8. Acquisition of Information Systems in Organizations

Lecture 7 – Acquisition of Information Systems in Organizations

The acquisition of an information system in organizations refers to the process of obtaining and implementing a new or upgraded system to support the organization’s information technology (IT) needs. An information system typically includes hardware, software, data, networks, and people working together to collect, process, store, and distribute information within an organization.

The acquisition process involves several key steps:

• Identify the Need: The organization identifies the need for a new information system, which could be due to technological advancements, changes in business requirements, or the need to replace outdated systems.
• Requirements Gathering: The organization defines its requirements for the new information system by analyzing current processes, identifying deficiencies, and considering future needs. This includes identifying functional requirements (e.g., specific features and capabilities), technical requirements (e.g., hardware and software compatibility), and any regulatory or security requirements.
• Research and Evaluation: The organization researches available information systems in the market that meet its requirements. This may involve conducting a request for proposal (RFP) process, where potential vendors submit proposals outlining their solutions. The organization evaluates the proposals based on factors such as functionality, cost, scalability, vendor reputation, and support.
• Vendor Selection: Based on the evaluation, the organization selects a vendor or solution provider that best meets its requirements. This decision may involve considering factors such as the vendor’s track record, financial stability, implementation approach, and ability to provide ongoing support.
• Contract Negotiation: The organization negotiates the contract with the selected vendor, including pricing, licensing terms, service level agreements (SLAs), and other contractual terms. Legal and procurement departments often play a role in this stage to ensure the organization’s interests are protected.
• Implementation: Once the contract is finalized, the organization and the vendor work together to implement the information system. This includes tasks such as system configuration, customization, data migration, integration with existing systems, employee training, and testing.
• Deployment and Transition: After the implementation phase, the new information system is deployed and made operational. The organization transitions from the old system to the new one, ensuring a smooth transfer of data and processes. E.g. direct change over, phased changeover, parallel changeover, hybrid changeover etc.
• Post-Implementation Evaluation: After the system is deployed, the organization evaluates its performance and conducts user feedback sessions to identify any issues or areas for improvement. This feedback helps refine and optimize the system’s functionality and usability.
• Ongoing Maintenance and Support: The organization maintains and supports the information system over its lifecycle. This includes regular system updates, addressing issues or bugs/errors, monitoring system performance, and providing user support and training.

It’s important to note that the acquisition of an information system is a complex and iterative process, involving various stakeholders, including IT personnel, business users, management, and external vendors. Effective project management, communication, and collaboration among these stakeholders are critical to ensure successful acquisition and implementation of the information system in an organization.

Acquisition from external sources (Outsourcing or Purchase)

There are several principal ways to acquire an information system from outside the organization. Many firms have resorted to outsourcing their information systems. Outsourcing entails transferring the major components of the organization’s systems and operation such as data-centres, telecommunications, and software development and maintenance to a specialized company that provides its services under long-term contracts specifying the service levels (that is, the scope and the quality of service to be provided at a fee). Thus, responsibility for the acquisition of new applications then falls to the outside company. In other cases the company may outsource just the development or maintenance of their information systems, with the outside company being a systems developer. Examples of outsourced information system platforms may be provided as follows:

Cloud computing services:

This is increasingly being adopted as a source of information services. It offers services on-demand access via the Internet by a provider that runs data centres with the necessary software and other resources. The services can be provided at one of three levels: as the infrastructure-as-a-service for running existing applications, as the platform-as-service for developing new applications, or as software-as-a-service (SaaS) to be used by the firm over the network.

Generally, cloud computing is provided by external vendors, although some firms implement their own private clouds in order to share resources that employees can access over the network from a variety of devices, often including smart-phones. Scalability and avoidance of capital expenditures are notable advantages of public clouds; the partial loss of control is a drawback.

Companies may choose to acquire an application by leasing/buying a proprietary package from a vendor under a license and having the software customized internally or externally by the vendor or another outside contractor. Enterprise systems are generally leased in this way. An alternative is to deploy an open-source application, whose program code is free and open for all to modify under a different type of license that enforces the openness of the application in perpetuity. Generally, the costs of the use of open-source software include the technical support from specialized vendors.

Information systems development within Organizations

Information system development in organizations involves the process of creating or enhancing an information system to meet specific business needs. It encompasses the design, development, testing, implementation, and maintenance of the system. Here are the key steps involved in information system development:

• Identify Business Needs: The first step is to identify and understand the specific business needs or problems that the information system should address. This requires close collaboration between IT professionals and business stakeholders to determine the system’s purpose, objectives, and scope.
• System Analysis: In this phase, a detailed analysis of the requirements is conducted. It involves gathering information about the current business processes, identifying user requirements, and determining the system’s functional and non-functional requirements. This step helps define the system’s features, functionalities, and constraints.
• System Design: The system design phase involves creating a blueprint for the information system based on the requirements identified in the previous step. It includes designing the system’s architecture, database structure, user interface, and any necessary integrations with existing systems. This stage also considers factors such as scalability, security, and performance.
• System Development: The actual development of the information system takes place in this phase. It involves coding the software components, developing the database, implementing the user interface, and integrating various modules. The development can follow different methodologies such as waterfall, agile, or hybrid approaches, depending on the organization’s preferences and project requirements.
• System Testing: Once the development is completed, rigorous testing is conducted to ensure that the system functions as intended. This involves various types of testing, including unit testing (testing individual components), integration testing (testing interactions between components), system testing (testing the system as a whole), and user acceptance testing (involving end users to verify the system meets their needs).
• System Implementation: After successful testing, the information system is deployed and implemented within the organization. This includes activities such as data migration, installation of hardware and software components, configuring the system, and ensuring user access and security settings are in place. Proper training and change management processes are crucial to facilitate the adoption of the new system.
• System Maintenance and Support: Once the system is live, ongoing maintenance and support are required to ensure its optimal performance. This includes monitoring the system, addressing issues or bugs, applying updates or patches, and providing user support. Regular maintenance activities also include performance optimization, data backups, and security enhancements.
• System Evaluation and Improvement: Periodic evaluation of the system’s performance and its alignment with business objectives is essential. This evaluation can involve feedback from users, performance metrics analysis, and assessing the system’s effectiveness in meeting business goals. Based on the evaluation, improvements and enhancements may be identified, and the development cycle may restart to address these requirements.

Throughout the information system development process, effective project management, communication, and collaboration among stakeholders, including IT professionals, business users, and management, are crucial for successful outcomes. It is also important to consider factors such as security, scalability, usability, and regulatory compliance throughout the development lifecycle to ensure the system meets the organization’s needs and industry standards.

Types of system maintenance

System maintenance involves activities that are performed to keep a computer system or software application running smoothly and efficiently. There are several types of system maintenance, each serving a specific purpose:

1. Corrective Maintenance:
   • Focuses on fixing errors, bugs, or defects in the system. Aims to correct problems identified during system usage or testing.
2. Adaptive Maintenance:
   • Involves modifications to the system to adapt it to changes in the environment. Ensures that the system remains compatible with evolving hardware or software.
3. Perfective Maintenance:
   • Enhances the system’s performance or adds new features. Aimed at improving the system’s efficiency, usability, or user experience.
4. Preventive Maintenance:
   • Proactive measures to prevent potential issues. Regularly scheduled tasks such as backups, security updates, and system checks.
5. Routine Maintenance:
   • Regular, ongoing tasks to ensure the system’s optimal performance. Includes activities like data cleaning, file organization, and database optimization.
6. Emergency Maintenance:
   • Unplanned activities in response to critical issues that threaten system functionality. Addresses unexpected failures or security breaches.

Effective system maintenance requires a combination of these types, tailored to the specific needs and requirements of the system in question. Regular maintenance is crucial for the longevity, reliability, and security of computer systems.