AIS Development Strategies Part 1 PDF

8/26/24 AIS DEVELOPMENT STRATEGIES PART 1 Dr Zubir Azhar CamEd 1 Learning Objectives u Describe how organizations purchase application software, vendor servi...

8/26/24 AIS DEVELOPMENT STRATEGIES PART 1 Dr Zubir Azhar CamEd 1 Learning Objectives u Describe how organizations purchase application software, vendor services, and hardware u Explain how information system departments develop custom software u Explain how end users develop, use, and control computer-based information systems u Explain why organizations outsource their information systems and evaluate the benefits and risks of this strategy 2 1  8/26/24 Introduction u Companies can experience several difficulties in developing an AIS internally, including: u Projects are backlogged for years because of the high demand for resources u The newly designed system fails to meet user needs u The process takes so long that by the time it’s complete, it’s obsolete u Users can’t adequately specify their needs u Changes to the AIS are often difficult to make after requirements have been written into the specifications 3 To obtain information systems 4 2  8/26/24 To obtain an Information System (IS) Obtain IS u Three ways: u Purchase Purchase u Inhouse u Outsource Inhouse Outsource 5 Obtain IS Obtain IS u Purchase u Select a vendor (from referrals, trade shows, etc.) Purchase u Request for proposal (RFP) that meets needs u Evaluate proposals Inhouse u Top vendors invited to give demonstrations on how their system will fit your needs Outsource u Make a final selection based upon certain agreed criteria 6 3  8/26/24 Obtain IS – Purchase Canned Software Obtain IS u Canned software sold on the open market to users with similar requirements Purchase u Difficulties of canned software: u 3rd party software rarely meets all needs Inhouse u Need to upgrade to new versions u Loss of control/dependence on vendors Outsource 7 Obtain IS – Purchase Some insights on Canned Software Obtain IS u My Personal Experience: u UBS system (2001) Purchase u Mr Accounting (2003) u Coda Financials (2004) Inhouse u MYOB (2009) u QuickBooks (2020) Outsource 8 4  8/26/24 Obtain IS – Purchase How? u Find vendor: Referrals/Magazines/Competitors/ Obtain IS Hire 3rd Party Organizations u Request for proposal/information (RFP/RFI) unless (preferred vendors) Purchase u Eliminate those not meeting basic requirements u Evaluate the rest (H/W, S/W, Vendor) Inhouse u Weighted Scoring u Benchmarking (Performance) u Requirements (Costing) Outsource u Select (shall use a similar vendor selection process when outsourcing) 9 Obtain IS Obtain IS u Inhouse Advantages Provides a significant competitive advantage Purchase Risks Requires significant amounts of time Inhouse Complexity of the system Poor requirements defined Insufficient planning Outsource Inadequate communication and cooperation Lack of qualified staff Poor top management support 10 5  8/26/24 Obtain IS – Inhouse u Some companies prefer inhouse (for Obtain IS custom S/W) approach – especially if the company is large, has unique needs, and believes their systems provide a Purchase competitive advantage. u Software developed by “IS staff”. Inhouse u Software developed by “end users”. u Accountants help contribute by being Outsource project supervisors, users, development team members or managers 11 Obtain IS – Inhouse How? u IS/IT department do all the Obtain IS development u End users do the development (ease of Purchase programming & user computer-literacy driving it). It is called end user computing (EUC) Inhouse Generally, it’s a combination - designing & core processing remains with IT staff. User needs (e.g., reporting/analytics moving to Outsource end users) 12 6  8/26/24 Obtain IS – Inhouse End User Computing (EUC) Obtain IS u Benefits: user requirements met better, IS staff freed up. Change Management addressed Purchase u Risks: inefficient architecture, testing Inhouse not thorough, duplication as no central governance (To address the risks, put Corporate IT Governance in Outsource place) 13 Obtain IS Obtain IS u Outsourcing Advantages Disadvantages u Allows companies to concentrate on core u Inflexibility Purchase competencies u Loss of control u Asset utilization u Reduced competitive advantage u Access to greater expertise and better Inhouse technology u Locked-in system u Lower costs by standardizing user u Unfulfilled goals applications and splitting development and maintenance costs between projects u Poor service Outsource Less development time u u Increased risk u Elimination of peaks-and-valleys usage u Facilitates downsizing 14 7  8/26/24 Obtain IS – Outsourcing u Outsourcing Candidates: Obtain IS u Non-criticalsystems/Non-Core stuff u Non-intellectual property systems Purchase u Operational maintenance (IT Helpdesk) u Recent Trends - entire work, including Inhouse non-core are also outsourced sometimes. Even to multi-vendors. Outsource There are cases of in-sourcing too (why?) – To protect intellectual property 15 Obtain IS – Outsourcing Benefits & Risks Obtain IS Purchase Inhouse Outsource 16 8  8/26/24 Class Activity 1. What is an accountant’s role in the computer acquisition process? 2. What are the benefits of analyzing the operating environment before selecting the software? 3. List the primary components of an RFP. 4. Explain End-User-Developed Software. 5. What are the benefits of outsourcing? 17 9