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Justifying Information Systems Projects

Justifying Information Systems Projects. IS 460 Notes by Thomas Hilton. Topics. Why Develop Information Systems Cost-Justification Non-cost Justification. Why Develop Information Systems?. Information is the intended output Data is the main input Is there a difference?

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Justifying Information Systems Projects

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  1. Justifying Information Systems Projects IS 460 Notes by Thomas Hilton

  2. Topics • Why Develop Information Systems • Cost-Justification • Non-cost Justification

  3. Why Develop Information Systems? • Information is the intended output • Data is the main input • Is there a difference? • There had better be!

  4. Data: Objective Measures of Traits of Real-World Objects • Objective • Not subjective • Replicable • Measures • Values • Quantitative • Qualitative • Traits • Characteristics • Attributes • Real-World Objects • Entities or Classes • Tangible • Intangible

  5. Information: Data Aggregated and Placed in a Useful Context • Data • see prior • Aggregation • Groups • Calculations • Manipulations • Context • Titles • Labels • Rows • Columns • Usefulness • Decision-Making • Judged by User

  6. Information Quality Six Traits • Accuracy • Timeliness • Relevance • Verifiability • Accessibility • Security

  7. Cost-Justification • “Is the system worth its cost?” • Compare “worth” with “cost” • Various Methods • ROI • Present Value • Cost-Benefit Analysis

  8. Cost-Benefit Analysis Conceptually Simple • Quantify all Costs • Quantify all Benefits • Divide Costs by Benefits • If C/B Ratio < 1, then Proceed

  9. Cost-Benefit Analysis Complex in Practice • System Lifespan • Tangibles vs. Intangibles • Future Orientation

  10. Costs People Facilities Supplies Data Hardware Software Training Procedures Opportunities Confusion

  11. Benefits • Cost Elimination • Worker • Process • Carrying Cost • Cost Reduction • Efficiency • Productivity • Maintenance • Cost Shifting • Inventory • Labor • Debt • Profit Generation • Product • Service

  12. Cost-Benefit Analysis Table

  13. An Example Network Design Proposal

  14. Non-Cost Justifications • Cost-benefit analysis is not iron-clad • Often, detractors can discredit it • Therefore, it must be accompanied by non-cost justifications • Organizational culture • Strategic direction • Potential competitive advantage • Environmental Imperatives • Top Management Support

  15. Now You Do It!

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