Decision Making in Information Technology

Acquisition:
A System Analysis Approach

Introduction

The dependency on information technology (IT) has increased progressively for organizations

as a strategically important competitive advantage. If planned, developed, and managed properly, IT

can bring about greater efficiency in organizational operations, better working environments, and

effective decision-making processes.[1] Therefore, many organizations are trying to catch up the

development gap with the industry by means of technology acquisition.2 Technology acquisition

process is essential in developing a good management information system for an organization. Many

IT projects have failed because of poor design planning, false selection of the development, and a lack

of follow up on key milestones addressed in the acquisition process. This research paper discusses

proper steps and key factors in planning, acquiring, developing, and reviewing the IT acquisition.

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Decision Making Strategy in IT Acquisition

The term ‘acquisition’ refers to all the stages from buying, introducing, applying,

adopting, adapting, localizing, and developing through to diffusion. [2]The acquisition issue

is multifaceted for various reasons including large variety of IT applications, rapid change in

new technology, and involvement of several business entities in the organization. The set of

processes for the build, lease, or buy decision must be identical for every instance or

business opportunity that arises. The processes determine the strategic value and potential

savings of the proposed project, as well as factors like business transformation versus drive

for competitive advantage.[3]

 The range of IT applications stipulates a variety of advance approaches. The

application itself can be acquired by in-house development, buy, lease, outsource, or any

combination of two. For example, a company website can be developed in-house with

HTML, JAVA, or any other web programming languages. Some other alternatives would be

implementing commercial web development packages, leasing a web application from

application service providers (ASPs) with some monthly or yearly fees, or purchasing on-

demand application from a vendor.[4] If we look at larger applications such as enterprise-

wide application, building such system would require more extensive integration with existing

information systems such as corporate databases, intranets, enterprise resource planning

(ERP), and other application programs.[5] Thus, implementing accurate IT application

involves critical control process that need to be in place in order to support and protect

company’s best-interest.

            For an organization, the major reason of acquiring IT applications is to effectively and

efficiently support one or more business process.[6] Prior to the acquisition process, the

detail requirements of the process should have already been identified clearly.[7] More

importantly, the business objectives should be identified for the solution being sought and

the management decision whether building, leasing, or buying the IT application should

consider a value-versus-risk matrix to determine which options can be applied. Both IT

auditors and corporate management should evaluate offerings over the long term and

compare the "trickling" investment over time to the one-time cost of buying and implementing

a system. Moreover, this technology acquisition process requires an extensive evaluation

considering the system requirements, feasibility analysis, and risk management assessment.

Therefore, the decision here is not as easy as to make, lease,-or-buy the solutions, but then

supposed if we decide to buy, the next question should be, “how to create company’s

competitive advantages through such decision?” Decision making science requires that

management understand the fundamentals of how IS acquisition decisions related to

management information system (MIS) are made. What are the expectations and how they
will be achieved? The value of using managerial sciences to approach this decision is to

understand the motivation drivers that justify MIS and IT acquisition decision.[20]

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IT Acquisition Process

The acquisition process should involve the identification and analysis of alternative

solutions that are each compared with the established business requirements. The decision

making to acquire a typical IT application primarily consists of the following stages: (see

Appendix)

STAGE 1: IDENTIFYING, PLANNING, AND JUSTIFYING THE INFORMATION AND

SYSTEM REQUIREMENTS

One of the most essential assessments in decision making process is identifying the

business objective after first knowing the problems being solved. The management should

primarily identify the business processes involved in the organization. Information systems

are usually developed as enablers of the business processes. The first phase of the

acquisition process should align the business process with the company objectives and the

business plan.  Note that specific process may need to be prioritized to fully obtain the

benefits of IT implementation.  Moreover, each process should be carefully analyzed to

ensure that it will have the certain functionality to meet the requirements of the business

process and the users, as well as the benefits which can be justified with its cost.5

            Another big challenge in the procuring information systems is to define the system

requirements. System requirements describe the objectives of the system. They define the

problem to be solved, business, and system goals, system process to be accomplished, user

expectations, and the deliverables for the system. Furthermore, the requirements should
incorporate information about system inputs, information being processed in the system, and

the information expected out the system. Each of this information should be clearly defined

so that later gaps in requirements and expectations are avoided. Information system

requirements can be gathered through interviews, questionnaires, existing system

derivation, benchmarking with related system, prototyping, and Rapid Application

Development (RAD).[7]

The output of this step is a decision to go with specific application, timetable, budget,

and system expectations. As Small Business Television (SBTV) Network Chief Operating

Officer, Michael Kelley, explains, "Before we went and purchased anything, we developed a

business plan with a three-year outlook on what we thought we needed for the business.

During the planning process, we knew that we were going to have to make a change within a

three-year period. So that was an 'x' on the side of 'reasons not to buy, lease, or build in-

house' because we new we might have to change our technology — probably in less than

two years. As it turned out, it was about 14 months, and we had to make a lot of changes

and reconfigurations."[5]

STAGE 2: RESTRUCTURING INFORMATION SYSTEM ARCHITECTURE

With the regards of system analysis approach, an organization which is still in the

progress of acquiring IT should remodel its information system (IS) architecture. IS

architecture is the conceptualization of how the organization’s information objectives are met

by the capabilities of the specific applications.[7]This structural design however describes

the flow of the information, data hierarchy, application functionality, technical feasibility, and

organization architecture in the organization. The output from this phase should be a

strategic planning level on how to develop specific application that meets the constrained

defined by the IS architecture. Therefore, the application portfolio may be changed

corresponding to this structure.

STAGE 3: IDENTIFYING A DEVELOPMENT ALTERNATIVE

There are several options in procuring software solutions. Some available

alternatives are: (1) Developing the system in-house, (2) Off-the self solutions (Purchasing

commercially available solution),

(3)Buying a custom made system for a vendor, (4) Leasing software from an application

service provider (ASP) or lease through utility computing (contracted development), (5)

Outsourcing a system from other companies (6) Participating in auction, e-marketplace, or a

public exchange (consortium) ,(7)Use a combination of these listed options.

The consideration criteria and some critical factors upon various options will be

discussed thoroughly later in the next section. While an organization is in the phase of

deciding which alternative being selected, the management should carefully examine not

only the advantages and disadvantages of each procuring option, but more importantly, the

option must be best-fit with the organization business plan that has been documented in the

previous steps. Any system development project, whether the system is built in-house or

purchased elsewhere, should support the company’s business and IT strategy. The solution

being sought associated with business requirements should align the business goals with IT

strategy.

STAGE 4: CONDUCTING A FEASIBILITY ANALYSIS

 As a part of the assessment in acquiring the solutions, a feasibility analysis is important

to identify the constraints for each alternative from both technical and business perspective.

Feasibility analysis incorporates the following categories:

·       Economic feasibility analysis provides cost-benefit justification with being regard to the

expenses of a system, which include procurement, project-specific, start-up, and

operational costs. Some cost examples are one-time and recurring cost, consultants,
 support staff, infrastructure, maintenance, training, and application software cost. This

examination ensures that the solution won’t exceed the budget limit as well as it increase

the efficiency and better resource utilization.

·       Technical feasibility assessment analyzes the technical reasonableness of the

proposed solution. Technical feasibility evaluates whether the company has the

infrastructure and resources including hardware, software, and network capability to

support the application. Meanwhile, it also assesses the consistency of the proposed

system in terms of the technical requirements with the company technical resource.

Therefore, this assessment guarantees the reliability and capacity for the future growth.

·       Operational feasibility evaluation reviews the extent of organizational changes required

to accommodate the proposed system. The proposed system should solve the business

problems and provide better opportunity for the business since the business process

might be changed. Some alignments that may occur include business process, human

resource management, and products or service offered.

·       Legal and contractual feasibility. The proposed solution must pass any related legal or

contractual obligations associated with. Corporate legal counsel should ensure that there

are no illegal practices corresponding to the new system related with any preexisting

regulations. Organization also may work with some experts from Computer Law

Association to make sure this analysis strictly enforced. Thus, the underlying theme will

protect the company and the establishment of the remedy process should the vendor or

contractor fail to perform as promised.

·        Political feasibility. The nature of the organization most likely will be affected by the

presence of the new system. Therefore, this feasibility analysis evaluates how the

internal organization will accept the new system. It also incorporates the user expectancy
 regarding the new system and the corporate culture response toward the proposed

solution.

Upon completion of the series of feasibility analyses, the risk analysis review most likely

will be conducted. Risk analysis evaluate the security of proposed system, potential threats,

vulnerabilities, impacts, as well as the feasibility of other controls can be used to minimize

the identified threats.[6]

Finally, the company may perform some ergonomic requirements review to provide a

work environment that is safe and efficient for the employee.  Ergonomic check will make

sure the design of the human interface components (i.e: monitor, keyboard, etc) is user

friendly enough to accommodate all the requirements that make the users feel comfortable

to work with.

STAGE 5: PERFORMING THE SELECTION PROCEDURE

Selection procedure is the process of identifying the best match between the

available options and the identified requirements. In this process, the company requests for

a proposal from prospective providers, evaluates the proposal, and selects the best available

alternative. There are various ways to solicit responses from providers. Some of the

common methods comprise request for information (RFI), request for bid (RFB), and request

for proposal (RFP). An RFI is used to seek information from vendors for a specific intention.

RFI should act as a tool for determining the alternatives or associated alternatives for

meeting the organization’s needs. An RFB is designed to procure specific items or services

and used where either multiple vendors are equally competent of meeting all of the technical

and functional specifications or only one provider can meet them. Furthermore, an RFP

specifies the minimal acceptable requirements, including functional, technical, and

contractual aspects. This document offers flexibility to respondents to further define the

requested requirements. RFPs can be a lead to a purchase or continued negotiation.

 All of these processes should be structurally proceeded to ensure the process would

be completed neatly in a timely fashion. If done properly, this process turns out to be a

purchasing decision for the selected application. Note that the entire process must be

documented in a written letter before moving to the next step. This is an important issue to

avoid a bid protest that may be filled from any other potential vendors. Management, IT

auditor and also legal counsel must review every point in detail before the proposal

evaluation process begins.

STAGE 6: PROPOSAL EVALUATION PROCESS

           Proposal evaluation is a crucial process in the software acquisition since one of more

key stakeholders reviews submitted proposals using a list of objective selection criteria and

decide the best match between the product features and functionality with the identified

requirements.

Martin, et al (2000) identified six steps in selecting a software vendor with its

application package:[8]

1. Examining potential vendors’ background. Potential software application providers can

be identified from software catalogs, lists provided by hardware vendors, technical and trade

journals, or consultants experienced in the other companies, and Web searches. These

preliminary evaluation criteria can be used to pre-eliminate the unqualified potential vendors

based on the vendor track record, reputation, and some previous feedback.

2. Determining the evaluation criteria. One of the most difficult tasks in evaluating the

vendor and a software package is to determine a set of detailed criteria for choosing the best

vendor and package. These criteria can be identified from the RFP feedback sent by the

vendors. Some areas that should be considered: characteristics, of the vendor, functional

requirements of the system, technical requirements, total project costs, scalability of the

solution, project time frame, quality of documentation provided, and vendor support package.
3. Evaluating providers and their applications. The objective of this evaluation is to

determine the gaps between the company’s needs and the capabilities of the vendors and

their application packages. Ranking the vendors on each weighted criteria and then multiply

the ranks by the associated weight can be one method to evaluate the vendors and their

solution packages.

4. Selecting the provider and its solution. Choosing the vendor and its software depends

on the nature of the application. Negotiation can begin with vendors to determine how their

packages might be modified to remove any discrepancies with the company’s IT needs.

Furthermore, feedbacks from the users who will work with the system and the IT staff who

will support the system have to be considered. In general, defined list of criteria for selecting

a software application package are following:

TABLE 1. Criteria for Selecting a Software Application Package to use

 
·   Usability and functionality ·   Required training

·   Cost-benefit analysis ·   System security

·   Upgrade policy and cost ·   Maintenance and operational requirements

·   Vendor reputation ·   User easiness to learn

·   System flexibility and scalability ·   Performance measurement

·   Manageability ·   Interoperability and data handling

·   Quality of documentation ·   Ease of integration

·   Hardware and networking resources ·   Reliability measurement

·   Upgradeability ·   Compatibility with other applications

5. Negotiate a contract. Once the vendor and its package selected, then the company can

move to the contract negotiation, in which the company can specify the price of the software
and the type of the support to be provided by the vendor. The contract must describe the

detailed specifications, all the included services provided by the vendor, and other detail

terms of the system. Contract is a legal document so the company should involve the

experienced software purchasing specialists and legal assistance. Since the contract can be

very tricky so these legal counsel should be involved from the beginning of selection

process.

6. Establishing a service level agreement (SLA). SLA is formal agreement regarding the

distribution of work between the organization and its vendor. Such agreement is created

according to a set of agreed-upon objective, quality tests, and some what-if situations.

Overall, SLA defines: (1) company and vendor responsibilities, (2) framework for designing

support services, (3)   company privilege to have most of the control over their system.

STAGE 7: IMPLEMENTING THE SELECTED SOLUTION

Upon completion of the contract negotiation, an acceptance plan should be agreed

by both the company and the vendor so the new application can be ready to be installed or

developed. No matter what options the company chooses, even when they decide to build

their software in house, the company will most likely have to deal with some vendor (s)

and/or certain software that has to be purchased from some supplier(s).  During this

process, the application is also tested and user reactions are evaluated. After the application

or prototype of the application has passed user requirements, they can be deployed. Under

this circumstance, the company management may deal with organizational issues such as

conversion strategies, training, and resistant to change [9]

STAGE 8: REVIEWING AND MONITORING THE ACQUISITION PROCESS

Software acquisition process is a continuing process that must be reviewed in

ongoing basis. A purchased software solution should effectively and efficiently satisfy user

requirements. Software maintenance and operation can be an issue due to rapid changes in
IT technology. However, this process can involve external evaluation to make sure the

procedures and processes in place and whether the acquisition was in compliance with

institutional processes and operating procedures.

Standard project management techniques and tools are useful for this task. Operation,

maintenance, and evaluation can be done in-house or outsourced. For medium-large

applications, a company may create a project team to manage the process. Company also

may collaborate with other business partners to monitor the development process; however,

it may have some critical issue with IT failure, such as: application incompatibility between

two entities, communication breakdown, etc. IT can be a place where these acquisition

procedures are lacking; therefore, the development process must be managed properly.

Ultimately, investing an IT project may require streamlining of one or more business

processes and excellent coordination between all the related entities.

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Key Factors in Selecting Available Alternatives

Some main alternatives exist in acquiring IT applications. Some major options are

buy, lease, develop in-house, or outsourcing a system from any other companies. When

does it make more sense to buy the applications? When does it make more sense to lease?

Do we have to outsource our applications to other companies? The set of processes for the

acquisition decision must be identical for every instance or business opportunity that arises.

In the past anything that has been deemed strategic has been built in-house but the trend to

outsource and buy more systems has grown. Below are some critical factors that should be

evaluated prior to choose preferable IS procurement strategy, whether to buy, lease, build

in-house, or outsource IT applications.

1. Buying the Applications (Off-the-Shelf Solution)

 Purchasing commercially available solutions requires that the business adapt to the

functionality of the system. Buying an existing package can be a cost effective and time

saving strategy compared with in-house development. The business adaptation process

obliges that the organization could also customize the software product and subsequently

maintains those customizations within the processes that have been modified and changed.

Most organizations are rarely fully satisfied by one software package. Therefore, it is

sometimes necessary to acquire multiple packages to support even one business process.

Note that when selecting a vendor package, organizations should consider the following key

factors:

 Vendor stability  Hardware and software

 System upgrades requirements
 Customer support provided by  Required customization of the base
vendor software

A ‘buy’ option should be carefully considered to ensure all the critical features of the current

and future needs are included in the package. Buying makes sense if an organization plan to keep

something for a long time, but technology typically becomes outdates every two to three years. Irv

Rothman, president and CEO of the $8 billion-strong HP Financial Service said, "The reason a small-

business customer never buys information-technology equipment is because there is an obsolescence

curve. When you know something is going to become obsolete, why does a small-business customer

want to be an owner of that equipment, instead of simply a user of that equipment?"[10] When the

business is all about cutting-edge technology, buying can make good sense. Eventually, buying

decision typically means picking up something inexpensive to do the job right now. Learning from

SBTV's experience, the decision to buy was a need to look "asset strong" to outside investors. "Our

technology platform and our content are our two most important assets," says Kelley, SBTV CEO.

"We didn't want to look to an outside investor as not having built our assets."7 The advantages and

shortcomings of ‘buy’ option are summarized in Table2.

TABLE 2. Advantages and Disadvantages of  ‘Buy’ Option

  
ADVANTAGES DISADVANTAGES
·   Shorter implementation time ·   Incompatibility with company needs

·   Use of proven technology ·   Incompatibility between different applications

·   Availability of outside technical expertise ·   Limitation on the software customization

·   Easier to define costs ·   Have no control over software improvements

·   Frequent software updates ·   Long term reliance on vendor support

·   The price is usually cheaper ·   Specific hardware or software requirements

·   Minimal IT personnel  

2. Leasing the Applications

Lease option can result in substantial cost and time savings compared to buy option

or in-house development. Leasing can be a good choice for small-medium enterprise that

can not afford large investment in IT applications. Moreover, many common features that are

needed by most organizations are usually incorporated in the leased package even though it

may not always exactly include all the required features. Also, regarding a shortage of IT

personnel, many companies choose to lease instead of develop software in-house. Leasing

can help you decrease the total cost of ownership of technology assets. It allows you to

track, standardize and regularly upgrade your practice's technology.[11] Large companies

may also prefer to choose this option since to evaluate the potential IT solutions before

investing a heavy installment, especially in the long run. Therefore, leasing requires another

kind of management skill, too, which is: Lifecycle management. Whereas buying typically

means picking up something inexpensive to do the job right now, leasing means that a

business is looking at the bigger picture, planning for future upgrades and evolving needs.10

When controlling cash flow is critical and you don't have time to worry about your equipment,

leasing can be a great option. Other vendors concur that built-in protections against
obsolescence can encourage leasing. "Even companies that do not have any cash flow

issues often take advantage of technology refresh terms built into a lease," says Richard

McCormack, vice president of product marketing for Fujitsu Computer Systems.[12]

Ultimately, leasing can be considered a risk-management tool. Kendall, HP's managing

director for Financial Services, remarks "When you enter into a lease, the ability to progress

from one generation of technology to the next, to expand your technology solution, to rid

yourself of obsolete equipment is far easier and far smoother, because of the way a lease is

structured for small and medium businesses." 7The advantages and disadvantages of

‘lease’ option are summarized in Table 3.

TABLE 3. Advantages and Disadvantages of  ‘Lease’ Option

 
ADVANTAGES DISADVANTAGES
·   Shorter time implementation ·   May not exactly fit with company needs

·   Cost saving (cheaper than buy option) ·   Limitation on the software customization

·   Ease to maintain cash flow ·   Have no control over software improvements

·   Required only minimum IT staff ·   Specific hardware or software requirements

·   Less risky to anticipate technology updates ·   Include an interest component that a cash
purchase would not include
·   Having most of the required features
 

3. Developing the applications in-house

Another strategy of IT acquisition is to build the application in-house. This option

works well for the organization that has the resources and time to develop the IT applications

by its own.  This approach may be time consuming and somehow costly, but the company

may have a system that meet all the organization objective requirements. Its overriding

advantage was the freedom to create a system that would closely fit the company’s business

processes. In contrast to other solutions, it would be relatively inexpensive; however, it

would take more time (maybe significantly more) to implement. If successful, the outcome
could lead to another revenue stream from royalties for software sales.[13] When a

“buy/lease” option is evaluated, the result can be measured as a percentage fit to the user

requirement – say 80 or 90%. Users make the assumption – which often turns out to be false

– that an in-house solution will give a 100% fit. But in the real world, there are a host of

issues that get in the way of the dream of getting a software system with a 100% fit to our

needs.[14] There are two major ways to develop the system in-house.4 First, building the

application from the scratch is one of the approaches to match the specific application with

the requirements. Another way of building the in-house application is using the standard

components or features that have been included in some commercial packages (i.e. Java,

Visual Basic, C++) or using available packaged software that can be customized. However,

the second approach offers greater flexibility, cost and time saving rather than building the

software from the base.7

The advantages and limitations of ‘in-house development’ option are summarized in Table 4.

TABLE 4. Advantages and Disadvantages of  ‘In-house development’ Option

 
ADVANTAGES DISADVANTAGES
·   Best fit with the company requirements ·   Required more IT personnel

·   Have control over software improvements ·   High overhead cost

·   Have all of the required features ·   Time consuming

·   Main core competencies and maintain level ·   Problem with usability of the system
of quality service
·   High switching cost
·   Make a distinction with other companies
·   Difficult to update to newer technology

 
 

4. Outsourcing the applications

            One of the recent trendsetters in IT acquisition strategy is outsourcing. As defined by
Griffiths,outsourcing is a strategic use of outside resources to perform activities traditionally
handled by internal staff and resources.[15] Laudon and Laudon define it as the process
turning over an organization computer center, telecommunication network or application
development to external vendors. However, in general, the reasons boiled down to one
factor. It is less costly for the purchasing company to turn outside rather than do the work in
house.[16]This strategy does not have to the expertise and it is less costly to buy the
expertise than build it. Perhaps it does not have time o pull off a project. However, it can take
advantage of the economy of scale that the provider has and which the purchasing company
does not. As a matter of fact, the organization turns to outsourcing to save money.[17]
Decisions as what to what and whether to outsource should be tied to an identification and
understanding of an organization’s core competencies and its critical success factors. [18]If
a task is a both a core competency and a critical success factor, it should not be considered
outsourcing. Such projects are at the heart of the company. Success or failure of such
functions is directly tied to success or failure of the company as a whole. In general, such
functions are critical to an organization’s day-to-day operations, ability to competitively
differentiate itself, ability to deliver value to customers and partners, and ability to innovate17

Some different types of outsourcing relationships are partnership, service provider, and

vendor. Strategic partnerships might even establish some form of mutual ownership or revenue

sharing. A service provider relationship is established when an ASP operate MIS applications and

contracts are flexible to respond to changing needs of the organization. Most of ASPs develop custom

software applications for the line of business. Meanwhile, vendor or transaction partnerships are more

typical outsourcing arrangements where a company simply contracts with a vendor to provide the

service or product. The vendor usually provides hardware, telecommunication, backup, and managed

applications for the company. In this term of partnership, contracts usually escalate fess based on

levels of usage of line item services. [19] As an example of successful outsourcing strategy, CIO

Magazine (1999) discusses how Kodak used a multiple vendors to handle data center operations,

telecommunications, and desktop support applications. However, by using vendors to provide basic IT

resource management services within a year, Kodak’s IT capital costs dropped 95%, PC support cost

dropped 10%, and mainframe costs dropped by 15%. In selecting outsourcing partner, Kodak uses

reputation as a means of gauging the ability of its outsourcers as equal criteria for selection, equal to

lower costs and greater efficiency of operations.[20]

Outsourcing can be utilized to exploit the lower cost base of external service providers, which

allows for reduction in operating costs.[21] Having access to work with IT expertise would be another

benefit of outsourcing; thus, it reduces the risk of technology obsolescence and overtaking
competitors on the technological front.[22] Furthermore, it allows a company to focus on its core

business and reduce its workload. Some limitations of this strategy include the risk of loosing the

organizational core competencies, reduction in the quality of service received by a client, and also

some risk of the rise of unexpected expenses.The advantages and shortcomings of the ‘outsourcing'

option are summarized in Table 5.[23]

TABLE 5. Advantages and Disadvantages of Outsourcing

 
ADVANTAGES DISADVANTAGES
·   Cost Reduction ·   Loss of organizational competencies

·   Access to word class specialist providers ·   Reduction in quality of services

·   Improved focus on core business ·   Cost escalation from unforeseen expenses

·   Subcontracting of workload

·   Better risk management

 
 

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Factors for Success and Failures in IT Acquisition

           While the business context in which technology acquisition is utilized may various,
resulting in a vast combination of variables that influences outcomes, there are some
common characteristics and traits in acquisition process that may indicate its inclination
toward success or failure. These commonalities, termed key factors, are briefly outlined in
the Table 6 below:
TABLE 6. Factors for Success and Failures in IT Acquisition

 
Factors of Success Factors of Failure
·   Understanding of company objectives ·   Short term benefits motivation

·   Strategic vision and plan ·   Unqualified service providers (vendors)

·   Executive and management level support ·   Domination of service providers in decision
making
·   Comprehensive financial justification
·   Lack of management capability
·   Use of external expertise in decision process
·   Open communication with users ·   Failure in IS Acquisition planning

·   Careful selection of the vendor ·   Cultural issue (Resistant to change)

·   Ongoing management of the acquisition ·   Lack of defined process and change management

·   Periodical performance review

 
 

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Conclusion

          IT acquisition is expected to grow as more organizations seek to leverage the business goals. IT
acquisition strategy is often considered to be faster, easier, and most powerful way for companies to
meet their business needs. While acquisition method can be very successful and boost company’s
competitive advantage, it can also fail. There are many factors that should be considered prior to
acquire information systems functions. Managers should consider alignment between company’s
business and IT strategy; core competencies and critical success factors, feasibility studies, and wide
range specific information system functions that can be acquired, as well as understanding of the
related acquisition and implementation methodologies. Ultimately, the work does not end with the
implementation of the systems. Indeed monitoring and evaluating the developed system in ongoing
basis is also crucial for the success of IT acquisition.

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[7] Gallegos, F., Senft. S., Manson, D.,& Gonzales, C. (2004) Information Technology
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[8] Martin,E. W., et al.,(2000). Managing Information Technology. Upper Saddle River, NJ:
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[9] Whitten et al., (2003) Systems Analysis and Design Methods, 6th ed. New
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[10] Stone, A. (2003, April 11). The Lease-Versus-Buy Equation. Retreived Nov 26, 2006,
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Appendix
Figure 1. Information Technology Acquisition Process