Background
Scenario – Home Bookstore
Samuel Gabriel is a young entrepreneur who has a keen interest in books. He has decided to follow his passion and launch his own bookstore. Samuel has determined that conventional book stores are rapidly becoming obsolete and online downloads of books are ever increasing in popularity.Rather than running a business with a physical location selling hard copies of books he wants to pursue setting up an online business selling downloadable versions instead.
CSE1ISX Information Systems Assignment 1- Latrobe University Australia.
Samuel plans to launch his business, ‘Home Bookstore, in a few months’ time. Before launching any online bookstore, the business will require a web-based system that will handle most of his business transactions. The plan is to develop a system that manages core features of the business only. After the business is successfully up and running and the system has been trialled Samuel plans to extend the web-based system to handle all other business-related transactions.
Samuel has the following features in mind with the new system. The ‘Home Bookstore’ system must be designed to allow customers to register with the store to gain membership. The customers provide their personal details and payment information (i.e. credit card details) to register with the store. Once the details are verified, the customers will be requested to choose a username and a password for login purposes.
Once the customers gain their membership, they will be able to log in to the system and browse the store for books. The price of each book is displayed along with other details of the book. Once the members come across a book they like, they should be able to click a button to download the book
for rental. Once the member authorises a rental, a receipt is emailed to the email address of the user. Each book can be rented for a maximum of 30 days from the day it is downloaded. A member can rent ten (10) books at any given time.
Samuel also needs to keep track of the state of his business. To do this, the system should generate various monthly reports.
Samuel already has a team of IT professionals to help him run his other business ventures. The IT team is also capable of developing the Home Bookstore system. Samuel is however weighing the pros and cons of developing the system in-house or outsourcing it to a software development
company named ‘TechnoPal’.
As an independent IT consultant, you have been called in by Samuel to provide him with some advice on the setup of his new venture.
Tasks:
Task 1
In a meeting with Samuel he mentions about different development methodologies that you could use such as:
• Structured Analysis
• Object-oriented Analysis
• Agile methods
Samuel is keen to know which method you would recommend, and why.
Develop a 500-word report that clearly explains
• The purpose of using a System Development Methodology in a project
• An outline of each of the methodologies listed above
• Which methodology you would recommend for this project including details of
o Benefits of selected methodology
o Advantages over other methodologies
o Details of any disadvantages
• Make sure that you include appropriate references in your report.
Task 2
Assume that a decision has been made to have the system be built by the in-house team. Samuel asks you about requirements analysis. He mentions a couple of techniques that he is familiar with and this includes:
• Joint Application Development (JAD)
• Rapid Application Development (RAD)
• Agile Method
CSE1ISX Information Systems Assignment 1- Latrobe University Australia.
Develop a 500-word report that clearly explains
• The value of gathering requirements
• An outline of each of the techniques listed above
• Which technique you would recommend for this project including details of the
o Benefits of selected technique
o Any shortcomings with the selected technique
• Make sure that you include appropriate references in your report.
Task 3:
Samuel is having some doubts about proceeding into the online bookstore space. Samuel has asked if you might be able to conduct a SWOT analysis for the project to give him some further insight as to whether he is making a sound decision.
Create a SWOT analysis for Home Bookstore. Use the given SWOT analysis template (Table 1) to create your answer.
List at least two items for each category including a brief explanation as to why each item was listed under their category.
Task 4
Samuel has decided to go ahead with the implementation of the online bookstore. You have been in discussions with him around whether it would be better to build the system in-house or outsource it to Techno Pal
CSE1ISX Information Systems Assignment 1- Latrobe University Australia.
It is estimated that if the system is to build in-house, it would take the IT team five weeks to complete development. The hired IT team consists of three IT professionals. All development tasks from project initiation to delivery (system installation) will be carried out by the team.
CSE1ISX Information Systems Assignment 1- Latrobe University Australia.
Assume that three team members work 35 hours a week and are paid $50 per hour on developing the project. Training in the usage of the system would be carried out by Damini Hopkins from the IT team, who is also an IT training specialist. Damini is paid $75 per hour, 7 hours per day, for the
training session that is estimated to take two days to complete. The system maintenance and troubleshooting will be performed by a system administrator who will be hired as an on-call (casual) employee at $40 per hour. It is estimated that the system administrator will need to work five hours per week to complete the maintenance and support work.
By contrast Techno Pal has provided Samuel an estimate indicating that it would take three weeks to complete the project and that it would cost $60,000. This includes a day long training session for employees. Techno Pal has the capability to provide ongoing maintenance for the system for a fixed annual fee of $4000.
Regardless of the option Samuel chooses, the hardware cost must be paid for by the Home Bookstore business. The hardware cost for the project, which includes desktop computers for all staff and other necessary equipment, is estimated to be $10,000. The licences for the software are
estimated to cost $6000. It is estimated that the cost of hardware and software are outright costs that will only affect the project initiation. It is expected that the system will not require upgrades within the first six years of its operation.
Samuel has estimated his costs for launching his business as a conventional (physical) bookstore.This estimate includes $80,000 per annum for the shop lease and cost of an employee to work in the store to be $35,000 per annum.
CSE1ISX Information Systems Assignment 1- Latrobe University Australia.
The estimate also revealed that errors and omissions of a manual system would cost the organisation $650 in lost revenue per month. An online system is predicted to eliminate these losses.
Regardless of either option used, the system will only be operational for four months in its first year of use. This time will be considered as a trial period for the system.
To help Samuel decide whether to develop the system in-house or to outsource it, identify costs and benefits for both options. The life span of the system is estimated to be five years from when it is operational.
Use the cost-benefit analysis template (Table 2) to help you answer the question. Create a separate cost benefit analysis table for each option.
Task 5
Compare the two options examined in Task 4 by calculating the Return-on-Investment (ROI). Base the ROI calculation over a five-year period, as indicated in the cost benefit analysis template.
CSE1ISX Information Systems Assignment 1- Latrobe University Australia.
Using the cost benefit analysis calculated in Task 4 and the ROI analysis, recommend which option Samuel should choose to develop the ‘Home Bookstore’ system. Provide justification for your recommendation.
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