Chapter 9: Developing and Acquiring Information Systems

Know the audience

- People from different areas of the firm typically hold very different perspectives.

Why outsource?

- costs and quality concerns - problems in IS performance - supplier pressures - simplifying downsizing and reengineering - organizational culture - internal irritants

Advantages of custom software

- customizability: software can be tailored to meet unique organizational requirements - problem specificity: company pays only for the features specifically required for its users

Software Tests

- developmental testing: ensures each module of a program is error free - alpha testing: assesses whether the entire system meets design requirements of users - beta testing: testing performed by actually system users with actual data in their work environment

System Construction Process

- identify large organizational problem to solve - decompose large problem into many small problems - translate each small problem into a software module - piece together the separate modules into overall comprehensive information systems

systems analysis: collecting requirements

- interview people - questionnaires - observations - document analysis - joint application design (JAD): a Group meeting based process for requirements collection

Software conversion strategies

- parallel: old and new systems used at the same time - direct: old system is discontinued on one day and the new is used on the next - phased: parts of the new system are implemented over time - pilot: entire system is used in one location

Examples of Off-the-Shelf Software

- payroll: automation if payroll services - personal productivity: support for tasks from word, to graphics to email - inventory: automation of inventory tracking, order processing, billing and shipping

Phase 3: systems design elements

- processing and logic - databases and files - human computer interface

Phase 2: Systems Analysis

-Collecting Requirements -Modeling Data -Modeling Processes and Logic

Phase 1: Systems Planning and Selection

-Identify, plan, and select a development. Limited resources

Presenting the Business Case

-Know the Audience -Convert Benefits to Monetary Terms -Measure What is Important to Management

Identifying Costs

-Tangible Costs - Total Cost of Ownership (TCO) *Non-recurring costs *Recurring costs -Intangible Costs

What two popular options do organizations consider when it isn't possible to develop a system in house?

1 external acquisition of a prepackaged system 2 outsourcing systems development

What goes into the project selection decision?

1. Existing available resources 2. Perceived and real needs 3. List of potential and ongoing projects 4. Current and organizational environment 5. Evaluation criteria

Unintended consequences of technology investments

1. Junk and Personal E-Mailing 2. Personal Surfing and Shopping 3. Game Playing

Four situations you might need to consider alternative developmental strategies

1. Limited IS Staff 2. IS staff has limited skill set 3. IS Staff is overworked 4. Problems with performance of IS Staff

Goal of Making the Business Case

1. Make sure the investment adds value 2. Make sure it helps the firm achieve its strategy and competitive advantage over its rivals 3. Make sure the money is being spent wisely

Steps in External Acquisition

1. Systems planning and selection 2. Systems analysis 3. Development of a request for proposal 4. Proposal evaluation 5. Vendor selection

Systems Development Life Cycle (SDLC) 4 phases

1. Systems planning and selection 2. Systems analysis 3. systems design 4. Systems implementation and operation

Example of an enabler of the maker movement

3D Printing

Information systems planning

A formal process for identifying and assessing all possible information systems development projects of an organization

Change request management

A formal process that ensures that any proposed system changes are documented, reviewed for potential risks, appropriately authorized, prioritized, and carefully managed.

software asset management

A set of activities performed to better manage an organization's software infrastructure by helping to consolidate and standardize software titles, decide when to retire unused software, or decide when to upgrade or replace software.

Extreme Programming (XP)

A software development methodology that utilizes fast software releases to customers, small development teams (usually pairs), and extensive code reviews and testing.

Net Present Value analysis

A type of cost-benefit analysis of the cash flow streams associated with the system at an organizations discount rate

break-even analysis

A type of cost-benefit analysis to identify at what point (if ever) benefits equal tangible costs

enterprise license

A type of software license that is usually negotiated and covers all users within an organization. Also known as a "volume license."

Shrinkwrap License

A type of software license that states that the contract is activated when the shrink wrap is removed on a box

Decision outcomes

Accept project, reject project, delay project, refocus project, end-user project, proof of concept

Proxy variables

Alternative measures of outcomes when it is not easy to quantify the impact of an investment. Can be computer through percentages, increase or decrease, etc

Who determines weights for the weighted multi criteria analysis?

Analysis team, users, and managers

Faith Argument

Arguments based on beliefs about organizational strategy, competitive advantage, industry forces, customer perceptions, market share, etc

Fact Argument

Arguments based on data, quantitative analysis, and/or indisputable factors

Fear Argument

Arguments based on the notion that if the system is not implements the firm will lose out on competition or go out of business

Areas covered in the request for proposal

Summary requirements for system performance Requirements for reliability and back up Criteria used to evaluate proposals Timetable and budget constraints

Systems development controls

Systems development processes and procedures used to ensure that necessary security features are implemented and enabled and that proper change management processes are followed.

Off-the-shelf software

Used to support common business processes that do not require any specific tailoring.

Request for Proposal (RFP)

a document that is used to tell vendors what your requirements are and to invite them to provide information about how they might be able to meet those requirements

weighted multicriteria analysis

a method for deciding among different information systems investments or alternative designs for a given system in which requirements and constraints are weighted on the basis of their importance

Productivity Paradox Redistribution

a new type of system may be beneficial for individual firms but not for a particular industry or the economy as a whole

click-wrap license

a type of software license primarily used for downloaded software that requires computer users to accept the license terms by clicking a button before installing the software

software bug

an error, flaw, failure or fault in a computer program or system that causes it to produce an incorrect or unexpected result, or to behave in unintended ways.

Patch management system

an online system that utilizes web services to automatically check for software updates, downloading and installing these "patches" as they are made available

Productivity Paradox Mismanagement

build bad systems, implement them poorly, and rely on technology fixes when the organization has problems that require a joint technology/process solution

tangible benefits

easy to quantify and typically measured to determine the success or failure of a project

What factors have major impacts on a firm's productivity?

government regulations, more complex tax codes, stricter financial reporting requirements, and more complex products

Management perspective/focus in making IS investment decisions

greater strategic focus, largest project sizes, longest project durations

Productivity Paradox Measurement Problems

quality, external elements, precise units, difficult to qantify

Pseudocode

representation of the programs internal functioning, independent of the actual programming language being used

custom software

software that performs functions specific to a business or industry

Making the Business Case for a Proposed System

the case will be used to determine if the new system is a "go" or a "no-go"

Making the Business Case for an Existing System

the case will be used to determine whether the company will continue to fund the system

Total Cost of Ownership (TCO)

the cost of owning and operating a system, including the total cost of acquisition, as well as all costs associated with its ongoing use and maintenance

Productivity Paradox

the observation that productivity increases at a rate that is lower than expected when new technologies are introduced.

Human-computer interface

the point of contact between a system and users

system conversion

the process of decommissioning the current system and installing a new system into the organization

Systems analysis and design

the process of designing, building, and maintaining information systems

Making the Business Case

the process of identifying, quantifying, and presenting the value provided in a system

External Acquisition

the process of purchasing an existing information system from an external organization or vendor

The Maker Movement

trend of individuals and small groups participating in the full cycle of product innovation

Three Types of Arguments Commonly Made in the Business Case for an Information System

Faith, Fear, Facts

IS executive perspective/focus in making IS investment decisions

Focus on integration with existing systems, fewer development delays, less concern with cost benefit analysis

Phase 4: Systems Implementation and Operation

Group 1 focuses on transforming the system design into a working information system Group 2 focuses on preparing the organization for using the new information system

Alternatives to SDLC

Prototyping, agile methodology (evolutionary systems development that produces small parts instead of one large application)

Best way to provide facts and quantitative analysis for a business case?

Provide a detailed cost-benefit analysis of the information system

Examples of intangible costs

Reduced traditional sales and losing customers that are not web ready like old people

Open Source Software (OSS)

Software that is free and where anyone can look at and potentially modify the code.

systems benchmarking

The use of standardized performance tests to compare different systems.

intangible benefits

Benefits that are not easily quantified; they include more efficient customer service, enhanced decision making, perception of the firm, stock value may improve (if publicly traded), strategic necessity

Open source projects provide the tools to deal with _____

Big data

Why do managers continue to invest in information systems?

Competitive pressures force managers to invest in information systems

Types of Systems Maintenance

Corrective maintenance (repair flaws in design) Adaptive maintenance (evolve functionality) Preventive maintenance (reduce chance of system fail) Perfective maintenance (enhancements)

Tangible Costs

Costs of using a particular system of technology that is quantifiable

Steering committee perspective/focus in making IS investment decisions

Cross functional focus, greater organizational change, formal cost benefit analysis, larger and riskier projects

Four key elements to the development of a system

Data, requirements, data flows, and processing logic

Business case argument based on faith should focus on ____

Describing the firms mission and objectives, the strategy for achieving them, and the types of information systems needed to enact the strategy

Off-the-shelf software advantages

Less costly, faster to procure, higher quality, and less risky

Factors leading to the information systems productivity paradox

Measurements, Time Lags, Mismanagement, Time Lags

systems analysis: modeling processes and logic

Modeling how data are being input, processed, and presented to the users

capital expenditures

Money spent to acquire or improve a long-term asset such as a piece of equipment or a building

User Department perspective/focus in making IS investment decisions

Narrow, nonstrategic focus, faster development

Total Cost of Ownership (TCO) is divided into which two categories?

Non-recurring costs: one time costs not expected to continue after the system is implemented (Operational Costs) Recurring costs: ongoing costs that occur through the life of the system

Sources for New Information Systems Options

Option 1 Build information systems Option 2 buy prepackaged system/use open source software Option 3 outsource development to third party Option 4 open source software

Project manager

Person responsible for ensuring that a project is successfully completed

____ makes solving large, complex problems easier

Problem decomposition

Performing cost-benefit analysis

Techniques that contrast the total expected tangible costs versus the tangible benefits of an investment (net costs/benefits)

What is one of the most important industry factor that can affect technology investments?

The nature of competition and industry rivalry

Systems analyst

The organizational role most responsible for systems analysis and design

Systems Integration

The process of linking together different computing systems and software applications physically or functionally to act as a coordinated whole

discount rate

The rate of return used by an organization to compute the present value of future cash flows

Productivity Paradox Time Lags

Time difference between the a company making an investment and observable impacts on the bottom line