The acquisition of information systems: Issues, choices, activities

MBA 501Week 5

Objectives of today’s 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”

Stages of the Systems Development Life CycleInitiationInput: evaluation of IT problems/needs

Output: Ideas for new system

Requirement (systems) analysisInput: Terms of reference from feasibility report

Output: Detailed requirements / system specification. DFDs, ERDs etc

System designInput: Requirements specification

Output: Detailed design specification (database, interface, data capture and storage etc)

System buildInput: Requirements and design specifications

Output: working software, manuals, documentation

Feasibility studyInput: Ideas for new system

Output: feasibility report and go/no go recommendation

ImplementationInput: Working system not tested by users

Output: signed-off operational system installed in all locations

MaintenancePost implementation review

System improvement

Kill

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 – also

known as Agile methods

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 isn’t necessarily what they want

Reasons for the development of Rapid Application Development (RAD) / Agile

• RAD was launched in the early 90’s 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

InitiationFeasibility analysis, project planning,

Change and Risk Management

PROTOTYPING (analysis and design)

ANALYSIS

DESIGN

DEVELOP

TEST ANDREVIEW

Design, test,

specification

Prototype produced

Requirements specificationChange requests

Final implementationSystem and acceptance testingData migration and changeover

MaintenanceMonitoring and enhancing

The role of prototyping within the SDLC

MANAGEMENT ISSUES RELATED TO HOW BUSINESS INFORMATION SYSTEMS ARE ACQUIRED

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

Information system needs (requirements)

Business strategy

and policies

External business

environment

Internal business

processes

Typical software acquisition alternatives that must be evaluated

Bespoke development

In-house

Outsourced

Off-the-shelf(on-premise or

SaaS)

Standard

Tailored

User-developed

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 (but Agile methodologies help to mitigate this problem)

– Quality – may be buggy (insufficient testing) or may not meet business requirements - often due to poor analysis of system requirements

Purchasing ‘off-the-shelf’ software (can be on-premise or SaaS)

• 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 some extent

to suit particular business requirements (usually done by the vendor)

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 user’s

requirements and the system• Disadvantages

– there may be the use of inappropriate software tools– hard to maintain (didn’t work to standards)– buggy software because of

• lack of knowledge• little or no design, planning or documentation

Factors affecting software acquisition: evaluation of alternatives

Acquisition option

Delivery time

Cost Quality: Bugs

Quality: Fits business need

Bespoke in-house

Poor Poor Poor Good

Bespoke software house

Good Very poor Medium Medium

End-user development

Poor Medium Poor Good

Tailored - off the shelf

Good Good Good Medium

Standard - off the shelf

Very good Very good Very good Poor

Other factors affecting software acquisition

• Where the software is generic (such as office productivity packages) organizations will purchase off-the-shelf

• Where the function of the software is at the “Unique” stage of the Software Maturity Model – more likely to be acquired via bespoke development

• 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

Application complexity versus uniqueness

HIGH

HIGHLOW

LOW

Complexity of application

Off-the-shelf package

Bespokedevelopment

Off-the-shelf package or end-user development

Bespoke or end-userdevelopment

Uniqueness of application

High complexity

Low uniqueness

Low complexity

Low uniqueness

High complexity

High uniqueness

Low complexity

High uniqueness

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

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

Software trends that impact the

acquisition decision• Open source software

• “Real-time” enterprise software

• Software is becoming much more network-centric. – “Cloud computing” and “Software-as-a-

Service” (We will look at these next week)

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

Videos – What is Open SourceUpStart Workshop - Episode 23 - What is Open Source Software?

– http://youtu.be/qyiUv7fCrjU• UpStart Workshop - Episode 24 - What does

it mean for open source software to be viral? – http://youtu.be/cHel8oES68s

• Two other videos by Computer Floss on the same topic– http://youtu.be/QfXkxkybQ4Q– http://youtu.be/IF2Tg6k0Qa0

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

So, is it free?• It depends……• UpStart Workshop - Episode 27 - Is Open

Source Software Cost-Free? – http://youtu.be/19Bf7VczqgE

• Definition of free software• Customization, integration, installation,

support, maintenance, training– Definitely not free – Red Hat’s revenue stream

comes from subscriptions to services that support the use of Linux (Open Source OS)

Drivers towards Open Source adoption

– Report from The Standish Group (registration needed)1. Fashion2. Community3. Security4. Quality and reliability5. Initial cost6. Development speed7. Vendor initiative8. Support9. Skills10. Ongoing costs

What are the risks and benefits of using open source software?

• UpStart Workshop - Episode 25 - What are the risks and benefits of using open source software?

• http://youtu.be/xJaRQL8xl6w

Business issues re Open Source• Now seen as “disruptive technology”• Viability was underestimated

– Stats showing Server OS (Netcraft, January 2014 survey)– Stats for browsers and desktop OS (W3Counter, December 2013)

• Microsoft underestimated the threat – normal rules of competition don’t 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

• Forrester’s 5 stages of open source adoption (Video of CodePlex panel) 6m

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 dealer’s 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 sense-and-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 call-

centre workers (HUDS etc)McNurlin, Sprague & Bui. Information

Systems Management in Practice. Pearson. 2008

So why don’t 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 real-time 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