ISYS1000 Lecture Notes - Lecture 10: Software As A Service, Application Service Provider, Breakcore
29 May 2018
School
Department
Course
Professor
Module – ICT Procureet
LEARNING OUTCOMES
14.1 Planning for and justifying IT applications
14.2 Strategies for acquiring IT applications
14.3 The Traditional systems development life cycle
14.4 Alternative methods and tools for systems development
14.5 Vendor and software selection
14.1 PLANNING FOR AND JUSTIFYING IT APPLICATIONS
Organisations must analyse the need for (IT) applications and then justify each purchase in
terms of costs and benefits.
- The cost–benefit justification must look at the wisdom of investing in a specific IT
application versus spending the funds on alternative projects
o formal processes of large organisations, smaller organisations employ less
formal processes
o decision makers should consider each step when they are planning changes
in their information systems
IT PLANNING
1. Aalyse the ogaisatio’s stategi pla
o Ioles idetifyig the og’s issio, goals, ad steps required to reach
these goals
2. Develop the IT strategic plan
o IT strategic plan: a set of long-range goals describing IT infrastructure &
identifying IT initiatives needed to reach the goals
▪ Must be aligned with the ogaisatio’s stategi pla
▪ Steering committee can help develop and implement plan
3. Develop IS operational plan
o Define a set of IS projects that will be executed to support the IT strategic
plan
▪ Must provide for an IT architecture that seamlessly networks users,
applications, and databases
▪ Must efficiently allocate resources among competing projects so the
projects can be completed on time and within budget and still have
the required functionality
find more resources at oneclass.com
find more resources at oneclass.com
EVALUATING AND JUSTIFYING IT INVESTMENT
Assessing the costs
- Placing a dollar value on cost of IT investments is highly complex
- Allocate fixed costs among different IT projects
- Costs of a system do not end when the system is installed
Assessing the benefits
- Even more complex than calculating IT investment costs
- Intangible benefits are difficult to quantify
Conducting the Cost-Benefit Analysis
- Four common approaches
o Net present value (NPV)
o Return on investment (ROI)
o Breakeven analysis
o Business case approach
14.2 STRATEGIES FRO ACQUIRING IT APPLICATIONS
FUNDAMENTAL DECISIONS
- How much computer code does the company want to write?
- How will the company pay for the application?
- Where will the application run?
- Where will the application originate?
SYSTEM ACQUISITION METHODS
Purchase a prewritten application
Advantages
- May diffeet types of off‐the‐shelf software are available.
- Software can be tried out.
- The company can save much time by buying rather than building.
find more resources at oneclass.com
find more resources at oneclass.com
- The company can know what it is getting before it invests in the product.
- The company is not the first and only user.
- Purchased software may eliminate the need to hire personnel specifically dedicated
to a project.
Disadvantages
- Software may not exatly eet the opay’s eeds.
- Software may be difficult or impossible to modify, or it may require huge business
process changes to implement.
- The company will not have control over software improvements and new versions.
- Purchased software can be difficult to integrate with existing systems.
- Vendors may discontinue a product or go out of business.
- Software is controlled by another company with its own priorities and business
considerations.
- Intimate knowledge in the purchasing company is lacking about how and why the 10
software works as it does.
Customise a prewritten application
Advantages
- Attractive option if the vendor allows the company to modify the application to
meet its needs
Disadvantages
- Customising a prewritten application can be extremely difficult, particularly for large,
complex applications
- May not be attractive if customisation is the only way to addess the opay’s
needs
- Not the best strategy for very expensive software or when software is likely to
become obsolete in a short time
Lease the application
- Can save the company time and money compared to buying or in-house
development
- 80/20 rule
o if the software meets 80% of the needs, the company should consider
changing business processes so it can utilise the remaining 20%
- Three approaches
o Lease the application from a software developer, install it, and run it on own
opay’s platfo
o Lease the appliatio ad u it o the edo’s platfo as Application
service provider)
o Lease the appliatio ad u it o the edo’s platform (as Software-as-a-
service)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
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