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Is It More Time-Consuming To Develope Or Purchase An Information System?

13 Mar

stock-photo-business-clock-isolated-on-white-background-15401869The compeditive nature of modern day business means that time is of the essence. If you are wasting time you are wasting money. It is of vital importance that a business not only gets a suitable information system installed but it is important that the information system is up and running as quickly as possible. I would like to explore which method of installing an information system is the most time consuming.

Purchasing An Information System

  • The information system is already made out and just has to be installed.
  • less time spent ironing out small details about the information system as it’s development is outsourced.
  • Outsourcing the information system leads to the information system being installed quickly.
  • The company making up the information system such as Oracle will have expertes in this area and will therefore be for efficiant .
  • Less likely to be time wasting internal disputes over what type of information system should be installed when the information system is outsourced .

Developing An Information System

  • Time can be wasted with internal staff arguments over small details of the information system.
  • Will take longer to develop and install than an independant outsourcing company.


It is clear that it is more time effective to outsource the development of an information system. This fact makes the idea of outsourcing the development of an information system all the more appealing to companies.

Some Disadvantages of Outsourcing.

13 Mar

In my last post I discussed some of the advantages of outsourcing but it may not always be the best option for a company.

Here I will discuss some of the main disadvantages of outsourcing.

1.  Loss of managerial control:  While outsourcing can be a solution to many managerial headaches, it can also be the cause of some.  If you agree to outsource some of your operations to another company then you effectively put them in charge of that task for the duration of the contract.  Of course a lot of specialists in outsourcing companies will be open to suggestion in order to keep their customer (you) happy but you may not always be fully aware of what they’re doing until it’s too late.

2.  Hidden costs:  We all know that outsourcing is used as a way to minimize costs.  Outsourcing companies know this too and so they will compete with each other on price.  In order to do this they may subtly imply a certain package without actually stating the specifics.  You may later find that you’ve paid for a lot less than you had originally thought you were going to get.  They may start billing you for “additional charges” which you had assumed would be fairly standard and already covered in the agreed contract.  If you choose to fight them legally on this you may find that they have sewn up every loose thread and that you are now cornered.  They are in the business of doing this and so they invest huge efforts into ensuring an airtight procedure.  Unfortunately your legal costs won’t pay themselves either.

3.  Threat to security and confidentiality:  While your business may follow strict policy with regard to confidential information there is nothing that guarantees your outsourcing company will adhere to the same standards.  If they are granted access to personal information of staff, business plans or product ideas it should first be ensured that your contract with them has penalty clauses to restrict the misuse of such information.

4.  Quality problems:  Although expected, they might not use the best tools for the job or necessarily go about things in the best way.  They’re only obligated to fulfill the contract agreed and so they may cut corners in  order to reduce their own expenses and therefore increase their profit levels.

5.  Tied to the financial well-being of another company:  You are now relying on this other company to take care of some task for you.  Should they experience financial difficulties which result in them going out of business you may be left in the lurch!

6.  Bad publicity and ill-will:  Some workers feel very threatened by the thought of jobs being outsourced.  Should they see job losses in one department due to outsourcing they may feel threatened and the morale among workers in your firm may fall.  As well as this, should the outsourcing company you’ve used receive bad publicity in the media and it is widely-known that they supply to you then the reputation of your company could be jeopardised.

7.  Time wasted in securing satisfactory outsourcing:  Lengthy bid-processes along with negotiations can be very time-consuming.

8.Lack of strategic alignment:  As mentioned earlier, the interests the outsourcing company and your firm could be very different.  If these interests are too far-removed then outsourcing simply is not the best fit for your organisation.  Look within your organisation.  These people will have a vested interest in the success of your business and will more than likely be willing to work harder to achieve such successes.  Most analysts recommend that firms do not outsource any key functions which directly affect the products or services produced by the company.




Outsourcing? What’s so good about it?

13 Mar

Outsourcing.  It’s a massive opportunity which almost all businesses, particularly medium to large scale businesses, must consider.  But what exactly is it?  The concept of outsourcing can be applied to pretty much all aspects of a firm’s operations.   Essentially it involves paying someone from outside of your organisation to handle a certain operation in which they are usually an expert.  It can often save a firm time, money and an awful lot of stress!
And of course outsourcing occurs in the field of IT with up to 60% of all businesses outsourcing their IT to an IT specialist.

Outsourcing can prove a great way to reduce costs.  You don’t have to hire staff to carry out these tasks so there’s no salaries to be paid, no salary-related taxes, no costs of training new staff, no need to purchase certain hardware and/or software and you don’t need to provide extra work-space.  Not to mention the savings that can be made on insurance!

Some Reasons for Outsourcing

By outsourcing to a quality IT provider you can also reap the benefits of top-level expertise without having to incur some of the expenses mentioned earlier.  With technology changing and improving so rapidly these days it can happen that the new piece of technology you bought last week for your company will be out of date in six months time!  If you outsource then the onus is on the supplier to ensure that they have the latest technology available to them or else they will lose your custom.

Another advantage of outsourcing in this area of expertise is that the organisation to which you outsource will undoubtedly have dealt with tonnes of similar problems with other companies in the past and will be able to recognise a problem and come up with the solution quickly and efficiently.

To sum up, firms who take advantage of outsourcing from a reliable supplier can save costs, ensure the highest level of service, increase efficiency and most of all keep up with or even get ahead of the competition!
It can also offer some managers better sleep.



Constantly Updating Your Information Systems Is Like Keeping Up With The Joneses

12 Mar



The nature of technology is that it is constantly evolving and breaking new ground. This puts an added pressure on businesses to keep up with these technological advances in order to be competitive. It is often the case that the most competitive firms in the market are the most up to date with modern technology such as Paddy Power the online gambling firm that has dominated the market share in the UK and Ireland with an income of €450 million in 2010 due to its information system’s making it easier than ever for customers to place bets using the well developed company software. Now companies  try to evolve with the technology in order to gain a competitive advantage over rival firms.



It is now necessary that a company budgets for technology updates to keep up with technology and competitors. Paddy Power invested 20% of their profits in 2011 into developing new software that allows customers to download an app on their smartphones that allows the customer to place bets using their handheld devices. This was a follow on from their launch of online gambling in 2007 which has proved to be a resounding success with profits increasing by 35% in the first 2 years. The success of the software updates of paddy power has transformed the landscape of gambling as the traditional process of going to the bookies has now been outdated by this recent development in information technology. Competitors such as Ladbrokes have followed suit in order to survive keeping in theme with the new keeping up with the Joneses nature of advances in information technology.

Real Life Examples Of Failures In Information Systems

11 Mar

An information system can be extremely beneficial to a company, however when an information system fails the results can be devestating and can even lead to the demise of the company. There have been many examples of companys collapsing due to a failure in an information system. I would like to discuss examples of companies and organisations that have suffered huge financial loss due to the failure of an information system.


Irish Electronic voting Failure 2004   

This information technology failure is perhaps the most famous in irish polotics and is widely regarded as the biggest waste of the tax payers money ever recorded in irish history with the failure causing the irish economy 55 million euro. It was implemented by Taoiseach Bertie Ahern who wanted to make the irish voting system more efficient.

Reason For Failure: The implementation of the system was not well  recieved by the general public who worried that it would lead to a lack of transparency and also the elections could be open to manipulation if these electronic voting systems were used. It then transpired that the electronic voting machines could be easily hacked and manipulated. The system was never implemented and lead to 55 million euro of the tax payers money being wasted.

Hilton Hotels Information system failure

Hilton Hotels attempted to implement a system that allowed customers to Confirm reservations  for hotel bookings and Car rentals online. This information system was to be brought in with the intention of making the booking system easier for both the consumers and the company.

Reason For Failure: After 4 years and 125million dollars invested the project crumbled in 1992 when it became clear that the company would miss its deadline by 2 years.


Tri Valley Growers Information System Failure

A giant agricultural co-operative, Tri Valley bought at least $6 million worth of ERP software and services from Oracle in 1996. This lead to a $20 million lawsuit claim by Tri Valley against Oracle.

Reason For Failure: None of the software worked as promised and some of it could not be installed by Tri Valley. Oracle denied any wrong doing. Tri valley lost the court case and was left with a net loss of $30 million.




Developing information systems

11 Mar

There are various approaches to developing information systems. These include examples such as traditional systems life cycle, prototyping, software packages, end user development and outsourcing. Firsty SDLC involves building the system by completing 6 stages sequentially:

  1. Project Definition
  2. Systems Study
  3. Design
  4. Programming
  5. Installation
  6. Post-implementation

Prototyping involves building an experimental system quickly and cheaply and is good as it is fast and has alot of user involvement. Software packages involve purchasing programs that have been written and tested and are good as they are cost saving, there’s limited technical skills and clear expectations. End-user development then involves building the system by end-users with little or no formal technical assistance. Finally, outsourcing means using an external vendor to develop or operate an organisation’s I.S.

Each approach should be safeguarded by security and quality assurance. I.S security includes, data, hardware and network security and also a recovery plan. Quality assurance includes, development methodology, quality measurements, programming standards, testing, development tools and quality audits.

Thanks for reading 🙂


The Spiral Model

11 Mar

Modern day Information systems used by businesses follow models of development I would like to examine one such model in detail. This is a commonly used model called the Spiral Model.

The spiral model, also known as the spiral lifecycle model, is a systems development lifecycle (SDLC) model used in information technology (IT). This model of development combines the features of the prototyping model and the Waterfall Model. The spiral model is favored for large, expensive, and complicated projects. This model is often used by large multinational companies and is very expensive to implement firms such as KPMG have utilized this model to great effect.

The steps in the spiral model can be generalized as follows:

  • The new system requirements are defined in as much detail as possible. This usually involves interviewing a number of users representing all the external or internal users and other aspects of the existing system.
  • A preliminary design is created for the new system. Based on the requirements of the company.
  • A first prototype of the new system is constructed from the preliminary design. This is usually a scaled-down system, and represents an approximation of the characteristics of the final product. It will take time for all the minor details of the information system to be ironed out, this will be achieved through discussions and company meetings to decide the best design to go with.
  • A second prototype is evolved by a fourfold procedure: (1) evaluating the first prototype in terms of its strengths, weaknesses, and risks; (2) defining the requirements of the second prototype; (3) planning and designing the second prototype; (4) constructing and testing the second prototype. This prototype should be close to the final information system.
  • At the customer’s option, the entire project can be aborted if the risk is deemed too great. Risk factors might involve development cost overruns, operating-cost miscalculation, or any other factor that could, in the customer’s judgment, result in a less-than-satisfactory final product. This is a critical step as if the company goes ahead with the project and it fails it can lead to the firm loosing a large amount of revenue.
  • The existing prototype is evaluated in the same manner as was the previous prototype, and, if necessary, another prototype is developed from it according to the fourfold procedure outlined above.
  • The preceding steps are iterated until the customer is satisfied that the refined prototype represents the final product desired.

The final system is constructed, based on the refined prototype. The Spiral Model is a well regarded method that is used worldwide and has proven to be effective.




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