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Chapter 14: Acquiring information systems and applications. In this chapter, the learning objectives are: Discuss the different cost–benefit analyses that companies must take into account when formulating an IT strategic plan, discuss the four business decisions that companies must make when they acquire new applications,. | CHAPTER 14 Acquiring Information Systems and Applications CHAPTER OUTLINE 14.1 Planning for and Justifying IT Applications 14.2 Strategies for Acquiring IT Applications 14.3 The Traditional Systems Development Life Cycle 14.4 Alternative Methods and Tools for Systems Development 14.5 Vendor and Software Selection LEARNING OBJECTIVES Discuss the different cost/benefit analyses that companies must take into account when formulating an IT strategic plan Discuss the four business decisions that companies must make when they acquire new applications Enumerate the primary tasks and importance of each of the six processes involved in the systems development life cycle Describe alternative development methods and tools that augment development methods Analyze the process of vendor and soft ware selection 14.1 Planning for and Justifying IT Applications Planning for and Justifying IT Applications Organizations must analyze the need for the IT application. Each IT application | CHAPTER 14 Acquiring Information Systems and Applications CHAPTER OUTLINE 14.1 Planning for and Justifying IT Applications 14.2 Strategies for Acquiring IT Applications 14.3 The Traditional Systems Development Life Cycle 14.4 Alternative Methods and Tools for Systems Development 14.5 Vendor and Software Selection LEARNING OBJECTIVES Discuss the different cost/benefit analyses that companies must take into account when formulating an IT strategic plan Discuss the four business decisions that companies must make when they acquire new applications Enumerate the primary tasks and importance of each of the six processes involved in the systems development life cycle Describe alternative development methods and tools that augment development methods Analyze the process of vendor and soft ware selection 14.1 Planning for and Justifying IT 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. The application portfolio 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 14.2 Strategies for Acquiring IT Applications 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) .