Introduction

When it comes to implementing enterprise information systems (EIS), organizations have important decisions to make. One of the first considerations is whether to host the systems on organization servers or in the cloud. Hosting on organization servers provides greater control and customization options but requires significant infrastructure and maintenance. On the other hand, cloud hosting offers scalability and accessibility, but raises concerns about data security and privacy.

Organizations must also decide whether to purchase and use commercial information systems or develop their own. Commercial systems provide ready-made solutions but can be expensive, while developing custom systems provides flexibility but requires extensive resources and expertise.

Lastly, organizations must choose between open source and commercial systems for their information needs. Open-source systems are free and customizable, but may lack support and require technical expertise, while commercial systems offer support but come with licensing costs.

Ultimately, the choices organizations make in hosting, purchasing, and system selection will determine the success and efficiency of their enterprise information systems.  We will explore these tradeoffs in this chapter.

IS Hosting Alternatives

Self-Hosting

When Information Systems (IS) are hosted on an organization’s servers, various hardware and software considerations come into play to ensure optimal performance, reliability, and security. Additionally, routine IT maintenance and security measures are essential to address potential issues and safeguard the integrity of hosted IS. Here’s a description of these considerations:

Hardware Considerations: The hardware infrastructure supporting hosted IS is a critical component of the overall system. Organizations need to consider factors such as server specifications, storage capacity, and network infrastructure. For example, a robust server setup might involve high-performance processors, ample RAM for efficient multitasking, and redundant storage configurations such as RAID to ensure data integrity and availability.

Software Considerations: The software environment on the organization’s servers plays a pivotal role in hosting IS. This includes the operating system, middleware, databases, and any specific software dependencies required by the IS. Regular updates and patches are crucial to address vulnerabilities and enhance system stability. For instance, hosting a web-based application may require a web server like Apache or Nginx, along with a database server like MySQL or PostgreSQL.

Routine IT Maintenance: Routine IT maintenance involves ongoing tasks to keep the hosted IS running smoothly. This includes regular system updates, software patches, and firmware upgrades for server components. For example, applying security patches to the operating system helps protect against known vulnerabilities. Routine backups of data and system configurations are also critical to ensure data recovery in case of unexpected failures.

Security Measures: Security is a top priority when hosting IS on organization servers. This involves implementing measures such as firewalls, intrusion detection systems, and access controls to prevent unauthorized access. For example, configuring firewalls to allow only necessary network traffic and regularly reviewing access logs are standard security practices. Employing encryption for data in transit and at rest adds an additional layer of protection.

Monitoring and Performance Tuning: Continuous monitoring of server performance is essential to identify and address issues promptly. IT administrators need to monitor resource utilization, network traffic, and system logs. Performance tuning involves optimizing configurations to ensure efficient resource utilization. For instance, adjusting server settings, such as memory allocation or database indexing, can enhance overall system performance.

Backup and Disaster Recovery Planning: Establishing robust backup and disaster recovery plans is crucial to mitigate the impact of data loss or system failures. Regularly scheduled backups of critical data and configurations are essential. Organizations should conduct periodic disaster recovery drills to ensure that data can be restored effectively in case of a catastrophic event. For example, hosting an e-commerce platform requires a comprehensive backup strategy to safeguard customer transaction data.

User Authentication and Access Management: Ensuring secure user authentication and access management is vital when hosting IS. This involves implementing strong password policies, multi-factor authentication, and role-based access controls. Regularly reviewing user permissions helps prevent unauthorized access. For instance, hosting an enterprise resource planning (ERP) system requires careful user access management to protect sensitive business data.

In summary, hosting IS on organization servers requires a thoughtful approach to hardware and software configurations, routine maintenance, security measures, monitoring, backup planning, and access management. By addressing these considerations, organizations can create a robust and secure hosting environment for their information systems, ensuring reliability and safeguarding against potential risks.

Cloud Hosting or Software as a Service (SaaS)

Cloud computing refers to the delivery of computing services over the internet. These services include servers, storage, databases, software, and other computing resources that can be accessed on demand as needed. Cloud computing enables businesses and individuals to store, manage, and process their data and computing applications remotely in a secure, efficient, and scalable manner, without the need for on-premises hardware and infrastructure. The key benefits of cloud computing include cost-effectiveness, flexibility, scalability, and reliability, making it a popular choice for businesses of all sizes and industries.

Software as a Service (SaaS) is a cloud computing model that delivers software applications and services via the internet. Under this model, software is hosted on the vendor’s server and accessed through a web browser or a dedicated app. Users do not need to install or maintain the software themselves, as all aspects of the software, including maintenance and updates, are managed by the provider. SaaS applications are typically subscription-based and are paid for on a monthly or annual basis. SaaS is an alternative to the traditional approach of purchasing and installing software on individual computers or servers, providing flexibility, scalability, and cost-effectiveness to businesses and individuals.

Advantages may include:

Cost Savings: Switching to cloud computing or SAAS can potentially save the business money by eliminating the need for expensive hardware and maintenance costs.

Flexibility and Scalability: Cloud computing and SAAS can provide businesses with greater flexibility and scalability, allowing them to expand or reduce their usage as needed.

Accessibility: Cloud computing and SAAS provide easy accessibility from anywhere with an internet connection, allowing for remote work and collaboration.

Automatic Updates: Cloud computing and SAAS often come with automatic updates, eliminating the need for businesses to manually update their software.

Saves Time: Cloud computing and SAAS can save time by eliminating the need for businesses to manage and maintain their own IT systems.

Potential Disadvantages:

Security: Cloud computing and SAAS can present security risks, such as the potential for data breaches or cyber attacks.

Reliance on Internet Connectivity: Cloud computing and SAAS rely on internet connectivity, which can be a potential drawback if internet access is lost or limited.

Data Control: When using cloud computing or SAAS, businesses may have less control over their data, as it is stored on servers owned and managed by third-party providers.

Compatibility: Cloud computing and SAAS may not be compatible with all existing software and systems, which can create integration issues.

Subscription Costs: While cloud computing and SAAS may save money in the long-term, businesses may face ongoing subscription costs that can add up over time.

Commercial or Custom Software Alternatives

It is important to understand the various business considerations that come into play when deciding between using off-the-shelf commercial software or designing and building custom software for an information system. The decision to use open source or commercial software, as well as on-premises or cloud-based solutions, will depend on the specific needs and priorities of the business.

Cost: Using off-the-shelf commercial software may be less expensive upfront, but there may be ongoing costs associated with maintenance and upgrades. In contrast, custom software may have a higher initial cost but could save money in the long term by reducing maintenance and upgrade costs. Additionally, open-source solutions are often free to use and distribute, making them an attractive option for businesses with limited budgets.

Scalability: As a business grows, its information system must be able to accommodate increasing demands. Off-the-shelf commercial software may have limitations in terms of scalability, while custom software can be designed to meet specific needs and can be easily scaled up as needed. Cloud-based solutions also offer greater scalability, as businesses can expand or reduce usage as needed without having to worry about hardware limitations.

Reliability: The information system must be reliable to ensure that the business can operate smoothly without downtime. Off-the-shelf commercial software is often tested and refined over time, making it a reliable option. However, custom software can also be designed with reliability in mind, using rigorous testing processes and quality assurance measures.

Compatibility: The information system must be able to integrate with other business applications to streamline processes and improve efficiency. Off-the-shelf commercial software is often designed with compatibility in mind, but custom software can also be built to meet specific integration needs. Cloud-based solutions also offer greater compatibility, as they can be accessed from anywhere with an internet connection.

Security: The information system must have built-in security features to protect the business from cyber threats. Off-the-shelf commercial software often has extensive security features, but custom software can also be designed with security in mind. Cloud-based solutions may present security risks, such as data breaches or cyber attacks, so it’s important to carefully evaluate the security measures of any third-party provider.

Performance: The information system must have the required processing power and memory to run business applications efficiently. Off-the-shelf commercial software is often designed to meet performance needs, but custom software can be optimized for specific performance requirements. Cloud-based solutions may also offer greater performance, as they can leverage the processing power of remote servers.

Energy Efficiency: Energy efficiency is also becoming a more important consideration as businesses strive to reduce their carbon footprint and operating costs. The information system must be energy-efficient to reduce operating costs and environmental impact. Off-the-shelf commercial software may not prioritize energy efficiency, but custom software can be designed with this in mind. Cloud-based solutions also offer the potential for energy savings, as businesses can reduce their reliance on on-premises hardware.

Vendor Support: The vendor must offer adequate support and maintenance services to ensure the software or system operates optimally. Off-the-shelf commercial software often comes with technical support and maintenance contracts, while cloud-based solutions may offer support through online resources or technical support teams.

Ultimately, when deciding between off-the-shelf commercial software or custom software businesses must carefully evaluate their specific needs and priorities. Cost, scalability, reliability, compatibility, security, performance, energy efficiency, and vendor support are all important factors to consider. Additionally, businesses must consider other factors such as data management, user-friendliness, training and support, compliance, backup and recovery, integration, scalability, and vendor partnership. By carefully weighing these factors, businesses can make informed decisions that will suit their needs and help them achieve their goals.

Open Source or Commercial Software Alternatives

Open-source software refers to computer programs whose source code is made freely available to the public, allowing users to view, modify, and distribute the code. This collaborative and transparent development model fosters a community-driven approach where programmers worldwide can contribute to the improvement and customization of the software. Examples of widely used open-source software include the Linux operating system, the Apache web server, and the Firefox web browser.

One notable advantage of open-source software lies in its accessibility and cost-effectiveness. Users can download and use these programs without incurring licensing fees, promoting widespread adoption and collaboration. The open nature of the source code also enhances security, as a global community of developers can identify and address vulnerabilities promptly.

However, challenges exist. The decentralized development model may lead to variations in quality and support, as not all open-source projects receive the same level of attention. Additionally, some organizations may face compatibility issues when transitioning from proprietary software to open-source alternatives. Despite these challenges, the open-source movement continues to thrive, driven by the principles of collaboration, transparency, and community-driven innovation.

When deciding between open source and commercial software for information systems, businesses must consider the cost, scalability, reliability, compatibility, security, performance, energy efficiency, and vendor support. Other business considerations include data management, user-friendliness, training and support, compliance, backup and recovery, integration, scalability, and vendor partnership.

In terms of cloud computing and SAAS, an example of an open-source option is OwnCloud, while the commercial option is Dropbox. OwnCloud is a self-hosted open-source cloud platform that allows users to store and access files remotely. It allows for greater control over data and security, as the user owns and manages the server. Additionally, it is free to use and can be customized to meet specific needs.

Dropbox, on the other hand, is a commercial cloud-based file storage and sharing service. It is widely used and has a user-friendly interface, making it a popular option for businesses of all sizes. It offers automatic syncing and backup, as well as easy collaboration with team members. However, it comes with a monthly subscription fee, which can add up over time. Additionally, as a third-party provider, Dropbox has control over the user’s data and may not be as secure as a self-hosted solution like OwnCloud.

When deciding between open source and commercial software or between on-premises and cloud-based solutions, businesses must carefully consider their specific needs and priorities. Factors such as cost, scalability, reliability, compatibility, security, performance, energy efficiency, and vendor support are important considerations. Additionally, businesses must consider other factors such as data management, user-friendliness, training and support, compliance, backup and recovery, integration, scalability, and vendor partnership. By carefully weighing these factors, businesses can make informed decisions that will suit their needs and help them achieve their goals.

Summary

This chapter focuses on enterprise information systems (EIS) and the considerations organizations need to make when implementing them. It discusses hosting alternatives and information system options, including the choice between hosting EIS on organization servers or in the cloud. It also tackles the decision between purchasing commercial information systems or developing custom systems, as well as the advantages and challenges of using open-source systems. Data security and privacy implications are explored, and the chapter concludes by discussing the overall impact of hosting, purchasing, and system selection decisions on the success and efficiency of EIS.