COST OF SOFTWARE 1
COST OF SOFTWARE
Feasibility analysis
During the feasibility analysis while analyzing the cost of the software, the software designer usually has a number of options available to him. The number of options is three, and they include an option to build the software in-house, to buy an already pre-made software off the shelves, or to outsource the building to a firm that specializes in building of software. Various factors like cost and time usually determine which method to use. This paper will analyze these three options for a large retail chain that is looking to implement an information system. The paper advocates for outsourcing the information system to a firm that specializes in software development. This paper will show which factors the author considered when settling on this decision, and why this decision offers the best value for the least cost and risk.
The primary factor that will shape such a decision is the cost factor. The cost factor contains many elements such as hardware costs, the human resource involved among other factors. The paper choosesoutsourcing as it is the option that will deliver the least cost to the software. Outsourcing represents a middle ground between purchasing a software off the shelves and building one yourself. While purchasing does offer the most benefits including the least cost, an off the shelves software is impossible to modify and forces the business to restructure its operations to how the software operates. However, building the software in-house is an expensive venture for the company, especially considering the circumstances and context of this company.
This company is a large-scale retail company. It may not have the technical expertise required and thus would have to invest and create the human resource from scratch, which is a very expensive affair. In addition getting quality human resource is a challenge. Additional costs associated with software development such as maintenance require the company to maintain an active IT department. For a company whose main specialization is not IT, a huge IT is a big drain on resources of the company.However, the middle ground is outsourcing. This allows the company to have a custom-made solution for the company and yet reduce the heavy cost and effort required to build a system in house. In addition, the company gets to enjoy benefits associated with both methods such as support and training.
The other critical factor that usually factors during the cost analysis is the time factor. Time as a factor will usually have a heavy influence on the cost of the software. The alternative with the best timelines is the off shelf option, while the longest timeline is the in-house option. Once again, outsourcing offers a middle ground for the company. Under outsourcing, the company can invite potential companies to id and state their timelines. The company then chooses the alternative with the best costs, features, and timelines. Since, the timeline is self-imposed and protected contractually; the retail company can ensure they get the best value for time.
A company looking to invest in a systems information system should choose a system that bests complements their operations. Such a system might be hard to get off the shelves. Alternatively, it is expensive to build from scratch especially for a firm with no previous IT expertise. Therefore, outsourcing offers the best benefits for the company. Outsourcing offers the least costs, the most customizable option, and the most flexible timelines. This three milestones swing the favor to the outsourcing option rather than the other options.