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Chapter 17 Acquiring and Implementing
Accounting Information Systems
Accounting Information Systems 7eUlric J. Gelinas and Richard Dull
Copyright © 2008 Thomson Southwestern, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
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Learning Objectives
• Describe the systems acquisition/development process and its major phases and steps.
• Understand the differences in the process for purchased, versus internally developed systems.
• Understand the nature and importance of the accountant’s involvement in systems development and acquisition projects.
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IT Project Success Rates
• 28% success• 72%:
– Stopped before completion (IRS, Post Office, etc.)
– Materially late– Materially over budget– Missing required features
• Reason #1 – lack of user involvement• (Standish Group recent report)
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Why Systems Fail• Lack of senior management support and
involvement• Shifting user needs• Development of strategic systems• New technologies• Lack of standard systems development
methodology• Overworked or under-trained development staff• Resistance to change• Lack of user participation• Inadequate testing and user training
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Today’s Business Environment
• Users demand more robust services• Pengguna menuntut jasa yang lebih sempurna• Customers want quicker response• Pelanggan ingin yang merespon dengan cepat• Customers want more flexible interfaces
pelanggan ingin hubungan yg bflexible• Organizations are more internally connected
• Organizations are more externally connected (supply chain)• Competition is fierce• New technologically based opportunities
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Accountant’s Roles in System Development
• System user• Business process owner• Member of development team –
designer and tester• Implementation project manager• Systems analyst – obtaining
requirements
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Systems Development Life Cycle
Analysis:• Develop
Specs for a new or revised system
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Systems Development Life Cycle
Design:• Develop an
appropriate system manifestation
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Systems Development Life Cycle
Implementation:• Begin using
the new system
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Systems Development Life Cycle
Operations:• Use the new
system
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1.0 Conducting the Systems Survey
• Determine the nature and the extent of each reported problem or opportunity.
• Determine the scope of the problem or opportunity.
• Propose a course of action that might solve the problem or take advantage of the opportunity.
• Determine the feasibility of any proposed development.
• Devise a detailed plan for conducting the analysis step.
• Develop a summary plan for the entire development project.
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Systems Survey Tools
• Existing documentation• Interviews• Surveys• Observation
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2.0 Structured Systems Analysis
• Define the problem precisely• Devise alternative designs (solutions) • Choose and justify one of these
alternative design solutions• Develop logical specifications for the
selected design (DFDs, flowcharts, etc.)• Develop the physical requirements for the
selected design• Develop the budget for the next two
systems development phases: systems design and systems implementation
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Structured Systems Analysis Deliverables
• Current logical data flow diagram• User requirements• Proposed system logical data flow
diagram• Proposed system physical data flow
diagram• Cost/effectiveness study • Proposed system recommendation• Approved systems analysis document
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Cost/Benefit Analysis
• Which alternative best accomplished the goals?
• Which alternative achieves the goals for the least cost?
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Cost/Benefit Analysis
• Direct costs• Direct benefits• Indirect costs• Indirect benefits – difficult to
measure• Tangible versus intangible costs and
benefits• Recurring versus nonrecurring costs
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3.0 Systems Selection developed versus acquired
• Determine what computer software design will implement the logical specification
• Determine what computer hardware will satisfy the physical requirements
• Contract for development resources
• Determine which acquired system will best meet the users needs
• Determine (with the vendor’s assistance) what hardware will be needed
• Contract with the vendor
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Systems Selection Cont.• Choose acquisition financing
methods that are in the best interest of the organization (purchase, rent, or lease equipment)
• Determine appropriate acquisition ancillaries (maintenance agreements, licensing, revision procedures, etc.)
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Approved Configuration Plan• Chosen software configuration and
expected performance specifications.• Chosen hardware type, manufacturer, and
model• Items to be included in the hardware
contracts• Results of testing alternative software
design and hardware resources.• Assessment of financing and outsourcing
alternatives.
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Internal vs. External System Sources
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Vendor Proposals
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4.0 Structured Systems Design
• Develop a plan and budget that will ensure an orderly and controlled implementation of the new system
• Develop an implementation test plan that ensures that the system is reliable, complete, and accurate
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Structured System Design Cont.
• Develop a user manual that facilitates efficient and effective use of the new system by operations and management personnel
• Develop a training program that ensures that users and support personnel are adequately trained
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5.0 Systems Implementationdeveloped versus acquired
• Complete, as necessary, the design• Write, test, and document the
programs and procedures• Complete the preparation of user
manuals and other documentation and training
• Become familiar with the acquired system
• Obtain vendor documentation and training
• Customize the documentation and training
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5.0 System Implementationdeveloped versus acquired
• Thoroughly test the system• Convert procedures and data• Implement hooks to existing systems
• Thoroughly test the system• Convert procedures and data• Implement hooks to existing systems
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Implementation Strategies
• Parallel – costly but safest• Direct – riskiest and cheapest• Modular – most common
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Systems Implementation Approaches
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Systems Implementation Steps
• Complete or update the system design or obtain system documentation from vendor
• Acquire hardware and software• Test system• Configure system – especially important with
acquired software• Train operators and users• Conduct conversion
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6.0 Post Implementation Review Goals
• Determine if the user is satisfied with the new system
• Identify how well the system’s achieved performance corresponds to the performance requirements, recommending improvements if necessary
• Evaluate the quality of the new system’s documentation, training programs, and data conversions
• Ascertain that the organization’s project management framework and SDLC were followed during development
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Post Implementation Review Goals Cont.
• Recommend improvements to the systems development/acquisition standards manual if necessary
• Improve the cost/effectiveness analysis process by reviewing cost projections and benefit estimations and determining the degree to which these were achieved
• Make any other recommendations that might improve the operation of the system or the development of other information systems
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7.0 System Maintenance Types
• Corrective. Maintenance performed to correct errors (17% of maintenance costs)
• Perfective. Maintenance conducted to improve the performance of an application (60% of maintenance costs)
• Adaptive. Maintenance that adjusts applications so that they reflect changing business needs and environmental changes (18% of maintenance costs)
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Systems Maintenance Goals • Accomplish system changes quickly and efficiently• Prevent system changes from causing other system
problems• Make system changes that are in the organization's
overall best interest• Perfect systems development and systems
maintenance procedures by collecting and using information about system changes
• Supplant systems maintenance with the systems survey if requested changes are significant or if they would destroy the system
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Accountant’s Involvement
• User – Test and operate• Analyst – On analysis team• Purchaser – On selection team• Implementer – Conversion and
configuration• Consultant – Outside expert• Internal Auditor – Monitor process and
evaluate controls• External Auditor – Audit it
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Summary
• Need an SD(A)LC methodology• Logical steps – analysis, design,
implementation, operation• Today almost all operational systems are
purchased• If purchased, need external access to data
for reporting• If purchased, need way to “feed” data
to/from the system