Information Technology Reference
In-Depth Information
Table 13.2
Renting (Short-Term Option)
Advantages and Disadvantages of
Acquisition Options
Advantages
Disadvantages
No risk of obsolescence
No ownership of equipment
No long-term financial investment
High monthly costs
No initial investment of funds
Restrictive rental agreements
Maintenance usually included
Leasing (Intermediate to Long-Term Option)
Advantages
Disadvantages
No risk of obsolescence
High cost of canceling lease
No long-term financial investment
Longer time commitment than renting
No initial investment of funds
No ownership of equipment
Less expensive than renting
Purchasing (Long-Term Option)
Advantages
Disadvantages
Total control over equipment
High initial investment
Can sell equipment at any time
Additional cost of maintenance
Can depreciate equipment
Possibility of obsolescence
Low cost if owned for a number of years
Other expenses, including taxes and insurance
Evaluating and Selecting a Systems Design
The final step in systems design is to evaluate the various alternatives and select the one
that will offer the best solution for organizational goals. For example, financial concerns might
make a company choose rental over equipment purchase. Specific performance objectives—
for example, that the new system must perform online data processing—might result in a
complex network design for which control procedures must be established. Evaluating and
selecting the best design involves achieving a balance of system objectives that will best sup-
port organizational goals. Normally, evaluation and selection involves both a preliminary and
a final evaluation before a design is selected.
A
preliminary evaluation
begins after all proposals have been submitted. The purpose of
this evaluation is to dismiss unwanted proposals. Several vendors can usually be eliminated
by investigating their proposals and comparing them with the original criteria. The
final
evaluation
begins with a detailed investigation of the proposals offered by the remaining
vendors. The vendors should be asked to make a final presentation and to fully demonstrate
the system. The demonstration should be as close to actual operating conditions as possible.
Figure 13.6 illustrates the evaluation process.
preliminary evaluation
An initial assessment whose
purpose is to dismiss the unwanted
proposals; begins after all
proposals have been submitted.
final evaluation
A detailed investigation of the
proposals offered by the vendors
remaining after the preliminary
evaluation.
Evaluation Techniques
The exact procedure used to make the final evaluation and selection varies from one orga-
nization to the next. Some were first introduced in Chapter 2, including return on investment
(ROI), earnings growth, market share, customer satisfaction, and total cost of ownership
(TCO). Cabelas and Staples, for example, are using Web-style testimonials to get customer
Motors and the Pentagon are adopting the Capability Maturity Model Integration (CMMI),
first developed by the Carnegie Mellon Software Engineering Institute, to help evaluate new
