38 Questions
What is the primary role of the attorney in the ERP implementation process?
To write the contract
What is the primary reason why a third-party partner may be required for ERP implementation?
Because the company lacks the necessary expertise and resources
What is the primary benefit of ERP integration?
Better quality data for better decision making
What is the role of top managers in ERP implementation?
To motivate other employees and take a serious role
What is the primary characteristic of a successful ERP implementation team leader?
Giving team members the authority to make some decisions
What is the primary requirement for a positive mindset in ERP implementation?
Everyone must be involved and feel satisfied
What is the primary reason why businesses tend to purchase software rather than building it?
It is cheaper and easier to implement
What is the first phase of the software development lifecycle (SDLC) when purchasing software?
Definition Phase
What is the primary role of an Alpha Site in the software development process?
Playing a significant role in determining the final functionality and user interface
What is the main disadvantage of purchasing software?
It may not exactly fit the business needs
What is the purpose of creating a cost estimate in the software development process?
To compare prices for building or buying software
What is the primary role of a Beta Site in the software development process?
Initiating the purchasing process for the vendor
How many phases are involved in the software development lifecycle (SDLC) when purchasing software?
3
What is the main advantage of building custom software?
It is more tailored to the specific business needs
What is a major factor that contributes to the success of purchased systems?
The performance of the third-party vendor
What is a benefit of purchasing software?
Reduced dependence on internal IS resources
What is a disadvantage of open-source software?
The documentation is not free
What is a benefit of using open-source software?
The user has access to the source code
What is a risk associated with purchased systems?
Risks due to lack of package knowledge
What is a benefit of open-source software in terms of vendors?
The user has a choice of multiple vendors
What is a disadvantage of purchased systems?
The user is dependent on the vendor for support
What is a characteristic of open-source software?
The software is reliable due to volunteer testing
What is a potential issue with open-source licensing?
It is not aligned with the business's legal requirements
What is the main advantage of using an Application Service Provider (ASP)?
It allows for cheap and quick installation
What is a potential risk of using an ASP?
Sensitive data may be exposed to external vendors
What is the primary purpose of a Service Level Agreement (SLA)?
To specify the ASP's expected performance
What is a potential drawback of open-source software?
The local cost of ownership is high
What is a benefit of using an ASP over traditional software purchasing?
It offers a higher level of customization
What is included in a Service Level Agreement (SLA)?
The system uptime and recovery time
What is a potential issue with volunteers in open-source software development?
They are not coordinating with each other, resulting in duplicated efforts
What is the primary purpose of developing a Request for Proposal (RFP) document?
To formally communicate the organization's requirements to vendors
Why is it essential to create selection criteria for packages and vendors?
To ensure that the chosen package meets the organization's requirements
What is the primary concern when evaluating a software package's compatibility with current hardware and software?
The environment in which the system will be used
What should an organization do if they find a good system but it's not perfect?
All of the above
What is the purpose of a contract in a software package purchase?
To outline the terms and conditions of the agreement
What is a characteristic of a fixed-price contract?
The total price is agreed upon from the beginning
What is the primary purpose of evaluating a vendor's track record?
To evaluate the vendor's stability and reliability
What is a common outcome when evaluating software packages against an organization's requirements?
Finding a package that meets most requirements but has some discrepancies
Study Notes
Purchasing vs Building Software
- Businesses often prefer to purchase software rather than build it due to advantages like lower costs and easier implementation.
- However, purchased software may not exactly fit business needs, and may require trade-offs.
Purchasing Methodology
- The purchasing process goes through three phases: Definition, Construction, and Implementation.
- The Definition Phase involves:
- Creating a cost estimate to compare prices for building or buying software.
- Evaluating available features of the package with current hardware and software compatibility.
- Establishing selection criteria, including vendor track record.
- The Construction Phase involves:
- Developing a Request for Proposal (RFP) to send to vendors, outlining system objectives, requirements, and environment.
- Evaluating proposals from vendors based on the established criteria.
- The Implementation Phase involves:
- Negotiating a contract to ensure all terms are met within the agreed time.
- Considering three ways to write a contract: fixed price, third-party partner, and attorney.
Enterprise Resource Planning (ERP)
- ERP is a system that combines all departments and functions in one single system.
- ERP integration provides better quality data for decision making, but installation can be challenging and may require third-party help.
- Five factors for successful ERP implementation are:
- Top management involvement and motivation.
- Having an experienced team leader and giving team members authority to make decisions.
- Getting help from external experts.
- Positive mindset and employee involvement.
- System risks dependent on third-party performance and contract negotiation.
Open Source Software
- Open source software is free, but users may still pay for additional features, training, and documentation.
- Advantages of open source software include:
- Fast bug fixing and reliability due to volunteer testing and development.
- Access to source code for modification and customization.
- No dependence on a single vendor and more control over the software environment.
- No maximum users or installations.
- Disadvantages of open source software include:
- Paid documentation and technical support.
- General solutions that may not meet company-specific requirements.
- Duplicating efforts due to lack of coordination among volunteers.
- Potential legal issues due to license agreements.
Application Service Provider (ASP)
- ASPs offer cloud-based software subscriptions, eliminating the need for companies to buy and install software.
- Advantages of ASPs include:
- Lower upfront costs and quick installation.
- Monthly fees rather than large investments.
- Disadvantages of ASPs include:
- Exposed sensitive data to external vendors.
- Relying on ASPs requires accurate assessment.
- Service Level Agreement (SLA) is a document that defines the ASP's expected performance, including system uptime, recovery time, help desk calls, and software updates.
This quiz covers the pros and cons of purchasing software versus building it in-house, including the decision-making process and business needs.
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