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Management Information Systems, Second EditionEffy Oz
Chapter 16Chapter 16Alternative Avenues for Alternative Avenues for Systems AcquisitionsSystems Acquisitions
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Learning ObjectivesLearning Objectives
When you finish this chapter, you will
Recognize the differences among the alternatives to in-house system development.
Be able to list the business trade-offs inherent in the various methods of acquiring systems.
Understand why the alternatives to in-house development have become so popular.
Know which systems acquisition approach is appropriate for a particular set of circumstances.
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Sources of InformationSources of Information
Figure 16.1 Alternatives to in-house development of ISs
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Sources of InformationSources of Information
Figure 16.2 Major information systems magazines
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Sources for InformationSources for Information
Outsourcing Short-term contractual relationship with a service
firm to develop a specific application
Long-term contractual relationship with a service firm to take over all or some of an organization’s IS functions
Figure 16.3 Outsourced IS services
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OutsourcingOutsourcingAdvantages of Outsourcing
Improved financial planning Reduced license and maintenance fees Increased attention to core business Shorter implementation cycles Reduction of personal and fixed costs Increased access to highly qualified know-how Availability of ongoing consulting as part of
standard support Increased security
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OutsourcingOutsourcing
Figure 16.4 How IS executives rank outsourcing benefits
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OutsourcingOutsourcing
Risks of Outsourcing
Loss of control
Loss of experienced employees
Risks of losing a competitive advantage
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OutsourcingOutsourcing
Figure 16.5 Risks of outsourcing are higher at higher levels of management.
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The InformationThe InformationSystems SubsidiarySystems Subsidiary
IS service companies that are owned by and served by one large company
Some grow large enough to service the market at large
Some corporations purchase an IS consulting firm
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Purchased ApplicationsPurchased Applications
Why Purchase?
Immediate system availability
High quality
Low price
Available support
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Purchased ApplicationsPurchased Applications
Figure 16.6 The process of choosing ready-made software
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Purchased ApplicationsPurchased Applications
Steps in Purchasing Ready-made Software
Identifying the problem
Identifying potential vendors
Soliciting vendor information
Defining system requirements
Requesting vendor proposals
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Purchased ApplicationsPurchased Applications
Reviewing proposals and screening vendors
Visiting sites
Selecting the vendor
Benchmarking
Negotiating a contract
Implementing the new system
Managing post-implementation support
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Purchased ApplicationsPurchased Applications
Figure 16.7 A system should be purchased only if all or most needs are met.
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Purchased ApplicationsPurchased Applications
Figure 16.8 How IS managers rank the importance of product purchase factors
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Purchased ApplicationsPurchased Applications
Benchmarking
Codified comparison of performance measures between systems
Ensures adopted application satisfies the organization's minimum requirements
Learning from Experience
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Purchased ApplicationsPurchased Applications
Figure 16.9 The eight commandments of effective benchmarking
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Purchased ApplicationsPurchased Applications
Purchasing Risks
Loose fit between needs and features
Bankruptcy of the vendor
High turnover of vendor personnel
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Renting SoftwareRenting Software
On-site Renting
Client purchases a license to use a certain application for a specified time
Renting Through the Web
Application installed at vendor’s location; client accesses through the Web or leased line
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Renting SoftwareRenting Software
Figure 16.10 Benefits and risks of software rental through the Web
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User Application DevelopmentUser Application Development
Factors Encouraging User Application Development
The programming backlog
The widespread use of PCs
The emergence of 4GLs
Increasing popularity of prototyping
Increasing popularity of client/server architecture
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User Application DevelopmentUser Application Development
Figure 16.11 Guidelines for end-user development of applications
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User Application DevelopmentUser Application Development
Figure 16.12 Graphical 4GLs, such as PowerBuilder 5.0, shown here, provide friendly tools for end users to develop their own applications.
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User Application DevelopmentUser Application Development
Figure 16.13 Graphical 4GLs
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User Application DevelopmentUser Application Development
Managing User-developed Applications
Managing the reaction of IS professionals
Providing support – help desk
Compatibility – standard tool
Managing access – database access
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User Application DevelopmentUser Application Development
Advantages of user application development
Shortened lead times
Good fit to needs
Compliance with culture
Efficient utilization of resources
Acquisition of skills
Free IS staff time – complex system development
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User Application DevelopmentUser Application Development
Risks of user application development
Poorly developed applications
Islands of information
Duplication
Security problems
Poor documentation
Futz factor
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User Application DevelopmentUser Application Development
Figure 16.14 The costs of end-user computing
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Ethical and Societal IssuesEthical and Societal IssuesComputer Use Policies for Employees Computer Use Policies for Employees
End-user computing encourages increased productivity, but business computers are often used for unproductive personal activities.
Most state statutes do not address unauthorized use of computers.
Employers should provide clear guidelines stating acceptable and unacceptable use of company computers.
