citm102 ch06

citm102 ch06 - CITM CH06 DEVELOPMENT BIG 4 QUESTIONS 1 Is...

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CITM CH06 DEVELOPMENT – BIG 4 QUESTIONS 1. Is there a need for an IS Company considers if: Organizations can improve their business processes by automating, informating, and transforming Can IS add value to organization’s products and services Can IS help exploit an opportunity or solve a problem If there is a need, organization begins the first phase of the project – inception Inception - Also known as Concept/idea phase or Proposal - Determine whether or not the project has a reasonable chance of success, company performs a feasibility study or produces a concept paper outlining, at high level, what the IS is going to accomplish and how. 2. Is the project feasible Feasibility study - a detailed investigation and analysis of a proposed development project, to determine whether it is technically and economically feasible - Technically feasible: o technology is available/can be created to solve the IS problem o company is technically capable of acquiring and using the required technology o The Test examine potential solutions and evaluate solutions based on its capabilities and the capabilities of any technology partners it may choose to work with - Financially Feasible: o Company is able to pay for the project o Project represents a good use of financial resources
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CITM CH06 o The Test Step 1 – Show 1) that it can afford to build/buy an IS 2) that the IS will financially benefit the company Step 2 – Use financial measures to show feasibility and justify expenses 1) Return on Investment (ROI) 2) Net Present Value (NPV) 3) Internal Rate of Return (IRR) (1 – 3 are measures that estimate the amount of benefit to expect from implementation) 4) Payback Period A measure that estimates when it will see the benefits of implementing a system Tools Used: Spread Sheets – calculate financial feasibility metrics Difficulties Obtaining the exhaustive list of all costs and benefits, and then placing a monetary value on each of them Costs and benefits are either tangible or intangible. That is either a value can be easily applied to them or they are difficult to measure in monetary terms. Therefore, due to the many intangibles that an organization must consider in a major IS development, he financial measures are, at best, good guesses of the project’s final costs and benefits 3. Build or Buy/Lease There are 3 primary options for obtaining an IS: - Buying Advantage(s): 1) Less costly than building 2) Faster to put in place than building Disadvantage(s): 1) Little/no competitive advantage 2) Need to compromise on some features 3) Dependent on vendor for product updates - Leasing Advantage(s): 1) Lowest cost 2) Fastest to put in place 3) Vendors are in charge of maintenance and updates 4) Does not require and in-house IS staff Disadvantage(s): 1) No competitive advantage 2) No control over system features 3) Dependent on vendor for entire system
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CITM CH06 4) Can get locked into undesirable contract Example(s) 1) Customer Service System
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citm102 ch06 - CITM CH06 DEVELOPMENT BIG 4 QUESTIONS 1 Is...

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