12-1 How should managers build a business case for the acquisition and development of a new information system? The business case for an IT investment describes the problem facing the organization that can be solved by investing in a proposed system solution. It provides an analysis of whether an information system project is a good investment by calculating its costs and benefits. Tangible benefits are quantifiable, and intangible benefits cannot be immediately quantified but may provide quantifiable benefits in the future. Benefits that exceed costs should then be analyzed using capital budgeting methods to make sure they represent a good return on the firm’s invested capital. Organizations should develop an information systems plan that describes how information technology supports the company’s overall business plan and strategy. Portfolio analysis and scoring models can be used to evaluate alternative information systems projects.
12-2 What are the core problem-solving steps for developing a new information system? The core problem-solving steps for developing new information systems are: (1) define and understand the problem, (2) develop alternative solutions, (3) evaluate and choose the solution, and (4) implement the solution. The third step includes an assessment of the technical, financial, and organizational feasibility of each alternative. The fourth step entails finalizing design specifications, acquiring hardware and software, testing, providing training and documentation, conversion, and evaluating the system solution once it is in production.