Acquiring IT Applications

1
Chapter 14
Acquiring IT Applications and Infrastructure
2
Learning Objectives

• IT acquisition process
• IT acquisition options
• Criteria for selection
• Advantages/disadvantages
• Vendor and software selection

3
Acquisition Process
4
Acquisition Process, cont

• Identify, justify, plan IS
• Identify typically systematic
• Justify discussed in ch. 13
• Plan to be discussed in SAD
• IT architecture creation/update
• Discussed in ch. 2
• Acquire Application
• Test, Install, Connect
• To be discussed in SAD
• Operations and Maintenance
• To be discussed in SAD

5
Acquiring Applications

• Past option
• Current options
• Buy (COTS)
• Lease
• Develop In-House (in-source to be discussed in
  SAD)
• Build from scratch
• Build from components
• End-user development
• Develop Externally
• Install internally (outsource)
• Install externally (ASP)

6
Why so many options?

• Need for ISs higher than ever
• Demands for access/response higher than ever
• Systems more complex
• Functionality
• Environment
• Technology changes
• IS Personnel harder to find
• IS Personnel more expensive
• Organizations need to
• Cut costs
• Focus on core competencies

7
Buying Applications

• Commercial off-the-shelf software (COTS)
• Pre-written software
• Total Solutions ?? "Aggregate Systems"
• Used more than you might think
• Advantages
• Disadvantages

also see Table 14.1
8
Leasing Applications

• Similar to COTS, but less
• Advantages
• Disadvantages

9
Developing Applications Externally Outsourcing

• Contracting with an external company to do an IT
  function
• Evolution
• 60's/70's
• Payroll processing
• Timesharing
• 70's/80's
• Contract programmers
• 80's/90's
• Entire IT functions
• 90's and beyond
• Off-shoring
• 1/3 of Fortune 500 companies outsource
  development to India

10
Developing Applications Externally Outsourcing,
cont

• Scope of IT "function" outsourced varies
• Examples
• Proctor and Gamble
• Pilkington
• Kodak
• Millenium Partners Sports Clubs
• Baylor University
• Advantages also see table 13.2
• Disadvantages

11
Developing Applications Externally ASP

• Application Service Providers
• Form of outsourcing
• ASPs assemble the software needed by firms
• except
• Software runs on ASP-managed servers
• Accessed over Internet
• Advantages
• Disadvantages

12
Which Acquisition Approach???

• Study table 14.2

13
Vendor and Software Selection

• 6-Step Process
• Identify potential vendors
• Determine evaluation criteria
• RFP VERY important!
• Evaluate vendors' plans/packages
• Choose vendor
• Negotiate contract
• Establish SLA
• VERY important!
• Examples