INSY 50 – Fundamentals of Information Systems

Mr. Rendel Edison Sinag

Introduction to System Acquisition and Development

System acquisition and development are critical processes in implementing Information Systems
(IS) that meet organizational needs. This lesson will explore different approaches to acquiring and
developing systems, the methodologies used, and the implications of these choices. By the end of
the lesson, students will understand the processes, decision-making factors, and methodologies
related to system acquisition and development.

Subscribe vs. Buy vs. Build

Organizations often face the decision of how to acquire a system. The three primary approaches
are subscribing, buying, or building a system.

Subscribe

 Subscribe refers to using cloud-based or online software solutions by paying a recurring fee
(e.g., monthly or yearly subscription).
 Example: Using a SaaS solution like Microsoft 365 for productivity tools.
 Advantages
o Lower upfront costs.
o Quick deployment.
o Scalability according to organizational needs.
o Regular updates and maintenance by the service provider.
 Disadvantages
o Dependence on the service provider.
o Limited customization options.
o Potential long-term costs may exceed other approaches.
o Requires reliable internet access.

Buy

 Buying involves purchasing off-the-shelf software solutions that are pre-developed and
ready to implement.
  Example: Purchasing an ERP software like SAP Business One.
 Advantages
o Faster implementation compared to building.
o Lower development risk.
o Established reliability and support.
o Vendor-provided updates and patches.
 Disadvantages
o Limited flexibility and customization.
o Licensing costs.
o May not fully meet unique business requirements.

Build

 Building refers to developing a custom solution tailored to the specific needs of the
organization.
 Example: A retail company building a custom inventory management system.
 Advantages
o Complete control over functionality.
o Tailored to exact business requirements.
o Can provide competitive advantages.
 Disadvantages
o High cost and time requirements.
o Requires skilled personnel.
o Greater risk of project failure.
o Potential for delays and budget overruns.

Software as a Service (SaaS)

Software as a Service (SaaS) is a software distribution model where applications are hosted by a
service provider and accessed by users over the internet.

SaaS has become a popular model for delivering software solutions.

Advantages of SaaS

1. Cost-Effectiveness
o No need for expensive hardware or extensive IT staff.
o Subscription pricing reduces upfront investments.
2. Ease of Access
o Accessible via web browsers, enabling remote work.
3. Automatic Updates
o Service providers handle maintenance and updates, ensuring users always have the
latest version.
4. Scalability
o Easily scale resources up or down based on user demand.
5. Reduced Time-to-Market
o Immediate availability without extensive setup or deployment.
6. Cross-Device Compatibility
o SaaS applications often work seamlessly across multiple devices, including
smartphones, tablets, and desktops.
Disadvantages of SaaS

1. Limited Customization
o SaaS solutions may not address unique needs or provide the flexibility of custom-
built solutions.
2. Data Security Concerns
o Sensitive data is stored on third-party servers, raising potential privacy and security
issues.
3. Dependence on Internet Connectivity
o Requires reliable internet access for functionality; outages can disrupt operations.
4. Vendor Lock-In
o Switching providers can be complex, involving data migration and potential
compatibility issues.
5. Long-Term Costs
o Subscription fees over time may become more expensive than a one-time purchase.

Buying Off-The-Shelf Software

Buying off-the-shelf software refers to purchasing pre-made software solutions that are ready to
deploy and use.

Buying off-the-shelf software involves specific phases to ensure successful implementation.

Package Evaluation Phase

 Identify Requirements
o Create a detailed list of business and technical needs to ensure the software aligns
with organizational goals.
o Example: A company needs CRM software with features like email integration, lead
tracking, and automated reporting.
 Shortlist Vendors
o Compare features, costs, and vendor reputation. Use comparison matrices to
evaluate how well each package meets requirements.
 Request for Proposal (RFP)
o Issue RFPs to vendors to gather detailed information about their products and
services.

Finalize Contract

 Negotiate Terms
o Ensure the contract includes clear terms on licensing, support, and future upgrades.
Pay attention to service-level agreements (SLAs).
o Example: Specify the number of users covered under the license and the duration of
support agreements.
 Legal Review
o Have legal and procurement teams review the contract to ensure compliance with
organizational policies.
Integration and Testing

 Integration
o Connect the new software with existing systems, such as linking a CRM solution with
an ERP system.
o Example: Ensuring seamless data flow between an accounting system and payroll
software.
 Testing
o Conduct thorough testing, including unit tests, integration tests, and user acceptance
testing (UAT), to ensure the software performs as expected.

Implementation

 Training
o Train employees on how to use the software effectively through workshops,
manuals, or online tutorials.
 Deployment
o Roll out the software in phases, such as by department or location, to minimize
disruptions and address issues promptly.
 Post-Implementation Review
o Assess whether the software meets the organization's objectives and gather user
feedback for future improvements.

Waterfall System Development Process

The Waterfall System Development Process is a linear and sequential approach to software
development, where each phase is completed before the next begins.

The waterfall model is a sequential development process with distinct phases. Each phase must be
completed before moving to the next.

1. System Investigation

o Define the problem, establish goals, and determine the feasibility of the solution.

Example: A retailer investigating whether an inventory management system will improve

stock tracking and reduce overstock.

Deliverable: Feasibility study and project charter.

2. System Analysis

o Analyze current processes, identify problems, and gather detailed requirements

from stakeholders.
 Example: Conducting interviews and surveys with employees to understand workflow
inefficiencies.

Deliverable: Requirements specification document.

3. System Design

o Design system architecture, interfaces, data structures, and workflows to meet

requirements.

Example: Designing a user-friendly dashboard for managers to monitor inventory

levels.

Deliverable: Detailed design document.

4. Construction

o Develop the system according to specifications, including coding and preliminary

testing.

Example: Programmers writing code for features like inventory tracking and real-
time alerts.

Deliverable: Functional software prototype.

5. Integration and Testing

o Combine all components and test the system end-to-end for defects and
performance issues.

Example: Testing the inventory system by simulating real-world scenarios, such as

order processing during peak hours.

Deliverable: Test report and bug fixes.

6. Implementation

o Deploy the system to users and transition from the old system.

Example: Migrating historical data from the old inventory system to the new one
and training users.

Deliverable: Fully operational system.

7. System Operation and Maintenance

o Monitor system performance, address issues, and implement updates or

enhancements.

Example: Adding new features or modules as business needs evolve.

 Deliverable: System updates and performance reports.

Agile Development

Agile Development is an iterative and flexible approach to software development that emphasizes
collaboration, customer feedback, and small, incremental improvements.

Key Features of Agile

1. Iterative Development
o Break projects into smaller iterations (sprints) to deliver value early and
continuously.
o Example: Delivering a basic CRM module in the first sprint.
2. Collaboration
o Continuous interaction between developers and stakeholders ensures alignment
with business goals.
3. Flexibility
o Agile adapts to changing requirements, making it suitable for dynamic environments.
4. Focus on Working Software
o Prioritizes delivering functional software over comprehensive documentation.

Example of Agile in Practice

A team using Scrum to develop an e-commerce website:

1. Sprint Planning
o Define features for the next 2-week sprint, such as implementing a shopping cart
feature.
2. Daily Standups
o Team members discuss progress, challenges, and next steps.
3. Sprint Review
o Present the completed shopping cart feature to stakeholders for feedback.
4. Retrospective
o Reflect on the sprint to identify areas for improvement in the next iteration.