Professional Documents
Culture Documents
Objectives
Explain the differences among the alternatives to tailored system development: outsourcing, licensing ready-made software, contracting with an application service provider, and encouraging users to develop their own applications List the business trade-offs in the various methods of acquiring systems
Objectives (continued)
Describe which systems acquisition approach is appropriate for a particular set of circumstances Discuss organizational policies on employee computer use
Deciding factor usually cost License low cost and immediately available
Best choice
Outsourcing
Outsourcing has two meanings:
Commission development of application to other organization Hire services of other company to manage services
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Outsourcing IT Services
Many businesses turn to IT companies for longterm services
Purchasing and maintaining hardware Developing Maintaining and operating Web sites Staffing help desks Running IT daily operations Managing customer and supplier relations
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Reduction of personnel and fixed costs Increased access to highly qualified know-how Availability of ongoing consulting as part of standard support
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Figure 13.5: Risks of outsourcing are higher at higher levels of decision making
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Licensing Applications
Purchased software usually licensed Large selection of high-quality packaged software Two groups
Inexpensive office helpers Large applications supporting whole organization
May cost millions
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Beta version: software to be tested by companies Up to 1 year of free service Installation specialists needed
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Soliciting vendor information Request for information (RFI): request informal information about product
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Reviewing proposals and screening vendors Visiting sites Selecting the vendor
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Figure 13.7: How IT managers rank the importance of product purchase factors
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Software As a Service
Application service provider (ASP): organization that offers software on Web Software as a service (SaaS): applications through Web No software installed Files may be stored on local storage device ASP may rent software
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Caveat Emptor
ASP may be disappointing
Scope of services Reliability
Manager guidelines
Check ASP history Check ASP financial strength Ensure you understand price scheme Get list of providers infrastructure Craft service contract carefully
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Caveat Emptor
Uptime: proportion of time ASP systems up
No ASP has 100 percent uptime 99.999 percent uptime recommended
Less than 5 minutes a year
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Summary
Several alternatives to having applications developed in-house Outsourcing can mean commissioning development or assigning services to vendor Outsourcing custom-designed applications gives good fit Outsourcing IT services benefits are great
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Summary (continued)
Outsourcing IT services has potential risks such as loss of control Licensing software advantages are immediately available and low priced Disadvantage of licensing software is loose fit to organization ASP is popular method of obtaining software Client pays monthly fees for ASP
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Summary (continued)
User application development advantages are short lead time and good fit User application development disadvantage is poor quality Over half of Americas office workers have rich computer resources Policies established to prevent computer abuse
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