Week No. 8-Topic10-Chapter9-RefBook.pptx

Chapter 9: Developing and Acquiring Information Systems No matter what area of an organization you are in, you will be involved in systems development or technology acquisition processes Copyright © 2016 Pearson Education, Ltd. Chapter 9 Learning Objectives Making the Business Case • Describe how...

Chapter 9: Developing and Acquiring Information Systems No matter what area of an organization you are in, you will be involved in systems development or technology acquisition processes Copyright © 2016 Pearson Education, Ltd. Chapter 9 Learning Objectives Making the Business Case • Describe how to formulate and present the business case for technology investments. The Systems Development Process • Describe the systems development life cycle and its various phases. Acquiring Information Systems • Explain how organizations acquire systems via external acquisition and outsourcing. Copyright © 2016 Pearson Education, Ltd. Making a Business Case: Business Case Objectives • A business case is a complete justification for making or continuing to make an investment in a new or ongoing information system. • Making the business case refers to the process of identifying, quantifying, and presenting the value provided by a system. Copyright © 2016 Pearson Education, Ltd. The Productivity Paradox While it is easy to quantify the costs associated with developing an information system, it is often difficult to quantify tangible productivity gains from its use. Information systems may have increased productivity, but other forces may have simultaneously worked to reduce it, the end results being difficult to identify. Copyright © 2016 Pearson Education, Ltd. The Productivity Paradox Copyright © 2016 Pearson Education, Ltd. (Cont.) The Productivity Paradox (Cont.) • Measurements: • The gains are real, but our current measures miss them. • Companies typically focus on efficiency (doing something with few resources), over effectiveness (or doing something well), and information systems sometimes increase effectiveness over efficiency. • Timing: • The gains take a long time to show up. • Many information systems take years to hit the bottom line, so any measurement immediately after implementation may show no, or even a negative, productivity impact. Copyright © 2016 Pearson Education, Ltd. The Productivity Paradox (Cont.) • Redistribution: • Some industries have a limited size, so the first mover in the industry may get a bigger slice of the pie, so once everyone has implemented the new technology to catch up, overall, it looks like there is no improvement across the industry. • Mismanagement: • There are no gains because of the unusual difficulties in managing IT or information itself. Copyright © 2016 Pearson Education, Ltd. Making a Successful Business Case: Building a Costs-Benefits Analysis 1. Identifying Costs – Tangible costs—total cost of ownership (TCO) • Non-recurring costs (acquisition): one time cost not expected to continue. • Recurring costs (use and maintenance): Ongoing cost, will continue throughout the life. – Intangible costs (e.g., loss of customers): they are not easy to Copyright © 2016 Pearson Education, Ltd. Making a Successful Business Case: Building a Costs-Benefits Analysis 2. Identifying Benefits – Tangible benefits (e.g., estimated sales gains) – Intangible benefits (e.g., improved customer service) Copyright © 2016 Pearson Education, Ltd. Making a Successful Business Case: Building a Costs-Benefits Analysis 3. Performing Costs-Benefits Analysis – Cost Benefit Analysis is a systematic approach to estimating the strengths and weaknesses of alternatives. Copyright © 2016 Pearson Education, Ltd. Weighted Multi-Criteria Analysis • Explicitly evaluates multiple conflicting criteria in decision making. • Cost or price is usually one of the main criteria, and some measure of quality is typically another criterion Copyright © 2016 Pearson Education, Ltd. Presenting the Business Case • Business case is presented to management by completely knowing the audience. Copyright © 2016 Pearson Education, Ltd. System Development: IS Development in Action Copyright © 2016 Pearson Education, Ltd. Steps in the Systems Development Process • The term systems development life cycle (SDLC) describes the life of an information system from conception to retirement (Valacich & George, 2017). • The SDLC has four primary phases: 1. 2. 3. 4. Systems planning and selection Systems analysis Systems design Systems implementation and operation Copyright © 2016 Pearson Education, Ltd. Steps in System Development • Information systems planning: • Translating strategic and organizational goals into systems development initiatives • System Analysis: • Systems analysis involves determining what the optimal approach will be. • This requires gathering requirements and performing modeling at a deeper level than in Phase 1. Copyright © 2016 Pearson Education, Ltd. Steps in System Development System Analysis: 1. Collecting Requirements – It is the process of gathering information from users to understand how a proposed information system should function. 2. Modeling Data – What data are needed – Modeled using entity-relationship diagrams 3. Modeling Processes and Logic – Model the data flow (the movement of data through an organization or within an IS) – Model the processing logic (the way in which data are transformed.) 4. Develop System Designs and Evaluate, Selecting One Copyright © 2016 Pearson Education, Ltd. Steps in System Development • Systems Design: – In this phase the system is completely modeled based on those decisions, • System Implementation and operation: – Convert system design into a working system • Software programming and software testing • implementing the database, creating the user guides, conducting the training, and Copyright © 2016 Pearson Education, Ltd. switching over to the new system. Phase 4: Systems Implementation and Operation(cont.) • System conversion is the process of decommissioning the current way of doing things (automated or manual) and installing the new system in the organization. • System conversion can be performed in at least four ways. Copyright © 2016 Pearson Education, Ltd. Other Approaches to Designing and Building Systems 1. Prototyping – An iterative approach that use trial-and-error to discover how a system should operate. – Operational prototype: functioning prototype • Accesses real data files, edits input data, makes necessary computations and comparisons, and produces real output – Nonoperational prototype: a mock-up, or model • Includes output and input specifications and formats • Works even when the desired endpoint isn’t known, if there is a basis for determining when one prototype is better than another Copyright © 2016 Pearson Education, Ltd. Other Approaches to Designing and Building Systems Copyright © 2016 Pearson Education, Ltd. Other Approaches to Designing and Building Systems(cont.) 2. RAD and JAD: • Rapid application development (RAD): employs tools, techniques, and methodologies designed to speed application development – Makes extensive use of Joint Application Development (JAD) for data collection and requirements analysis • JAD often uses GSS software – Best suited for DSSs and MISs; less well suited for TPSs Copyright © 2016 Pearson Education, Ltd. Other Approaches to Designing and Building Systems(cont.) 2. RAD and JAD: • Joint application design (JAD) is a group meeting– based process for requirements collection. Copyright © 2016 Pearson Education, Ltd. Acquiring Information Systems: External Acquisition • Reasons for External Acquisition – Possible situations: • • • • Situation Situation Situation Situation staff 1: 2: 3: 4: Limited IS staff IS staff has limited skill set IS staff is overworked Problems with performance of IS – When this is the case, there are two options: • External acquisition of a prepackaged system Copyright © 2016 Pearson Education, Ltd. External Acquisition: Steps 1. Systems planning and selection 2. Systems analysis 3. Development of a request for proposal 4. Proposal evaluation 5. Vendor selection Copyright © 2016 Pearson Education, Ltd. The first 2 steps similar to External Acquisition: Steps • Request for Proposal (RFP) is a document used to tell vendors what your requirements are and to invite them to provide information about how they could meet those requirements. • System Evaluation may include: – Viewing system demonstrations – Evaluating system performance – Judging how system fulfill the important criteria Copyright © 2016 Pearson Education, Ltd. External Acquisition: Steps • Vendor Selection: – Typically, multiple feasible solutions • Prioritize or rank competing proposals – Once a vendor is selected, external acquisition is complete Copyright © 2016 Pearson Education, Ltd. Outsourcing • Outsourcing systems development is a way to acquire new systems that closely resembles the process of in-house development. Copyright © 2016 Pearson Education, Ltd. End User Development • End-user systems development: primary effort is undertaken by a combination of business managers and users. • Sometimes it has disadvantages as may be users don’t have the training to effectively develop and test a system. Copyright © 2016 Pearson Education, Ltd.