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CHAPTER 10

CHAPTER 10. Alternative Approach: Purchasing Systems. SYSTEMS DEVELOPMENT APPROACHES. SYSTEMS DEVELOPMENT LIFE CYCLE (SDLC) PROTOTYPING PURCHASED SOFTWARE OUTSOURCING (SYSTEMS INTEGRATOR) END USER DEVELOPMENT *. MAKE-OR -BUY DECISION. ASSESS RISKS & BENEFITS

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CHAPTER 10

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  1. CHAPTER 10 Alternative Approach: Purchasing Systems

  2. SYSTEMS DEVELOPMENT APPROACHES • SYSTEMS DEVELOPMENT LIFE CYCLE (SDLC) • PROTOTYPING • PURCHASED SOFTWARE • OUTSOURCING (SYSTEMS INTEGRATOR) • END USER DEVELOPMENT *

  3. MAKE-OR -BUY DECISION • ASSESS RISKS & BENEFITS • MAKE: UseSDLC , prototyping,RAD if organization hasISskills. Can save cost, speed implementation • BUY: If vendor offers acceptable product and required support at lower cost, faster time than in-house development could provide. Usually system must be modified to meet organization’s needs *

  4. THE PURCHASING PROCESS DEFINITION PHASE: • FEASIBILITY ANALYSIS • REQUIREMENTS DEFINITION • SHORT LIST OF PACKAGES • ESTABLISH EVALUATION CRITERIA • DEVELOP AND DISTRIBUTE RFP • CHOOSE PACKAGE • NEGOTIATE CONTRACT *

  5. THE PURCHASING PROCESS CONSTRUCTION PHASE: • SYSTEM DESIGN: Package modification • SYSTEM BUILDING: Package modification • SYSTEM TESTING IMPLEMENTATION PHASE: • INSTALLATION • OPERATIONS • MAINTENANCE *

  6. REQUEST FOR PROPOSAL (RFP) • DOCUMENT SENT TO POTENTIAL VENDORS INVITING THEM TO SUBMIT A PROPOSAL TO FURNISH A SYSTEM • PROVIDES DETAILED INFORMATION ABOUT THE DESIRED SYSTEM, ITS ENVIRONMENT, MATERIAL REQUIRED FROM VENDOR, AND GENERAL CRITERIA USED TO EVALUATE PROPOSALS *

  7. SAMPLE CONTENTS OF RFP 1. INTRODUCTION: A. STRUCTURE & SCOPE B. OBJECTIVE C. COMPANY BACKGROUND, PHILOSOPHY D. HARDWARE/SOFTWARE ENVIRONMENT E. CURRENT BUSINESS ENVIRONMENT *

  8. SAMPLE CONTENTS OF RFP II. GUIDELINES FOR RESPONSE: A. GUIDELINES B. VENDOR’S RESPONSE C. GENERAL EVALUATION PROCESS D. HARDWARE/SOFTWARE ENVIRONMENT E. CURRENT BUSINESS ENVIRONMENT *

  9. SAMPLE CONTENTS OF RFP III. REQUIREMENTS: A. VENDOR INFORMATION B. VENDOR SUPPORT/TRAINING C. DOCUMENTATION D. PACKAGE HARDWARE & SYSTEM SOFTWARE ENVIRONMENT E. APPLICATION & DATABASE ARCHITECTURE F. TUNING & MEASUREMENT G. FUNCTIONAL REQUIREMENTS *

  10. SAMPLE CONTENTS OF RFP IV. COSTS: A. SUMMARY B. NON-RECURRING C. RECURRING D. PRICE GUARANTEE E. MAINTENANCE AGREEMENT F. NEW RELEASES V. SIGNATURE PAGE *

  11. PACKAGE CAPABILITIES COMPANY NEEDS IDENTIFY DISCREPANCIES CHOOSE ALTERNATIVES MODIFY PACKAGE LIVE WITH PROBLEMS CHANGE COMPANY MATCHING COMPANY NEEDS WITH PACKAGE CAPABILITIES

  12. ROLES FOR PURCHASING PACKAGED APPLICATIONS • PROJECT MANAGER:Manages process, responsible for the success of the project, may be user but IS expertise required • VENDOR:Must be responsive to customer’s needs • PURCHASING SPECIALIST:Helps prepare RFP, assist in entire process • ATTORNEYS:Oversee writing, approval of contract *

  13. PURCHASING SOFTWAREADVANTAGES: • REDUCED TIME TO IMPLEMENT • LOWER OVERALL ACQUISITION COSTS • APPLICATION QUALITY • REDUCED NEED FOR INTERNAL IS RESOURCES • INFUSION OF EXTERNAL EXPERTISE *

  14. PURCHASING SOFTWAREDISADVANTAGES: • RISKS DUE TO LACK OF PACKAGE KNOWLEDGE • RISKS DUE TO EXTENT OF ORGANIZATIONAL CHANGES REQUIRED • INITIAL & ONGOING DEPENDENCE ON VENDOR *

  15. SPECIAL CASE: ENTERPRISE RESOURCE PLANNING (ERP) • INTERFACES CROSS SEPARATE FUNCTIONAL SYSTEMS • MUST SUPPORT CROSS-FUNCTIONAL BUSINESS PROCESSES • COMPLEX SYSTEMS TAKE YEARS TO COMPLETE • REQUIRES EXTENSIVE TRAINING • HEAVY RELIANCE ON CONSULTANTS *

  16. CHAPTER 10 Alternative Approach: Purchasing Systems

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