IS Procurement:
IS procurement refers to acquiring an IS from external sources or suppliers. It is also called external procurement of IS. An organization should first carry out an upfront analysis of its specific needs. Such an analysis should take into account the basic purpose/s for which the system is required, the budget considerations, the number of employees using the system, etc. This analysis will help the organization to narrow down the various options and save time. After making the analysis, the organization should seek information about the various systems from the potential suppliers.
Post evaluation of the information, the organization would have a list of vendors who can set up their systems in the organization for testing. Based on the reaction of the IS staff and the performance of the system in the actual working environment, the organization can make the final decision of whether or not to procure a system from a particular vendor.
For making an external procurement, organizations by and large opt for the process of competitive bidding. Under this method, the suppliers have a chance to display the systems that meet the needs of the organization. The competitive bidding process helps the organization to get the best system at the lowest possible rate. The following are the steps involved in the process:
- Identifying, selecting, and planning the system
- Analyzing the system
- Inviting proposals
- Evaluating the proposals
- Selecting the vendor.
The first two steps are similar to developing a system in-house. The next three steps involved in the process differentiate an external procurement from developing a system in-house.
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