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Guide to Purchasing a Computer Information System

The information age is upon us. Computers are accessible to nearly every individual in the modern world. Almost every one is contacted or affected by an information system. Even primitive bushmen in the South Pacific are tracked by computers via satellite. The inundation of information we are subjected to requires an information system capable of processing and sorting data peculiar to an individuals specific needs. Likewise, we also have a plethora of equipment designed to process this information. The market place is filled with a kaleidoscope of variables constantly in a state of change. Which type of system will satisfy your needs? Do you want to be on the "cutting edge" of technology, the safe haven of a fully developed product; in the economy range with a product at the end of its life cycle; or a compromise somewhere in between? Each of these decisions may be the right one for you depending on your needs and circumstances. The Official (s) responsible for acquiring a computer information system (CIS) must consider all aspects of the system: What is its initial cost? What will be the maintenance costs? Is it expandable for future needs?

The purpose of this pamphlet is to provide the Official with the questions to ask which will assist in determining the optimal system which will satisfy particular needs.


COMPUTER INFORMATION SYSTEMS: COMPONENTS

What are the crucial parts of a CIS? There are five basic categories:

  1. Operating System Software: The operating system software facilitates computer and application software operation. PC-DOS and MS-DOS are common operating systems for PC's.
  2. Application Software: Application software performs a specific function or set of functions. Application software includes spreadsheet, database, and word processing programs.
  3. Hardware: The computer itself. There is a multitude of hardware providers. Some well known providers include IBM, Hewlett-Packard, Digital Equipment Corporation (DEC), and Unisys. Each provider offers a wide selection of product lines, often supported by various operating systems.
  4. Peripheral Equipment: Office machines connected to your computer are your "peripherals". This equipment includes printers, plotters, and workstations. To possess an efficient CIS, peripherals must be compatible with the hardware, application software, and operating software. Many brands of equipment may appear very similar; however, the control units in each peripheral are usually different. For example, an Epson printer on an IBM network may require substantial re-configuration to operate correctly on a DEC or HP network. You may also want some of your workstations to be PC's, independent of the main system. However, if the PC is compatible with the system, future expansion or networking can be facilitated.
  5. Wiring and Configuration: The operation of your system will depend upon how the independent parts are connected. installation wiring needs to be done carefully to avoid problems and to allow for future expansion. Remote stations are often subject to the variables of your telephone system and modems. Digital vs. analog telephone switching units may impact your operations. Bell Telephone's "Call Waiting" can interrupt communications between a workstation and the control unit.

Configuration is the process of adjusting each piece of the operating system software, application software, hardware' and peripherals to interact and work efficiently with the entire system.


HARDWARE SELECTION

What is the best hardware? How should your hardware be purchased? The best hardware for you is the set that satisfies your needs efficiently. Each vendor will assure you that their brand is the "best". To avoid pitfalls, your hardware purchase should be your last consideration. The process should begin with a review of your needs. Then select the software to fulfill those needs. The selection of software will guide you in determining your hardware needs. If the software operates on an "open system" (see discussion below) the type of hardware may not be critical, therefore allowing price to determine your choice.


APPLICATION SOFTWARE SELECTION

Application software systems run on various types of operating system software. Your selection of an optimal application system will somewhat dictate what type of operating system you will require.

What is the best application software?

Of course, it is the one that accomplishes your goals. The first decision you are going to make is to determine what your goals are. Easier said than done, right?

During your goal assessment, you will establish some parameters which will clarify your needs. By prioritizing the parameters, you will begin painting a clear picture of your needs and goals.

Remember, some of your goals may not be compatible with other goals. If you want the most economical system but also desire the most sophisticated, your final choice may be somewhere in between. Likewise, if you intend to utilize various pieces of hardware you already own, the savings you gain in the installation process may be offset by increased re-configuration and maintenance costs of the older equipment.


"OPEN SYSTEMS" MAY NOT BE OPEN

An open system generally means a system that can communicate with a variety of other equipment and systems. "Unix" is often used to mean I open' system; however, Unix is a brand name of one type of an open system, as 'Hershey' is the name of one type of chocolate bar. Many users want a Unix-type system because various departments have different software, and the user would like all of the software to "work together".

When a user speaks of an open system, they usually mean "full office function integrated", meaning the system will process the information and reports required by your office, as well as word processing, data base, spreadsheet, FAX, and voice mail functions. Generally, most requirements can be achieved if your solution-based service provider knows, in advance, your needs.

First of all, an "open system" is a concept. There is no single "open system language". Currently, there are seven different types (or Protocols, as they are known). One protocol will not necessarily interact with another. Nearly all major hardware suppliers have their own version of an open system; and these systems can generally only be assured to be "open" to their own products. Therefore, you may eventually end up with all IBM, all HP, or all DEC equipment along with their associated peripherals. Open systems also tend to be heavily equipment dependent, thereby increasing your purchase cost. The complexity of such systems also increase maintenance costs.


HOW MUCH IS THAT SYSTEM IN THE WINDOW?

What will a computer system cost? Many individuals purchase hardware for the best price from one vendor, software from one vendor, and peripherals from another vendor. While this practice may be beneficial to one's purse, the benefits of a fully integrated system may not be accomplished. A good analogy to this approach is hiring a plumber, an electrician, and a carpenter to build a house without the benefit of a general contractor or blueprints. In order to operate efficiently, the components of a computer information system must be assembled and maintained properly.

Software and hardware are rapidly becoming commodities. Grocery stores in California are selling PCs, software, and peripherals along side pork & beans!

It is common to find that the bargain "off the shelf" systems cost several thousand dollars to install and learn to use because the operating system and peripherals need to be modified to work properly.


HOW MUCH DOES THE SYSTEM REALLY COST?

The total cost of a system is the purchase price plus maintenance fees. All systems have a functional life cycle. The use of old equipment in a new system is one method to reduce initial costs; however, remember that new equipment ordinarily has a one year warranty (often extendable by service contract), and therefore will have no maintenance costs during that period. The older equipment will need to be maintained and possibly replaced during that same period. Also, the lowest purchase price may often contain the hidden costs of high maintenance expenses, and the "cutting edge" technology often has high maintenance costs and lost productivity due to down time.

A rule of thumb in the software business is "easy on the front end, hard on the back end". Translated, this means that a more user-friendly program requires complex programming which may increase its potential for malfunction, and therefore raising maintenance and repair costs. For example, many people will not buy cars with electric windows. Electric windows are great, but when they stop working, they are expensive to repair.

The computer industry estimates that users only utilize 10% of an application system's potential. Everyone in your office will not become a computer "guru". People are creatures of habit; once a method of generating the information required is learned, additional and sometimes easier features of a system are seldom explored. Therefore, consider the features and options of a system carefully. Additional features mandate a more complex system, with associated higher maintenance costs.

Another pitfall to be aware of is the "trap of multiple vendor service contracts". Each component of your system: hardware, software, and peripherals may be covered under different maintenance agreements. Three issues arise in these situations:

  1. The cost of separate service agreements is often more than having one vendor service all aspects of the system.
  2. If the wrong vendor is contacted for service, billing for services not covered in their agreement can result.
  3. Decreased productivity from down time while the correct vendor is contacted.

Another "trap" commonly encountered is the exclusion of covered equipment. This occurs when you add peripherals and fail to amend your maintenance agreement. Equipment not covered by an agreement will normally be repaired on a time and materials basis, with hourly time charges often exceeding $200.00.

Finally, many users fall into the "trap" of inadequate upgrading. Application and operating system software can have several upgrade versions. Operating system software often is not upgraded in conjunction with the application software because the upgrade notices come from different companies. Usually, timely upgrades involve minimal or no cost; when several upgrades have been missed, a new licensing and installation fees may be incurred. Additionally, upgraded application software will run more efficiently on current operating system software.


COMPUTER SYSTEM SELECTION CRITERIA

Perform your own analysis of your needs by using this checklist.

  1. Set realistic goals to be achieved. Remember that some goals may preclude the achievement of others.
  2. Work with "solution based consultants". Avoid pricing system components separately. A fee per hour basis consultant is your best non-biased contact in developing your "solution". Vendors may provide this service "free", but remember, they want to sell their product. Some vendors also have fee per hour services which will be offset against any acquisition of their products. This will generally provide a reasonable solution for you. if you decide to purchase their product, the service, in effect, becomes free.
  3. Consider all of the "costs". Remember, the purchase price is just the beginning. Compare the maintenance and operation costs over a period of years --- usually three. Consider "training" and "re-training" of experienced and new staff. Complex systems require more frequent training. By adding acquisition, training, and maintenance costs, you will arrive at your "real" cost. By knowing your actual cost, comparison of vendors and products will be much easier.
  4. Consider the life cycle of the software system. Brand new systems will obviously have longer life, but they often go through "growing pains" and frequently require adjustments and maintenance. A software system which is approaching the end of its cycle may be very reliable, but may operate on equipment that is no longer being produced (therefore increasing maintenance costs), or it may not interface with other products on the market. A product which has been on the market for several years and has had several release revisions will often have most of the features you will need, will be reasonably reliable, and will generally operate on a wide variety of equipment.

    Keep in mind that the "life cycle" of a PC product may be a few months, or at most a few years. Larger systems, capable of operating on mini computers or Local Area Networks (LANS) will usually have life cycles of several years.
  5. Check on the reliability of the vendor. Some major hardware vendors have gone bankrupt in the last few years. Their equipment may be economical, but acquiring additional equipment or parts for the existing system may prove costly. The computer software industry estimates that 1/3 of the service companies are insolvent or bankrupt, 1/3 are in some sort of trouble, and 1/3 are reasonably healthy. Assure yourself that your vendor will still be around in the future to service your system. Question the firm's financial soundness. Good indicators of financial soundness are the fee charges and maintenance structure the service vendor provides. if service is a "throw- away" to ensure hardware and software sales, then limited support can be expected in the future. If fees and maintenance are very low, the vendor may be "buying" work to deter insolvency.

    Review the vendor's corporate policy regarding support of their systems. is the line of products being "phased out" or placed "on the market" to be sold to another company. Check the local library for Standard and Poor's industrial Surveys for information.

WHO IS YOUR SERVICE OPERATOR?

The best service vendor is one which has a large, local "installed base" and derives a significant amount of their revenues from support services. Generally, they are in the "service" business rather than the "sales" business; they will be able to provide reliable quality service in the future. Lastly, look for a vendor which offers support for operating system software, hardware, and application software. An efficient service operator can coordinate all of your service needs, thereby saving you time, service charges, and a lot of headaches.


Originally written by Carl W. Grow in 1991, the concepts present in this article still helps government officials purchasing a new computer information system or replacing the current system.