CHP13

Week 11 Overview

• Dr. Nash Milic

• Course: Fundamentals of Management Information Systems (MIS)

• Affiliation: American University of Sharjah – Marketing and Information Systems department

Cost/Benefit Analyses in IT Strategic Planning

• Importance: Companies must evaluate potential costs and benefits when formulating IT strategies.

• Key Considerations:

  • Different cost/benefit analyses are essential.

  • Four critical business decisions in acquiring new applications.

Systems Development Life Cycle (SDLC)

• Key Processes:

  • Six processes involved in developing systems, each with distinct tasks and importance.

Alternative Development Methods

• Discussion of methodologies and tools that augment the systems development process.

Planning and Justifying IT Applications

• Strategies for Acquiring IT Applications:

  • Evaluating various options such as purchasing, customization, leasing, or using software services.

  • Choices must align with organizational goals.

Strategic Planning Framework

• Organization Strategic Plan:

  • Identifies overall mission and necessary goals.

• IT Strategic Plan:

  • Sets long-range goals and initiatives for IT infrastructure.

• IT Steering Committee:

  • Manages IT priorities to align with organizational needs.

• IS Operational Plan:

  • Walks through specific projects to support the IT strategy.

Alignment and Efficiency

• Critical Aspects:

  • Must align with the organization’s strategic objectives.

  • Should provide a seamless IT architecture.

  • Optimum resource allocation is required to meet deadlines and budget constraints.

Essential Components of the IS Function

• Key Elements:

  • Mission Statement

  • IS Environment

  • Objectives and Constraints of the IS function

  • Application portfolio

  • Resource allocation and project management

Cost Assessment Methods

• Components of Cost-Benefit Analysis:

  • Assessing Costs

  • Assessing Benefits

  • Performing Cost-Benefit Analysis

Financial Evaluation Techniques

• Net Present Value (NPV):

  • Converts future benefits to present value using discounting methods.

• Return on Investment (ROI):

  • Ratio of net income generated to average assets invested.

• Breakeven Analysis:

  • Determines financial viability by assessing when benefits equal costs.

• Business Case Approach:

  • Developers write proposals justifying funding for applications.

Fundamental Decisions in Acquiring IT Applications

• Options for IT Applications:

  • Purchase a prewritten application.

  • Customize a prewritten application.

  • Lease applications.

  • Use Application Service Providers (ASP) and Software-as-a-Service (SaaS).

  • Open-source software.

  • Outsourcing, continuous development, and custom development.

Application Considerations

• Factors to contemplate:

  • Amount of coding.

  • Funding strategies.

  • Application deployment and origination.

Systems Development Life Cycle (SDLC)

• Phases of SDLC:

  • Investigation, Analysis, Design, Programming and Testing, Implementation, Operation and Maintenance.

Key Personnel in Systems Development

• Roles and Responsibilities:

  • Systems Analysts

  • Programmers

  • Technical Specialists

  • Stakeholders

Feasibility Studies and Decision Making

• Types of Feasibility:

  • Technical Feasibility

  • Economic Feasibility

  • Behavioral Feasibility

• Go/No Go Decision: Critical evaluation point for project continuation.

Implementation Strategies

• Conversion Strategies:

  • Direct Conversion: Immediate switch.

  • Pilot Conversion: Limited rollout for evaluation.

  • Phased Conversion: Gradual introduction of system components.

  • Parallel Conversion: Running both old and new systems simultaneously, rarely used.

Development Methodologies

• Prototyping:

  • Build a model system based on user requirements and iteratively refine it.

• CASE Tools:

  • Automate various SDLC tasks using both upper and lower toolsets.

• Component-Based Development and Object-Oriented Development:

  • Focus on using standard components or modeling real-world processes.

Collaborative Development Techniques

• Joint Application Design (JAD):

  • User involvement in system requirements gathering through group meetings.

• Agile Development:

  • Rapid iterations with close user communication and collaboration.

• Rapid Application Development (RAD):

  • Uses JAD and iterative methods for quick system development.

• End-User Development:

  • Users create their applications with minimal IT support.