Trend Report of IST 309

Unit 10

Acquiring Information Systems and Applications

Planning for and Justifying IT Applications

Organizations must analyze the need for the IT application. Each IT application must be justified in terms of costs and benefits.

IS Operational Plan

Contains the following elements: Mission   IT environment   Objectives of the IT function   Constraints of the IT function   Application portfolio   Resource allocation and project management

Evaluating & Justifying IT Investment: Benefits, Costs & Issues

Assessing the costs Fixed costs   Total cost of ownership (TCO)  

Assessing the benefits (Values) Intangible benefits: Benefits from IT that may be very desirable but difficult to place an accurate monetary value on.  

Comparing the two

Conducting the Cost-Benefit Analysis

•Using Net Present Value (NPV)

•Return on investment

•Breakeven analysis

•The business case approach

Strategies for Acquiring IT Applications

Four fundamental business decisions to make before choosing a strategy: (1) How much computer code does the company want to write? (2) How will the company pay for the application? (3) Where will the application run? (4) Where will the application originate?

Strategies for Acquiring IT Applications

Purchase a Prewritten Application Customize a Prewritten Application Lease the applications Application Service Providers and Software-

as-a-Service Vendors Use Open-Source Software Outsourcing Custom Development