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Chapter 21

AIS Development Strategies

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Learning Objectives
Describe how organizations purchase application software, vendor services,
and hardware.
Explain how information system departments develop custom software.
Explain how end users develop, use, and control computer- based
information systems.

Explain why organizations outsource their information systems, and evaluate

the benefits and risks of this strategy.
Explain the principles and challenges of business process management.
Describe how prototypes are used to develop an AIS, and discuss the
advantages and disadvantages of doing so.
Explain what computer-aided software engineering is and how it is used in
systems development.

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Ways to Obtain an AIS

Purchase the software
Develop software in-house
Hire and external company to develop and maintain
new software

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Purchasing Software
Off the Shelf (OTS) Canned
System capabilities for users with similar requirements

Turnkey System
Hardware and software sold as a package

Application Service Provider (ASP)

Software is provided to user via the Internet

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In-House System Development

Main criteria for in-house development
Provides a significant competitive advantage

Risks of in-house development

Significant amounts of time required
Complexity of the system
Poor requirements defined
Insufficient planning
Inadequate communication and cooperation
Lack of qualified staff
Poor top management support

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End-User Computing (EUC)

Hands-on development, use, and control of computer- based information systems by


Advantages of EUC
User creation, control, and implementation
Users decide whether a system should be developed and what information is
Systems that meet user needs
Users discover flaws that IS people do not catch.
Many of the user-analyst-programmer communication problems in traditional
program development are avoided.
Time-consuming cost-benefit analyses, detailed requirements definitions, and
the delays and red tape of the approval process can be avoided.

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End-User Computing (EUC) (contd)

Advantages of EUC (contd)

Freeing up of systems resources
The more information needs users meet, the more time the IS department can
spend on other development and maintenance activities.
Versatility and ease of use
Users can change the information they produce or modify their application any
time their requirements change.

Disadvantages to EUC:
Logic and development errors
Inadequately tested applications
Inefficient systems
Poorly controlled systems
Poorly documented systems
Incompatible systems
Redundant data
Wasted resources
Increased costs

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Outsourcing the System

Hiring an outside company to handle all
or part of an organizations data
processing activities
Strategic and economic business
solution that allows companies to
concentrate on core competencies
Organizations improve their cash
position and reduce expenses by
selling assets to an outsourcer
Access to greater expertise and
better technology
Lower costs by standardizing user
applications, buying hardware at
bulk prices, splitting development
and maintenance costs between
projects, and operating at higher
Less development time.
Elimination of peaks-and-valleys
Facilitates downsizing
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Reduced competitive
Unfulfilled goals
Poor service
Increased risk


Methods to Develop an AIS

Business Process Redesign
Computer-Aided Software Engineering (CASE) Tools

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Business Process Redesign

Drastic, one-time-event approach to improving and
automating business processes
Low success rate
Evolved into:
Business Process Management (BPM)
Systematic approach to continuously improving and
optimizing an organizations business processes

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Better definition of user needs
Higher user involvement and
Faster development time
Fewer errors
More opportunity for changes

Less efficient use of system
Inadequate testing and
Negative behavioral reactions
Never-ending development

Less costly

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Computer-Aided Software
Engineering (CASE)
Software to help plan, analyze, design, program, and
maintain an information system
Strategic planning
Project and system management

Database design
Screen and report layout
Automatic code generation

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CASE Advantages vs. Disadvantages

Improved productivity


Improved program quality


Cost savings

Unmet expectations

Improved control
Simplified documentation

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