GIT: Living in the IT Era

LECTURE 07

1
Chapter Objectives
Describe the concept of Software as a Service
Define Web 2.0 and cloud computing
Explain software acquisition alternatives, including traditional and
Web-based software development strategies
Describe software outsourcing options, including offshore
outsourcing and the role of service providers

2
Chapter Objectives
Explain advantages and disadvantages of in-house software
development
Discuss cost-benefit analysis and financial analysis tools
Describe the system requirements document
Explain the transition from systems analysis to systems design

3
Systems
Development
Life
Cycle
(System Analysis)
System Development Life Cycle
Introduction
The main objective of the systems analysis phase is to build a
logical model of the new information system. Let us evaluate the
different alternative solutions, preparation of the system
requirements document, and presentation of the system
requirements document to the management.

6
Development Strategies Overview
Selecting the best development path is an important decision that
requires companies to consider three key topics
• The impact of the Internet
• Software outsourcing options
• In-house software development alternatives

7
The Impact of the Internet
• Software as a Service
 A model of software deployment where an application is hosted as a
service provided to customers over the Internet. SaaS reduces the
customer's need for software maintenance, operation, and support
 The Software and Information Industry Association (SIIA) believes
that the concept of software as a service is redefining the way that
companies develop and deploy their information systems

8
The Impact of the Internet
• Traditional vs Web-based Systems Development
 Traditional development
o System design is influenced by compatibility issues
o Systems are designed to run on local and wide-area company networks
o Web-based features are treated as enhancements rather than core elements of the
design

9
The Impact of the Internet
• Traditional vs Web-based Systems Development
 Web-based development
o Systems are developed and delivered in an Internet-based framework such as .NET or
WebSphere
o Internet-based development treats the Web as the platform, rather than just a
communication channel
o Web-based software usually requires additional layers, called middleware

10
The Impact of the Internet
• Traditional vs Web-based Systems Development
 WebSphere
 Microsoft’s .NET
 Many firms rely on traditional systems

11
Outsourcing
• The transfer of information systems development, operation, or
maintenance to an outside firm that provides these services, for a
fee, on a temporary or long-term basis
• Outsourcing can refer to relatively minor programming tasks,
renting software from a service provider, outsourcing a basic
business process (often called business process outsourcing, or
BPO), or handling a company's entire IT function

12
Outsourcing
• The Growth of Outsourcing
 Traditionally, firms outsourced IT tasks as a way of controlling costs
and dealing with rapid technological change
 Outsourcing has become part of an overall IT strategy for many
organizations

13
Outsourcing
• The Growth of Outsourcing
 A firm that offers outsourcing solutions is called a service provider
 Application service providers (ASP)
 Internet business services (IBS)
 Also called managed hosting

14
Outsourcing
• Outsourcing Fees
 A fixed fee model uses a set fee based on a specified level of service
and user support
 A subscription model has a variable fee based on the number of users
or workstations that have access to the application
 A usage model or transaction model charges a variable fee based on
the volume of transactions or operations performed by the application

15
Outsourcing
• Outsourcing Issues and Concerns
 Mission-critical IT systems should be out-sourced only if the result is a
cost-attractive, reliable, business solution that fits the company’s long-
term business strategy
 Outsourcing also can affect day-to-day company operations and can
raise some concerns

16
Outsourcing
• Outsourcing Issues and Concerns
 A company must review carefully issues relating to insurance, potential
liability, licensing and information ownership, warranties, and disaster
recovery
 Mergers and acquisitions also can affect outsourcing clients
 Outsourcing can be especially attractive to a company whose volume
fluctuates widely, such as a defense contractor

17
Outsourcing
• Offshore Outsourcing
 also known as global outsourcing
 Practice of shifting IT development, support, and operations to other
countries

18
In-House Software
Development Options

19
In-House Software Development
Options

20
In-House Software Development
Options
• Make or Buy Decision
 The choice between developing versus purchasing software often is
called a make or buy, or build or buy decision
 The company’s IT department makes, builds, and develops in-house
software
 A software package is obtained from a vendor or application service
provider

21
In-House Software Development
Options
• Make or Buy Decision
 Software vendors – companies that develop software for sale
 Value-added reseller (VAR) – a firm that enhances a commercial
package by adding custom features and configuring it for a particular
industry
 Horizontal application – available for every type of activity, separate
divisions
 Vertical application – for a specific type of business

22
 In-House Software Development
Options
IN-HOUSE DEVELOPMENT
• Satisfy unique business requirements • Lower costs
• Minimize changes in business
procedures and policies
• Meet constraints of existing systems
• Meet constraints of existing
technology
• Develop internal resources and
capabilities
PURCHASING A SOFTWARE PACKAGE
• Requires less time to implement
• Proven reliability and performance
benchmarks
• Requires less technical development
staff
• Future upgrades provided by the
vendor
• Obtain input from other companies
23
In-House Software Development
Options
• Customizing a Software Package
1. You can purchase a basic package that vendors will customize to suit
your needs
2. You can negotiate directly with the software vendor to make
enhancements to meet your needs by paying for the changes
3. You can purchase the package and make your own modifications, if
this is permissible under the terms of the software license

24
In-House Software Development
Options
• Creating User Applications
 User application
 User interface
 Help desk or information center (IC)
 Screen generators
 Report generators
 Read-only properties

25
Role of the System Analyst
• When selecting hardware and software, part of the evaluation
and selection team
 Eliminate system alternatives that will not work
 Rank the system alternatives that will work
 Present the viable alternatives to management for a final decision

26
The Software
Acquisition Process

27
The Software Acquisition Process
1. Evaluate the Information System Requirements
2. Identify Potential Vendors or Outsourcing Options
3. Evaluate the Alternatives
4. Perform Cost-Benefit Analysis
5. Prepare a Recommendation
6. Implement the Solution

28
The Software Acquisition Process
1. Evaluate the Information System Requirements

• Identify key features

• Prepare a request for proposal or quotation
 Request for proposal
 Evaluation model
 Request for quotation

29
The Software Acquisition Process
2. Identify Potential Vendors or Outsourcing Options

• Potential use of the Internet

• Work with a consulting firm
• Source from the Internet bulletin board systems that contain
thousands of forums, called newsgroup

30
 The Software Acquisition Process
3. Evaluate the Alternatives

• Existing users
• Application testing
• Benchmarking
•

31
The Software Acquisition Process
4. Perform Cost-Benefit Analysis

• Purchase software = software license

32
The Software Acquisition Process
5. Prepare a Recommendation

• Recommendation that evaluates and describes the alternatives,

together with the costs, benefits, advantages, and disadvantages
of each option
• Document each step and deliver a presentation

33
The Software Acquisition Process
6. Implement the Solution

• Implementation tasks will depend on the solution selected

• Before the new software becomes operational, you must
complete all implementation steps, including loading, configuring,
and testing the software; training users; and converting data files
to the new system’s format

34
Completion of Systems Analysis
Tasks
• System Requirements Document
• Presentation to Management
 Implement an outsourcing alternative
 Develop an in-house system
 Purchase or customize a software package
 Perform additional systems analysis work
 Stop all further work

35
System Development Life Cycle