Advances in information technology have created more complexity and
with it increased complications in defining costs and risks. At the
same time, an increased sense of urgency to make decisions about information
technology due to competitive implications poses difficult management
questions: "Which projects are the wisest use of resources?". Overall,
our goal is to focus on ways to improve the contribution of the IS
organisation to the success of the enterprises they serve.
When
faced with the very important question of whether to buy an off-the-shelf
software or to "create" your own, companies need to evaluate costs
(including risks) and benefits of both alternatives. However, because
costs and risks associated with in-house software development is most
often underestimated, it is important to show what could happen when
a company decides to develop their own application.
Two
months into the project, the two programmers assigned to John's project
have left the company to work for competitors. His team is now left
with hundreds of lines of undocumented code. To continue the development,
John needs to hire two new programmers and allow them the appropriate
time to understand the project and the code.
Two months later, the programming team approaches John with a request
to delay the project by another three months. After investing over
four months, thousands of dollars in labor and lost production, the
IT team is now forced to spend another three months on the project.
Three months later, the product is ready for use. The problem now
however, is the cost of training each employee on the software because
the interface is not user friendly enough and no help files or user
manuals were provided with the program. Furthermore, John now finds
out that because the programmers were pressed for time, the program
was not well tested and, as a result, seems to be full of bugs.
Users are having a difficult time operating the system. Since they
were not consulted during the planning phase of the project, the reports
are not displaying the proper information. Everyone is having problems
networking the software because no real network testing was performed.
Furthermore, the upper management is not content since the IT programming
team affected to the time management project could have been working
on a project that is more in line with the company's strategic plan.
The project was to create an intelligent system for on-line ordering.
The on-line ordering project would help create a bind with their customers
in a way that would make it difficult for competitors to dislodge
ABC.
After
using the software and surveying employees using it, John now approaches
the programming team with a list of requests for changes, including
a link to Microsoft Office. After reviewing the requests, the programming
team informs him that it will take an additional six months to add
the appropriate functionality to the program. Before approving the
project upgrade, John reviews some of the time management packages
already on the market. Rather than spending another large amount of
money required to upgrade "his" system as well as significant loss
in productivity by the programming team because they could be working
on more strategically oriented projects, John decides to purchase
a system for a few thousand dollars. With this system comes the reliability
of a fully tested program, help files and printed documentation, and
sufficient resources at the company's disposal for support of their
product.
