3343: Chapter 3
Disadvantage Break-Even Analysis
Benefits are assumed to remain the same regardless of which system is in place. - Does not Account for intangible benefits!
39. What is meant by team process?
"Team process" is the interaction that occurs among team members.
3 methods to identify problems
1. Check output against performance criteria 2. Observe behavior of employees 3. Listen to external feedback from: Vendors and service providers, customers and suppliers
Q8: What two main options do organizations have for acquiring or using computer hardware?
1. Buying Hardware 2. Leasing Cloud Services
*Problem Definition
1-2 paragraphs of formal statement of the problem including the situation, objectives, requirements and constraints
*BYOD disadvantages
1. Biggest Threat: Security risks from untrained users 2. Loss of device 3. Theft of device 4. Unauthorized access of corporate networks 5. Unacceptable behavior: Using Free WiFi hotspots
*BYOD advantages
1. Boost employee morale 2. Lowers initial cost to organization of purchasing mobile devices 3. Facilitating remote, 24/7 access to corporate networks 4. Building on familiar UI to access corporate services
T/F: Good managers realize diagnosing problems at an early stage is imperative for the business to keep functioning at highest potential
* On quiz Answer: True
*Work Breakdown Structure (WBS)
- A hierarchical decomposition of the total scope of work to be carried out by the project team to accomplish the project objectives and create the required deliverables. - Systems analysts are responsible for completing projects on time and within budget and for including the features promised. - The activities defined must add up to 100% of the work
*Program Evaluation and Review Technique (PERT)
- AKA: Network Diagram - PERT helps an analyst determine the critical path and slack time, which is the information required for effective project control. - Show precedence the activities that must be completed before the next activities may be started. -It is used to calculate the critical path, the longest path through the activities. This is the shortest time to complete the project. - Useful when activities can be done in parallel rather than sequence - Length of arrows does not indicate time - Displays activities as arrows in a network (not the way Detillier does it)
*Intangible Benefits
- Advantages from the use of the information system that are difficult to measure; - Extremely important and have far-reaching implications Ex: Improving decision-making process, enhancing accuracy, becoming more competitive, maintaining good business image, increasing job satisfaction
*Tangible Benefits
- Advantages that are Measurable in Dollars, resources, or time saved Ex: Speed of processing, access to otherwise inaccessible information
Technical Feasibility
- Assesses whether the current technical resources are sufficient for the new system and if not, can they be upgraded to provide the level of technology necessary for the new system.
*Intangible Costs
- Costs that are difficult to estimate, and may not be known; - Nearly impossible to accurately project a dollar amount for -To aid decision makers who want to weigh a proposed system and all its implications, you must include intangible costs even though they are not quantifiable
*Tangible Costs
- Costs that can be accurately projected/measured in dollar amount -These costs are usually well established and can be discovered easily Ex: Cost of equipment, resources, analyst's time, salaries
* Project failures can be avoided by:
- Examining the motivations for requested projects - Understanding team's motives for recommending or avoiding a particular project
Team Member Qualities
- Experience - Enthusiasm - Motivated - Trust
Appendicies
- Include any information that you feel may be of interest to specific individuals but that is not essential for understanding the systems study and what is being proposed.
18. Define intangible costs and benefits. Give an example of each one.
- Intangible costs are those that are difficult to estimate, and may not be known; ^for example, the cost of losing a competitive edge, and declining company image. -Intangible benefits are advantages from the use of the information system that are difficult to measure; ^for example, improved effectiveness of decision-making processes and maintaining a good business image.
Executive Summary
- MUST NOT EXCEED 2 PAGES a. provides the who, what, when, where, why, and how of the proposal, just as would the first paragraph in a news story. b. include the recommendations of the systems analysts and desired management action because some people will only have time to read the summary. c. Written last, after rest of proposal
Feasibility Study
- Systems analyst gathers data to enable management to decide whether to proceed with full systems study - Analyzes a proposed solution's feasibility and determines how best to present the solution to management. It usually has five major dimensions: economic, technical, operational, scheduling, and legal
Feasibility Study
- Systems analyst gathers data to enable management to decide whether to proceed with full systems study - Analyzes a proposed solution's: economic, technical, operational feasibilities
17. Define tangible costs and benefits. Give an example of each one.
- Tangible costs are those that can be accurately projected by systems analysts and the business' accounting personnel; ^ for example, the cost of equipment, costs of resources, and cost of systems analysts' time. - Tangible benefits are advantages measurable in dollars that accrue to the organization through use of the information system; ^for example, increase in speed of processing, and getting information on a timelier basis than before.
*BYOD (bring your own device)
- The practice of allowing users to use their own personal devices to connect to an organizational network. - Companies have been adopting this as user sophistication grows
*Project Charter
- The project charter serves the purpose of identifying objectives, determining scope, and assigning responsibilities, - The project charter describes in a written document the expected results of the systems project (deliverables) and the time frame for delivery. - Essentially becomes a contract between the chief analyst (or project manager) and the analysis team, with the organization users requesting the new system.
Break-Even Analysis
- Used to determine break-even capacity of a proposed info system - The point at which the total costs of the current system and the proposed system intersect represents the break-even point, the point where it becomes profitable for the business to get the new information system. - Only looks at costs (tangible)- cost of current system vs. proposed
Payback Method
- Useful when business is growing and volume is key variable and costs - Can determine how long it will take for the benefits of the system to pay back the cost of developing it - Factors in both Benefits and costs of proposed system
Use payback when:
- the improved tangible benefits form a convincing argument for the proposed system. - Useful when business is growing and volume is key variable and costs
Software Statistics
-Over ½ systems being developed are built from ground up - Fewer than ½ developed from existing applications - Less than 5% of software is off-the-shelf with no modifications
Motivating Project Team Members
...- People are motivated to fulfill unmet needs - Setting a challenging but achievable goal and then periodically measuring performance seems to work in motivating people - Goal Setting motivates people because they know prior to any performance review, what is expected of them - Give team members freedom to use their own expertise to achieve goals
Q2: List three ways to find out about problems or opportunities that might call for a systems solution.
1. Checking output 2. Observing or researching employee behavior 3. Listening to feedback from external sources
Q11: List three of the many drawbacks of cloud computing for organizations
1. Company does not control own data 2. Data Security is a risk 3. Reliability Risks of internet platform 4. Proprietary APIs and software may make switching providers difficult
Disadvantages of Cloud Services
1. Company doesnt control its own data 2. Data security is at risk 3. Reliability risks of internet platform 4. Proprietary APIs and Software may make switching providers difficult
*Software can be created as:
1. Custom Product 2. Purchased as a commercial off-the-shelf (COTS) software package 3. outsourced to a SaaS provider
27. List three advantages of a PERT diagram over a Gantt chart for scheduling systems projects.
1. Easier identification of the order of precedence 2. Easier identification of the critical path and critical activities 3. Easier determination of slack time
*Steps of putting together Effective Systems Proposal:
1. Effectively organize the proposal content 2. Write and deliver proposal in appropriate business style 3. content should be divided into 10 sections 4. Visual Considerations are important 5. Face-to-Face meetings with Key decision makers provide opportunity to orally present systems proposal in a brief and compelling way
*Gantt Chart
1. Enables you to easily schedule tasks 2. Bars represent tasks or activities 3. Length of each bar represents relative length of task 4. Main Advantage: Simplicity, easy to use, lends itself to worthwhile communication with end users 5. Disadvantage: Does not indicated presedence
*Project Planning Includes:
1. Estimation of time required for each of the analyst's activities 2. Scheduling the activities 3. expediting them if necessary to ensure project is completed on time
Reasons Businesspeople suggest systems projects:
1. Experience Problems that lend themselves to systems solutions 2. Recognize Opportunities for improvement through upgrading, altering or installing new systems
*Disadvantages of purchasing computer hardware
1. Initial Cost is High 2. Risk of Obsolescence 3. Risk of being stuck if choice was wrong 4. Full Responsibility for operation and Maintenance
*4 parts of a problem definition
1. Issues of present situation 2. Objectives for each issue 3. Requirements that must be included in all proposed systems 4. Constraints that limit system development
Assembling a Team
1. Look for others with shared values 2. Good to have one other person who understands business 3. Ideally 2 systems analysts 4. Have people who can see big picture, and others who see small picture
Q11: List three of the many drawbacks of cloud computing for organizations
1. Loss of control of data stored in the cloud, if the cloud services provider ceased to exist, it is unclear what would happen to the organization's data, 2. potential security threats to data that is not stored on premises or even on the organization's own computers. 3. reliability of the Internet as a platform, the prospect that the company could get stuck using application programming interfaces (APIs) that are proprietary with the cloud provider.
Advantages of Cloud Services
1. Maintenance and upgrades performed by provider 2. Ability to change software and hardware rapidly 3. Scalable- Can grow quickly 4. Consistent over multiple platforms 5. No capital is tied up, and no financing is required.
Q10: List 5 Benefits of Cloud computing for Organization
1. Maintenance and upgrades performed by provider 2. Ability to change software and hardware rapidly 3. Scalable- Can grow quickly 4. Consistent over multiple platforms 5. No capital is tied up, and no financing is required.
Q3: List the five criteria for systems project selection.
1. Management Backing 2. Adequate time frame 3. Alignment with organizational goals 4. Adequate resources on the part of the analyst and the organization 5. The worthiness of the project
Evaluation of Vendor Support for Software and SaaS
1. Performance Effectiveness 2. Performance Efficiency 3. Ease of Use 4. Flexibility 5. Quality of Documentation 6. Manufacturer support
*Types of WBS
1. Product oriented 2. Process oriented
*5 Major Project Management Fundamentals a Systems Analyst must handle:
1. Project Initiation - Defining a Problem 2. Determining Project Feasibility 3. Activity planning and control 4. Project Scheduling 5. Managing Systems Analysis Team Members
*5 Criteria for Project Selection
1. Requested project be backed my management 2. Timed appropriately for a commitment of resources 3. Moves Business towards attainment of its goals 4. Practical 5. Important enough to be considered over other possible projects
*3 Main categories of cloud computing
1. SaaS: Software as a service 2. IaaS: Infrastructure as a service 3. PaaS: Platform as a service
29. How does a project manager assess the risk of things going wrong and take that into consideration of the time needed to complete the project?
1. Size of Project: The project manager must look at the size of the project. ^If it is large, it should be broken down into smaller projects. 2. Another factor is team members may take longer on their current project or that key managers would not be able to interview during the needs requirement phase. The project manager must add some additional time as a buffer.
16. What are three main categories of cloud computing?
1. Software as a Service (SaaS) 2. Infrastructure as a Service (IaaS) 3. Platform as a Service (PaaS).
41. What are four ways in which ecommerce project management differs from traditional project management?
1. The data used by ecommerce systems is scattered across the organization. 2. Ecommerce systems need a staff with a wide variety of skills. 3. Partnerships must be built externally and internally well ahead of implementation. 4. Security is of utmost importance.
Q7: List four criteria for evaluating system hardware.
1. Time required for Average Transaction 2. Total Volume Capacity of System 3. Idle Time of Processing Unit 4. Size of memory provided
* 3 Reasons Computer Programmers cited for Project Failure:
1. Unrealistic Management Deadlines 2. Adding unneeded personnel to a project that is trying to meet unrealistic deadline 3. not permitting developer teams to seek expert help outside immediate group
19. List 4 techniques for comparing costs and benefits of a proposed system
1. break-even analysis 2. payback 3. cash-flow analysis 4. present value methods.
Q14: What are the benefits of BYOD to an employee?
1. building employee morale 2. building on a familiar user interface to access corporate computing services, applications, databases, and storage.
44. What are the three steps the systems analyst must follow to put together an effective systems proposal?
1. effectively organizing the content 2. writing in a professional style 3. orally presenting the proposal in an informative way.
30. What costs need to be estimated to prepare a budget?
1. hours worked and the rates of pay for each of the internal or outsourced workers 2. the hardware and software costs 3. how much of each type of equipment is needed 4. costs involved with training.
21. What are the 3 drawbacks of using the payback method?
1. it is strictly a short-term approach to investment and replacement decision 2. it does not consider the importance of how repayments are timed 3. It does not consider total returns from the proposed systems project that may go well beyond the payback year.
Q13: What are the benefits of BYOD to an organization
1. potential for lowering the initial cost of organizational IT hardware purchase 2. facilitating remote 'round-the-clock access to corporate computer networks regardless of location.
37. List the two types of team leaders.
1. task leaders 2. socioemotional leaders.
The systems analyst must manage:
1. team members 2. their activities 3. time 4. resources
40. What are three reasons that goal setting seems to motivate systems analysis team members?
1. the very act of setting challenging and achievable goals and periodically measuring performance against the goal seems to motivate individuals 2. team members know exactly what is expected of them and are afforded some autonomy in achieving the goal 3. the setting of goals clarifies what must be done in order to get results.
25. What is a Gantt chart?
A Gantt chart is a chart on which bars represent each task or activity. The length of each bar represents the relative length of the task.
38. What is meant by dysfunctional team norm?
A dysfunctional team norm is a norm that hinders team progress.
*If a Requested Project meets the 5 Criteria for Project Selection:
A feasibility study of its operational, technical, and economic merits can be done.
Q5: Define economic feasibility.
A project is economically feasible if costs do not overshadow benefits.
Q6: Define operational feasibility.
A project is operationally feasible if the proposed system will operate and be used once it is installed.
Q4: Define technical feasibility.
A project is technically feasible if the technology is available and capable of meeting users' requests.
24. What is work breakdown structure (WBS), and when should it be used?
A work breakdown structure (WBS) are the tasks or activities that a project is broken down into. Each task has a deliverable and is assigned to an individual or team, and has a responsible person monitoring and controlling performance.
T/F: Teams have their own personalities as a result of combining each individual team member with every other in a way that creates a totally new network of interactions.
True
Issues are major parts of the problem and are identified by:
A. An issue, topic, or theme that is repeated several times, sometimes by different people in several interviews. B. Users may communicate using the same metaphors. C. Users speaking at length on a topic. D. Users may say something like "This is a major problem. E. Users may show importance by body language or may speak emphatically on an issue. F. The problem may be the first thing mentioned by the user.
Approaches to cost estimation:
A. Basing estimates on similar projects, also called the top-down approach B. Building bottom-up estimates C. Using parametric modeling
Some guidelines to use graphs effectively are:
A. Choose a style that communicates your intended meaning well. B. Integrate the graph into the body of the proposal. C. Give the graph a sequential figure number and a meaningful title. D. Label each axis, and any lines, columns, bars, and pieces of the pie on the graph. E. Include a key to indicate differently colored lines, shaded bars, or crosshatched areas.
Developing a WBS, either
A. Decomposition, starting with large ideas, then breaking them down into manageable activities B. Product oriented, building a website can be broken down into many parts C. Process-oriented, emphasizes the importance of each phase
Decisions on cloud computing can first be addressed on a strategic level. Business should focus on:
A. Define a high-level business case that focuses on high-level benefits B. Define core requirements C. Define core technologies for the enterprise
Work breakdown structure properties are:
A. Each task or activity contains one deliverable, or tangible outcome, from the activity B. Each task can be assigned to a single individual or a single group C. Each task has a responsible person monitoring and controlling performance
Using a work breakdown structure:
A. Estimate costs for each activity in the work breakdown structure B. Prepare a budget for the project and have it approved by the organization or client C. Manage and control the costs throughout the project
Project Manager Needs to Understand
A. How to determine what is needed B. How to initiate a project C. How to develop a problem definition D. How to examine feasibility of completing the project E. How to reduce risk F. How to identify and manage activities G. How to hire, manage, and motivate other team members
Some guidelines to use tables effectively are:
A. Integrate the table into the body of the proposal. B. Try to fit the entire table vertically on a single page if possible. C. Number and title the table at the top of the page. Make the title descriptive and meaningful. D. Label each row and column. E. Use a boxed table if room permits. F. Use a footnote if necessary to explain detailed information contained in the table.
The analyst needs to determine hardware and software needs using the following steps:
A. Inventory computer hardware currently available B. Estimate current and future system workloads C. Evaluate available hardware and software D. Choose to use cloud services E. Choose the vendor F. Acquire the computer equipment G. Choose to create software, use COTS software or use SaaS provider
Time Estimation Techniques
A. Relying on experience B. Using analogies C. Using three-point estimation D. Identifying function points E. Using time estimation software * Best way is to have experience
Ecommerce project management has some significant differences compared to traditional software projects:
A. The data used by ecommerce systems is scattered across the organization. B. Ecommerce systems need a staff with a wide variety of skills. C. Partnerships must be built externally and internally well ahead of implementation. D. Security is of utmost importance.
Evaluate the performance of different systems hardware including the following
A. Time required for average transactions B. Total volume capacity of the system C. Idle time of the CPU or network D. Size of memory provided
The analyst should inventory computer hardware, including the:
A. Type of equipment B. Operation status of the equipment C. Estimated age of equipment D. Projected life of equipment E. Physical location of equipment F. Department or person responsible for equipment G. Financial arrangement for equipment
Some of the cloud services available are:
A. Web hosting B. Email hosting C. Application hosting D. Backup E. Storage and processing of databases F. Archiving G. Ecommerce
Estimate at Completion (EAC)
An estimate of what it will cost to complete the project based on performance to date
31. Why is preparing a budget so important for a systems analyst who is managing a project?
Because every client wants to see a detailed budget early in the process.
20. When is break-even analysis useful?
Break-even analysis is useful when a business is growing and volume is a key variable in costs.
22.
Cash-flow analysis is used to examine the direction, size, and pattern of cash flow associated with the proposed information system.
SaaS
Cloud vendor sells access to applications
Q9: What does COTS Stand For
Commercial off-the-shelf
PaaS
Companies use the internet to rent all manner of hardware, OS, Storage and even network capacity through Cloud Service
Operational Feasibility
Determines if the human resources are available to operate the system once it has been installed. ex: resistance to implementing the new system will be strong. The new system has a low chance of becoming operational.
Economic Feasibility
Determines whether the time and money are available to develop the system, including the purchase of new equipment, hardware, and software. - Factor in your time/teams time -Cost of full System Study - If short-term costs are not overshadowed by long- term gains or if the project produces no immediate reduction in operating costs, the system is not economically feasible and should not proceed further.
Gantt Chart Disadvantage
Does not Indicate Precedence
Productivity Goals
Goals that are concerned with the amount of output achieved from resources.
Slack Time
Leeway to fall behing somewhat on non-critical paths
*Process Oriented WBS
Most Typical in Systems Analysis and Design
26. When is a PERT diagram useful for systems projects?
PERT charts are useful when activities can be done in parallel rather than in sequence.
*What is the biggest threat to organizations adopting a BYOD policy?
Security risks from untrained users are likely the biggest threat to organizations adopting a "bring your own device" policy.
Cover Letter
Should list the people who did the study and summarize the objectives of the study. Keep the cover letter concise and friendly.
Gantt Chart Main Advantage
Simplicity, easy to use, lends itself to worthwhile communication with end users.
45. List the 10 main sections of the systems proposal.
The 10 main sections of the system proposal are: 1. Cover letter 2. Title page of project 3. Table of contents 4. Executive summary (including recommendations) 5. Outline of systems study with appropriate documentation 6. Detailed results of systems study 7. Systems alternatives (three or four possible solutions) 8. Systems analysts' recommendations 9. Summary 10. Appendices (assorted documentation, summary of phases, correspondence, etc.)
28. Define the term critical path.
The critical path is the path that will cause the whole project to fall behind schedule if one day's delay is encountered on it.
Q1: What are the 5 Major Project Fundamentals?
The five major project fundamentals are: 1. Project initiation 2. Determining project feasibility 3. Scheduling of the project 4. Managing activities 5. Managing team members
42. What elements are contained in a project charter
The project charter contains the following elements: 1. User expectations or objectives and how the system will achieve the objectives. 2. The scope or boundaries of the project. 3. The analysis methods used to interact with users in gathering data, developing, and testing the system. 4. The key participants and how much time are users willing and able to commit to participating. 5. The project deliverables. 6. The people that will evaluate the system and how they will evaluate it. 7. The estimated project timeline and how often the project milestones are reported. 8. The people that will train the users. 9. The people that will maintain the system
* An Analyst creates a Problem Definition when:
They are faced with questions of how businesses can meet their goals and solve system problems.
* T/F: Face-to-Face meetings with Key decision makers provide opportunity to orally present systems proposal in a brief and compelling way
True
*T/F: Analysts may help the organization weigh the advantages and disadvantages of renting time and space through use of a cloud service provider.
True
*T/F: Costs and benefits can be tangible (quantifiable) or intangible (nonquantifiable and resistant to direct comparison).
True
*T/F: Preparing a systems proposal means identifying all the costs and benefits of a number of alternatives.
True
*T/F: Selecting a project is a difficult decision because more projects will be requested than can actually be done.
True
*T/F: To complete projects on time, within budget, and with the features that are promised, a project needs to be broken down into smaller tasks or activities.
True
T/F: . Perhaps the best strategy for a systems analyst is to adhere to a structured approach in identifying activities and describing these activities in sufficient detail. In this manner, the systems analyst will at least be able to limit unpleasant surprises.
True
T/F: A Gantt chart is easy to construct and use, and shows activities over a period of time.
True
T/F: A project team should consist of high quality team members with a variety of skills necessary to complete the project.
True
T/F: Evaluating new computer hardware is the shared responsibility of management, users, and systems analysts.
True
T/F: Experience gives you the most likely estimate and pessimistic estiamte
True
T/F: Issues are matched by objectives, along with a weight that indicates the importance of each objective.
True
T/F: Project Selection: First and foremost is backing from management. Absolutely nothing can be accomplished without the endorsement of the people who will eventually foot the bill.
True
T/F: Project managers need to break complex projects down into smaller projects to increase their probability of success.
True
T/F: Project risk may be prevented by training, experience, and by learning why other projects have failed.
True
T/F: Successful projects require that reasonable productivity goals for tangible outputs and process activities be set. Goal setting helps to motivate team members.
True
T/F: Systems analysts should take tangible costs, intangible costs, tangible benefits, and intangible benefits into consideration to identify cost and benefits of a prospective system.
True
T/F: There is no substitute for experience in estimating time requirements
True
T/F: To select the best alternative, systems analysts should compare costs and benefits of the prospective alternatives. Break-even analysis, payback, cash-flow analysis, and present value method are the most popular techniques for this purpose.
True
T/F: Users are the best people to identify critical Objectives
True
23.
Use present value when the payback period is long, or when the cost of borrowing money is high.
moving average
a forecasting model that computes a forecast as the average of demands over a number of immediate past periods
task leader
a leader who plans activities and helps keep the group on task
Use COTS When:
a. Can easily integrate apps or packages into existing planned system, and when system will not continuously change or be customized b. Use when organization is unlinkely to undergo major changes
Use Custom Product when:
a. Do this when COTS software does not exist or cannot be identified for desired application, or may be too expensive
Table of Contents
a. The table of contents can be useful to readers of long proposals. If the proposal is less than 10 pages long, omit the table of contents.
Proposal Summary
a. a brief statement that mirrors the content of the executive summary. b. You should once more stress the project's importance and feasibility, along with the value of the recommendations for reaching the users' goals and improving the business. c. Conclude the proposal on a positive note.
Detailed Results Section
a. describes what the systems analyst has found out about human and systems needs through all the methods described in the preceding section. b. Conclusions about problems workers experience when interacting with technologies and systems that have come to the fore through the study should be noted here. c. list the problems or suggest opportunities that call forth the alternatives presented in the next section.
Systems Analysts Recoomendations
a. expresses the recommended solution. b. Include the reasons supporting the team's recommendation so that it is easy to understand why it is being made.
Title Page
a. name of the project, the names of the systems analysis team members, and the date the proposal is submitted.
Systems Alternatives
a. present two or three alternative solutions that directly address the aforementioned problems. b. include one that recommends keeping the system the same . c. Describe the costs and benefits of each situation d. include the advantages and disadvantages of each.
Outline of Systems study
a. provides information about all the methods used in the study and who or what was studied. b. questionnaires, interviews, sampling of archival data, observation, or prototyping used in the systems study should be discussed in this section.
Infrastructure as a Service (IaaS)
delivers hardware networking capabilities, including the use of servers, networking, and storage, over the cloud using a pay-per-use revenue model
critical path
in a PERT network, the sequence of tasks that takes the longest time to complete
IaaS
outsources hardware operations
Q15: What is the biggest drawback of BYOD for an organization?
security risks posed by untrained users
Benchmarking
simulate workloads on different systems to test hardware and software capabilities
Use present value when:
the payback period is long.
Use cash-flow analysis when:
the project is expensive, relative to the size of the company.
Use break-even analysis if:
the project needs to be justified in terms of cost, not benefits.
team process
the way team members work together to accomplish tasks
Vendor Support
whether and how much support the vendor can provide and at what cost
Disadvantages using SaaS
• Loss of control of data, systems, IT employees, and schedules • Concern over the financial viability and long-run stability of the SaaS provider • Security, confidentiality, and privacy concerns • Loss of potential strategic corporate advantage regarding innovativeness of applications
Disadvantages: Creating Custom Software
• May be significantly higher initial cost compared to COTS software or ASP • Necessity of hiring or working with a development team • Ongoing maintenance
Advantages Using SaaS
• Organizations that do not specialize in information systems can focus on what they do best (their strategic mission) • There is no need to hire, train, or retain a large IT staff • There is no expenditure of employee time on nonessential IT tasks
Disadvantages: Purchasing COTS packages
• Programming focused; not business focused • Must live with the existing features • Limited customization • Uncertain financial future of vendor • Less ownership and commitment
Advantages: Purchasing COTS packages
• Refined in the commercial world • Increased reliability • Increased functionality • Often lower initial cost • Already in use by other firms • Help and training comes with software
Advantages: Creating Custom Software
• Specific response to specialized business needs • Innovation may give firm a competitive advantage • In-house staff available to maintain software • Pride of ownership
