• IS371 WEEK 8
Instructor
Online
Evaluations
• Last and Final Assignment
• Application Development
• Alternatives to Application Development
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Application Portfolio Management
McFarlan
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The Traditional Life-cycle Approach
The Traditional Life-cycle Approach
· Program development is subdivided into phases
· This makes complex activities easier to understand and
control
· Skills vary over time and are more easily managed in phases
· Interactions between developers and users are improved
· Phases permit systematic management intervention
Phases in Development Life Cycle
1. Initial investigation
4. Development
2. Requirements definition
5. Installation
3. General design
6. Post-installation
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Stages of the SDLC
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Major Causes of System Failure
 Lack of project plan and bad project
management
 Inadequate definition of project scope
 Lack of communication with end users
 Insufficient personnel resources and associated
training
 Lack of communication with project team
 Inaccurate estimate
 Scope creep
 Expectation Failure
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Risk Analysis
Client Activities
Programming and management skills
Application characteristics
Project importance and commitment
Hardware requirements
System software requirements
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Risk Management Analysis Primer
 A process for assessing
threats and determining which ones to
 ignore,
 reduce,
 eliminate
level of feasible support for efforts to reduce and
eliminate
 Expected Loss = P1 x P2 x L
where:
P1 = Probability of attack
P2 = Probability attack is successful
L = loss occurring is attack is successful
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Risk Management Analysis Primer
A process for assessing
threats and determining which ones to
ignore,
reduce,
eliminate
level of feasible support for efforts to reduce
and eliminate by comparing expected losses to
prevention costs
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Risk Management Analysis Primer
 Expected Loss or EL = P1 x P2 x L
where:
P1 = Probability of attack
P2 = Probability attack is successful
L = Loss occurring is attack is successful
PC = Prevention costs
If EL < PC then ignore
If EL > PC then investing in PC is reasonable
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Risk Analysis Steps
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The SPIRIAL MODEL
Do a little bit of requirements gathering, then a little bit of analysis,
design, coding, test and release, and then use that as the starting point
for getting and clarifying the next small set of requirements
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Release 1
Requirements
Analysis
Design
Code
Test
Release 2
Release
Requirements
Analysis
Design
Code
Release 3
Test
Release
Requirements
Analysis
Design
Code
Test
Release
The problem with a small amount of requirements
is that when you get your next set of requirements,
you find that you did something wrong, or asked
the wrong question when getting the first set of
requirements. By the final incremental iteration,
your system is such a mess that no-one can
understand how it got that way.
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SYSTEM CONSTRUCTION
GOOD DESIGN CHECKLIST
1. WORKS CORRECTLY
2. RELIABLE
3. MAINTAINABLE
4. EASY TO USE
5. EASY TO IMPLEMENT / TEST
6. EFFICIENT
7. ON TIME/ON BUDGET
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MEASURES OF IT SUCCESS/FAILURE
ON TIME/ON BUDGET
SYSTEMS THAT DON’T RESULT IN AT LEAST A MINIMALLY FUNCTIONING SYSTEM
OR HAVE MAJOR COST OR TIME OVER RUNS WILL BE CONSIDERED FAILURES
CORRESPONDENCE
SYSTEMS THAT ARE JUSTIFIED BASED ON PLANNED BENEFITS THAT ARE NOT
REALIZED WILL BE CONSIDEED FAILURES
EXPECTATION
SUCCESS IS MEASURED BY THE ATTITUDE OF THE USER TOWARD THE SYSTEM. IF
THE USER WILL NOT, OR CAN NOT, USE THE SYSTEM IT WILL BE CONSIDERED A
FAILURE.
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Make or buy decision
Decision Criteria
Business strategy
Pressure to “Make/Own”
IT application or infrastructure
provides proprietary competitive
advantage
Pressure to “Buy”
IT application or infrastructure
supports strategy or operations, but
is not considered strategic in its own
right
Core competence
Information/ process
security and
confidentiality
Availability of suitable
partners
Availability of packaged
software or solutions
Cost/benefit analysis
Time frame for
implementation
Evolution and complexity
of the technology
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Ease of implementation
PACKAGED
SOFTWARE
EXTERNAL
VENDOR
IN-HOUSE
DEVELOPMENT
BUSINESS NEED
STANDARD
NON-STRATEGIC
STRATEGIC
IN-HOUSE
EXPERIENCE
IN-HOURSE
FUNCTIONAL AND
TECHNICAL
SKILLS EXIST
NO IN-HOUSE
EXPERIENCE
IN-HOUSE
FUNCTIONAL &
TECHNICAL
SKILLS EXIST
PROJECT SKILLS
SKILLS ARE
STANDARD
OUTSOURCING IS
A STRATEGIC
DECISION
IN-HOUSE
ONGOING NEED
PROJECT
MANAGEMENT
ABILITY TO
COORDINATE
WITH VENDOR
ABILITY TO
DEFINE
OUTSOURCING
TERMS
IN-HOUSE
MANAGEMENT
AND
TECHNOLOGY
EXPERIENCE
TIME
SHORT
FLEXIBLE
FLEXIBLE
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Packaged software
PROS
Faster implementation
Lower maintenance expense
the organization need not redefine requirements for legal
or other new requirements. Instead, this is the vendor’s
job.
Purchased software provides extensive documentation.
CONS
Has a tendency to evolve slowly.
May use multiple programming languages.
May be incompatible with users’ databases.
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SYSTEM CONSTRUCTION
TO BUILD OF BUY,
THAT IS THE QUESTION
1. DEFINE YOUR REQUIREMENTS
2. IDENTIFY YOUR ALTERNATIVES
3. BUY IT IF YOU CAN
CONSIDER:
REPUTATION OF THE VENDOR
LEVEL OF VENDOR SUPPORT
CONTACT CURRENT CUSTOMERS
VERIFY QUANTITIVE MEASURES OF PERFORMANCE
EASE OF CUSTOMIZATION
GOOD v. PERFECT FIT
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Accounting for Information
Technology Costs
Allocated Method
Description
Advantage
Disadvantage
Unallocated cost
center
All IS costs are
considered an
organizational expense
Experiments with
technology can occur
User can request the
development of new
systems
IS can develop systems
regardless of economic
benefit.
Costs can get out of
control.
IS professionals cannot
easily allocate their budget
among conflicting requests.
Allocated cost
center
IS department allocates
costs to departments that
use its services.
User request only
beneficial services.
It works well in
organization where
changes are made regularly
to all internal customers
Profit center
IS charges internal and
external users the same
and attempts to get both
kinds of business.
IS can have problems
determining allocation of
costs
Friction among user
departments and between
them and IS can occur
IS has no reason to
operate efficiently.
Outsourcing may become
more common.
Fees may be higher than
with other methods.
Users can choose who
will perform their IT
service.
IS department has
incentives to operate
efficiently.
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