Is-IT Procurement March-2012 NOTES2

8/2/2019 Is-IT Procurement March-2012 NOTES2

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MARCH 2012 LECTURE NOTES

by

Mr. Dominic K. Louis

(Lecturer, Faculty of Informatics)GhanaTelecom University College

M39EKMINFORMATION SYSTEM/INFORMATION

TECHNOLOGY PROCUREMENT


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TELECOMMUNICATIONS AND NETWORKS Telecommunications is the transmission of data (voice,

text, images, audio, video) over networks by such means

as electrical signals carried over telephone lines, radio

waves or satellite transmission apparatus.

A network is a set of devices that can directly access

each other by means of a shared directory.

Examples of linked electronic devices are computers,telephones and webTV.

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CLASSIFICATION OF NETWORKS


Network Classification

Communication

MediaTypes of

Technology

Types of

Ownership

Geographic

ScopeNetwork

Topology


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COMMUNICATION MEDIA Information may only be transmitted by voice,

videos, data, e-mail, fax and multimedia means (e.g.

Voice + data + text +image).

These may be sub-categorised as:

Twisted pair

Coaxial cable

Fibre optic

Wireless technologies



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Communications Media

Twisted-pair wire:

Ordinary telephone wire

Copper wire twisted into

pairs

Transmission speeds range

from 2 million bits per

second (unshielded) to 100million bits (shielded)

Source: Phil Degginger/Getty Images.


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Coaxial cable:

Sturdy copper or

aluminum wire wrapped

with spacers to insulate

and protect it

Transmission speeds range

from 200 million bits to

over 500 million bits persecond

Source: Ryan McVay/Getty Images.


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Fiber-optic cable: One or more hair-thin

filaments of glass fiberwrapped in a protective

jacket

Transmission speeds rangesfrom as high as trillions ofbits per second.

Uses light elements insteadof electricity

Source: CMCD/Getty Images.


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Terrestrial microwave

Earthbound microwave systems that transmit high-

speed radio signals in a line-of-sight path

Between relay systems spaced approximately 30-miles

apart

Communications satellites

Satellite serves as relay stations for communications

signalsUses microwave radio signals

Wireless Technologies

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Cellular and PCS telephone and pager systems

Divide the geographic area into small areas or cells

Each cell has transmitter or radio relay antenna to send

message from one cell to another

Wireless LANs Radio signals within an office or building

Connect PCs to networks

Bluetooth

Short-range wireless technology To connect PC to peripherals such as printer

Wireless Technologies



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TYPE OF TECHNOLOGYThe dominant technology for a particular

application may be optic, microwave or

satellite, either separately or

interoperating.



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TYPE OF OWNERSHIP Networks may be Public or Private, open or closed.

The worlds largest Public network is the Internet,

accessible by telephone lines.

In essence the internet is a network of networks, linkingan ever growing number of networks and users in almost

every country in the world.

The internet was created in the 1960s by the US military-

industrial complex to enable government researchersworking on military projects to share computer files.



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TYPE OF OWNERSHIP contd The Internet has several uses these include:

1. To send and receive e-mail.

2. To transfer files from one computer to another.

3. To locate information on a global basis for businessresearch or political, educational or business purposes.

4. To communicate with other computers either one at a

time (instant message) or many at once ( chat rooms

or discussions groups). etc.



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Business value of the Internet



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TYPE OF OWNERSHIP contd The world wide web is not the internet but one

system running on the internet.

Basically, the internet is the hardware and the web the

software.The web provides a graphical user interfaceand means for the display of graphical images, pictures

etc.

The usefulness of the word is that every document

embodies someone's effort to explain what resourcesare available and to organise them in a way that

facilitates their retrieval.14IS/IT Procurement - March 2012


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TYPE OF OWNERSHIP contd The web also allows users to create their own web

documents which, in turn, can provide links to further

documents.The web is the most common ways for

business to establish a presence on the internet.

Private networks are those in which the organisation

typically runs its own private data-switching equipments,

as well as modems, multipliers and other circuit

interface devices.



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TYPE OF OWNERSHIP contd Intranet is a term applied to an organisation-wide systems

that operate like an internal internet. Such a system may allowother links in the supply chain to communicate in procurementand vice versa.

Intranets uses Internet technologies (such asWeb browsers and servers,

TCP/IP protocols, HTML, etc.)

to provide an Internet-like environment within the organization

for information sharing, communications, collaboration and support

of business processes Protected by security measures

Can be accessed by authorized users through the Internet



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Extranet is a network link that uses Internet technologies To connect the Intranet of a business

With the Intranets of its customers, suppliers or other business

partners

Extranet is the term used for an internet that has been

extended to include access to or from selected external

organisation such as customers or suppliers thus making

possible collaborative inter-enterprise sharing of information

and communication.

TYPE OF OWNERSHIP contd



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Extranet Uses



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TYPE OF OWNERSHIP contd Organisations may also set up bilateral, point to point

transmission schemes with other enterprises who are

regular trading partners.

Alternatively organisations use a third party value addednetwork for receiving, storing distributing their data.

The user transmits the data which is routed to and

collected in an electronic mailbox provided by the value

added network (VAN) service provider and owned by the

user.19IS/IT Procurement - March 2012


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TYPE OF OWNERSHIP contd The right pieces of data are then re-routed automatically

by theVAN services to other electronic mailboxes owned

by intended recipients where they are held until the

receiving organisation asks for them.

This process provides the opportunity for transmission

and receipt from multiple partners with a single

telephone call.



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GEOGRAPHIC SCOPENetworks are categorised as LANS,WANS,

and MANS according to the area covered:

LAN (Local Area Network) are privately owned

communication networks linking personalcomputers and workstations or telephones within a

limited geographical area such as a building or a

group of buildings within a distance of one or two

miles.



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Local Area Network (LAN)

Connect computers within a limited physical area suchas an office, classroom, or building


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GEOGRAPHIC SCOPE cont. WANs (Wide Area Network) extended over a large

geographical area such as whole country.The Internet

links together hundreds of computerWANs. Most

telephone systems areWANs.



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GEOGRAPHIC SCOPE cont.MANs (Metropolitan Area Network) are high

speed or telephone networks designed to link

two or more LANs within a limited

geographical regions as the variousdepartments of a local authority.



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A secure network that uses the Internet as its

backbone but relies on firewalls, encryption and

other security. In other words its a pipe traveling

through the Internet

Virtual Private Networks (VPN)

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NETWORK TOPOLOGY In this context, topology relates to the inter

connection or organisation of computers in a

network.

It may also be defined as the physical configurationof the various nodes and the manner in which they

are linked.

A node is a point to which a group of devices such

as microcomputers or terminals and transmissionlines connect.



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NETWORK TOPOLOGY contd Most LAN topologies currently in use are bus, star

or token ring.

A star network means that the arrangement of the

LAN resembles a star.

A star LAN has a central server ( a server is a central

computer that holds databases and programs for

many pc work stations or terminals which are calledclients).



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NETWORK TOPOLOGY contd



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NETWORK TOPOLOGY cont.The disadvantage of a star topology is that if

the hub fails then all the computers on that

hub fail.

If however, a line from the hub to thecomputer is broken then only that computer is

down.

If one computer fails the rest of the networkstays up.



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NETWORK TOPOLOGY contd A bus topology means that the arrangement

resembles the seating on a bus.

Each seat on the bus is a computer and the

computers communicate through the passage down

the centre in the bus as shown on slide 63.

The disadvantage is that cable breaks can disable the

whole network.



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NETWORK TOPOLOGY contd A ring topology means that the computers are

arranged in a ring as shown on slide 63.

With this there is no central server computers

communicate by passing an electronic token or signalfrom computer to computer until the information

reaches the destination computer that matches the

address on the data.

Again a break on the ring can disable the entirenetwork.



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NETWORK TOPOLOGY contd Other forms of networks include mesh and hybrid topologies.

A mesh network is one in which every device on the network

is connected to every other device.

Such networks are not much used on LANs but are utilisedforWANs were reliability is important.

Hybrid networks are combination of bus, ring and star

topologies.

Because each topology has its own strengths and weaknessesseveral types can be connected for maximum effectiveness.



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E-Procurement or Online Procurement Involve using the Internet and related technologies

to change the role of the purchasing department

from a transaction-oriented function to a more

managerial function focused on establishing andmaintaining relationships

Growth rate of e-procurement revised downwards

due partly to the dot.com bubble.



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Electronic Data Interchange (EDI) A technology that ensures a direct secure link

between organisations computer systems for the

convenience of sharing information, and

sending/receiving documents.

The key operational function is that EDI comprises

an exchange between organisations and companies

without paperwork.



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How EDI WorksThe sequence is as follows:

a) Company A sets up a procurement order using

its internal business software (i.e. EDI).

b) The EDI software translates the order from the

internal format to the ISO standard 850

Procurement Order document format.



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How EDI Workscont.c) Company A sends 850 Procurement Order

documents to company B over a third party

value added network or encrypted in

EDIFACT format over the Internet.

d) Company B receives the 850 Procurement

Order document and translates it from EDI to

its proprietary format. (Typically Company Bwill send an acknowledgement to Company A).IS/IT Procurement - March 2012 36


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Advantages of EDI1) EDI effectively puts the product back on the shelf

with no paperwork and a minimum of human

involvement.

The replacement of the paper documents e.g.

procurement orders,

acknowledgements,

invoices, etc.

used by buyers and sellers in commercial transactions, by

standard electronic computers often without the need for

human intervention.37IS/IT Procurement - March 2012


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Advantages of EDIcont. One of the best examples in the way an EDI works is

the EPOS at some supermarkets.

When a product is procured, the checkout operator scans

the bar code on its label which automatically registers the

price on the cash till.

That same signal also triggers a computer process which:

reorders the items from the manufactures,

sets off a production cycle,

arranges invoicing, payment and transportation of the

new order.38IS/IT Procurement - March 2012


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Advantages of EDIcont.2) EDI promotes a reduction in lead times

through buyers and suppliers working

together in a real-time environment.

For instance,Armstrong and Jackson provides a

real-life example of pre and post-EDI lead times

in which the latter shows reduction of 8 days to

acknowledge the order and 5 days to deliver it.



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Advantages of EDIcont.Day 1: Order prepared and authorised electronically posted

into EDI service.

Day 2: Order taken from EDI service by recipient and put

straight into order system, acknowledgement created

automatically and sent to EDI service.Day 3: Manufacturing process begins (7 DAYS),

acknowledgement received by originator and processed

automatically.

Day 9: Manufacturing complete.

Day 11: Delivery complete.40IS/IT Procurement - March 2012


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Advantages of EDIcont.3) Reduction in cost of inventory and release of

working capital.

4) Promotion of such strategies as Just-in-Time

(JIT) as a consequence of points 2 and 3above.

5) Better customer service.



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Advantages of EDIcont.6) Facilitation of global purchasing through

international standards, e.g. EDIFACT which

is compatible with most equipment in most

countries.

For example, in 1970 SITPRO (Simplification of

InternationalTrade Procedures) board was established to

guide, stimulate and assist the rationalisation of

international trade procedures and the documentation and

information flows associated with them. SITPRO worked

with the British Standards Institution (BSI) in connection

with EDI standards. 42


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Advantages of EDIcont.7) Facilitation of invoice payments by the computer-

to-computer transfer of money which eliminates

the need for the preparation and posting of

cheques.8) Promote the integration of functions, particularly

marketing, procurement, production and finance.

9) EDI tends to promote long- term buyer- supplierrelationships and increase mutual trust.



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Potential Problems in ImplementingEDIKillen & Kamauff (1995) point out that before

adopting EDI an organisation should:

Ensure that exchanging information electronically supports

the over all organisational strategy.

Consider the cost and ramifications of EDI standard tools

and techniques of implementation, software maintenance,

manpower and participant training and how to promote

systems and applications integration.

Consider the organizational and process changes involved.



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Potential Problems in ImplementingEDI. cont.Desmarais Norman (1999) states that the more

data is being processed and reprocessed the more

there is to save time and money.

Potential EDI users should therefore calculate

the cost per transaction. If it is cheaper to fax or

manually perform the task the buyer probablylacks the volume to invest in EDI.



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Indicators of a reasonable opportunityfor the application of EDI Monczka & Carter (1988) propose the following

indicators of a reasonable opportunity for the

application of EDI in the procurement environment: A high volume of paperwork transaction documents.

Numerous suppliers.

A long internal administration lead time associated with the

procurement cycle.

A desire for personnel reductions, new hire avoidance, or both.

A need to increase the professionalism of procurementpersonnel.



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LIMITATIONS of EDIHistorically the two principal limitations of EDI relate

to cost and inflexibility.

Cost EDI was, and still is, an expensive option giventhat, until recently, organisations sent all EDI transactions

over aVAN that had high set-up and running costs often onthe basis of per thousand characters transmitted.

The scope of EDI was also internationally limited to ensure

controlled activity within a closed-door environment.Theheavy overhead associated with EDI infrastructure was

prohibitive for many small and medium sized enterprises.47IS/IT Procurement - March 2012


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LIMITATIONS of EDI..cont. Internet and Extranet approaches can enable small businesses to

link into secure EDI networks at minimal cost.The Internet

pricing model of flat monthly rates have forced most of theVAN

networks to lower their pricing structures.

A new market shift is also under way in which organisations are

moving from proprietary technology to Extranet solutions.A

comparison of EDI and extranet technology is shown on the next

slide

Small businesses using the internet can compete on a level

playing field with large competitors, expand globally andimprove their trading partner relationships.



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Comparison of EDI and ExtranetsCharacteristics EDI Extranets

Infrastructure Customised software Package solutions thatleverage and extend

existing internet.

Transmission cost ExtensiveVANS or leasedlines, slow dial-up

connections

Inexpensive and fast

internet connections.

Access Proprietary software Web browser, support EDIprotocols as well as many

other open Standards

Scale Restricted to only the

largest vendors who cansupport the EDI

infrastructure.

Supports real-time buying

and selling, allowing fortighter and more proactive

planning



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LIMITATIONS of EDI..cont.(INFLEXIBILITY) EDI is a cumbersome, static and inflexible method of

transmitting data most suited to straightforwardbusiness transactions such as the placement ofprocured orders for known requirements.

It is not suitable for transactions requiring tightcoupling and coordination such as the combinationof several possible procured alternatives or supplychain optimisation.

Unlike human beings computers are poor at

interpreting unstructured data and cannot deriveuseful information from web documents that are notpredefined and permanent.



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INFLEXIBILITYcontdThe standard document language used to create

web pages is Hypertext Markup Language

(HTML).

HTML is able to display data and focuses on how data

looks, it cannot describe data.(i.e. HTML can state whatitems a supplier can offer, it cannot describe them).

Traditionally EDI approaches do not provide the

flexibility required in a dynamic Internet

environment.



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INFLEXIBILITY..contdXML(Extensible Markup Language) approved by

theWorldWideWeb Consortium (w3c) in 1998

is an attempt to solve the HTML problem and

provide a foundation for a whole new way ofcommunicating across the Internet.

The major difference between EDI and XML is

that the former is designed to meet businessneeds and is a process.



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INFLEXIBILITY..contdXML is a language and its success in any

business will always depend on how its being

used by a given application.

As a language, XML provides a basic syntax

that can be used to share information between

many types of computers, different

applications and organizations.



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INFLEXIBILITY..contdXML can describe (as distinct from display) data.

For example , it enables the procurer to understand in

detail what a supply has to offer and ensures that a

procurement order is accurate and describes what the

procurer requires.

XML provides a direct route between the procurer

and supplier irrespective of the size of either what

was unavailable with EDI.

Its argued that when widely used, XML will result

in the demise of EDI.54IS/IT Procurement - March 2012


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INFLEXIBILITY..contd

What XML will do- and is already doing- is to force EDIsolution providers to consider how they need to re-

engineer the EDI business model to fit into a more

flexible framework and also how to leverage the benefits

of the Internet.

As far as MRO (maintenance, repair and operating)

supplies e- procurement is concerned, XML will

become an important element and it will be necessary

for both purchasers and suppliers to consider how their

applications will work within the XML framework.55IS/IT Procurement - March 2012


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Other Ways of Transmitting DataElectronically Other ways of transmitting data electronically between two or

more organizations include.

Encrypted e-mails (which are very cost effective for

businesses)

Orders can be collected securely online and put into existing in-house

systems which automatically e-mail suppliers when stock value reach

lower limits.

Cellular phones and PDAs owing to changing technology.

Until recently PCs were the Internets access device of choice,but preferred substitutes such as cellular phones and PDAs are

outselling PCs several times over as IBM publication states.56IS/IT Procurement - March 2012


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Other Ways of Transmitting DataElectronically.cont. (PORTALS) Generally synonymous with gateway the term portal refers to

a world wide web site that provides a major starting point for

web users. (i.e. an entry point or homepage for accessing

Internet content and services).

Portals may be Horizontal orVertical.

Typical horizontal or consumer portals include yahoo, excite,

Lycos, and Microsoft network.

Vertical or Enterprise Information Portals (EIPs) provideinformation to a particular group or interest who access the

customised or personalised portal.As Pimblett states.57IS/IT Procurement - March 2012


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Enterprise Information Portal

IS/IT Procurement - March 201258


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Other Ways of Transmitting DataElectronically.cont. (PORTALS) Integrating existing systems and new technologies is the real

benefit of web portals .

In a back-to-front scenario, portals allow analytical processing

of applications to derive information from databases and otherinformation repositories that were previously unavailable to

managers or sales personnel in the field.

In a front-to-back scenario, portals allow a greater number of

points of entry for supply of databases and enterprise resourceplanning systems.



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Legal and Security Issues of E-BusinessAdoptionThe many advantages of EDI and the internet

are balanced by concern over security and legal

aspects.

Lack of clarity on these issues is significant

reason why many organizations have been slow

to adopt e-business approaches.



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Security Issues of E-Business AdoptionSecurity threats to information transmitted by EDI and

the Internet include:

Interception and modification of messages (e.g. purchaseorders, credit card numbers) sent by third parties

Loss of messages. Messages may be read by persons other than the intended

recipient.

A third party may pretend to be one of the original twoparties.

One of the parties may claim never to have sent or received aparticular message.



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Security Issues of E-BusinessAdoption.contdApproaches to meeting the above concerns include:

Encryption technologies:

the act of encoding information in such a way that only the

holder of a secret password can decode and read it. Encryption

is based on an algorithm or mathematical formula that can

transform unintelligible text, and a key (symmetric

encryption) or pair of keys ( asymmetric encryption) to

decrypt the text.

Certification authorities are entities that certify signatures andprovide proof that a signature is valid.



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Legal Issues of E-Business AdoptionE-business raises legal issues relating to:

Online contracts, i.e.

- Contracts and types of contracts

- Pre-contract considerations- Contract creation

- Writing and signature requirements

- Online contract terms and conditions



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Legal Issues of E-Business Adoption... contd International issues

- urisdiction

- Applicable law

- Enforcement

- Reconciliation of territorial law and global reach



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Legal Issues of E-Business Adoption... contdEvidence and security:

- Types of evidence

- Real evidence

- Admissibility and hearsay evidence

- The reliability of computer evidence

- Good practise i.e. BSI and DISC PC 00008 codes

- Protection of intellectual property.



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Legal Issues of E-Business Adoption... contdData protectionWebvertising

Taxation of electronic commerce

For further clarification on the above matters students shouldconsult ISO and BS specifications 17799 and 7799 in which

information security is defined as maintaining:

Confidentiality- personal and business sensitive

confidential information is protected from unauthoriseddisclosure, loss, damage or use.



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Legal Issues of E-Business Adoption... contd Availability- ensuring that information is available to

those persons authorised to see, use and process

information.

Integrity- information is protected from unauthorised

alteration and is reliable.

Other useful sources of information on the security and legal

aspects of e-business include relevant publications of the UK

government and the European Commission.



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The IS/IT Evolutionary Steps/Phases As an organization moves along the evolutionary

process, it expands its capability for delivery and

increased business value via information.

Understanding how to evolve to an intelligententerprise means the organization has comprehended

the steps along the way.

Organizations need to recognise where they are and

why, and then understand how to move to the nextlevel.



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The IS/IT Evolutionary Steps....cont. These are classified into the following five levels.

o Level 1: Operate

o Level 2: Consolidate.

o

Level 3: Integrate.o Level 4: Optimise.

o Level 5: Innovative.

These five steps along the IS/IT evolutionary road,and some milestone issues, are illustrated below.



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The IS/IT Evolutionary Steps....cont.


Operate

Consolidate

Integrate

Optimize

Innovate

Develop team work

Better cross-functional

communications

Still some variable

quality

Still some departmental

interestBasic information

Limited Processes

IndividualisticSeparate independent

systems

Enterprise

Information

More information-based decisions

Awareness of

improvement

opportunities

Improved

performance

measurements

Incremental

improvements

Added-value

improvements

Improved supplier

management

Improved qualitymanagement

Added-value HR

systems

Sustainable business

model for theenterprise ERP

culture

Improved target

achievements

Better links to

strategic plans and

vision

Better relationship

managementdata/deliverables


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The IS/IT Evolutionary Steps....cont.

Companies and organisations use informationtechnology (IT) and information system (IS) differently.

Organisations are at varying levels of IT/IS evolution

and maturity, and at the same time the technology

continues to move forward. The key to using information successfully is not in how

far the organisation has evolved but how it is evolving.

The intelligent enterprise shows sound judgement and

rationality in planning a practical approach to deliveringsolutions that meet the long-term information need of

the organisation. 71


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Key Elements of IT System ProcurementThe basic purpose of a purchasing system are to:o Receive or identify and log customers demands or requirements.

o Identify a source of supply to specification

o Ensure audit process and authority

o Enable a buyer to agree a price and terms for supplyo Raise an order or contract for delivery from a supplier

o Ensure that goods are delivered to that order requirement

o Generate the order or contract as a prime document in the

payment processo Produce procurement reports.



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Key Elements of IT System Procurement..cont The assessment and evaluation of existing or planned

purchasing systems should relate to these basic purpose.

However, if a buyer is involved in specifying an upgrade

or a new system, there are several other costs and

measures that should be considered:o IT software licence fees

o Database integration costs- set-up and or integration

with existing systems

o

Installation costso Training costs, including software maintenance and

upgrade time and costs.73


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INFORMATION TECHNOLOGY/INFORMATIONSYSTEMS PROCUREMENT Technology purchases are risky because of its extensive use in

businesses

The product may or may not work as advertised or may not

provide the level and quality of work that may be desired.

There is a need to consider as many of the potential issues aspossible.

The supplier may not be financially stable enough to stay till the

live of the technology.

IT/IS should provide a technical solution to organisations

challenges but not to create more problems.



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Evolution of purchasingby Reck, R.F and Long B. (1998)

Stage Characteristics1.

Passive

Purchasing reacts to request by functions and has no strategicdirection

Low purchasing visibilitySupplier selection based on prices and availability

2. Independent Purchasing function adopts latest techniques but strategy is

independent of firms strategyPerformance based on cost reduction

3. Supportive Purchasing supports firms competitive strategy

Purchasing included in sales proposal teams

Suppliers considered as a resource

Mkts are analyzed and monitored

4. Integrative Fully integrated into firms strategy

Use of cross functional teams

Performance measurement of purchasing



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Changing role of purchasing

Aspect Traditional ChangingStructure Regarded as a separate

function

Considered a cross functional relationship

and part of the integrated Supply chain

Procedures Paper-based, slow and high

cost

IT based, emphasis on centre led and user

department involvement

Purchase

considerations

price Total cost

Sourcing Multi sourcing , local or

national

Reduced supplier base, global sourcing

Purchasing

performance

Price differences and saving s Value-added as part of the supply chain



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Changing role of purchasing

Aspect Traditional ChangingSupplier Relationships Short term and adversarial Long term and partnerships

Quality and specification Purchasing specification Supplier specification and

certification

Inventory and lead times High to provide security Low due to JIT

Purchasing performance Price differences and saving s Value-added as part of the supply

chain



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Five rights These objectives aim at securing goods and services:

1. of the right quality,

2. at the right time,

3. delivered to the right place,

4. in the right quantity,

5. at the right price

Others are :

6. at the right terms, and

7. from the right source.



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Procurement Process

Identifying the need Determining the quality requirements,

Determining the quantity requirements,

Solicitation of bids/quotes

Selecting the sources of supply, Negotiating the terms of purchase and delivery,

Issuing the formal purchase orders/procurement

contracts,

Monitoring and follow-up of the contract,

Reviewing performance80IS/IT Procurement - March 2012


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Procurement Process..cont Identification of Need This need is normally identified by the function

Together with the procurement and supply

function develop a clear specification which willprovide potential suppliers with adequate

information.



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Procurement Processcont

Quality May be defined as the suitability of the product

for its intended use.

The procurement department should have wide

knowledge on materials, market trends

and the credibility of different suppliers.



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Quality cont.

Quality may be defined as fitness forintended purpose ie fitness; merit;

excellence.



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WHAT IT/IS TO PROCURE This will depend on Business case but it must:-

- detail benefits in measurable form

- provide critical accountability and monitoring

-distinguish mandatory from desirable features

- help manage priorities

-build in transaction, flexibility and scalability

- precede organisational requirement analysis

- Define Statement of work and evaluation criteria



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WHAT IT/IS TO PROCURE cont. Senior management should understand as well as approve the

business case

Changes during actual procurement process are very expensive,

get it right first time

Introduce to IT/IS procurement contract management Laws and regulations Governing IT/IS must be covered

extensively

Supplier selection must include the undertaking due diligence,

Negotiation before awarding



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IT/IS OPTIONSThree options in order of preference:

1. Buy a package on the market

2. Get external supplier to developwhat the organisation

3. Develop it in house

86IS/IT P t M h 2012

Documents

Is-IT Procurement March-2012 NOTES2