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C HAPTER 19

AIS Development Strategies

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INTRODUCTION
• Questions to be addressed in this chapter include:
– How do organizations buy software, hardware, and
vendor services?
– How do information systems departments develop
custom software?
– How do end users develop, use and control
computer-based information systems?
– Why do organizations outsource their information
systems, and what are the benefits and risks of doing
so?
– How are prototypes used to develop an AIS, and what
are the advantages and disadvantages?
– What is computer-aided software engineering, and
how is it used in systems development?

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INTRODUCTION

• Companies can experience a number of


difficulties in developing an AIS, including:
– Projects are backlogged for years because of the high
demand for resources.
– The newly designed system doesn’t meet user needs.
– The process takes so long that by the time it’s
complete, it’s obsolete.
– Users can’t adequately specify their needs.
– Changes to the AIS are often difficult to make after
requirements have been written into the
specifications.

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INTRODUCTION

• We’ll be discussing how to obtain a new information


system by:
– Purchasing prewritten software;
– Developing software in-house; or
– Outsourcing.
• We’ll also discuss how to hasten or improve the
development process through:
– Business process reengineering
– Prototyping
– Computer-aided software engineering (CASE) tools

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 4 of 171
INTRODUCTION

• We’ll be discussing how to obtain a new information


system by:
– Purchasing prewritten software
– Developing software in-house; or
– Outsourcing.
• We’ll also discuss how to hasten or improve the
development process through:
– Business process reengineering
– Prototyping
– Computer-aided software engineering (CASE) tools

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 5 of 171
PURCHASING PREWRITTEN SOFTWARE

• In the early days of computers,


companies were rarely able to buy
software to meet their needs.
• But commercially available packages
are now outpacing custom-developed
software as old systems are replaced.

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PURCHASING PREWRITTEN SOFTWARE

• Canned software is sold on the open


market to a broad range of users with
similar requirements.
– Some companies sell hardware and software
together as a package.
• These systems are called turnkey systems.
• Many are written by vendors who specialize in a
particular industry.

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PURCHASING PREWRITTEN SOFTWARE

– A major problem with canned software:


• It often does not meet all of a company’s
information needs.
• Can be overcome by modifying the canned
software.
– Usually best done by the vendor.
– Unauthorized modifications may render the
program unreliable and unstable.

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PURCHASING PREWRITTEN SOFTWARE

• Companies can also acquire software through


application service providers (ASPs).
– ASPs host web-based software and deliver it to
clients over the Internet.
– Companies don’t have to buy, install, or maintain
canned software; they simply “rent” it.
– If you used an online version of a package like Turbo-
Tax to prepare your taxes, that’s a consumer version
of renting software over the Internet.

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PURCHASING PREWRITTEN SOFTWARE

– Advantages of ASPs:
• Reduction of software costs and administrative
overhead.
• Automated software upgrades.
• Scalability as the business grows.
• Global access to information.
• Access to skilled IT personnel.
• Ability to focus on core financial competencies
rather than IT.

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PURCHASING PREWRITTEN SOFTWARE

• Purchasing Software and the SDLC:


– Companies that buy rather than develop
software still follow the SDLC process,
including:
• Systems analysis
 They conduct an initial investigation,
systems survey, and feasibility study, as
well as determining AIS requirements.

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PURCHASING PREWRITTEN SOFTWARE

• Purchasing Software and the SDLC:


– Companies that buy rather than develop
software still follow the SDLC process,
including:
• Systems analysis
• Conceptual design
• An important aspect is determining
whether software that meets AIS
requirements is already available.
• If so, a make-or-buy decision must be
made.

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PURCHASING PREWRITTEN SOFTWARE

• Purchasing Software and the SDLC:


– Companies that buy rather than develop
software still follow the SDLC process,
including:
• Systems analysis • If software is purchased,
program design and coding
• Conceptual design can be omitted.
• Physical design • But software modifications
may be needed.
• Companies also may design
inputs, outputs, files, and
control procedures.

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PURCHASING PREWRITTEN SOFTWARE
• These activities must still take place,
including:
• Purchasing Software
– Selecting andpersonnel
and training the SDLC:
– Companies – Installing and testing hardware and software
that buy rather than develop
– Documenting procedures
software still follow the SDLC process,
– Converting from old to new AIS
including:
• However, the software modules do not
• Systems analysis
have to be developed and tested.
• Conceptual
• And design
the computer programs do not need
• Physical
todesign
be documented.
• Implementation and conversion

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PURCHASING PREWRITTEN SOFTWARE

• Purchasing Software and the SDLC:


– Companies that buy rather than develop
software still follow the SDLC process,
including:
• Systems analysis
• Conceptual design
• Physical design
• Implementation and conversion
• Operation and maintenance
• The AIS is operated like any other software.
• The vendor usually maintains the software.
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PURCHASING PREWRITTEN SOFTWARE

• Selecting a Vendor
– Deciding whether to make or buy software
can be made independently of the decision to
acquire hardware, service, maintenance, and
other AIS resources.
– And the preceding resources can be bought
independently of the software.
– But hardware and vendor decisions may
depend on the software decisions.

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PURCHASING PREWRITTEN SOFTWARE

• Vendors can be found by:


– Looking in phone book
– Obtaining referrals
– Scanning computer or trade magazines
– Attending conferences
– Using search organizations
• Beware of fly-by-night companies that can
leave your organization high and dry.

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PURCHASING PREWRITTEN SOFTWARE

• Acquiring Hardware and Software


– Once AIS requirements have been defined,
the organization can buy software and
hardware.
– Companies needing only a PC and some
office software can usually complete their own
research and make a selection.

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PURCHASING PREWRITTEN SOFTWARE

• When buying large or complex systems, a


request for proposal (RFP) should be
prepared:
– The RFP is an invitation to bidders to propose
a system by a specific date.
– Each proposal is evaluated.
– Finalists are investigated in depth.

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PURCHASING PREWRITTEN SOFTWARE

• The formal approach is important for


several reasons:
– Saves time • The same information is
provided to all bidders.

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PURCHASING PREWRITTEN SOFTWARE

• The formal approach is important for


several reasons:
– Saves time
– Simplifies the decision-making process
• The bidders all respond in the
same format and based on
the same information.

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PURCHASING PREWRITTEN SOFTWARE

• The formal approach is important for


several reasons:
– Saves time
– Simplifies the decision-making process
– Reduces errors • Less likely to look over
important factors in
evaluating proposals.

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PURCHASING PREWRITTEN SOFTWARE

• The formal approach is important for


several reasons:
– Saves time
– Simplifies the decision-making process
– Reduces errors
– Avoids potential for disagreement
• Both parties have the same
expectations and information
in writing.

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PURCHASING PREWRITTEN SOFTWARE

• When an RFP is solicited based on exact


hardware and software specifications:
– Total costs are usually lower.
– Less time is required for vendor preparation
and company evaluation.
– However, the vendor cannot recommend
alternatives.

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PURCHASING PREWRITTEN SOFTWARE

• A generalized RFP contains a problem


definition and requests a system that
meets specific performance objectives and
requirements.
– Leaves technical issues to the vendor.
– However, makes it more difficult to evaluate
proposals.
– May produce more costly bids.

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PURCHASING PREWRITTEN SOFTWARE

• Usually, the more information a company provides


to the vendors, the better their chances of
receiving a system that meets their requirements.
– Detailed specifications should include:
• Required applications
• Inputs and outputs
• Files and databases
• Frequency and methods of file updating and inquiry
• Unique characteristics or requirements
– Be sure to distinguish between mandatory and desirable
requirements.

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PURCHASING PREWRITTEN SOFTWARE

• Evaluating Proposals and Selecting a System


– Eliminate any proposals that:
• Are missing important information.
• Fail to meet minimum requirements.
• Are ambiguous.
– Those that pass the preliminary screening should be
compared with the proposed AIS requirements to
determine:
• If they meet all mandatory requirements.
• How many desirable requirements they meet.
– Finalists can be invited to demo their system using
company-supplied data.

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PURCHASING PREWRITTEN SOFTWARE

• In reviewing the proposals, you need to


evaluate:
– Hardware
– Software
– Vendors

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PURCHASING PREWRITTEN SOFTWARE

• In reviewing the proposals, you need to


evaluate:
– Hardware
– Software
– Vendors

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PURCHASING PREWRITTEN SOFTWARE

• Criteria to evaluate hardware include:


• Cost • Availability
• Ability to run required • Compatibility with existing
software hardware, software, and
• Processing speed and peripherals
capabilities • Performance compared to
• Secondary storage competitors
capability • Cost and availability of
• Input and output speeds support and maintenance
• Communication capabilities • Warrantees and guarantees
• Expandability • Financing arrangements
• Recency of technology • Ability to meet mandatory
requirements
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PURCHASING PREWRITTEN SOFTWARE

• In reviewing the proposals, you need to


evaluate:
– Hardware
– Software
– Vendors

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PURCHASING PREWRITTEN SOFTWARE

• Criteria to evaluate software include:


• Conformity with • User-friendliness
specifications • Ability to be demonstrated
• Need for modification and test-driven
• Performance (speed, • Warranties
accuracy, reliability) • Flexibility and
• Use by other companies maintainability
• Satisfaction of other users • Capability for online inquiry
• Documentation of files and records
• Compatibility with existing • Vendor upgrades
software

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PURCHASING PREWRITTEN SOFTWARE

• In reviewing the proposals, you need to


evaluate:
– Hardware
– Software
– Vendors

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PURCHASING PREWRITTEN SOFTWARE

• Criteria to evaluate vendors include:


• Size • Reputation for reliability
• Financial stability and and dependability
security • Hardware and software
• Experience support and maintenance
• Quality of support and • Implementation and
warranties installation support
• Regularity of updates • Quality and responsiveness
of personnel
• Ability to provide financing
• Willingness to provide
• Willingness to sign
training
contract
• Responsiveness and
• Willingness to provide
timeliness of support
references

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PURCHASING PREWRITTEN SOFTWARE

• Approaches to comparing system


performance:
– Benchmark problem
– Point scoring
– Requirements costing

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PURCHASING PREWRITTEN SOFTWARE

• Approaches to comparing system


performance:
– Benchmark problem
– Point scoring
– Requirements costing

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PURCHASING PREWRITTEN SOFTWARE

• Benchmark problem
– The new AIS performs a data processing task
with input, processing, and output jobs typical
of what would be required of the new system.
– Processing times are calculated and
compared.
– The AIS with the lowest time is judged most
efficient.

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PURCHASING PREWRITTEN SOFTWARE

• Approaches to comparing system


performance:
– Benchmark problem
– Point scoring
– Requirements costing

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PURCHASING PREWRITTEN SOFTWARE

• Point scoring:
– A weight is assigned to each criterion used to
evaluate the system, based on the relative
importance of that criterion.
– Each criterion is rated for each product.
– Each rating is multiplied times the weight
assigned to the criterion to develop a
weighted score.
– The weighted scores are added for each
product.
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PURCHASING PREWRITTEN SOFTWARE

• EXAMPLE:
– Zorba Co. is evaluating systems offered by three
different vendors: Able Co., Baker Co., and Cook Co.
– Zorba has determined three criteria that they will use
to evaluate the different systems: cost, speed, and
vendor reliability.
– They have provided the following weights to each
criteria, with vendor reliability being the most critical:
• Vendor reliability—9
• Cost—6
• Speed—4

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PURCHASING PREWRITTEN SOFTWARE

• Zorba examined the packages offered by the three vendors and rated them based
on these three criteria. Ratings were from 1-5 with 5 being the highest score.

Criteria Able Co. Baker Co. Cook Co.


Vendor reliability (9) 2 5 4
Cost (6) 5 3 4
Speed (4) 3 4 2

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PURCHASING PREWRITTEN SOFTWARE

 The weighted scores are then computed by multiplying


the rating given to each vendor on each criterion times
the weight assigned to that criterion.
Criteria Able Co. Baker Co. Cook Co.
Vendor reliability (9) X 2 = 5 4
Cost (6) 5 3 4
Speed (4) 3 4 2

WEIGHTED SCORES
Criteria Able Co. Baker Co. Cook Co.
Vendor reliability (9) 18 45 36
Cost (6) 30 18 24
Speed (4) 12 16 8
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PURCHASING PREWRITTEN SOFTWARE

• The weighted scores for each company are


summed:
– Able = 60 points
– Baker = 79 points
– Cook = 68 points
• Based on the preceding scores, the bid would
probably be awarded to Baker Co.
WEIGHTED SCORES
Criteria Able Co. Baker Co. Cook Co.
Vendor reliability (9) 18 45 36
Cost (6) 30 18 24
Speed (4) 12 16 8
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PURCHASING PREWRITTEN SOFTWARE

• The preceding example is a simplification.


In a real-life scenario, several factors
would be different:
– There would probably be many more criteria
being considered.
– Several people would be rating the criteria,
and the final scores for each vendor would
probably be a composite of those individual
scores.

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PURCHASING PREWRITTEN SOFTWARE

• Approaches to comparing system


performance:
– Benchmark problem
– Point scoring
– Requirements costing

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PURCHASING PREWRITTEN SOFTWARE

• Requirements costing:
– Estimates cost of purchasing or developing
features that are not included in a particular
AIS.
– The total AIS cost is calculated by adding the
acquisition cost to the purchasing and
development costs.
– Total cost = cost of system with all required
features.

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PURCHASING PREWRITTEN SOFTWARE

• To verify that the AIS that looks best on


paper is actually the best in practice:
– Test-drive the software.
– Contact other users for references.
– Evaluate vendor personnel.
– Confirm details of the proposal.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 47 of 171
INTRODUCTION

• We’ll be discussing how to obtain a new information


system by:
– Purchasing prewritten software
– Developing software in-house
– Outsourcing
• We’ll also discuss how to hasten or improve the
development process through:
– Business process reengineering
– Prototyping
– Computer-aided software engineering (CASE) tools

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 48 of 171
DEVELOPING SOFTWARE IN-HOUSE

• Despite the availability of good canned


software, many organizations develop
their own because:
– Their requirements are unique; or
– Their size and complexity necessitates a
custom package.
• Developing custom software is difficult and
error prone and consumes much time and
resources.
© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 49 of 171
DEVELOPING SOFTWARE IN-HOUSE

• The most difficult hurdles:


– Lack of time.
– Complexity of desired system.
– Poor requirements and systems planning.
– Inadequate communication and cooperation
between departments and users.
– Lack of qualified staff.
– Poor senior executive support.

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DEVELOPING SOFTWARE IN-HOUSE

• After end users define their requirements,


the analysts:
– Work with the end users to determine the
format of paper and screen outputs.
– Identify:
• Data required for each input.
• Data to be retained in files.
– Develop detailed program specs to be
interpreted and coded by programmers.

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DEVELOPING SOFTWARE IN-HOUSE

• The process requires much discipline and


management supervision.
• Accountants may help as project
supervisors, users, or development team
members.

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DEVELOPING SOFTWARE IN-HOUSE

• Custom software is usually developed and


written in-house.
– Alternately, organizations may engage an
outside company to develop a package or
assemble one from their inventory of modules.
– These modules are adapted, combined, and
organized to form a customized product that
meets specific requirements.

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DEVELOPING SOFTWARE IN-HOUSE

• When contracting with an outside organization,


maintain control over development and observe
the following guidelines:
– Carefully select a developer
• Look for:
– Experience in the industry
– A good understanding of:
• Business in general
• How your company
conducts business

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DEVELOPING SOFTWARE IN-HOUSE

• When contracting with an outside organization,


maintain control over development and observe
the following guidelines:
– Carefully select a developer
– Sign a contract to clearly define responsibilities

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DEVELOPING SOFTWARE IN-HOUSE

• When contracting with an outside organization,


maintain control over development and observe
the following guidelines:
– Carefully select a developer
– Sign a contract to clearly define responsibilities
– Plan and monitor each step
• Design all aspects in detail.
• Include frequent checkpoints.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 56 of 171
DEVELOPING SOFTWARE IN-HOUSE

• When contracting with an outside organization,


maintain control over development and observe
the following guidelines:
– Carefully select a developer
– Sign a contract to clearly define responsibilities
– Plan and monitor each step
– Maintain effective and frequent communication

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 57 of 171
DEVELOPING SOFTWARE IN-HOUSE

• When contracting with an outside organization,


maintain control over development and observe
the following guidelines:
– Carefully select a developer
– Sign a contract to clearly define responsibilities
– Plan and monitor each step
– Maintain effective and frequent communication
– Control all costs
• Cash outflows should be minimized until
the project is completed and accepted.

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DEVELOPING SOFTWARE IN-HOUSE

• Information systems consultants suggest that


clients develop their own software only if it
provides a significant competitive advantage.
– Payroll and A/R systems are not good candidates for
in-house development.
– There might be significant benefits to developing
sophisticated product manufacturing software.
• If there is no significant competitive advantage,
buy software from an outside supplier.
– Trend appears to be in that direction.
• There is no pat answer to the make-or-buy
decision.

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DEVELOPING SOFTWARE IN-HOUSE

• Another approach to developing software


in-house is to take the lion’s share of the
effort out of the hands of the IS
department and place it in the laps of the
ultimate information users.

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DEVELOPING SOFTWARE IN-HOUSE

• End-User Developed Software


– End-user computing (EUC) is the hands-on
development, use, and control of computer-based
information systems by users.
– With EUC, individuals use IT to meet their own IS
needs rather than rely on systems professionals.
– Why?
• The demand for information systems has grown
exponentially since the introduction of the computer.
• One solution to meeting these needs is to have end users
meet their own information needs.

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DEVELOPING SOFTWARE IN-HOUSE

• Technology has evolved to automate


much of the system development process.
Factors contributing to EUC are:
– Increased computer literacy.
– Easier-to-use programming languages.
– Inexpensive PCs.
– A variety of powerful and inexpensive
software packages.

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DEVELOPING SOFTWARE IN-HOUSE

• Consequently, users have begun to


develop their own systems to:
– Create and store data.
– Access and download company data.
– Share data and computer resources in
networks.

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DEVELOPING SOFTWARE IN-HOUSE

• As end users began to meet their initial


needs, two things happened:
– Users realized computers could be used to
meet more and more information needs.
– Increased access to data created many new
uses and needs for information.
• Result: A tremendous growth in end-user
computing that is expected to continue.

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DEVELOPING SOFTWARE IN-HOUSE

• EUC has altered the role of the IS staff:


– They continue to develop and maintain transaction
processing systems and company-wide databases
from which end users draw information.
– They provide users with technical advice and
operational support and make as much information
available to them as possible.
– While the support work has increased for the IS staff,
this work is counter-balanced by a decreased demand
for traditional IS services.
– EUC may make up 75-95% of all IS processing by
2010.
• Because accountants will be end users, they
need an understanding of EUC concepts.
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DEVELOPING SOFTWARE IN-HOUSE

• Appropriate End-User Development and


Use
– End user development (EUD) happens when
information users (e.g., managers, accountants,
auditors) develop their own applications using
computer specialists as advisors.
• Inappropriate for complex systems.
• Not used for large-scale processing, such as payroll,
receivables, payables, general ledger, or inventory.

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DEVELOPING SOFTWARE IN-HOUSE

– End user development may be most


appropriate for:
• Retrieving info from company databases to
produce simple reports or answer single queries.
• Performing “what if,” sensitivity, or statistical
analyses.
• Developing applications that use prewritten
software (e.g., spreadsheet or database software).
• Preparing schedules (such as aging of accounts)
and lists.

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DEVELOPING SOFTWARE IN-HOUSE

• Benefits of end-user computing:


– User creation, control, and implementation
• Users control the development process, decide
what info needs are important, and if a system
should be developed.
• Ownership helps them build better systems.

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DEVELOPING SOFTWARE IN-HOUSE

• Benefits of end-user computing:


– User creation, control, and implementation
– Systems that meet user needs
• Because users discover flaws that systems people
would not catch.
• Also, the communication problem between user 
analyst  programmer are avoided.

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DEVELOPING SOFTWARE IN-HOUSE

• Benefits of end-user computing:


– User creation, control, and implementation
– Systems that meet user needs
– Timeliness
 Much of the expensive and time-consuming cost-
benefit analysis, requirements definitions, and red
tape are reduced.

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DEVELOPING SOFTWARE IN-HOUSE

• Benefits of end-user computing:


– User creation, control, and implementation
– Systems that meet user needs
– Timeliness
– Freeing up systems resources
• The IS department can exert time and resources
on other information and maintenance activities.
• Reduces both visible and invisible backlog of
systems development projects.

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DEVELOPING SOFTWARE IN-HOUSE

• Benefits of end-user computing:


– User creation, control, and implementation
– Systems that meet user needs
– Timeliness
– Freeing up systems resources
– Versatility and ease of use
• Most EUC software is easy to understand and use.
• With a laptop, the work can be done at home or
almost anywhere.

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DEVELOPING SOFTWARE IN-HOUSE

• Risks of end-user computing:


– Logic and development errors
• End users are inexperienced in systems development.
• Consequently, they are more likely to make errors and less
likely to recognize them.
• They may:
– Solve wrong problem
– Poorly define systems requirements
– Apply inappropriate analytical methods
– Use wrong software
– Use incomplete or outdated information
• Errors are often caused by faulty logic, formulas, or software
commands.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 73 of 171
DEVELOPING SOFTWARE IN-HOUSE

• Risks of end-user computing:


– Logic and development errors
– Inadequately tested applications
• Users probably won’t test rigorously.
• They tend not to recognize the need for testing, the difficulty,
or the time involved.
• Tend to have grossly inflated opinions of how error-free their
systems are.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 74 of 171
DEVELOPING SOFTWARE IN-HOUSE

• Risks of end-user computing:


– Logic and development errors
– Inadequately tested applications
– Inefficient systems
• They get the job done but aren’t always efficient.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 75 of 171
DEVELOPING SOFTWARE IN-HOUSE

• Risks of end-user computing:


– Logic and development errors
– Inadequately tested applications
– Inefficient systems
– Poorly controlled and documented
systems
• Many end users don’t implement controls to protect their
system
• Systems are often poorly documented because they think
it’s unimportant
• They fail to realize that others cannot understand the
system without documentation.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 76 of 171
DEVELOPING SOFTWARE IN-HOUSE

• Risks of end-user computing:


– Logic and development errors
– Inadequately tested applications
– Inefficient systems
– Poorly controlled and documented systems
– System incompatibilities
• Some companies add end-user equipment without
considering the technological implications.
• May end up with a diversity of hardware and
software that is difficult to support or network.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 77 of 171
DEVELOPING SOFTWARE IN-HOUSE

• Risks of end-user computing:


– Logic and development errors
– Inadequately tested applications
– Inefficient systems
• If end users aren’t aware that others have similar information
needs, duplication occurs.
– Poorly •controlled
Inexperiencedand documented
users may also bite off moresystems
than they can
chew, wasting time and resources.
– System incompatibilities
– Duplication of systems and data and
wasted resources

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 78 of 171
DEVELOPING SOFTWARE IN-HOUSE

• Risks of end-user computing:


– Logic and development errors
– Inadequately tested applications
– Inefficient
• Buying PCs for multitudes of workers is costly.
systems
• Regular updating of hardware and software is also
– Poorly controlled
expensive. and documented systems
• EUC also increases costs if it diverts users from their
– System primary
incompatibilities
jobs.
• EUC can increase demands on the company mainframe
– Duplication of systems and data and wasted
and IS staff for support.
resources
– Increased costs

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 79 of 171
DEVELOPING SOFTWARE IN-HOUSE

• To achieve proper balance between


maximizing the benefits of end user
systems and minimizing the risks:
– Systems analysts can act as advisers and
require user-created systems to be reviewed
and documented prior to use.
– Users can be trained in systems analysis so
they can identify and adequately meet their
needs, as well as reviewing the work of
others.
© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 80 of 171
DEVELOPING SOFTWARE IN-HOUSE

• Organizations use several approaches to


managing and controlling EUC.
– If you give the systems department control over EUC:
• Growth of EUC is discouraged
• The organization is denied most of its benefits
• It’s not in the company’s best long-term interests.
– However, if there are no controls over the tools that
can be purchased or how they can be used:
• Chaos can result
• The system can be difficult to support

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 81 of 171
DEVELOPING SOFTWARE IN-HOUSE

• Best to provide enough guidance and


support to adequately control the system
but allow users flexibility.
• A help desk can encourage, support,
coordinate, and control end-user activities.
– One level of help desk employees might be
trained with scripted answers.
– A higher level might handle more complicated
issues.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 82 of 171
DEVELOPING SOFTWARE IN-HOUSE

• Help desk duties include:


– Providing hotline assistance to solve problems.
– Serving as a clearinghouse for information, coordination,
and assistance.
– Training end users how to use specific hardware and
software, and providing technical maintenance and
support.
– Evaluating new end-user hardware and software products.
– Assisting with application development.
– Developing and implementing standards for:
• Hardware and software purchases to ensure compatibility.
• Documentation and application testing.
• Overseeing security issues such as fraud, software piracy,
and viruses.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 83 of 171
INTRODUCTION

• We’ll be discussing how to obtain a new information


system by:
– Purchasing prewritten software
– Developing software in-house
– Outsourcing
• We’ll also discuss how to hasten or improve the
development process through:
– Business process reengineering
– Prototyping
– Computer-aided software engineering (CASE) tools

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 84 of 171
OUTSOURCE THE SYSTEM

• Outsourcing is hiring an outside company


to handle all or part of an organization’s
data processing activities.
– In a mainframe outsourcing agreement:
• The outsourcers buy the client’s computers and
hire all or most of the client’s employees.
• Then operate and manage the entire system on
the client’s site or migrate it to the outsourcer’s
computers.
• Many of these contracts have terms of 10 or more
years and cost from hundreds of thousands to
millions of dollars a year.
© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 85 of 171
OUTSOURCE THE SYSTEM

– In a client/server or a PC outsourcing
agreement the organization outsources:
• A particular service (e.g., help desk services);
• A segment of its business
• A particular function; or
• PC support.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 86 of 171
OUTSOURCE THE SYSTEM

• Examples of outsourced activities:


– Installation
– Training
– Maintenance
– Help desk
– Technical support

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 87 of 171
OUTSOURCE THE SYSTEM

• The Growth in Outsourcing


Applications
– Outsourcing was initially used for
standardized applications such as payroll,
accounting, and purchasing.
– Also used by companies that were struggling
to survive and wanted a quick cash infusion
from selling their hardware.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 88 of 171
OUTSOURCE THE SYSTEM

• Kodak and Xerox were very successful at


cutting capital expenditures and other
costs, which motivated others to outsource
their systems.
• Now many Fortune 500 companies
outsource some or all of there IS.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 89 of 171
OUTSOURCE THE SYSTEM

• Most companies that outsource use


several different companies rather than a
single source in order to:
– Increase flexibility
– Foster competition
– Reduce costs
• Most companies do not outsource:
– Strategic management of their IT environment
– Business process management
– IT architecture
© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 90 of 171
OUTSOURCE THE SYSTEM

• Benefits of outsourcing:
– Provides a business solution
• Allows companies to concentrate on their core competencies.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 91 of 171
OUTSOURCE THE SYSTEM

• Benefits of outsourcing:
– Provides a business solution
– Asset utilization
• Companies can improve cash position and reduce
expenses by selling their computers to an
outsourcer.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 92 of 171
OUTSOURCE THE SYSTEM

• Benefits of outsourcing:
– Provides a business solution
– Asset utilization
– Access to greater experience and more
advanced technology
• The cost and time to stay at the cutting edge of
technology is escalating rapidly.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 93 of 171
OUTSOURCE
• OutsourcingTHE SYSTEM
can reduce IS costs by 15-30
percent.
• Outsourcers can pass along savings
• Benefits of outsourcing:
from:
– Provides a –business solution
Standardizing applications
– Buying hardware at bulk prices
– Asset utilization
– Splitting development and maintenance costs
– Access to greater
betweenexperience
projects and more
advanced technology
– Operating at higher volumes

– Lower costs

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 94 of 171
OUTSOURCE THE SYSTEM

• Benefits of outsourcing:
– Provides a business solution
– Asset utilization
– Access to greater experience and more
advanced technology
– Lower costs
– Improved development time
• Experienced specialists can often develop and
implement a system faster and more efficiently.
• Can also help the company cut through some of
the internal politics.
© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 95 of 171
OUTSOURCE THE SYSTEM

• Benefits of outsourcing:
– Provides a business solution
– Asset utilization
– Access to greater experience and more
advanced technology
• Companies with seasonal fluctuations don’t have
– Lower costs
to staff an IT force or maintain hardware for peak
– Improvedperiods.
development time
– Elimination of peaks-and-valleys usage

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 96 of 171
OUTSOURCE THE SYSTEM

• Benefits of outsourcing:
– Provides a business solution
– Asset utilization
– Access to greater experience and more
advanced technology
– Lower costs
• Companies with in-house systems that downsize
– Improved development time
are often left with an unnecessarily large AIS
– Elimination of peaks-and-valleys usage
function.

– Facilitation of downsizing

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 97 of 171
OUTSOURCE THE SYSTEM

• Risks of outsourcing:
– Inflexibility
• Many outsourcing contracts are for 10 years.
• If the company is dissatisfied, has problems, or
goes through extensive structural changes, the
contract is difficult and/or costly to break.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 98 of 171
OUTSOURCE THE SYSTEM

• Risks of outsourcing:
– Inflexibility
– Loss of control
• The company may lose control of its system and data.
• Also risk of confidential data being shared with others.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 99 of 171
OUTSOURCE THE SYSTEM

• Risks of outsourcing:
– Inflexibility
– Loss of control
– Reduced competitive advantage
• Companies can lose a fundamental understanding of
their IS needs and how the system can provide it with
competitive advantages.
• Outsourcers are not as motivated to meet the client’s
competitive challenges.
• Can be mitigated significantly by outsourcing the
portion of business processes considered standard
(e.g., payroll, accounts receivable) and customizing the
portion that provides
© 2006 Prentice Hall Business Publishing
competitive advantage.
Accounting Information Systems, 10/e Romney/Steinbart
100 of 171
OUTSOURCE THE SYSTEM

• Risks of outsourcing:
– Inflexibility
– Loss of control
– Reduced competitive advantage
– Locked in system
• It is expensive and difficult to reverse outsourcing.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 101 of 171
OUTSOURCE THE SYSTEM

• Risks of outsourcing:
– Inflexibility
– Loss of control
– Reduced competitive advantage
– Locked in system
– Unfulfilled goals
• Many outsourcing goals and benefits are never realized.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 102 of 171
OUTSOURCE THE SYSTEM

• Risks of outsourcing:
– Inflexibility
– Loss of control
• Some companies complain of poor service from
their outsourcers,
– Reduced competitive particularly
advantagewith respect to:
– Slow or no responsiveness to changing business
– Lockedconditions.
in system
– Poorly planned migration to new technologies.
– Unfulfilled goals
– Poor service

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 103 of 171
INTRODUCTION

• We’ll be discussing how to obtain a new information


system by:
– Purchasing prewritten software
– Developing software in-house
– Outsourcing
• We’ll also discuss how to hasten or improve the
development process through:
– Business process reengineering
– Prototyping
– Computer-aided software engineering (CASE) tools

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 104 of 171
BUSINESS PROCESS REENGINEERING

• Business process reengineering (BPR) is


the analysis and redesign of business
processes and information systems to
achieve significant performance
improvements.
– Reduces a company to its essential business
processes
– Reshapes organizational work practices and
information flows to take advantage of
technological advancements.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 105 of 171
BUSINESS PROCESS REENGINEERING

• BPR:
– Simplifies the system.
– Makes it more effective.
– Improves a company’s quality and service.
• BPR software has been developed to help
automate many BPR tasks

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 106 of 171
BUSINESS PROCESS REENGINEERING

• Michael Hammer has set forth several principles


that help organizations successfully reengineer
business processes:
- Organize around outcomes, not tasks.
• DO AWAY WITH: Assigning different parts of a business
process to different people, with the resulting handoffs,
delays, and errors.
• INSTEAD: Each person’s job is designed around an
objective, outcome, or process rather than a task needed
to complete a process.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 107 of 171
BUSINESS PROCESS REENGINEERING

• Michael Hammer has set forth several principles


that help organizations successfully reengineer
business processes:
- Organize around outcomes, not tasks.
- Require those who use the output to perform the
process.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 108 of 171
BUSINESS PROCESS REENGINEERING

 Michael Hammer has set forth several principles


that help organizations successfully reengineer
business processes:
- Organize around outcomes, not tasks.
- Require those who use the output to perform the
process.
- Require those who produce information to
process it.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 109 of 171
BUSINESS PROCESS REENGINEERING
• You centralize operations to achieve economies
of scale and eliminate redundancy.
• Michael Hammer has set forth several principles
• You decentralize operations to be more
that help organizations successfully reengineer
responsive to customers and provide better
business processes:
service
- Organize around outcomes,
• With technology, not tasks.
you don’t have to choose
- Require those who use
– Corporate-wide the output
databases to perform
centralize data the
process.
– Telecommunications technology disburses it to the
organization.
- Require those who produce information to process it.
- Centralize AND disperse data.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 110 of 171
BUSINESS PROCESS REENGINEERING

• Michael Hammer has set forth several principles that


help organizations successfully reengineer business
processes:
- Organize around outcomes, not tasks.
- Require those who use the output to perform the process.
-  Example:
Require those In
whodeveloping a new product,
produce information includeit.on the
to process
development team at least one person from each involved
- Centralize AND disperse data.
department, so the right hand will know what the left hand
- Integrate parallel
is doing and theactivities.
process will be smoothly integrated.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 111 of 171
BUSINESS PROCESS REENGINEERING

• Michael Hammer has set forth several principles


that help organizations successfully reengineer
• In a traditional system, there is a layer of worker
business processes:
bees and several layers of manager bees,
- Organize
auditoraround
bees, outcomes,
and controllernot tasks.
bees.
- Require those who usesystem,
the output
• In a reengineered thetopeople
perform the do the
who
process.
work have decision-making responsibility.
- Require those who
– Information produce enables
technology information to process it.
their decision
- accuracy.
Centralize AND disperse data.
– Controls are built into the process itself.
- Integrate parallel activities.
- Empower workers, use built-in controls, and
flatten the organization chart.
© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 112 of 171
BUSINESS PROCESS REENGINEERING

• Michael Hammer has set forth several principles


that help organizations successfully reengineer
business processes:
- Organize around outcomes, not tasks.
- Require those who use the output to perform the
process.
- Require those who produce information to process it.
- Centralize
• InsteadAND disperse
of having each data.
functional area running its own AIS
- Integrate parallelthe
and entering activities.
same data, use source data automation,
EDI, etc.
- Empower to capture
workers, usedata electronically
built-in controls, at theflatten
and source and
disburse it tochart.
the organization where it needs to be used.
- Capture data once—at its source.
© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 113 of 171
BUSINESS PROCESS REENGINEERING

• Underlying reengineering is the efficient


and effective use of the latest information
technology, e.g.:
– Radio- and satellite-based communications
– Powerful handheld computers
– Image processing that lets multiple users
handle a document simultaneously.
– Active documents.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 114 of 171
BUSINESS PROCESS REENGINEERING

• Challenges Faced by Reengineering Efforts:


– Many BPR efforts fail or fall short of their objectives.
A company must overcome the following obstacles:
• Tradition
• “We’ve always done it this way!”
• Success requires changes in culture and beliefs.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 115 of 171
BUSINESS PROCESS REENGINEERING

• Challenges Faced by Reengineering Efforts:


– Many BPR efforts fail or fall short of their objectives.
A company must overcome the following obstacles:
• Tradition
• Resistance
• Change is always met with resistance.
• Requires continual reassurance, persuasion, and
support.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 116 of 171
BUSINESS PROCESS REENGINEERING

• Challenges Faced by Reengineering Efforts:


– Many BPR efforts fail or fall short of their objectives.
A company must overcome the following obstacles:
• Tradition
• Resistance
• Time and cost requirements
• Two or more years are required to complete BPR.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 117 of 171
BUSINESS PROCESS REENGINEERING

• Challenges Faced by Reengineering Efforts:


– Many BPR efforts fail or fall short of their objectives.
A company must overcome the following obstacles:
• Tradition
• Resistance
• Time and cost requirements
• Lack of management support
• Managers are nervous about the “big hype--few
results” syndrome.
• Without their support, the effort will fail.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 118 of 171
BUSINESS PROCESS REENGINEERING

• Challenges Faced by Reengineering Efforts:


– Many BPR efforts fail or fall short of their objectives.
A company must overcome the following obstacles:
• Tradition
• Resistance
• Time and cost requirements
• Lack of management support
• Skepticism
• BPR is sometimes viewed as just the same picture
in a different frame.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 119 of 171
BUSINESS PROCESS REENGINEERING

• Challenges Faced by Reengineering Efforts:


– Many BPR efforts fail or fall short of their objectives.
A company must overcome the following obstacles:
• Tradition
• Resistance
• Time and cost requirements
• Lack of management support
• Skepticism
• Retraining
• The necessary retraining costs time and dollars.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 120 of 171
BUSINESS PROCESS REENGINEERING

• Challenges Faced by Reengineering Efforts:


– Many BPR efforts fail or fall short of their objectives.
A company must overcome the following obstacles:
• Tradition
• Resistance
• Time and cost requirements
• Lack of management support
• Skepticism
• Retraining
• Controls
• Cannot skip the inclusion of controls to ensure
reliability and integrity.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 121 of 171
INTRODUCTION

• We’ll be discussing how to obtain a new information


system by:
– Purchasing prewritten software
– Developing software in-house
– Outsourcing
• We’ll also discuss how to hasten or improve the
development process through:
– Business process reengineering
– Prototyping
– Computer-aided software engineering (CASE) tools

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 122 of 171
PROTOTYPING

• Prototyping is an approach to systems design in


which a simplified working model of a system is
developed.
– The prototype (first draft) is built quickly at low cost
and provided to users for experimentation.
– Playing with the prototype allows users to determine
what they do and do not like.
– Developers modify the system in response to user
comments and re-present it to them.
– The iterative process continues until users are
satisfied that the system meets their needs.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 123 of 171
PROTOTYPING

• The basic premise is that it’s easier for


people to express what they like or dislike
than to imagine what they want in a
system.
– In another words, it helps to have a straw man
to aim at.
– Even a simple system that is not fully
functional demonstrates features far better
than graphics and verbiage.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 124 of 171
PROTOTYPING

• Developers who use prototyping still go through


the systems development life cycle.
• But prototyping allows them to expedite some
analysis and design.
• For example, prototyping captures user needs
and helps developers and users make many
conceptual and physical design decisions.
• Current practice leans heavily toward
prototyping so that projects can be completed
quickly.
© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 125 of 171
PROTOTYPING

• Four steps are involved in developing a


prototype:
– STEP ONE: Identify basic requirements
– STEP TWO: Develop an initial prototype
– STEP THREE: Repeated iterations
– STEP FOUR: Use the system

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 126 of 171
PROTOTYPING

• Four steps are involved in developing a


prototype:
– STEP ONE: Identify basic requirements
– STEP TWO: Develop an initial prototype
– STEP THREE: Repeated iterations
– STEP FOUR: Use the system

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 127 of 171
PROTOTYPING

• The first step is to identify basic


requirements by meeting with users to
agree on the size and scope of the system
and decide what it should include and
exclude.
– Developer and users also determine:
• Decision-making and transaction processing
outputs.
• Inputs and data needed to produce those outputs.
– The emphasis is on what outputs should be
produced rather than how.
© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 128 of 171
PROTOTYPING

– The developer must ensure:


• User expectations are realistic
• Their basic information requirements are met.
– The designer uses the information
requirements to develop cost, time, and
feasibility estimates for alternative AIS
solutions.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 129 of 171
PROTOTYPING

• Four steps are involved in developing a


prototype:
– STEP ONE: Identify basic requirements
– STEP TWO: Develop an initial prototype
– STEP THREE: Repeated iterations
– STEP FOUR: Use the system

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 130 of 171
PROTOTYPING

• The second step involves developing an


initial prototype that meets the agreed-on
requirements.
– Emphasize speed and low cost rather than
efficiency of operation.
– The goal is to implement the prototype within
a short time period.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 131 of 171
PROTOTYPING

• Because of time constraints, some aspects are


sacrificed. For example, at this point, you
ignore:
– Nonessential functions
– System controls
– Exception handling
– Validation of input data
– Processing speed
– Efficiency considerations

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 132 of 171
PROTOTYPING

• Users must see and use tentative versions of:


– Data entry display screens
– Menus
– Input prompts
– Source documents
• They must also:
– Respond to prompts
– Query the system
– Judge response times
– Issue commands

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 133 of 171
PROTOTYPING

• When the prototype is finished, the


developer returns to the users and
demonstrates the system.
• Users are instructed to:
– Experiment.
– Comment on what they do and do not like.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 134 of 171
PROTOTYPING

• Four steps are involved in developing a


prototype:
– STEP ONE: Identify basic requirements
– STEP TWO: Develop an initial prototype
– STEP THREE: Repeated iterations
– STEP FOUR: Use the system

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 135 of 171
PROTOTYPING

• The third step involves repeated iterations


of:
– Users identifying changes.
– Developers making the changes.
– The system being turned back to users for
next round.
• This step continues until users are
satisfied—usually 4-6 iterations.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 136 of 171
PROTOTYPING

• Four steps are involved in developing a


prototype:
– STEP ONE: Identify basic requirements
– STEP TWO: Develop an initial prototype
– STEP THREE: Repeated iterations
– STEP FOUR: Use the system

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 137 of 171
PROTOTYPING

• The final step involves using the system


approved by the users.
• An approved prototype is typically used in
one of two ways.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 138 of 171
PROTOTYPING

• Half of the prototypes are turned into fully


functional systems referred to as
operational prototypes.
– To make them operational, the developer
must:
• Add needed controls.
• Improve operational efficiency.
• Provide backup and recovery.
• Integrate the prototype with the systems with which
it interfaces.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 139 of 171
PROTOTYPING

• Changes may be necessary to allow the


program to:
– Accept real input.
– Access real data files.
– Process data.
– Make necessary computations and
calculations.
– Produce real output.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 140 of 171
PROTOTYPING

• When it’s not practical to modify the


prototype to make a fully functional
system, non-operational or throwaway
prototypes can be used in several ways:
– They may be discarded, and the systems
requirements identified in the process of
building them can be used to develop a new
system.
• If so, the SDLC is followed to develop the system,
and the prototype is a model.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 141 of 171
PROTOTYPING

– Alternately, they may be used as the initial


prototype for an expanded system designed
to meet needs of many users.
– As a final alternative, if users and developers
decide the system is unsalvageable, the
prototype can be discarded completely.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 142 of 171
PROTOTYPING

• When to Use Prototyping


– Prototyping supports rather than replaces the SDLC.
– It is appropriate when:
• Users don’t fully understand their needs, or the needs
change rapidly
• System requirements are difficult to define
• System inputs and outputs are not known
• The task to be performed is unstructured or semi-structured
• Designers are uncertain about what technology to use
• The system is crucial and needed quickly
• The risk of developing the wrong system is high

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PROTOTYPING
• The users’ reactions to the new system are important
development considerations
• Many design strategies must be tested
• The design staff has little experience developing this type of
system or application
• The system will be used infrequently so that processing
efficiency is not crucial

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PROTOTYPING

• Good candidates for prototyping:


– Decision support systems
– Executive information systems
– Expert systems
– Information retrieval systems
– Systems that involve experimentation and
trial-and-error development
– Systems in which requirements evolve as the
system is used

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PROTOTYPING

• Prototyping is usually inappropriate for:


– Large or complex systems that:
• Serve major organizational components; or
• Cross numerous organizational boundaries.
– Standard AIS components, such as:
• Accounts receivable
• Accounts payable
• Inventory management

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PROTOTYPING

• Advantages of Prototyping:
– Better definition of user needs
• Because of intensive end-user involvement.

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PROTOTYPING

• Advantages of Prototyping:
– Better definition of user needs
– Higher user involvement and satisfaction

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PROTOTYPING

• Advantages of Prototyping:
– Better definition of user needs
– Higher user involvement and satisfaction
– Faster development time
• It may take days or weeks to get a prototype up vs. a
year or more for a traditional system.

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PROTOTYPING

• Advantages of Prototyping:
– Better definition of user needs
– Higher user involvement and satisfaction
– Faster development time
– Fewer errors
• Errors are detected early because the users
experiment with each version.
• It’s also easy to identify and terminate an infeasible
AIS early.

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PROTOTYPING

• Advantages of Prototyping:
– Better definition of user needs
– Higher user involvement and satisfaction
– Faster development time
– Fewer errors
– More opportunity for changes

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PROTOTYPING

• Advantages of Prototyping:
– Better definition of user needs
– Higher user involvement and satisfaction
– Faster development time
– Fewer errors
– More opportunity for changes
– Less costly
• Some for 10-20% of the cost of traditional systems.

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PROTOTYPING

• Disadvantages of Prototyping:
– Significant user time

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PROTOTYPING

• Disadvantages of Prototyping:
– Significant user time
– Less efficient use of system resources
• Shortcuts in developing the system may
result in:
– Poor performance and reliability
– High maintenance and support costs

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PROTOTYPING

• Disadvantages of Prototyping:
– Significant user time
– Less efficient use of system resources
– Incomplete system development

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PROTOTYPING

• Disadvantages of Prototyping:
– Significant user time
– Less efficient use of system resources
– Incomplete system development
– Inadequately tested and documented
systems • Who wants to do that stuff?

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PROTOTYPING

• Disadvantages of Prototyping:
– Significant user time
– Less efficient use of system resources
– Incomplete system development
– Inadequately tested and documented systems
– Negative behavioral reactions
• If the prototype is discarded, users may be upset about using it
and losing it.
• May also be dissatisfied if all their suggestions are not
incorporated or if they have to go through too many iterations.

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PROTOTYPING

• Disadvantages of Prototyping:
– Significant user time
– Less efficient use of system resources
– Incomplete system development
– Inadequately tested and documented systems
– Negative behavioral reactions
– Never-ending development
• If not managed properly, the development could get stuck in a terminal loop.

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INTRODUCTION
• We’ll be discussing how to obtain a new
information system by:
– Purchasing prewritten software
– Developing software in-house
– Outsourcing
• We’ll also discuss how to hasten or improve the
development process through:
– Business process reengineering
– Prototyping
– Computer-aided software engineering (CASE) tools

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Computer-Aided Software Engineering
(CASE) Tools
• Traditionally, software developers have created
software to simplify the work of others, but not
for themselves.
• Computer-aided software (or systems)
engineering (CASE) tools are an integrated
package of computer-based tools that automate
important aspects of the software development
process.
– Used to plan, analyze, design, program, and maintain
an information system.
– Also used to enhance efforts of managers, users, and
programmers in understanding information needs.
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Computer-Aided Software Engineering
(CASE) Tools
• CASE tools do not replace skilled
designers, but provide developers with
effective support for all SDLC phases.
• CASE software typically includes tools for:
– Strategic planning
– Project and system management
– Database design
– Screen and report layout
– Automatic code generation
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Computer-Aided Software Engineering
(CASE) Tools
• Advantages of CASE technology:
– Increased productivity
• Can generate bug-free code from system
specifications.
• Can automate repetitive tasks.

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Computer-Aided Software Engineering
(CASE) Tools
• Advantages of CASE technology:
– Increased productivity
– Improved program quality
• Can simplify enforcement of structured
development standards, which:
– Improves quality of development.
– Reduces threat of serious design errors.
• Can check internal accuracy of design
and detect inconsistencies.

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Computer-Aided Software Engineering
(CASE) Tools
• Advantages of CASE technology:
– Increased productivity
– Improved program quality
– Cost savings
• Cost savings of up to 80-90% are possible.

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Computer-Aided Software Engineering
(CASE) Tools
• Advantages of CASE technology:
– Increased productivity
– Improved program quality
– Cost savings
– Improved control procedures
• Encourages development early in the
design process of:
– System controls
– Security measures
– System auditability
– Error handling procedures
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Computer-Aided Software Engineering
(CASE) Tools
• Advantages of CASE technology:
– Increased productivity
– Improved program quality
– Cost savings
– Improved control procedures
– Simplified documentation
 Automatically documents as the system
development progresses.

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Computer-Aided Software Engineering
(CASE) Tools
• Problems with CASE technology:
– Incompatibility
• Some tools don’t interact effectively with
some systems.

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Computer-Aided Software Engineering
(CASE) Tools
• Problems with CASE technology:
– Incompatibility
– Cost • Some packages > $360,000.

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Computer-Aided Software Engineering
(CASE) Tools
• Problems with CASE technology:
– Incompatibility
– Cost
– Unmet expectations
• Only 37% of CIOs believe they achieved expected
benefits.

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SUMMARY AND CONCLUSIONS

• You’ve learned:
– How organizations buy software, hardware,
and vendor services.
– How information systems departments
develop custom software.
– How end users develop, use and control
computer-based information systems.
– Why organizations outsource their information
systems, as well as the benefits and risks of
doing so.
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SUMMARY AND CONCLUSIONS

• You’ve also learned:


– What reengineering processes entail and
when they are appropriate.
– How prototypes are used to develop an AIS
and when it is advantageous to do so.
– What computer-aided software engineering is
and how it’s used in systems development.

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