the organization can use its existing technology to achieve the project's performance objectives.

Technical feasibility

Constraints on the IS Function

Technological, financial, personnel, and other resource limitations on the IS function.

1. It must be aligned with the organizations strategic plan. 2. It must proved for an IT architecture that seamlessly networks users, applications, and databases. 3. It must 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.

The IT strategic plan must meet three objectives:

systems development life cycle (SDLC), which you will read about in the next section.

The basic, backbone methodology for custom development is the

Objectives of the IS Function

The best current estimate of the goals of the IS function.

constraint on future development efforts.

The existing IT architecture is a necessary input into the IT strategic plan because it acts as a

Systems Investigation

The initial stage in the traditional SDLC that addresses the business problem (or business opportunity) by means of the feasibility study.

Mission

The mission of the IS function (derived from the IT strategy).

IT Strategic Plan

The organizational strategic plan and the existing IT architecture provide the inputs in developing the

organizational strategic plan.

The planning process for new IT applications begins with an analysis of the

feasibility study.

The primary task in the systems investigation stage is the

Application Portfolio

The set of recommended applications resulting from the planning and justification process in application development.

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?

There are several options for acquiring IT applications. To select the best option, companies must make a series of business decisions. The fundamental decisions are the following:

(1) net present value, (2) return on investment, (3) breakeven analysis, and (4) the business case approach

There is no uniform strategy for conducting a cost-benefit analysis. Rather, an organization can perform this task in several ways. Here you see four common approaches:

cost-benefit analysis. Cost-benefit analysis is not a simple task.

This comparison is frequently referred to as

Technial Economic Behavioral

Three types of feasibility

Section 14.3

Traditional Systems Development Life Cycle

systems development life cycle

Traditional structured framework, used for large IT projects, that consists of sequential processes by which information systems are developed.

systems development life cycle

What does SDLC stand for?

IT Strategic Plan

a set of long-range goals that describe the IT infrastructure and identify the major IT initiatives needed to achieve the organization's goals.

Platform

an underlying computer system on which application programs can run. On personal computers, Windows and Mac OS X are examples of platforms.

net present value (NPV) method

convert future values of benefits to their present-value equivalent by "discounting" them at the organization's cost of funds. They can then compare the present value of the future benefits with the cost required to achieve those benefits to determine whether the benefits exceed the costs.

IT architecture

delineates the way an organization should utilize its information resources to accomplish its mission. It encompasses both the technical and the managerial aspects of information resources.

Breakeven analysis

determines the point at which the cumulative dollar value of the benefits from a project equals the investment made in the project.

Users

employees from all functional areas and levels of the organization who interact with the system, either directly or indirectly

Technical Specialists

experts on a certain type of technology, such as databases or telecommunications.

Systems Stakeholders

include everyone who is affected by changes in a company's information systems—for example, users and managers.

Return on investment (ROI)

measures management's effectiveness in generating profits with its available assets. ROI is calculated by dividing the net income generated by a project by the average assets invested in the project. ROI is a percentage, and the higher the percentage return, the better.

Systems investigation Systems analysis Systems design Programming and testing Implementation Operation and maintenance

six processes, each of which consists of clearly defined tasks:

business case approach

system developers write a business case to justify funding one or more specific applications or projects. IS professionals will be a major source of input when business cases are developed because these cases describe what you do, how you do it, and how a new system could better support you.

application and a database for each customer.

the ASP hosts both an

Continuous application development

the process of steadily adding new computer code to a software project when the new computer code is written and tested.

Fixed costs

those costs that remain the same regardless of any change in the company's activity level. Ex. Salary of the IT Director