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19.3 ■ System procurement 567

3. External competition If a business needs to compete more effectively or maintain

a competitive position, managers may decide to buy new systems to improve business

efficiency or effectiveness. For military systems, the need to improve capability

in the face of new threats is an important reason for procuring new systems.

4. Business reorganization Businesses and other organizations frequently restructure

with the intention of improving efficiency and/or customer service. Reorganizations

lead to changes in business processes that require new systems support.

5. Available budget The budget that is available is an obvious factor in determining

the scope of new systems that can be procured.

In addition, new government systems are often procured to reflect political

changes and political policies. For example, politicians may decide to buy new surveillance

systems, which they claim will counter terrorism. Buying such systems

shows voters that they are taking action.

Large complex systems are usually engineered using a mixture of off-the-shelf

and specially built components. They are often integrated with existing legacy systems

and organizational databases. When legacy systems and off-the-shelf systems

are used, new custom software may be needed to integrate these components. The

new software manages the component interfaces so that these components can interoperate.

The need to develop this “glueware” is one reason why the savings from

using off-the-shelf components are sometimes not as great as anticipated.

Three types of systems or system components may have to be procured:

1. Off-the-shelf applications that may be used without change and that need only

minimal configuration for use.

2. Configurable application or ERP systems that have to be modified or adapted

for use either by modifying the code or by using inbuilt configuration features,

such as process definitions and rules.

3. Custom systems that have to be specially designed and implemented for use.

Each of these components tends to follow a different procurement process. Figure 19.9

illustrates the main features of the procurement process for these types of system. Key

issues that affect procurement processes are:

1. Organizations often have an approved and recommended set of application software

that has been checked by the IT department. It is usually possible to buy or

acquire open-source software from this set directly without the need for detailed

justification. For example, in the iLearn system, we recommended that

Wordpress should be made available for student and staff blogs. If microphones

are needed, off-the-shelf hardware can be bought. There are no detailed requirements,

and the users adapt to the features of the chosen application.

2. Off-the-shelf components do not usually match requirements exactly, unless the

requirements have been written with these components in mind. Therefore, choosing

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