system implementations american corporations spend about $300 billion a year on software...
Post on 21-Dec-2015
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System Implementations
American corporations spend about $300 Billion ayear on software implementation/upgrade projects
System Changes
Why?– To stay competitive– Growth/consolidation– Mergers or divestitures– Regulatory changes– Technology changes (better and/or cheaper)– Age of existing system
System Changes
Benefits:– Improved business processes– Productivity gains– Increased growth capacity– Increased efficiency– Enhanced availability of information– Downsizing– Enhanced system controls
System Development
Why should accountants care:
– Users of the system: can help specify system requirements (system input types, adequate output)
– Members of the development team: can ensure appropriate integration of data, identify shared data, highlight reporting requirements
– Auditors: ensure integrity of information provided by system, including adequate internal controls, user access, regulatory compliance, and evidentiary concerns
System Development
System Development Life Cycle (SDLC):
The process organizations follow to obtain and implement a new and well designed AIS
System Analysis: Components
• Determine and document information and processing volume needs of system users and managers – current/future
• Define what new system should accomplish (what is currently working/what is not?)
• Define what is out of scope of system• Determine available hardware, software and
personnel• Determine what is feasible and cost effective
System Analysis: Information Requirements
• Processes involved• Data elements required• Outputs – what types, timing, method• Inputs – what, timing, how• Constraints• Controls
System Analysis: Information Gathering Tools
• Interviews• Questionnaires• Observation• Existing System Documentation• Policies and Procedures• Desk Manuals• Internal Control Frameworks
System Analysis: Documentation
The information gathered during this phase must be documented so it can be used throughout the system development project
Means of documentation:• Data flow diagram• Flowcharts-document/system• Narratives• Checklists• Gantt/PERT charts
System Analysis Conclusion
Confirmation of the understanding of information gathered in this phase is key:
– Obtain appropriate user approval of documentation and conclusions
– Confirm system understanding with IT– Obtain management sign-off of system
requirements documents
Conceptual Design Phase
• Create general framework to implement user requirements and solve problems identified in the previous phase (Analysis).
• Three steps involved are:1. Evaluation of design alternatives2. Preparation of design specifications3. Preparation of conceptual systems design
report
Conceptual Design Phase - Evaluation
• Things to consider:
– Hardcopy vs. electronic (input and output)– Centralized vs. distributed– Packaged software vs. in-house development– In-house vs. outsourcing– Modification vs. replacement
Conceptual Design Phase - Evaluation
• A variety of design alternatives should be identified and evaluated.
• Questions to be asked:– Organizational goals met?– System objectives obtainable?– Economically feasible?– Time constraints realistic?– Expertise available?
• Advantages and Disadvantages should be highlighted for each alternative
Conceptual Design Phase – Design Specifications
Once design has been selected by steering committee conceptual design specifications are developed for:
» Data inputs» Data processing» Data storage» Informational outputs
Conceptual Design Phase - Report
Report prepared at end of Conceptual Design Phase to:
» guide physical system design activities» communicate how management and user
information needs will be met
Physical Design Phase
• How the conceptual AIS design is to be implemented.
• User requirements are translated into detailed specifications used to code and test computer programs
Physical Design Phase steps
• Output design• File and Database Design• Input Design• Forms Design• Computer screen Design• Program Design• Procedures Design• Controls Design
Implementation/Conversion Phase
• Process of installing hardware and software• Getting the AIS functional
Implementation/Conversion Phase Steps
• Developing a plan• Preparing the site• Installing and testing hardware/software• Selecting and training personnel• Completing documentation• Testing the system
Implementation/Conversion Phase Approaches
• Ways to change from the old AIS to the new (including hardware, software, data files and procedures):– Direct– Parallel– Phase-in– Pilot
Operations/Maintenance Phase
• A post-implementation review should be conducted to ensure:– New AIS met its planned objectives– Users are satisfied– System is reliable, accurate and timely– Internal Controls are adequate and working as
management intended– Documentation and training is adequate
• Any issues noted should be brought to management’s attention and remediation performed in a timely manner
• Final user acceptance sign-off should be obtained
System Implementation and Internal Controls
During an IT modification, controls need to be in place to ensure the continuation of system:
• Reliability• Security• Confidentiality• Integrity• Availability
System Implementation and Internal Controls
• It is much easier to build controls into a system at the initial stage then to add them after the fact.
• Accountants and other control experts should be an important part of the team that develops or modifies an information system.