Chapter 10 Development and Acquisition Alternatives Introduction Ebusiness

Chapter 10 Development and Acquisition Alternatives

Introduction • E-business is changing the way business operates. Managers must have a firm understanding of e-business systems: – Development – Acquisition – Operation – Web hosting – ASPs

Advances in Programming Tools and Techniques • Language Generations – 1 st – Machine Code – 2 nd – Assembly Language – 3 rd – Standard Language Prototypes • COBOL, BASIC, FORTRAN – 4 th – SQL, FOCUS, RPG • These languages increase programmer productivity, not necessarily execution speed

CASE Methodology • CASE stands for Computer-Aided Software Engineering – A set of tools and processes to support requirement definition, application development, and application maintenance • These tools assist in diagramming, modeling, code generation, test vector development, report generation, and screen layout • Implemented through multiple workstations and LANs to tie a project’s developers, clients, and managers together

CASE Tools • CASE tools are not only for new development – Used to enhance existing programs – Port programs from older languages to newer ones – Used to profile program flow and selectively optimize highly used sections

CASE Tools • Upper CASE tools – used for early program life cycle development (front-end) • Lower CASE tools – support code generation and test vector construction (back-end) • I-CASE tools – integrated platforms for the entire life cycle • There also tools for management that gather statistics, generate reports, and enhance team communications

The Object Paradigm • Object-oriented programming approaches a problem from a more abstract perspective – Objects are modular segments of code • Objects are grouped into classes • All objects inherit properties from the class – Objects are the foundation of reusable code segments • C++ and Java are object-oriented

Java Programming • Object-oriented programming language – Platform independent (OS, hardware) – Secure by design – Reusable code – Rapid design and prototyping – Open specification – No run time royalties – Built expressly for Internet applications

Linux • Open-source UNIX-like operating system – No licensing fees – No run time royalties – Built to be portable – Under development for 10 years, it is the operating system running greater than 40% of the servers connected to the Internet

HTML • Hyper. Text Markup Language – A text based coding language for documents – Uses embedded characters in conjunction with the browser to interpret and display the document • The same document will display differently in different browsers – Open standard and non-proprietary – Derived from an earlier language, SGML

XML • Extensible Markup Language – Instead of a predefined set of markup tags, XML enables users and groups to define custom tags. These tags allow • more efficient searches • better portability between browsers • creation of richer content – XML is more self-documenting and allows reusability of code

Prototyping • Changing project specifications when design work has begun is the leading cause of cost and time overruns • Prototyping allows developers and users to more realistically model program functions and create tight design specifications • This is a rapid turn cycle requiring CASElike tools and skilled manpower

The Prototyping Process

Other Development Methodologies • RAD – Rapid Application Development • JAD – Joint Application Development • Blends – Depending on the specific application, blends of the life cycle approach and others discussed will yield a more optimal path – Using what works is more important than purity of approach; a sign of good management is flexibility in problem solving

Improving Programming Quality • NIST reported inadequate software testing costs developers $21. 2 billion and users $38. 3 billion annually – Rigorous testing could potentially save $22. 3 billion annually – All software bugs cost $293 billion annually

The Programming Craft • Programming is an individual endeavor • A six sigma defect rate is 3 errors per million lines of code – Current measurements are in KLOCs (thousand lines of code) and poor programmers create code with 100 defects per 1000 lines • Process, feedback, and change are all necessary to improve the quality of coding

Process Improvements for Software • Humphrey Maturity Model – Initial Level (1) – little formalization exists – Repeatable Level (2) – statistical measures are used to exert quality control – Defined Level (3) – establish quality and cost parameters, use databases to track progress – Managed Level (4) – analyze and scrutinize programming processes, and initiate changes – Optimized Level (5) – improve process measures based on prior experience and optimize processes further

Subcontract Development • Subcontracting enables a firm to trade money for skill – Allows firms to engage in larger development projects without increasing permanent staffing – Can decrease project development time – Causes internal company knowledge to disseminate outside the company • Requires very mature project management skills

Purchased Applications • In the mid 1990 s, the number of internally developed software applications began to decline – Availability of high-function, commercially developed applications for PC use was an important factor – Purchased applications are becoming more commonly used in mini-computer and centralized mainframe installations – Firms would rather buy than develop

Advantages of Purchased Applications • Purchased applications have several advantages: – Early availability – Well-known functions – Available documentation – Periodic updates – Availability of maintenance – Known cost – Education and training programs

Disadvantages • Purchased applications have several disadvantages: – Functional deficiencies – Difficulty customizing to local environment, leading to inefficiencies – Contain unnecessary features – After the sale support may be poor – Vendor may go out of business or stop development of the product line

Internet Systems and Technology • E-business is built upon open standards and technology – HTML, XML – Java, . NET – PHP, PERL, and Python – TCP/IP – E-mail, instant messaging – Secure services (cryptology)

Web Hosting • Companies that establish and operate Web sites for others – Provide, maintain, and manage the hardware, applications, security, and connectivity – Allow rapid entry onto the Web, without the need to hire Web server personnel or purchase hardware – Create an offsite presence for the firm that can be secure, redundant, and highly available

Application Service Providers • Install, host, manage, and rent access to packaged application programs • Customers can use applications without investing in licenses, hardware, or operational resources • ASPs are rapidly growing – $3 billion in revenue in 2001 to $16 billion in 2005

Additional Alternatives • Alliances – Firms can look to share development costs across competitive lines within the same industry – Firms can develop partnerships with customers and suppliers in a B 2 B type of arrangement

Managing the Alternatives • Prioritization processes often reveal that programming talent is the constrained resource and money is a lesser constraint • Managers must use a thorough methodology before selecting the optimum alternative • The result is a balanced approach to application prioritization and development or acquisition

Identifying the Optimum Selection 1. Which applications can be processed at an ASP or outsourcer, saving people and computer resources? 2. Of the applications needing development or replacement, which can be purchased or leased to save programming resources or time? 3. Can the firm enter into agreements with others, through contracts or joint development, to optimize the firm’s resources?

Identifying the Optimum Selection 4. Can new development tools and techniques improve development productivity? 5. What alternatives can increase the human resources available for application development?

Summary • Application acquisition offers IT and user managers opportunities to optimize the firm’s resources – Response is rooted in a clear vision of the application portfolio’s contribution to the firm’s success – All opportunities present risk along with gain – Risks must be understood and mitigated – ASPs offer another possibility to managers beyond build or buy