The acquisition of information systems: Issues, choices, activities

MBA 501 Week 5

Objectives of todays class...

To distinguish between the typical stages involved in the development of a BIS (the SDLC) and explain their purpose and main deliverables To examine the management issues related to how BIS are acquired To examine some of the management issues related to the use of open source software To examine some of the management issues related to the real time enterprise
Business Information Systems. Bocij et al. Prentice Hall. 2005

Stages of the Systems Development Life Cycle

Initiation
Input: evaluation of IT problems/needs Output: Ideas for new system

Feasibility study
Input: Ideas for new system Output: feasibility report and go/no go recommendation

Requirement (systems) analysis

Input: Terms of reference from feasibility report Output: Detailed requirements / system specification. DFDs, ERDs etc

Kill

Maintenance
Post implementation review System improvement

System design System build Implementation

Input: Working system not tested by users Input: Requirements specification Output: Detailed design specification (database, interface, data capture and storage etc)

Input: Requirements and design specifications

Output: working software, manuals, documentation

Output: signed-off operational system installed in all locations Business Information Systems. Bocij et al. Prentice Hall. 2005

The sequence of phases in the SDLC

Structured analysis and design provides a systematic approach to developing systems:
The model indicates that each step should be satisfactorily completed before the next begins

Each step also has a link back to the previous stage, to correct errors/problems (eg. at the build stage, design errors or oversights may need to be corrected Analysis and design errors detected in the later phases of the SDLC cost more to fix than if detected in earlier phases Problems with highly structured methodologies has given rise to alternative models of systems development eg.
Rapid Application Development and Extreme Programming

Business Information Systems. Bocij et al. Prentice Hall. 2005

Failure points for traditional structured methods of systems development

Gap of understanding between users and developers Tendency of developers to isolate themselves from users Quality measured by closeness of product to specification rather than comparing deliverables to requirements Long development times Business needs change during the development process What users get isnt necessarily what they want
Business Information Systems. Bocij et al. Prentice Hall. 2005

Reasons for the development of Rapid Application Development (RAD)

RAD was launched in the early 90s in response to 2 conditions
increased speed and turbulence of doing business the ready availability of high-powered, computer-based tools to support systems development and maintenance

Problems with traditional waterfall method

long cycles - system may be obsolete before it is built

RAD and similar systems based on prototyping became increasingly legitimate and are widely used in the mainstream
Flavours of RAD: Agile, Extreme Programming (XP), Joint Application Development (JAD), Scrum, Lean Software Development
Business Information Systems. Bocij et al. Prentice Hall. 2005

The role of prototyping within the SDLC

Initiation
Feasibility analysis, project planning, Change and Risk Management

PROTOTYPING (analysis and design)

Change requests TEST AND REVIEW Prototype produced DEVELOP ANALYSIS Requirements specification DESIGN

Design, test,

specification

Final implementation System and acceptance testing Data migration and changeover

Maintenance Monitoring and enhancing

Business Information Systems. Bocij et al. Prentice Hall. 2005

MANAGEMENT ISSUES RELATED TO HOW BUSINESS INFORMATION SYSTEMS ARE ACQUIRED

Business Information Systems. Bocij et al. Prentice Hall. 2005

So you need some new software? Drivers for information systems acquisition
Internal business processes

External business environment

Business strategy and policies

Information system needs (requirements)

Business Information Systems. Bocij et al. Prentice Hall. 2005

Typical software acquisition alternatives that must be evaluated

Bespoke development
In-house

Off-the-shelf (packaged)
Standard

Userdeveloped

Outsourced

Tailored

Business Information Systems. Bocij et al. Prentice Hall. 2005

Bespoke development
Where an information system is developed from scratch by an IS professional (or team) to suit the business requirements of the application
Can be either in-house or outsourced

Benefits
Can be tailored to the precise business need Proprietary system may be a core business asset that competitors cannot match

Difficulties
Cost - the most expensive way to develop a new BIS Time - notorious for time overruns, especially when using formal structured methodologies Quality may be buggy (insufficient testing) or may not meet business requirements - often due to poor analysis of system requirements
Business Information Systems. Bocij et al. Prentice Hall. 2005

Purchasing off-the-shelf (packaged) software

Direct purchase of a pre-written application used by more than one company
written to offer broad functionality to suit a wide range of businesses Fewer bugs because software developed for commercial market Cheaper than bespoke

Difficulties
May offer features not needed Requires business processes to be organized in a particular way May have inflexible/unsuitable features (eg. specified # of characters for customer code)

Some packaged software can be tailored to suit

Business Information Systems. Bocij et al. Prentice Hall. 2005

End-user developed software

Written by non-IS professionals - ie. the business users themselves for end-user applications These apps are personal or departmental in nature and tend to be output or report-oriented Examples: spreadsheets, small databases, websites Advantage is that there will be good fit between the users requirements and the system Disadvantages
there may be the use of inappropriate software tools hard to maintain (didnt work to standards) buggy software because of
lack of knowledge little or no design, planning or documentation
Business Information Systems. Bocij et al. Prentice Hall. 2005

Factors affecting software acquisition: evaluation of alternatives

Acquisition option Delivery time Cost Quality: Bugs Quality: Fits business need Good Medium

Bespoke inhouse Bespoke software house End-user development

Poor Good

Poor Very poor

Poor Medium

Poor

Medium

Poor

Good

Tailored - off the shelf Standard - off the shelf

Good Very good

Good Very good

Good Very good

Medium Poor

Business Information Systems. Bocij et al. Prentice Hall. 2005

Other factors affecting software acquisition

Where the software is generic (such as office productivity packages) organizations will purchase off-the-shelf Where niche software is needed for particular purposes or to create business advantage, then the bespoke approach is more common Organization size In-house IS/IT expertise IS/IT expertise among end-users Linkages with existing applications software - amount of integration required Complexity of the required system Uniqueness of the required system
Business Information Systems. Bocij et al. Prentice Hall. 2005

Application complexity versus uniqueness

HIGH

Off-the-shelf package
Complexity of application
High complexity Low uniqueness

Bespoke development
High complexity High uniqueness

Off-the-shelf package or end-user development

Low complexity

Bespoke or end-user development

Low complexity High uniqueness

LOW LOW

Low uniqueness

HIGH Uniqueness of application

Business Information Systems. Bocij et al. Prentice Hall. 2005

In-class exercise: Decision model for selecting a method of information system acquisition

Business Information Systems. Bocij et al. Prentice Hall. 2005

Software trends that impact the acquisition decision

Open source software Real-time enterprise software
Software is becoming much more networkcentric.
Cloud computing and Software-as-aService (We will look at these next week)
Business Information Systems. Bocij et al. Prentice Hall. 2005

OPEN SOURCE SOFTWARE

Open source software

A definition (from the Open Source Initiative (OSI))
"Open source promotes software reliability and quality by supporting independent peer review and rapid evolution of source code. To be OSI certified, the software must be distributed under a license that guarantees the right to read, redistribute, modify, and use the software freely." Open source software is developed through public collaboration between programmers

Business Information Systems. Bocij et al. Prentice Hall. 2005

Open Source Software

Open Source is about how software is developed, enhanced, and managed
The detailed Open Source definition (Open Source Initiative)

The complete (uncompiled) source code must be distributed with any and all distributions Anyone can modify and redistribute the code for anyone else to use Licensed for these purposes (eg. under a GPL) It is the opposite of proprietary software, which is sold only in its compiled state that is indecipherable by humans
Business Information Systems. Bocij et al. Prentice Hall. 2005

So, is it free?
It depends Definition of free software The license is free Customization, integration, installation, support, maintenance, training
Definitely not free Red Hats revenue stream comes from subscriptions to services that support the use of Linux (Open Source OS)
Business Information Systems. Bocij et al. Prentice Hall. 2005

Drivers towards Open Source adoption

Report from The Standish Group (registration needed)
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Fashion Community Security Quality and reliability Initial cost Development speed Vendor initiative Support Skills Ongoing costs

Business issues re Open Source

Now seen as disruptive technology Viability was underestimated
Stats showing Server OS (Netcraft, January 2013 survey) Stats for browsers and desktop OS (W3Counter, December 2012)

Microsoft underestimated the threat normal rules of competition dont apply

Not possible to undercut the price Not possible to buy the company to get rid of competition Probably not possible to buy the people Negotiations / arguments are all done in public forums

Better way is to find ways to work together and co-operate

IBM is a prime example of an established company working within the open source movement

Forresters 5 stages of open source adoption (Video of CodePlex panel) 6m

Business Information Systems. Bocij et al. Prentice Hall. 2005

THE REAL-TIME ENTERPRISE

The Real-Time Enterprise

The essence of the real-time enterprise is that organizations can know what they are doing at the moment, rather than waiting days, weeks or months for the information, as has been the case Without a real-time feedback loop it is like driving a car without being able to see the road
McNurlin, Sprague & Bui. Information Systems Management in Practice. Pearson. 2008

Some uses of real-time technology

Enterprise nervous systems: to coordinate company operations eg. A car arrives on a dealers lot data is instantly available Straight-through processing: to reduce distortion in supply chains Communicating objects: to gain real-time data about the physical world (rg. RFID) Vigilant information systems: to move to a senseand-respond culture (not just receiving, but acting) Real time customer relationship management: to automate decision making about customers
McNurlin, Sprague & Bui. Information Systems Management in Practice. Pearson. 2008

Real-time CRM
Real-time response between a firm and its customer eg.
Via web site
Collaborative filtering (automated) amazon.com Sense and respond (automated) Customer service (two-way, always-on) Advertising networks

Via call centre

Information needs to be available in real-time to callcentre workers (HUDS etc)
McNurlin, Sprague & Bui. Information Systems Management in Practice. Pearson. 2008

So why dont all organization go real-time?

Getting closer... But not so easy to achieve
Expensive: sophisticated technology and a seamless integrated platform needed Assessment needed to decide what really needs to be realtime and what metrics should be used to help make automated decisions Needs care and attention from employees real-time expectations Privacy considerations
McNurlin, Sprague & Bui. Information Systems Management in Practice. Pearson. 2008