MGAC70

CLASS 7 – CHAPTER 13
ACQUIRING INFORMATION
SYSTEMS & APPLICATIONS
DOUGLAS KONG
 IT STRATEGIC PLAN

• IT strategic plan is a set of long-range goals that describe the IT

infrastructure and identify the major IT initiatives needed to achieve the
organization’s goals.
• The IT strategic plan must meet three objectives:
1. aligned with the organization’s strategic plan.
2. provide for an IT architecture that seamlessly networks users, applications, and databases
3. efficiently allocate IS development resources among competing projects so that the projects can be
completed on time and within budget and still have the required functionality.
 IS OPERATIONAL PLAN
• The IS operational plan that consists of a clear set of projects that the IS
department and the functional area managers will execute in support of the IT
strategic plan.
• A typical IS operational plan contains the following elements:
• Mission
• IT environment
• Objectives of the IT function
• Constraints of the IT function
• Application portfolio
• Resource allocation and project management
 IT STEERING COMMITTEE

One critical component in developing and implementing the IT strategic

plan is the IT steering committee.
The committee’s major tasks are
• To link corporate strategy with IT strategy,
• To approve the allocation of resources for the MIS function,
• To establish performance measures for the MIS function and
• Ensure that the performance standards are met.
STRATEGIES FOR ACQUIRING IT APPLICATIONS

• Purchase a Prewritten Application

• Customize a Prewritten Application
• Lease the Application
• Use Application Service Providers and Software-as-a-Service Vendors
• Use Outsourcing
• Use Continuous Development
• Use Custom Development
 STRATEGIES FOR ACQUIRING IT APPLICATIONS

• Companies must make a series of fundamental business 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?
 E VA L U AT I N G & J U S T I F Y I N G I T I N V E S T M E N T: B E N E F I T S ,
COSTS & ISSUES

• Justifying IT investment involves:

• Assessing the costs
• Fixed costs
• Future costs
• Assessing the benefits - Intangible benefits
• Comparing the two
 C O N D U C T I N G T H E C O S T- B E N E F I T A N A LY S I S

Four common approaches organizations use:

1. Net Present Value (NPV)
2. Return on Investment (ROI)
3. Breakeven Analysis
4. Business Case Approach
 OUTSOURCING OPTIONS

IT outsourcing for software development can take one of four forms:

1. Purchase existing software
2. Purchase existing software and pay the publisher to make certain
modifications
3. Purchase existing software and pay the publisher for the right to
make modifications yourself
4. Outsource the development of an entirely new and unique system
for which no software exists
OUTSOURCING OPTIONS
 OUTSOURCING PROCESS

When outsourcing, you’ll develop two vitally important documents – a request for proposal
and a service level agreement
 OUTSOURCING – RFP

Request for proposal (RFP) – formal document that describes in

excruciating detail your logical requirements for a proposed system
and invites outsourcing organizations to submit bids for its
development
• In outsourcing, you must tell another organization what you want
developed; you do that with an RFP
• Therefore, the RFP must be very detailed
• Some RFPs can take years to develop
 OUTSOURCING – SLA

• Service level agreement (SLA) - formal contractually obligated agreement

between two parties
• In outsourcing, it is the legal agreement between you and the vendor and
specifically identifies what the vendor is going to do (and by when) and
how much you’re going to pay
• Supporting SLA documents – service level specifications and service
level objectives – contain very detailed numbers and metrics
 OUTSOURCING OPTIONS

There are three different forms of outsourcing:

1. Onshore outsourcing - the process of engaging another company
within the same country for services
2. Nearshore outsourcing - contracting an outsourcing arrangement
with a company in a nearby country
3. Offshore outsourcing - contracting with a company that is
geographically far away
 THE ADVANTAGES AND DISADVANTAGES OF OUTSOURCING

• Advantages: • Disadvantages:
• Focus on unique core competencies • Reduces technical know-how for
• Exploit the intellect of another future innovation
organization • Reduces degree of control
• Better predict future costs • Increases vulnerability of your
• Acquire leading-edge technology strategic information
• Reduce costs • Increases dependency on other
organizations
• Improve performance accountability
 WHAT IS PROJECT MANAGEMENT?

• A project is undertaken to achieve a

specific goal.

As with all goals, projects should meet the S.M.A.R.T. criteria; that is, the project must
have a specific objective (S), progress must be measurable (M), it must be attainable
(A) and realistic (R), and there must be a defined time-frame (T). Projects have starting
points and (hopefully) ending points, and are, therefore, temporary by their very nature.
 THE FOUR STAGES OF PROJECT MANAGEMENT

• All projects have four essential phases: initiation, planning, execution, and closure.
• The initiation phase is when a project manager outlines what the project's
requirements are and analyzes the cost of the project.
• in the planning phase the project is broken down into its component parts
• visuals, such as Gantt charts. are included to allow people to view how the project will progress
from start to end

• Once a project has been planned, it can be executed in the third phase.
• here is where progress is monitored and, if necessary, plans can be revised

• Finally, in the closure phase, the manager must review the performance.
 FOUR STAGES OF PROJECT MANAGEMENT

• What happens in the initiation phase of planning a project?

• the initiation phase is when a project manager outlines what the project's requirements are and analyzes
the cost of the project

• What happens during the planning phase of a project?

• once a project has been planned, it can be executed in the third phase
• What happens during the execution phase of a project?
• here is where progress is monitored and, if necessary, plans can be revised
• What is the purpose of the closure phase of a project?
• this is a chance for everyone -- managers, stakeholders, etc. to review the performance and end all
associated contracts
 STAGE 1: INITIATION PHASE

• During the initiation phase the manager outlines the requirements of the project,
documents these requirements, and analyzes the costs of the project.
• The initiation phase begins by identifying project goals which may have originated,
because an opportunity has arisen (a client presents a request) or through a
brainstorming session.
• Once project objectives have been identified, managers conduct feasibility studies and
create business cases to determine whether or not the project will accomplish the stated
goals and if it can realistically be afforded.
• During the initiation phase the project’s scope and a projected timeline for deliverables
are described.
• Stakeholders in the project are identified and, finally, a statement of work or other
working agreement is created.
 S TA G E 2 : P L A N N I N G P H A S E

Define Project Objectives and Scope: Budgeting:

 Clearly outline the project's goals, objectives, and deliverables.  Estimate costs associated with each project task and the overall
 Define the boundaries and limitations of the project scope. project.
Create a Work Breakdown Structure (WBS):  Develop a budget that covers all project expenses.
 Break down the project into smaller, manageable tasks and Quality Planning:
components.  Establish quality standards and criteria for project deliverables.
 Develop a hierarchical structure to organize and represent the work
 Plan for quality assurance and control processes.
involved.
Communication Plan:
Identify Stakeholders:
 Identify all individuals and groups that may be affected by or have  Define a communication strategy to keep stakeholders
an impact on the project. informed.
 Understand their interests, expectations, and potential influence on  Identify communication channels, frequency, and key messages.
the project. Procurement Planning:
Risk Assessment and Management:  If applicable, plan for the procurement of external goods or
 Identify potential risks and uncertainties that could impact the services.
project.  Develop a strategy for vendor selection and management.
 Develop strategies for mitigating or responding to risks. Define Roles and Responsibilities:
Resource Planning:  Clearly outline the roles and responsibilities of each team
 Determine the human, financial, and material resources required for member.
the project.
 Ensure everyone understands their tasks and expectations.
 Allocate resources effectively to meet project goals.
Approval Processes:
Timeline and Scheduling:
 Establish a process for obtaining approvals at various project
 Develop a project schedule outlining tasks, dependencies, and
stages.
timelines.
 Define milestones to track progress and celebrate achievements.
 Define criteria for moving from one project phase to the next.
 STAGE 3: EXECUTION PHASE

• The execution phase of the project is typically

what people think of when they consider
working on a project.
• if the initiation and planning stages were completed
correctly, the execution phase should go smoothly

Of course, no project ever goes according to plan, but experienced managers

understand that they must allow for contingencies with every project, and that
communicating any issues quickly can serve to minimize their potential impact.
Managers must constantly monitor the progress of the project and the project’s
resources.
• a Gantt chart, or more accurately, a Gantt chart software system, can greatly simplify
progress and budget tracking
 STAGE 4: CLOSURE PHASE

• Even though a project has been completed, the manager’s job is still not done.
• A key component of project management is to review the team’s performance.
• Did the project accomplish its stated goals?
• Was the quality and timeliness of each member’s work aligned with expectations?

• During the closure phase, managers document the lessons they learned during the
project’s execution.
• the more information they can compile, the more accurately they can anticipate challenges and
estimate costs for future projects
• the closure phase also provides an opportunity for all stakeholders to discuss how closely the
project’s execution met their expectations

• Finally, the closure phase ensures the ending of all associated contracts and
accounting for all used and unused resources.
THE SYSTEMS DEVELOPMENT LIFE CYCLE (SDLC)

The systems Development Life Cycle

and Its Associated Activities

• The overall process for developing an IS from

planning to implementation and maintenance
• Begins with the business needs and ends when the
benefits of the system no longer outweighs its
maintenance costs
• Referred to as a cycle as the final maintenance
stage leads into planning for a new development
THE SYSTEMS DEVELOPMENT LIFE CYCLE (SDLC)
 TRADITIONAL SYSTEMS
DEVELOPMENT LIFE CYCLE (SDLC)

The SDLC is a structured framework that consists of sequential processes:

• Systems Investigation
• Systems Analysis
• Systems Design
• Programming and Testing
• Implementation
• Operation and Maintenance
 SDLC – SYSTEMS INVESTIGATION
The feasibility study is the main task of the Systems Investigation phase.
The feasibility study helps the organization choose from three options:
1. Do nothing and continue to use the existing system unchanged.
2. Modify or enhance the existing system.
3. Develop a new system.
 FEASIBILITY STUDY

The Feasibility Study provides a rough assessment of the project’s:

Technical feasibility: determines whether the company can develop and/or acquire the
hardware, software, and communications components needed to solve the business
problem
Economic feasibility: determines whether the project is an acceptable financial risk and,
if so, whether the organization has the necessary time and money to successfully
complete the project
Behavioral feasibility: addresses the human issues of the systems development project
 SDLC – SYSTEM ANALYSIS

Systems Analysis: The examination of the business problem that the

organization plans to solve with an information system.
• Main purpose is to gather information about existing system to determine
requirements for the new or improved system.
• Deliverable is a set of system requirements, also called user requirements.
• User requirements identify the specific requirements that the system must
satisfy.
 SDLC – SYSTEMS DESIGN

Systems design describes how the system will resolve the business problem.
• The deliverable is a set of technical system specifications, which specifies the
following:
• System outputs, inputs, calculations or processing, and user interfaces
• Hardware, software, databases, telecommunications, personnel, and
procedures
• A blueprint of how these components are integrated
• Adding functions after the project has been approved and initiated causes Scope
creep, which endangers the project’s budget and schedule
 SDLC – PROGRAMMING AND TESTING
• Programming involves the translation of a system’s design specification into computer code.
• Testing checks to see if the computer code will produce the expected and desired results under certain
conditions.
• Testing is designed to delete errors (bugs) in the computer code.
• Two primary testing activities:
• Test conditions - the detailed steps the system must perform along with the expected results of
each step
• Perform the testing of the system
• Unit testing – tests individual units of code
• System testing – verifies that the units of code function correctly when integrated
• Integration testing – verifies that separate systems work together
• User acceptance testing (UAT) – determines if the system satisfies the business
requirements
 SDLC – IMPLEMENTATION
• User documentation - highlights how to use the system
• Provide training for the system users
• Online training - runs over the Internet
• Workshop training - is held in a classroom environment and lead by an
instructor
• Choose the right implementation method
• Parallel implementation – use both the old and new system simultaneously
• Plunge implementation – discard the old system completely and use the
new
• Pilot implementation – start with small groups of people on the new system
and gradually add more users
• Phased implementation – implement the new system in phases
 S L D C – O P E R AT I O N & M A I N T E N A N C E

• Audits are performed to assess the system’s capabilities and to determine

if it is being used correctly.
• Systems need several types of maintenance.
• Debugging
• Updating
• Adding new functions or updating systems (maintenance)
 SYSTEM DEVELOPMENT TECHNOLOGIES
WATERFALL MODEL

• Waterfall Model is a sequential, predictive systems development

methodology that is simple to use and understand, but inflexible.
• Using the waterfall model, each phase of the SDLC must be completed before
the next phase can begin.
• Proper planning is a must in the waterfall system.
• It is particularly useful for small systems, short term projects, when it is
unlikely that requirements will change and when there are no ambiguous
requirements.
 SYSTEM DEVELOPMENT TECHNOLOGIES
WATERFALL MODEL

Verification = Testing & Delivery

 WAT E R FA L L - A D VA N TA G E S

• Design errors are captured before any software is written saving time during the
implementation phase.
• Excellent technical documentation is part of the deliverables and it is easier for new
programmers to get up to speed during the maintenance phase.
• The approach is very structured and it is easier to measure progress by reference to
clearly defined milestones.
• The total cost of the project can be accurately estimated after the requirements have
been defined (via the functional and user interface specifications).
• Testing is easier as it can be done by reference to the scenarios defined in the
functional specification
 WAT E R FA L L - D I S A D VA N TA G E S

• Clients will often find it difficult to state their requirements at the abstract level of a
functional specification and will only fully appreciate what is needed when the
application is delivered. It then becomes very difficult (and expensive) to re-engineer
the application.
• The model does not cater for the possibility of requirements changing during the
development cycle.
• A project can often take substantially longer to deliver than when developed with an
iterative methodology such as the agile development method.
 SYSTEM DEVELOPMENT TECHNOLOGIES
AGILE METHODOLOGY

• Most flexible of all systems development methodologies

• Uses iterative, incremental approach
• Addresses problem of rapid change occurring in the on-going demand
economy, such as changes in market forces, system requirements and
project staff
• Minimize risks by breaking down the project into small manageable
chunks called iterations and puts a strong emphasis on real-time
communication and teamwork.
• Focuses on collaboration and communication skills of its participants
SYSTEM DEVELOPMENT TECHNOLOGIES
AGILE METHODOLOGY
 AGILE FRAMEWORK (EXAMPLES)

• Kanban Method:
• A strategy that shows work items in context of each other so the team can see which items take priority and can avoid
committing to too many tasks at once.
• Scrum Method:
• Relies heavily with constant feedback, self management, small teams and work broken out into sprints (a sprint is a set
period of time during which specific work has to be completed and made ready for review.)
• Meeting structure:
• Planning – where sprint priorities are identified
• Commitment – where the team reviews a list or backlog of user stories and decides how much work can be done in the
sprint’s duration
• Daily standup meetings – Teams can communicate updates on their development status and strategies
• The duration of a sprint is determined by the scrum master, the team's facilitator and manager of the Scrum framework.
H O W D O E S A G I L E T E C H N O L O G Y R E A L LY W O R K ?
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 A G I L E - A D VA N TA G E S

• High product quality

In Agile development, testing is integrated during the cycle, which means that there are regular checkups to see that the
product is working during the development. This enables the product owner to make changes if needed and the team is
aware if there are any issues.
• Higher customer satisfaction
The product owner is always involved, the progress of development has high visibility and flexibility to change is highly
important. This implies engagement and customer satisfaction.
• Increased project control
Sprint meetings, transparency, visibility of each step of the project for both parties
• Reduced risks
• Agile methodologies virtually eliminate the chances of absolute project failure.
• Adaptation to the client’s needs and preferences through the development process
• Generating revenue early with self-funding projects, allowing organisations to pay for a project with little up-front
expense.
• Faster ROI
The fact that agile development is iterative means that the features are delivered incrementally, therefore benefits are
realised early while the product is in development process.
 A G I L E - D I S A D VA N TA G E S

• Teams get easily sidetracked due to lack of processes

• when you proceed without sufficient documentation or a clear vision of what your final product or outcome
looks like, the presence of scope creep becomes inevitable.
• Once there’s no finite end in sight, measuring progress can also be a challenge.
• Long-term projects suffer from incremental delivery
since Agile is based on the premise that teams won’t always know their end result will look like (or the next few
delivery cycles ahead for that matter) it becomes difficult to accurately predict the cost, time, or resources needed
at the beginning of a project.
• The level of collaboration can be difficult to maintain
• Agile demands a considerable commitment from everyone involved in your project, including your customers,
for it to be successful.
• in the absence of linear phase completion tactics, bringing your team together on a regular basis to discuss and
evaluate what is working (and what is not) is paramount.
C OM PAR I S ON OF WAT E R FA L L V S A G I L E
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 WHAT PROJECT MANAGEMENT SOFTWARE PROVIDES

• Fundamentally, project management (PM) software provides two functions: project

scheduling and project communications.
• While this may seem simple, each of these factors can be incredibly complex and
constantly in need of adjustment.
• these two functions continually interact
• the initiation phase involves significant communication as the client and the project manager
negotiate the objectives of the project
• they determine its feasibility by addressing the two questions
• Is it attainable (possible and effective)?
• Is it realistic (affordable in terms of time and resources)?

• After a feasibility study determines the efficacy of the project, the project scheduling
software will assist in determining the duration of the project by integrating the
dependent steps and activities required for project completion.
 HOW PROJECT MANAGEMENT SYSTEM SOFTWARE
INTERACTS WITH ERP

• There are two functions provided by project management software (PM).

• These are project scheduling and project communications.
• Although this may not appear confusing, each of these functions can be complicated
and require constant adjustment.
• Further, these two factors interact all the time.
• PM modules are specifically designed to integrate with an ERP system to support the
integration of project data and information.
• these modules provide a centralized location where data is stored and easily retrieved, allowing
management to review planning, management, and analysis of an organization’s project, regardless
of whether the project is in the planning, development, or monitoring phase
 HOW PROJECT MANAGEMENT SYSTEM SOFTWARE
INTERACTS WITH ERP
• Integration also allows for projects to be divided into
phases, subprojects, and tasks to make data analysis and
project monitoring easier.
• The stages of project fulfillment can also be tracked,
making visualization of project completion more
straightforward for management.

Lastly, management has the ability to assign project management tasks and responsibilities.
The performance of the project plan is usually evaluated by one individual who then reports
information to various departments.
Through integration, monitoring and reporting is more efficient due to the single source of
data collection and interpretation.
 FLOWCHARTS

• Project managers have long used flowcharts to

assist stakeholders to visualize the project
processes.
• The highly complex nature of projects
necessitates the use of visualization tools to
describe and understand a project.

Because projects are comprised of four distinct phases (initiation, planning,

execution, and closure) and because each phase has multiple steps that can be
conducted in series (one after the other), or in parallel (at the same time), using a
flow chart to visualize the overall process can be extremely beneficial in the
overall process.
 CREATING A FLOWCHART

• Personal computers make building flowcharts extremely efficient.

• being able to drag and drop shapes and lines quickly and easily greatly simplifies the creation process
• Many project managers build a relatively simple flowchart (or use an existing template)
prior to planning a project out with a Gantt Chart or more complex software.
• a simple flowchart often describes an overall project vision far more concisely than the most advanced
project management program
• this allows clients and investors, who might not be familiar with more evolved tools, to visualize the
entire project at a glance
• A simple flowchart can also serve as a building block to more sophisticated program
management tools and help all stakeholders better understand the project goals and the
intermediate steps required to complete the project.
 HOW GANTT CHARTS ADD VALUE

• After creating a flowchart, project managers

create Gantt charts to allow stakeholders to
visualize the time frame of each project
activity.
• Constructing a Gantt chart is an important part
of the planning phase of the project
management process.
The Gantt chart shows an estimated beginning point for each process as well as an
estimate of the process duration.
Unlike a flowchart, a Gantt chart allows stakeholders to see when processes can be
conducted concurrently.
Gantt charts also provide project managers with a framework from which they can
construct a program evaluation and review technique (PERT) network chart.
GANTT CHART
 PERT CHARTS

• A program evaluation and review technique

(PERT) network chart enables project managers
to visualize the relationships between numerous
interdependent activities and to determine which
activities will establish the actual timeline for
complex project completion.

The PERT chart allows project managers to note when certain processes have
interdependencies that create “slack” periods while awaiting the completion of other
activities.
A PERT chart allows project managers to use the critical path method (CPM) to
determine the most efficient means to complete a complex project.
 HOW PERT CHARTS ADD VALUE

• The program evaluation and review technique (PERT) was developed to assist in organizing
extremely complex projects involving numerous activities.
• The advantage of a PERT network chart is that it displays the interconnectivity of different
processes, including activities that can be completed concurrently.
• when activities take place concurrently, one activity will inevitably take longer than other activities,
defining a segment of the project’s critical path
• this allows managers to direct resources from activities that are not on this critical path and apply them to
more critical processes, speeding the completion of the entire process

PERT is often used when time is a more critical element than money.
 PERT CHART

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 RESOURCE ASSIGNMENT AND LEVELING

• Regardless of the project, every project manager faces

physical limitations such as the number of available
employees, the amount of available equipment, or constraints
due to the physical environment.
• Adjusting task completion to maximize the use of limited
resources is referred to as resource leveling.

When multiple activities vie for limited resources, project managers can use leveling
techniques.

Modern project management software, capable of producing PERT network charts, can provide
resource assignment and leveling recommendations if the program manager enters the appropriate
criteria including, specifically, which resources that are necessary for task completion, are identified
as the limiting factors.
 DEALING WITH UNKNOWNS

• Risk management is a significant issue with every project and is a constant concern for
project managers.
• These include risk management planning, risk identification, qualitative risk analysis,
quantitative risk analysis, risk response planning, and risk monitoring and control.
Project managers frequently use software to assist in evaluating risk. The software often
requires PMs to estimate the likelihood of the occurrence of a risk, as well as the impact
of the risk.
• Multiplying the risk probability by the risk impact allows PMs to estimate their risk
exposure. This exposure can then be compared to the project timeline in order to create
appropriate response plans.
 Dimensions of Project Risk

Level of project risk influenced by:

• Project size
• Indicated by cost, time, number of organizational units affected
• Organizational complexity also an issue
• Project structure
• Structured, defined requirements run lower risk
• Experience with technology
 Change Management and the Concept of Implementation

• Required for successful system building

• New information systems have powerful behavioral and organizational
impact
• Changes in how information is used often lead to new distributions of
authority and power
• Internal organizational change breeds resistance and opposition
 The Role of End Users

With high levels of user involvement

• System more likely to conform to requirements
• Users more likely to accept system
• User-designer communication gap
• Different backgrounds, interests, and priorities
• Different loyalties, priorities, vocabularies
• Different concerns regarding a new system
 Increasing User Involvement and Overcoming User Resistance

• External integration tools consist of ways to link work of implementation team to users
at all organizational levels
• Active involvement of users
• Implementation team’s responsiveness to users
• Address Counter-implementation
• A deliberate attempt to thwart implementation
 Management Support and Commitment

• Positive perception by both users and technical staff

• Ensures sufficient funding and resources
• Enforcement of required organizational changes
S U C C E S S F U L E R P I M P L E M E N TAT I O N :
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