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‡ Questions to be addressed in this chapter include:
± How do organizations buy software, hardware, and
vendor services?
± How do information systems departments develop
custom software?
± How do end users develop, use and control
computer-based information systems?
± Why do organizations outsource their information
systems, and what are the benefits and risks of doing
so?
± How are prototypes used to develop an AIS, and what
are the advantages and disadvantages?
± What is computer-aided software engineering, and
how is it used in systems development?

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‡ Companies can experience a number of


difficulties in developing an AIS, including:
± Projects are backlogged for years because of the high
demand for resources.
± The newly designed system doesn¶t meet user needs.
± The process takes so long that by the time it¶s
complete, it¶s obsolete.
± Users can¶t adequately specify their needs.
± Changes to the AIS are often difficult to make after
requirements have been written into the
specifications.

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          s of 172


& '#( '&

‡ We¶ll be discussing how to obtain a new


information system by:
± Purchasing prewritten software;
± Developing software in-house; or
± Outsourcing.
‡ We¶ll also discuss how to hasten or improve the
development process through:
± Business process reengineering
± Prototyping
± Computer-aided software engineering (CASE) tools

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          Š of 172


& '#( '&

‡ We¶ll be discussing how to obtain a new


information system by:
± 
   %)  ) 
± Developing software in-house; or
± Outsourcing.
‡ We¶ll also discuss how to hasten or improve the
development process through:
± Business process reengineering
± Prototyping
± Computer-aided software engineering (CASE) tools

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( &* !+ !& ', +!

‡ In the early days of computers,


companies were rarely able to buy
software to meet their needs.
‡ But commercially available packages
are now outpacing custom-developed
software as old systems are replaced.

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‡ ï 
 is sold on the open
market to a broad range of users with
similar requirements.
± Some companies sell hardware and software
together as a package.
‡ These systems are called 
   .
‡ Many are written by vendors who specialize in a
particular industry.

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± A major problem with canned software:


‡ It often does not meet all of a company¶s
information needs.
‡ Can be overcome by modifying the canned
software.
± Usually best done by the vendor.
± Unauthorized modifications may render the
program unreliable and unstable.

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‡ Companies can also acquire software through


 


 (ASPs).
± ASPs host Web-based software and deliver it to
clients over the Internet.
± Companies don¶t have to buy, install, or maintain
canned software; they simply ³rent´ it.
± If you used an online version of a package like Turbo-
Tax to prepare your taxes, that¶s a consumer version
of renting software over the Internet.

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± Advantages of ASPs:
‡ Reduction of software costs and administrative
overhead.
‡ Automated software upgrades.
‡ Scalability as the business grows.
‡ Global access to information.
‡ Access to skilled IT personnel.
‡ Ability to focus on core financial competencies
rather than IT.

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‡ 
   )  -  #./
± Companies that buy rather than develop
software still follow the SDLC process,
including:
‡    
' 
-
    $   
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)  -    0 1

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‡ 
   )  -  #./
± Companies that buy rather than develop
software still follow the SDLC process,
including:
‡ Systems analysis
‡ 
% - 
‡  %  %
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0    - $  1
‡    233 -
   
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‡ 
   )  -  #./
± Companies that buy rather than develop
software still follow the SDLC process,
including:
‡ Systems analysis ‡  )   %
 -
%  -  -
- 
‡ Conceptual design
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‡ 
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‡ 
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- /
‡ 
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±  
  - %
-     #./
± Companies ±  
that buy -rather
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 -)  - ) 
develop
± #
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-
software still follow the SDLC process,
± $    -  ) 
including:
‡ )$  )  -  - 
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‡ Conceptual
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% %  -  -
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design
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‡ 
   )  -  #./
± Companies that buy rather than develop
software still follow the SDLC process,
including:
‡ Systems analysis
‡ Conceptual design
‡ Physical design
‡ Implementation and conversion
‡ '%   -   

‡    % - 2   ) 1
‡  $-       ) 1
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‡  
  $-
± Deciding whether to make or buy software
can be made independently of the decision to
acquire hardware, service, maintenance, and
other AIS resources.
± And the preceding resources can be bought
independently of the software.
± But hardware and vendor decisions may
depend on the software decisions.

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‡ Vendors can be found by:


± Looking in phone book
± Obtaining referrals
± Scanning computer or trade magazines
± Attending conferences
± Using search organizations
‡ Beware of fly-by-night companies that can
leave your organization high and dry.

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‡ 
0    -)  - ) 
± Once AIS requirements have been defined,
the organization can buy software and
hardware.
± Companies needing only a PC and some
office software can usually complete their own
research and make a selection.

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‡ When buying large or complex systems, a



 

  (RFP) should be
prepared:
± The RFP is an invitation to bidders to propose
a system by a specific date.
± Each proposal is evaluated.
± Finalists are investigated in depth.

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‡ The formal approach is important for


several reasons:
±  $   ‡       
%$ --   --1

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‡ The formal approach is important for


several reasons:
± Saves time
±  %    -
 3 2  %

‡   -- %-  
    -  - 
     1

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‡ The formal approach is important for


several reasons:
± Saves time
± Simplifies the decision-making process
± -
  ‡ . 2   2 $
%  
 
$    %% 1

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‡ The formal approach is important for


several reasons:
± Saves time
± Simplifies the decision-making process
± Reduces errors
± $ - %  -  
‡  %    $   
4%
   -   
 )  1

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‡ When an RFP is solicited based on exact


hardware and software specifications:
± Total costs are usually lower.
± Less time is required for vendor preparation
and company evaluation.
± However, the vendor cannot recommend
alternatives.

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‡ A generalized RFP contains a problem


definition and requests a system that
meets specific performance objectives and
requirements.
± Leaves technical issues to the vendor.
± However, makes it more difficult to evaluate
proposals.
± May produce more costly bids.

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‡ Usually, the more information a company


provides to the vendors, the better their chances
of receiving a system that meets their
requirements.
± Detailed specifications should include:
‡ Required applications
‡ Inputs and outputs
‡ Files and databases
‡ Frequency and methods of file updating and inquiry
‡ Unique characteristics or requirements
± Be sure to distinguish between mandatory and
desirable requirements.

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‡ !$    %%  -  
  
± Eliminate any proposals that:
‡ Are missing important information.
‡ Fail to meet minimum requirements.
‡ Are ambiguous.
± Those that pass the preliminary screening should be
compared with the proposed AIS requirements to
determine:
‡ If they meet all   
requirements.
‡ How many 
 requirements they meet.
± Finalists can be invited to demo their system using
company-supplied data.

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‡  $ )   %%   - 


$  /
± Hardware
± Software
± Vendors

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‡  $ )   %%   - 


$  /
± -) 
± Software
± Vendors

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‡  $ )   %%   - 


$  /
± Hardware
± ) 
± Vendors

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‡    $   )  
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± Hardware
± Software
± 7-

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‡ Approaches to comparing system


performance:
± Benchmark problem
± Point scoring
± Requirements costing

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‡ Approaches to comparing system


performance:
± 
 2 % 
± Point scoring
± Requirements costing

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‡ Benchmark problem
± The new AIS performs a data processing task
with input, processing, and output jobs typical
of what would be required of the new system.
± Processing times are calculated and
compared.
± The AIS with the lowest time is judged most
efficient.

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‡ Approaches to comparing system


performance:
± Benchmark problem
±   
 
± Requirements costing

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‡ Point scoring:
± A weight is assigned to each criterion used to
evaluate the system, based on the relative
importance of that criterion.
± Each criterion is rated for each product.
± Each rating is multiplied times the weight
assigned to the criterion to develop a
weighted score.
± The weighted scores are added for each
product.
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‡ Example:
± Zorba Co. is evaluating systems offered by three
different vendors: Able Co., Baker Co., and Cook Co.
± Zorba has determined three criteria that they will use
to evaluate the different systems: cost, speed, and
vendor reliability.
± They have provided the following weights to each
criteria, with vendor reliability being the most critical:
‡ Vendor reliability²¢
‡ Cost²
‡ Speed²Š

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˜ Zorba examined the packages offered by the three


vendors and rated them based on these three criteria.
Ratings were from 1±ý with ý being the highest score.
    1  2 1 2 1
Vendor reliability (¢) 2 ý Š
Cost () ý s Š
Speed (Š) s Š 2

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' The weighted scores are then computed by multiplying


the rating given to each vendor on each criterion times
the weight assigned to that criterion.
    1  2 1 2 1
Vendor reliability (¢) : 2 ; ý Š
Cost () ý s Š
Speed (Š) s Š 2

+!* !# '!
    1  2 1 2 1
Vendor reliability (¢) 1V Šý s
Cost () s0 1V 2Š
Speed (Š) 12 1 V
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‡ The weighted scores for each company are


summed:
± Able = 0 points
± Baker = 7¢ points
± Cook = V points
‡ Based on the preceding scores, the bid would
probably be awarded to Baker Co.

+!* !# '!
    1  2 1 2 1
Vendor reliability (¢) 1V Šý s
Cost () s0 1V 2Š
Speed (Š) 12 1 V
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‡ The preceding example is a simplification.


In a real-life scenario, several factors
would be different:
± There would probably be many more criteria
being considered.
± Several people would be rating the criteria,
and the final scores for each vendor would
probably be a composite of those individual
scores.

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‡ Approaches to comparing system


performance:
± Benchmark problem
± Point scoring
± 0 
 

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‡ Requirements costing:
± Estimates cost of purchasing or developing
features that are  included in a particular
AIS.
± The total AIS cost is calculated by adding the
acquisition cost to the purchasing and
development costs.
± Total cost = cost of system with  required
features.

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‡ To verify that the AIS that looks best on


paper is actually the best in practice:
± Test-drive the software.
± Contact other users for references.
± Evaluate vendor personnel.
± Confirm details of the proposal.

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& '#( '&

‡ We¶ll be discussing how to obtain a new


information system by:
± Purchasing prewritten software
± #$ %  )  3
± Outsourcing
‡ We¶ll also discuss how to hasten or improve the
development process through:
± Business process reengineering
± Prototyping
± Computer-aided software engineering (CASE) tools

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‡ Despite the availability of good canned


software, many organizations develop
their own because:
± Their requirements are unique; or
‡  *' %  
± Their size and complexity
<= necessitates
- a
custom package. $  %>

 %  % -  -
‡ Developing custom software is difficult and
  --
error prone and consumes much time and
>
 $1
resources.
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‡ The most difficult hurdles:


± Lack of time.
± Complexity of desired system.
± Poor requirements and systems planning.
± Inadequate communication and cooperation
between departments and users.
± Lack of qualified staff.
± Poor senior executive support.

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‡ After end users define their requirements,


the analysts:
± Work with the end users to determine the
format of paper and screen outputs.
± Identify:
‡ Data required for each input.
‡ Data to be retained in files.
± Develop detailed program specs to be
interpreted and coded by programmers.

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‡ The process requires much discipline and


management supervision.
‡ Accountants may help as project
supervisors, users, or development team
members.

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‡ Custom software is usually developed and


written in-house.
± Alternately, organizations may engage an
outside company to develop a package or
assemble one from their inventory of
modules.
± These modules are adapted, combined, and
organized to form a customized product that
meets specific requirements.

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‡ When contracting with an outside organization,


maintain control over development and observe
the following guidelines:
±     
 -$ %
‡ .2 /
± !4% 
   -
±  - - -  /
‡    
‡ ) 
% 

-
  

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‡ When contracting with an outside organization,


maintain control over development and observe
the following guidelines:
± Carefully select a developer
±  

 
   -  %   

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          ýý of 172


#!7!.'&* ', +! &3 '(!

‡ When contracting with an outside organization,


maintain control over development and observe
the following guidelines:
± Carefully select a developer
± Sign a contract to clearly define responsibilities
±   -   
 %
‡ #  %
  - 1
‡ 
- 0

2% 1

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          ý of 172


#!7!.'&* ', +! &3 '(!

‡ When contracting with an outside organization,


maintain control over development and observe
the following guidelines:
± Carefully select a developer
± Sign a contract to clearly define responsibilities
± Plan and monitor each step
± ?   
 $ - 0

 

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          ý7 of 172


#!7!.'&* ', +! &3 '(!

‡ When contracting with an outside organization,


maintain control over development and observe
the following guidelines:
± Carefully select a developer
± Sign a contract to clearly define responsibilities
± Plan and monitor each step
± Maintain effective and frequent communication
± 

‡    )  -     8- 
 %>
 
% - -

%-1

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‡ Information systems consultants suggest that


clients develop their own software only if it
provides a significant competitive advantage.
± Payroll and A/R systems are not good candidates for
in-house development.
± There might be significant benefits to developing
sophisticated product manufacturing software.
‡ If there is no significant competitive advantage,
buy software from an outside supplier.
± Trend appears to be in that direction.
‡ There is no pat answer to the make-or-buy
decision.

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‡ Another approach to developing software


in-house is to take the lion¶s share of the
effort out of the hands of the IS
department and place it in the laps of the
ultimate information users.

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‡ End-user developed software


± End-user computing (EUC) is the hands-on
development, use, and control of computer-based
information systems by users.
± With EUC, individuals use IT to meet their own IS
needs rather than rely on systems professionals.
± Why?
‡ The demand for information systems has grown
exponentially since the introduction of the computer.
‡ One solution to meeting these needs is to have end users
meet their own information needs.

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‡ Technology has evolved to automate


much of the system development process.
Factors contributing to EUC are:
± Increased computer literacy.
± Easier-to-use programming languages.
± Inexpensive PCs.
± A variety of powerful and inexpensive
software packages.

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‡ Consequently, users have begun to


develop their own systems to:
± Create and store data.
± Access and download company data.
± Share data and computer resources in
networks.

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‡ As end users began to meet their initial


needs, two things happened:
± Users realized computers could be used to
meet more and more information needs.
± Increased access to data created many new
uses and needs for information.
‡ Result: A tremendous growth in end-user
computing that is expected to continue.

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‡ EUC has altered the role of the IS staff:


± They continue to develop and maintain transaction
processing systems and company-wide databases
from which end users draw information.
± They provide users with technical advice and
operational support and make as much information
available to them as possible.
± While the support work has increased for the IS staff,
this work is counter-balanced by a decreased
demand for traditional IS services.
± EUC may make up 7ý±¢ý of all IS processing by
2010.
‡ Because accountants will be end users, they
need an understanding of EUC concepts.
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‡ %%%  -3 -$ % -



± End user development (EUD) happens when
information users (e.g., managers,
accountants, auditors) develop their own
applications using computer specialists as
advisors.
‡ Inappropriate for complex systems.
‡ Not used for large-scale processing, such as
payroll, receivables, payables, general ledger, or
inventory.

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#!7!.'&* ', +! &3 '(!

± End user development may be most


appropriate for:
‡ Retrieving info from company databases to
produce simple reports or answer single queries.
‡ Performing ³what if,´ sensitivity, or statistical
analyses.
‡ Developing applications that use prewritten
software (e.g., spreadsheet or database software).
‡ Preparing schedules (such as aging of accounts)
and lists.

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‡ Benefits of end-user computing:


± (
  
  - %   
‡ (
  -$ % %
 -
-
)   -  %  -  
 -  -$ %-1
‡ ') %  %   -  1

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‡ Benefits of end-user computing:


± User creation, control, and implementation
±      -
‡ 
  - 
$  )    %% 
) - 

1
‡   

  %  )  w
  w %   $ --1

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‡ Benefits of end-user computing:


± User creation, control, and implementation
± Systems that meet user needs
±  
' ?
   4% $ -  3
 
3
     0  -    - -
 %  -
-1

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‡ Benefits of end-user computing:


± User creation, control, and implementation
± Systems that meet user needs
± Timeliness
± ,  %  

‡   -% 
 4   - 
 
    -   

 $  1
‡ -
  $    - $    
2  
 -$ % %>
1

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‡ Benefits of end-user computing:


± User creation, control, and implementation
± Systems that meet user needs
± Timeliness
± Freeing up systems resources
± 7   -    
‡ ? !( )      - - - 1
‡ +  %%  )2
  -   
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‡ Risks of end-user computing:


± .
- -$ % 
‡ !-   4% 
-   -$ %1
‡ 0     2    2  - 
2   
 8 1
‡   /
±  $ ) % 
±   -   0 
± %%   %%%   
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± ( ) ) 
± ( 
%   - -   
‡ !  
-     
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‡ Risks of end-user computing:


± Logic and development errors
±  -0   - %%
 
‡ ( %   )@    1
‡  -   
 8  -     - 
  
   $ $-1
‡ -   $    - %    ) 3  
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‡ Risks of end-user computing:


± Logic and development errors
± Inadequately tested applications
± 
 
‡    > -  @ )  
1

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          7ý of 172


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‡ Risks of end-user computing:


± Logic and development errors
± Inadequately tested applications
± Inefficient systems
±  
 - - -
-

‡ ?  -  -@ % 
  
%
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‡    %  -
- 

  2 @  % 1
‡     8   
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          7 of 172


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‡ Risks of end-user computing:


± Logic and development errors
± Inadequately tested applications
± Inefficient systems
± Poorly controlled and documented systems
±  
%    
‡ 
%   -- -3 0 % ) 

 -   
 
%
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‡ ?  - % )  - $    -)  -
)     - 
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‡ Risks of end-user computing:


± Logic and development errors
± Inadequately tested applications
± Inefficient
‡  systems
-  @ )      $   
   - -%
  

1
± Poorly controlled and documented systems
‡ 4% 
-          
± System incompatibilities


) )     - 
1
± #%
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‡ Risks of end-user computing:


± Logic and development errors
± Inadequately tested applications
‡  
± Inefficient     -  )2 
 1
systems
‡   %-     -)  - )   
± Poorly controlled
4% $1 and documented systems
± System ‡ !(  
 
   - $  
incompatibilities
  %   >1
± Duplication
‡ !( of
systems and data

  - - and
  wasted

% 
resources   -     %%1

± 
 -


|  
      

          7¢ of 172


#!7!.'&* ', +! &3 '(!

‡ To achieve proper balance between


maximizing the benefits of end user
systems and minimizing the risks:
± Systems analysts can act as advisers and
require user-created systems to be reviewed
and documented prior to use.
± Users can be trained in systems analysis so
they can identify and adequately meet their
needs, as well as reviewing the work of
others.
|  
      

          V0 of 172


#!7!.'&* ', +! &3 '(!

‡ Organizations use several approaches to


managing and controlling EUC.
± If you give the systems department control over EUC:
‡ Growth of EUC is discouraged.
‡ The organization is denied most of its benefits.
‡ It¶s not in the company¶s best long-term interests.
± However, if there are no controls over the tools that
can be purchased or how they can be used:
‡ Chaos can result
‡ The system can be difficult to support.

|  
      

          V1 of 172


#!7!.'&* ', +! &3 '(!

‡ Best to provide enough guidance and


support to adequately control the system
but allow users flexibility.
‡ A help desk can encourage, support,
coordinate, and control end-user activities.
± One level of help desk employees might be
trained with scripted answers.
± A higher level might handle more complicated
issues.

|  
      

          V2 of 172


#!7!.'&* ', +! &3 '(!

‡ Help desk duties include:


± Providing hotline assistance to solve problems.
± Serving as a clearinghouse for information, coordination,
and assistance.
± Training end users how to use specific hardware and
software, and providing technical maintenance and
support.
± Evaluating new end-user hardware and software products.
± Assisting with application development.
± Developing and implementing standards for:
‡ Hardware and software purchases to ensure compatibility.
‡ Documentation and application testing.
‡ Overseeing security issues such as fraud, software piracy,
and viruses.

|  
      

          Vs of 172


& '#( '&

‡ We¶ll be discussing how to obtain a new


information system by:
± Purchasing prewritten software
± Developing software in-house
± '

‡ We¶ll also discuss how to hasten or improve the
development process through:
± Business process reengineering
± Prototyping
± Computer-aided software engineering (CASE) tools

|  
      

          VŠ of 172


'( '(! ! A !?

‡ K 
 is hiring an outside company
to handle all or part of an organization¶s
data processing activities.
± In a mainframe outsourcing agreement:
‡ The outsourcers buy the client¶s computers and
hire all or most of the client¶s employees.
‡ Then operate and manage the entire system on
the client¶s site or migrate it to the outsourcer¶s
computers.
‡ Many of these contracts have terms of 10 or more
years and cost from hundreds of thousands to
millions of dollars a year.
|  
      

          Vý of 172


'( '(! ! A !?

± In a client/server or a PC outsourcing
agreement the organization outsources:
‡ A particular service (e.g., help desk services);
‡ A segment of its business;
‡ A particular function; or
‡ PC support.

|  
      

          V of 172


'( '(! ! A !?

‡ Examples of outsourced activities:


± Installation
± Training
± Maintenance
± Help desk
± Technical support

|  
      

          V7 of 172


'( '(! ! A !?

‡  )  
 %%
 
± Outsourcing was initially used for
standardized applications such as payroll,
accounting, and purchasing.
± Also used by companies that were struggling
to survive and wanted a quick cash infusion
from selling their hardware.

|  
      

          VV of 172


'( '(! ! A !?

‡ Kodak and Xerox were very successful at


cutting capital expenditures and other
costs, which motivated others to outsource
their systems.
‡ '
  
‡ Now many Fortune ý00 companies
%
    
outsource some or all)   -B 
of there IS.
- 
%   
>%     -
) 1

|  
      

          V¢ of 172


'( '(! ! A !?

‡ Most companies that outsource use


several different companies rather than a
single source in order to:
± Increase flexibility
± Foster competition
± Reduce costs
‡ Most companies do not outsource:
± Strategic management of their IT environment
± Business process management
± IT architecture
|  
      

          ¢0 of 172


'( '(! ! A !?

‡ Benefits of outsourcing:
± $ -     
‡  )
%   

    


%
1

|  
      

          ¢1 of 172


'( '(! ! A !?

‡ Benefits of outsourcing:
± Provides a business solution
±   8  
‡ %  
 %$
 %   - -

4%     
%  

1

|  
      

          ¢2 of 172


'( '(! ! A !?

‡ Benefits of outsourcing:
± Provides a business solution
± Asset utilization
± 

    4% 


 - 
-$ 
- 
 
‡ 
 -       
  - 

   
   % - 1

|  
      

          ¢s of 172


'( '(! !-

‡ '

 A !?

  CD
<= 
  
   
 -
)
  
1
‡ Benefits of‡ outsourcing:
? 
 %>
    -
± Provides a%  
business solution
   ) 

 <  (11
1
± Asset utilization
± Access to greater experience and more
advanced technology
± .)


|  
      

          ¢Š of 172


'( '(! ! A !?

‡ Benefits of outsourcing:
± Provides a business solution
± Asset utilization
± Access to greater experience and more
advanced technology
± Lower costs
± %$- -$ %  
‡ !4% 
- %

  -$ % -
%     -  
 1
‡     % 
% 
   
  % 
1
|  
      

          ¢ý of 172


'( '(! ! A !?

‡ Benefits of outsourcing:
± Provides a business solution
± Asset utilization
± Access to greater experience and more
advanced technology
‡ %   )     
   -@  $
± Lower costs
     
      -)   % 2
± Improved% -1
development time
± !      % 23 -3$   

|  
      

          ¢ of 172


'( '(! ! A !?

‡ Benefits of outsourcing:
± Provides a business solution
± Asset utilization
± Access to greater experience and more
advanced technology
± Lower costs
‡ %  
± Improved development )  3
time    -) 8
   )   
    
± Elimination of peaks-and-valleys usage

 1

± ,
    -) 8 

|  
      

          ¢7 of 172


'( '(! ! A !?

‡ Risks of outsourcing
± Many outsourcing contracts fail to meet
expectations for reasons including:
±  4  

‡ ?  


     1
‡  
%   -    -   %  
  4 $ 

  


  - 
  -
    2.

|  
      

          ¢V of 172


'( '(! ! A !?

‡ Risks of outsourcing:
± Inflexibility
± . 

‡ 
%    
    - -  1
‡    2 
 - -     - )  1

|  
      

          ¢¢ of 172


'( '(! ! A !?

‡ Risks of outsourcing:
± Inflexibility
± Loss of control
± -
-
%  $ -$  
‡ %  
  -  - -  
   - - )  
 %$ -  ) 

%  $ -$  1
‡ '
     $ -   
@

%  $
 1
‡       -   
   
 
%     %

 --  - -
511 %  

 
 $  6 -
 8  
%    %$ -
%  $ -$  1
|  
      

          100 of 172


'( '(! ! A !?

‡ Risks of outsourcing:
± Inflexibility
± Loss of control
± Reduced competitive advantage
± .
2-  
‡   4% $ - - 
   $ 
1

|  
      

          101 of 172


'( '(! ! A !?

‡ Risks of outsourcing:
± Inflexibility
± Loss of control
± Reduced competitive advantage
± Locked in system
± (  -  
‡ ?  
   -    $  8-1

|  
      

          102 of 172


'( '(! ! A !?

‡ Risks of outsourcing:
± Inflexibility
± Loss of control
‡ 
%  
%   % $
 
  

± Reduced competitive % 
  
advantage)  %
 /
±  )   % $ 
    
± Locked
-  1
in system
±  
± Unfulfilled % -      ) 
  1
goals
±  $


|  
      

          10s of 172


'( '(! ! A !?

‡ Risks of outsourcing:
± Inflexibility
± Loss of control
‡ ±
 -
Reduced 2competitive advantage

-    2 %  
±    
Locked
%   - %  
in system
%   1
± Unfulfilled goals
± Poor service
± 
 -  2

|  
      

          10Š of 172


& '#( '&

‡ We¶ll be discussing how to obtain a new


information system by:
± Purchasing prewritten software
± Developing software in-house
± Outsourcing
‡ We¶ll also discuss how to hasten or improve the
development process through:
±   %
   
± Prototyping
± Computer-aided software engineering (CASE) tools

|  
      

          10ý of 172


(&! '! !!&*&!!&*

‡ Business process reengineering (BPR) is


the analysis and redesign of business
processes and information systems to
achieve significant performance
improvements.
± Reduces a company to its essential business
processes.
± Reshapes organizational work practices and
information flows to take advantage of
technological advancements.

|  
      

          10 of 172


(&! '! !!&*&!!&*

‡ BPR:
± Simplifies the system.
± Makes it more effective.
± Improves a company¶s quality and service.
‡ BPR software has been developed to help
automate many BPR tasks.

|  
      

          107 of 172


(&! '! !!&*&!!&*

‡ Michael Hammer has set forth several principles


that help organizations successfully reengineer
business processes:
- '  8 - 
   21
‡ #' +A + /    -  %    
%
  -  %%  )       -
-  - 1
‡ & !#/ !
 %@ >  - - - 
>
 $ 
  %
      2 --

%  %
1

|  
      

          10V of 172


(&! '! !!&*&!!&*

‡ Michael Hammer has set forth several principles


that help organizations successfully reengineer
business processes:
- Organize around outcomes, not tasks.
- 0   )   %  % 
%
1

|  
      

          10¢ of 172


(&! '! !!&*&!!&*

' Michael Hammer has set forth several principles


that help organizations successfully reengineer
business processes:
- Organize around outcomes, not tasks.
- Require those who use the output to perform the
process.
- 0   ) %-
    
%
 1

|  
      

          110 of 172


(&! '! !!&*&!!&*
‡ A
 8 %   
 $ 
 
 
 -     -- 
1
‡ Michael Hammer has set forth several principles
‡ A -
 8 %     
that help organizations successfully reengineer
% $ 
 - %$ - 
business processes:
$

- Organize around outcomes,
‡ +  
  not tasks.
 -@  $ 
1
- Require those who use
± % 3) - the output
-    to perform

 8 -  1 the
process.
±  

  
  -    
  8  1
- Require those who produce information to process it.
-  8 &# - % -  1

|  
      

          111 of 172


(&! '! !!&*&!!&*

‡ Michael Hammer has set forth several principles


that help organizations successfully reengineer
business processes:
- Organize around outcomes, not tasks.
- Require those who use the output to perform the
' !4 % /  -$ %  ) %-
 
-  
process.
-$ %       %  
 $ $-
-% 
- Require those 
whoproduce
   - ) 2) ) 
information    -
to process it.
 -  -  %
 )     -1
- Centralize AND disperse data.
-   %  
 $  1

|  
      

          112 of 172


(&! '! !!&*&!!&*

‡ Michael Hammer has set forth several principles


that help organizations successfully reengineer
‡   -  
business processes:      )2
 - $      
- Organize
- around
 outcomes, not tasks.
-
  1
- Require those who use
‡   - the output
to%% 
perform the - 
)
process.
)2  $ -
 3 2  %  1
- Require those who
±    produce  

  information to process it.
  -
 
-


1
Centralize AND disperse data.
±        %
  1
- Integrate parallel activities.
- !%) )2   3 
  -
     8  
 1
|  
      

          11s of 172


(&! '! !!&*&!!&*

‡ Michael Hammer has set forth several principles


that help organizations successfully reengineer
business processes:
- Organize around outcomes, not tasks.
- Require those who use the output to perform the
process.
- Require those who produce information to process it.
- Centralize
‡  -AND disperse
  $  
 data.

      ) 
- Integrate parallel
-   activities.
  -    
 -    
!# 
1
- Empower 
%
workers, use-   


built-in controls, and
flatten

 -
-   chart.
the organization )  -   -1
-  % -  
B   
1
|  
      

          11Š of 172


(&! '! !!&*&!!&*

‡ Underlying reengineering is the efficient


and effective use of the latest information
technology, e.g.:
± Radio- and satellite-based communications.
± Powerful handheld computers.
± Image processing that lets multiple users
handle a document simultaneously.
± Active documents.

|  
      

          11ý of 172


(&! '! !!&*&!!&*

‡   
-     :
± Many BPR efforts fail or fall short of their objectives. A
company must overcome the following obstacles:
‡  -  
‡ E+@$ )  -    ) FG
‡ 

 0 


  
  -  1

|  
      

          11 of 172


(&! '! !!&*&!!&*

‡   ,
-     !:
± Many BPR efforts fail or fall short of their objectives. A
company must overcome the following obstacles:
‡ Tradition
‡   

‡    )   )    
1
‡ 0 
    
 %   -
%%1

|  
      

          117 of 172


(&! '! !!&*&!!&*

‡   ,
-     !:
± Many BPR efforts fail or fall short of their objectives. A
company must overcome the following obstacles:
‡ Tradition
‡ Resistance
‡  -
 0 
‡ )      0 - 
%  1

|  
      

          11V of 172


(&! '! !!&*&!!&*

‡   
-     :
± Many BPR efforts fail or fall short of their objectives. A
company must overcome the following obstacles:
‡ Tradition
‡ Resistance
‡ Time and cost requirements
‡ .
2     %%
‡ ?    $   E  %B)
 G -1
‡ +    %%   )  1

|  
      

          11¢ of 172


(&! '! !!&*&!!&*

‡   ,
-     !:
± Many BPR efforts fail or fall short of their objectives. A
company must overcome the following obstacles:
‡ Tradition
‡ Resistance
‡ Time and cost requirements
‡ Lack of management support
‡ 2%

‡     $ )-  >    %

 -   1

|  
      

          120 of 172


(&! '! !!&*&!!&*

‡   ,
-     !:
± Many BPR efforts fail or fall short of their objectives. A
company must overcome the following obstacles:
‡ Tradition
‡ Resistance
‡ Time and cost requirements
‡ Lack of management support
‡ Skepticism
‡   
‡  
    
   - - 1

|  
      

          121 of 172


(&! '! !!&*&!!&*

‡   
-     :
± Many BPR efforts fail or fall short of their objectives. A
company must overcome the following obstacles:
‡ Tradition
‡ Resistance
‡ Time and cost requirements
‡ Lack of management support
‡ Skepticism
‡ Retraining
‡  
‡   2 %  
  
   
   -  1

|  
      

          122 of 172


& '#( '&

‡ We¶ll be discussing how to obtain a new


information system by:
± Purchasing prewritten software
± Developing software in-house
± Outsourcing
‡ We¶ll also discuss how to hasten or improve the
development process through:
± Business process reengineering
± % 
± Computer-aided software engineering (CASE) tools

|  
      

          12s of 172


' ' A&*

‡ Prototyping is an approach to systems design in


which a simplified working model of a system is
developed.
± The prototype (first draft) is built quickly at low cost
and provided to users for experimentation.
± Playing with the prototype allows users to determine
what they do and do not like.
± Developers modify the system in response to user
comments and re-present it to them.
± The iterative process continues until users are
satisfied that the system meets their needs.

|  
      

          12Š of 172


' ' A&*

‡ The basic premise is that it¶s easier for


people to express what they like or dislike
than to imagine what they want in a
system.
± In another words, it helps to have a straw man
to aim at.
± Even a simple system that is not fully
functional demonstrates features far better
than graphics and verbiage.

|  
      

          12ý of 172


' ' A&*

‡ Developers who use prototyping still go through


the systems development life cycle.
‡ But prototyping allows them to expedite some
analysis and design.
‡ For example, prototyping captures user needs
and helps developers and users make many
conceptual and physical design decisions.
‡ Current practice leans heavily toward
prototyping so that projects can be completed
quickly.
|  
      

          12 of 172


' ' A&*

‡ Four steps are involved in developing a


prototype:
± STEP ONE: Identify basic requirements
± STEP TWO: Develop an initial prototype
± STEP THREE: Repeated iterations
± STEP FOUR: Use the system

|  
      

          127 of 172


' ' A&*

‡ Four steps are involved in developing a


prototype:
±  ! '&!/ -   
0 
± STEP TWO: Develop an initial prototype
± STEP THREE: Repeated iterations
± STEP FOUR: Use the system

|  
      

          12V of 172


' ' A&*

‡ The first step is to identify basic


requirements by meeting with users to
agree on the size and scope of the system
and decide what it should include and
exclude.
± Developer and users also determine:
‡ Decision-making and transaction processing
outputs.
‡ Inputs and data needed to produce those outputs.
± The emphasis is on what outputs should be
produced rather than how.
|  
      

          12¢ of 172


' ' A&*

± The developer must ensure:


‡ User expectations are realistic.
‡ Their basic information requirements are met.
± The designer uses the information
requirements to develop cost, time, and
feasibility estimates for alternative AIS
solutions.

|  
      

          1s0 of 172


' ' A&*

‡ Four steps are involved in developing a


prototype:
± STEP ONE: Identify basic requirements
±  ! +'/ #$ %    %%
± STEP THREE: Repeated iterations
± STEP FOUR: Use the system

|  
      

          1s1 of 172


' ' A&*

‡ The second step involves developing an


initial prototype that meets the agreed-on
requirements.
± Emphasize speed and low cost rather than
efficiency of operation.
± The goal is to implement the prototype within
a short time period.

|  
      

          1s2 of 172


' ' A&*

‡ Because of time constraints, some


aspects are sacrificed. For example, at
this point, you ignore:
± Non-essential functions
± System controls
± Exception handling
± Validation of input data
± Processing speed
± Efficiency considerations
|  
      

          1ss of 172


' ' A&*

‡ Users must see and use tentative versions of:


± Data entry display screens
± Menus
± Input prompts
± Source documents
‡ They must also:
± Respond to prompts
± Query the system
± Judge response times
± Issue commands

|  
      

          1sŠ of 172


' ' A&*

‡ When the prototype is finished, the


developer returns to the users and
demonstrates the system.
‡ Users are instructed to:
± Experiment.
± Comment on what they do and do not like.

|  
      

          1sý of 172


' ' A&*

‡ Four steps are involved in developing a


prototype:
± STEP ONE: Identify basic requirements
± STEP TWO: Develop an initial prototype
±  ! !!/ % -   
± STEP FOUR: Use the system

|  
      

          1s of 172


' ' A&*

‡ The third step involves repeated iterations


of:
± Users identifying changes.
± Developers making the changes.
± The system being turned back to users for
next round.
‡ This step continues until users are
satisfied²usually Š to  iterations.

|  
      

          1s7 of 172


' ' A&*

‡ Four steps are involved in developing a


prototype:
± STEP ONE: Identify basic requirements
± STEP TWO: Develop an initial prototype
± STEP THREE: Repeated iterations
±  ! ,'(/ (  

|  
      

          1sV of 172


' ' A&*

‡ The final step involves using the system


approved by the users.
‡ An approved prototype is typically used in
one of two ways.

|  
      

          1s¢ of 172


' ' A&*

‡ Half of the prototypes are turned into fully


functional systems referred to as

 
 .
± To make them operational, the developer
must:
‡ Add needed controls.
‡ Improve operational efficiency.
‡ Provide backup and recovery.
‡ Integrate the prototype with the systems with which
it interfaces.

|  
      

          1Š0 of 172


' ' A&*

‡ Changes may be necessary to allow the


program to:
± Accept real input.
± Access real data files.
± Process data.
± Make necessary computations and
calculations.
± Produce real output.

|  
      

          1Š1 of 172


' ' A&*

‡ When it¶s not practical to modify the


prototype to make a fully functional
system, 
  or 
 

  can be used in several ways:
± They may be discarded, and the systems
requirements identified in the process of
building them can be used to develop a new
system.
‡ If so, the SDLC is followed to develop the system,
and the prototype is a model.

|  
      

          1Š2 of 172


' ' A&*

± Alternately, they may be used as the initial


prototype for an expanded system designed
to meet needs of many users.
± As a final alternative, if users and developers
decide the system is unsalvageable, the
prototype can be discarded completely.

|  
      

          1Šs of 172


' ' A&*

‡ +   %% 


± Prototyping supports rather than replaces the SDLC.
± It is appropriate when:
‡ Users don¶t fully understand their needs, or the needs
change rapidly.
‡ System requirements are difficult to define.
‡ System inputs and outputs are not known.
‡ The task to be performed is unstructured or semi-structured.
‡ Designers are uncertain about what technology to use.
‡ The system is crucial and needed quickly.
‡ The risk of developing the wrong system is high.

|  
      

          1ŠŠ of 172


' ' A&*
‡ The users¶ reactions to the new system are important
development considerations.
‡ Many design strategies must be tested.
‡ The design staff has little experience developing this type of
system or application.
‡ The system will be used infrequently so that processing
efficiency is not crucial.

|  
      

          1Šý of 172


' ' A&*

‡ Good candidates for prototyping:


± Decision support systems.
± Executive information systems.
± Expert systems.
± Information retrieval systems.
± Systems that involve experimentation and
trial-and-error development.
± Systems in which requirements evolve as the
system is used.

|  
      

          1Š of 172


' ' A&*

‡ Prototyping is usually inappropriate for:


± Large or complex systems that:
‡ Serve major organizational components; or
‡ Cross numerous organizational boundaries.
± Standard AIS components, such as:
‡ Accounts receivable
‡ Accounts payable
‡ Inventory management

|  
      

          1Š7 of 172


' ' A&*

‡ Advantages of prototyping:
±  -      -
‡ 
   $ -3 $ $1

|  
      

          1ŠV of 172


' ' A&*

‡ Advantages of prototyping:
± Better definition of user needs
±   $ $ -   
 

|  
      

          1Š¢ of 172


' ' A&*

‡ Advantages of prototyping:
± Better definition of user needs
± Higher user involvement and satisfaction
± ,  -$ %  
‡     2 -   )2   %% % $1
      -   1

|  
      

          1ý0 of 172


' ' A&*

‡ Advantages of prototyping:
± Better definition of user needs
± Higher user involvement and satisfaction
± Faster development time
± ,) 
‡ !  -
-    
  
4%  )  
 $ 1
‡ @     -  -        
   1

|  
      

          1ý1 of 172


' ' A&*

‡ Advantages of prototyping:
± Better definition of user needs
± Higher user involvement and satisfaction
± Faster development time
± Fewer errors
± ? %%  
 

|  
      

          1ý2 of 172


' ' A&*

‡ Advantages of prototyping:
± Better definition of user needs
± Higher user involvement and satisfaction
± Faster development time
± Fewer errors
± More opportunity for changes
± .
 
‡   D=  
   -   1

|  
      

          1ýs of 172


' ' A&*

‡ Disadvantages of prototyping:
±   
   

|  
      

          1ýŠ of 172


' ' A&*

‡ Disadvantages of prototyping:
± Significant user time
± . 
    

‡ 
  -$ %     
  /
±  % 
 -   
±    
 - %%


|  
      

          1ýý of 172


' ' A&*

‡ Disadvantages of prototyping:
± Significant user time
± Less efficient use of system resources
± 
%   -$ %

|  
      

          1ý of 172


' ' A&*

‡ Disadvantages of prototyping:
± Significant user time
± Less efficient use of system resources
± Incomplete system development
±  -0   - - -
-
 ‡ + )   -   H

|  
      

          1ý7 of 172


' ' A&*

‡ Disadvantages of prototyping:
± Significant user time
± Less efficient use of system resources
± Incomplete system development
± Inadequately tested and documented systems
± &  $  $  
 
‡   %%  - 
--     %
    -   1
‡ ?    -    -      
 
% -     $    
    1
|  
      

          1ýV of 172


' ' A&*

‡ Disadvantages of prototyping:
± Significant user time
± Less efficient use of system resources
± Incomplete system development
± Inadequately tested and documented systems
± Negative behavioral reactions
± &$3-  -$ %
‡     - %%   -$ %
 - 

2    %1

|  
      

          1ý¢ of 172


& '#( '&

‡ We¶ll be discussing how to obtain a new


information system by:
± Purchasing prewritten software
± Developing software in-house
± Outsourcing
‡ We¶ll also discuss how to hasten or improve the
development process through:
± Business process reengineering
± Prototyping
± %3 -- )     5!6
 

|  
      

          10 of 172


%3 -- )  !  
5!6  
‡ Traditionally, software developers have created
software to simplify the work of others, but not
for themselves.
‡ ï 
 

 

ï  are an integrated
package of computer-based tools that automate
important aspects of the software development
process.
± Used to plan, analyze, design, program, and maintain
an information system.
± Also used to enhance efforts of managers, users, and
programmers in understanding information needs.
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%3 -- )  !  
5!6  
‡ CASE tools do not replace skilled
designers, but provide developers with
effective support for all SDLC phases.
‡ CASE software typically includes tools for:
± Strategic planning
± Project and system management
± Database design
± Screen and report layout
± Automatic code generation
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%3 -- )  !  
5!6  
‡ Advantages of CASE technology:
± 
 - %-
 $ 
‡     3
-  
%

 1
‡     %  $  21

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          1s of 172


%3 -- )  !  
5!6  
‡ Advantages of CASE technology:
± Increased productivity
± %$- %  0 
‡    %  
  
-
-$ %  - - )
/
± %$ 0   -$ %1
± -
      -  1
‡  

2 


  - 
- -
 
 
1

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          1Š of 172


%3 -- )  !  
5!6  
‡ Advantages of CASE technology:
± Increased productivity
± Improved program quality
±   $ 
‡   $   %  D"=  %  1

|  
      

          1ý of 172


%3 -- )  !  
5!6  
‡ Advantages of CASE technology:
± Increased productivity
± Improved program quality
± Cost savings
± %$-
 %
-
‡ !
  -$ %     
-  %
 /
± 
 
± 
   
±  -   
± !  -  %
-
|  
      

          1 of 172


%3 -- )  !  
5!6  
‡ Advantages of CASE technology:
± Increased productivity
± Improved program quality
± Cost savings
± Improved control procedures
±  %  - -
  
'  
 -
   
-$ % %1

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          17 of 172


%3 -- )  !  
5!6  
‡ Problems with CASE technology:
± 
%   
‡    -@ 
 
 $  ) 
 1

|  
      

          1V of 172


%3 -- )  !  
5!6  
‡ Problems with CASE technology:
± Incompatibility
±  ‡  %
2  I J<K1

|  
      

          1¢ of 172


%3 -- )  !  
5!6  
‡ Problems with CASE technology:
± Incompatibility
± Cost
± ( 4%
  
‡ '  <L=  '  $ 
 $- 4%
-
 1

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          170 of 172


(??A &# '&.('&

‡ You¶ve learned:
± How organizations buy software, hardware,
and vendor services.
± How information systems departments
develop custom software.
± How end users develop, use, and control
computer-based information systems.
± Why organizations outsource their information
systems, as well as the benefits and risks of
doing so.
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          171 of 172


(??A &# '&.('&

‡ You¶ve also learned:


± What reengineering processes entail and
when they are appropriate.
± How prototypes are used to develop an AIS
and when it is advantageous to do so.
± What computer-aided software engineering is
and how it¶s used in systems development.

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