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Chapter 10-1
Chapter 10-2
Chapter 10Developing and Implementing Effective
Accounting Information Systems
Introduction
The System Development Life Cycle: An Introduction
Systems Planning
Systems Analysis
Detailed Systems Design
Implementation, Follow-up, and Maintenance
Chapter 10-3
An Introduction
IT governance is the process of ensuring that it iseffective,
efficient, and strategic.
A comprehensive IT strategy
requires careful systems study and
should prioritize the acquisition or development of various information systems
Chapter 10-4
An Introduction
The IT systems study includes planning and analysis through
development,
implementation, and
a feedback loop for each new IT application.
Chapter 10-5
The Systems Development Life Cycle
Organizations study and reengineer accounting systems because their current system is inefficient two or more accounting systems need to be combined the power of the Internet encourages development of a web
presence
A systems development work begins with a formal investigation of an existing information system, is performed by in-house professionals in large organizations a hired team of outside consultants in smaller organizations
Chapter 10-6
The Four Stages in the Systems Development Life
Cycle
Planning and Investigation involves
a preliminary investigation of the current system
organizing a systems study team, and
developing strategic plans.
Analysis involvesanalyzing the company’s current system and
identifying its needs, strengths, and weaknesses.
Chapter 10-7
The Four Stages in the Systems Development Life
Cycle
Designing involveseliminating the current system’s weak points, and
preserving its strengths.
Implementation, follow-up, and maintenance includes
acquiring resources for the new system,
training new or existing employees,
identifying any new problems.
Chapter 10-8
System Development Life Cycle of a Business Information System
Chapter 10-9
Systems Studies and Accounting Information
Systems
Systems studies are part of the greater task of reengineering one or more of the core systems of an organization.A systems study looks at
applications portfolio, which includes an enterprise system, other specialized information systems, many separate systems for functional areas
Chapter 10-10
Systems Studies and Accounting Information
Systems
A systems study meansreplacing or
modifying existing information systems altering work flows, changing data gathering and
recording tasks, revamping employee responsibilities, and revising ways of rewarding personnel
Chapter 10-11
Systems Planning and Investigation
Systems Planning and Investigation involves Planning for Success approach problems from a broad point of view, use an interdisciplinary study team to evaluate
information systems, and make the study team work closely with a steering
committee
Broad Viewpoint in a Systems Study a systems approach aligned with mission, goals, and
objectives.
Chapter 10-12
The Study Team and the Steering Committee top management personnel critical to the
success of a new system.
Investigating Current Systems reports the problems or objectives the study team identified, solutions or alternatives it investigated, and further course(s) of action it recommends.
Systems Planning and Investigation
Chapter 10-13
The Study Team
The Study Team
consists of interdisciplinary specialists the importance of a broad viewpoint interdisciplinary knowledge
communicates closely with company’s managers meaningfully to provide solutions
who might be chosen asstudy team members?
Chapter 10-14
The Preliminary Investigation
The preliminary investigation
separates the symptoms from the causes,
considers alternatives to the current system,
attempts to estimate the costs and benefits, and
recommends desired alternatives.
The study team submitsthis report to the company
steering committee.
Chapter 10-15
The Steering Committee
The Steering Committee interfaces between the company’s management and the study teamincludes top management personnel like the controller, the vice president of finance, the top-level information systems manager one or more staff auditors, and the CEO (for very important projects)
may disband the study team and do nothing, perform further preliminary investigations, or proceed to the formal systems analysis stage
Chapter 10-16
Systems Analysis
The phases in systems analysis are:understanding the goals of the organization
using system survey techniques to acquire sufficient information regarding problems
analyzing data to suggest possible solutionsto the systems problems
evaluating system feasibility
Chapter 10-17
Understanding The Goals
Organization goals include:
general systems goals, awareness that benefits should exceed the costs, concern that the output should help in better decisions, designing to allow optimal access to information, and flexibility to accommodate to changing information needs.
top management systems goals, and long-range budget planning data periodic performance reports short-range operating performance of subsystems
Chapter 10-18
operating management systems goals are normally easier to determine relate to well-defined and narrower
organizational areas. are for the current business year are generated internally
Understanding The Goals
Chapter 10-19
Question
In developing and implementing IT, the study team and steering committee must consider organizational goals. These include:
a. General, technical, and top management goals
b. General, operating management, and technical goals
c. Top management, operating management, and economic goals
d. Top management, operating management, andgeneral systems goals
Understanding The Goals
Chapter 10-20
Systems Survey Work
Objectives of a systems survey: The study team has to understand the company’s current system, its environment, strengths, and weaknesses
The study team has to retain the system’s strengths and eliminate the system’s weaknesses.
Chapter 10-21
Critical Success Factors
The strategic success of an information system might be determined by achieving a small number of critical success factors.
Two weaknesses of this approach are:1. It is biased toward the perceptions of top
management
2. It is difficult to analyze the responses to open-ended questions and managerial opinions about a system
Chapter 10-22
The appearance of a study team on the work scene usually signals change.
The study team will meet employee resistance to change
will have to deal directly with this problem
must gain the full cooperation and support of the employees
The best designed system ‘‘on paper’’ is likely to cause behavioral problems when implemented
should have wide user support for true success
Understanding the Human Element
Chapter 10-23
Data Gathering
There are several ways of gathering data, including:
Review of existing documentation.
Observation of the current system
Using questionnaires and surveys
Review of internal control procedures
Interviews with individual system participants
Chapter 10-24
Data Analysis
The study team must analyze theresults which, includes
creating summary statistics,
developing flowcharts and/or process maps
highlighting bottlenecks ininformation flows,
reporting redundancy, and
identifying missing information links.
Chapter 10-25
Data Analysis
Systems analysis work
takes longer than a preliminaryinvestigation,
provides interim reports to thesteering committee
delivers the final systemsanalysis report.
Chapter 10-26
Steps in the Systems Design Phase
Chapter 10-27
Evaluating System Feasibility
The design team must examine five feasibility areas: technical feasibility technical resources - hardware and software components
operational feasibility examines its compatibility with the current operating environment
schedule feasibility importance of completion on time
legal feasibility system should comply with all applicable federal and state statutes
economic feasibility anticipated benefits of the system exceed its projected costs
Chapter 10-28
Question
The feasibility evaluation
a. is completed prior to detailed systems design.
b. includes economic, schedule, technical, legal,and operational feasibility.
c. both a and b are true
d. neither a nor b is true
Evaluating System Feasibility
Chapter 10-29
Detailed Systems Design
Processes Descriptions various processes in the revised system,what and by whom
Data elements and data structurerequired data elements and preliminary data structure
Inputs and outputssystem inputs and outputs - descriptions
Documentationoperation of revised system and each subsystem
Chapter 10-30
Detailed Systems Design
Constraints restrictions like staffing limitations andregulatory requirements.
Controls controls to reduce the risk of undetected errors
Reorganization
Chapter 10-31
Output, Process and Input Design
Output Design may be classified according to the area of use should be able to a demand reportshould be able to trigger an exception report
Processes Designearlier focus on what the system must provide now focus on how the system can provide it.
Input Designdescribe each data element in the systems design specify the way data items must be coded
Chapter 10-32
Detailed Systems Design
Prototypingis developing a simplified model of a system
is an iterative process of trial-use-and-modification
is not recommended where the inputs,processing, and outputs are already clearly defined.
Chapter 10-33
Detailed Systems Design
The system specifications reportproduces a report after inputs, outputs, and processing requirements are clear
submits this report to the steering committee - review, comment, and approval
The Make or Buy Decisionto use internal IT staff to develop the project in-house or
to outsource the project’s development to a contractor.
Chapter 10-34
Choosing an AIS
In choosing an AIS The following must be the basisSelection Criteria.The Performance Capability of Each Proposed SystemCosts and Benefits of Each Proposed SystemMaintainability of Each Proposed SystemCompatibility of Each Proposed System with Existing SystemsVendor SupportMaking a Final Decision.Point-Scoring Analysis.Selecting a Finalist
Chapter 10-35
Question
In selecting a new accounting information system, the steeringcommittee should consider
a. all expected costs and benefits of the new systems, including maintenance and operating costs.
b. support that a vendor can provide, including training, maintenance, and backup.
c. compatibility of a new system with existing systems.
d. All of the above are considerations in selecting a new system.
e. Only a and b are important considerations in selecting the new system.
Choosing an AIS
Chapter 10-36
Outsourcing
Outsourcing – two kindsBusiness Process Outsourcing (BPO) range from routine assistance with asingle application to almost all the accounting functions of the organization.
Knowledge Process Outsourcing (KPO) - three areas intellectual property data mining of consumer data, and research and development related to medical drugs
and biotechnology
Chapter 10-37
Outsourcing
Advantages and Disadvantages of Outsourcing. outsourcing also frees managerial time, financial
assets, and related resources for other purposes disadvantage is inflexibility. loss of control is loss of competitive advantage
Chapter 10-38
Implementation
Implementation Activities
Managing IT Implementation Projects
Post-Implementation Review
System Maintenance
Chapter 10-39
Implementation Activities
Implementation activities involvePreparation of the physical site
Determination of functional changes
Selection and assignment of personnel
Training personnel
Acquiring and installing computer equipment
Chapter 10-40
Implementation Activities
Establishing internal controls
Converting data files
Acquiring computer software
Testing computer software
Converting to the new system
Chapter 10-41
Question
Which of the following statements is not true:
a. A preliminary investigation of a current system isconducted by the steering committee.
b. Implementation, follow-up, and maintenance of IT includes acquiring resources for the new system.
c. In designing an AIS, the design team will begin with outputs.
d. The more work done during planning and analysis, theless likely the new system will fail.
Implementation Activities
Chapter 10-42
Managing ITImplementation Projects
Two tools to help manage projects: PERT (program evaluation and review technique) useful project management tool to help managers identify critical paths to recognise areas where slack time occurs.
Gantt charts are useful for scheduling and tracking the activities of systems
implementation projects for indicating progress directly on the Gantt chart in
contrast to the planned progress.
Chapter 10-43
Question
Which of the following statements is not true with respect to managing IT projects:
a. Program evaluation and review technique (PERT) allows managementto determine the shortest time it will take to implement a new system,and any slack time that might exist between implementation activities.
b. An advantage of PERT is that it allows managers to identify thecritical path in implementation.
c. Both PERT and Gantt charts are manual techniques used inmanaging IT implementations.
d. Gantt charts are useful in scheduling and implementing ITbecause they allow you to indicate actual progress versusplanned progress directly on the chart.
Managing ITImplementation Projects
Chapter 10-44
Post-Implementation Review
Reevaluation of the new system’s effectiveness by Checking with personnel about satisfactionwith the new system.Talking with end users to ascertain their satisfaction.Evaluating the control procedures of the system Observing employee work performance to determine efficiencyEvaluating effectiveness of computer processing functionsDetermining schedules for both internal and external reports are met with the new computer system.
Chapter 10-45
System Maintenance
System maintenance continues the tasks created by the initial follow-up study,
except that experts from the company’s IT subsystem now perform the modifications
exclusively.
The IT subsystem is responsible to respond toerrors and anomalies in the system estimate the cost of fixing them, andperform the necessary modifications.
Chapter 10-46
The IT departments haveforms for such requests,
policies for prioritizing maintenance tasks, and
formulas for allocating maintenance costs among the various departments.
System Maintenance
Chapter 10-47
Organizations spendabout 20 to 30 percent on developing and implementing
the remaining 70 to 80 percent on further modifications or software updates.
Maintenanceis not the most glamorous part of a system cycle
but always the most expensive part.
System Maintenance
Chapter 10-48
Copyright
Copyright 2005 John Wiley & Sons, Inc. All rights reserved.
Reproduction or translation of this work beyond that permitted in
Section 117 of the 1976 United States Copyright Act without the
express written permission of the copyright owner is unlawful.
Request for further information should be addressed to the
Permissions Department, John Wiley & Sons, Inc. The purchasermay make backup copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.
Chapter 10-49
Chapter 10