Chapter 13—Managing the Systems Development Life Cycle

TRUE/FALSE 1. The majority of the cost of a system is incurred in the new systems development phase of the life cycle. ANS: F 2. According to the text, a stakeholder is an end user of a system. ANS: F 3. The objective of systems planning is to link systems projects to the strategic objectives of the firm. ANS: T 4. The Systems Development Life Cycle (SDLC) concept applies to specific applications and not to strategic systems planning. ANS: F 5. An accountant’s responsibility in the SDLC is to ensure that the system applies proper accounting conventions and rules and possesses adequate control. ANS: T 6. In the conceptual design phase of the Systems Development Life Cycle (SDLC), task force members are focused on selecting the new system design. ANS: F 7. When determining the operational feasibility of a new system, the expected ease of transition from the old system to the new system should be considered. ANS: T 8. One-time costs include operating and maintenance costs. ANS: F 9. When preparing a cost-benefit analysis, design costs incurred in the systems planning, systems analysis and conceptual design phases of the Systems Development Life Cycle are relevant costs. ANS: F 10. A tangible benefit can be measured and expressed in financial terms. ANS: T 11. Instead of implementing an application in a single “big-bang” release, modern systems are delivered in parts continuously and quickly

ANS: T 18. Existing (maintained) applications are the prototypes for their new versions. ANS: T 13. ANS: F 15. ANS: F MULTIPLE CHOICE 1. Project initiation is the process by which systems proposals are assessed for consistency with the strategic systems plan and evaluated in terms of their feasibility and cost-benefit characteristics. Because of the robustness of modern technology. the need for user training will influence the schedule feasibility analysis c. When the nature of the project and the needs of the user permit. prototyping does not affect the schedule feasibility analysis b. ANS: T 20. businesses today see infrequent changes in their IT systems and much longer system life spans. When the nature of the project and the needs of the user permit. a cost-benefit review will affect the schedule feasibility analysis ANS: B . ANS: T 17. ANS: F 14. When studying the detailed feasibility of a new project a. most organizations will create the system in-house rather than rely on a commercial package.ANS: T 12. ANS: F 19. Mixing technologies from many vendors improves technical feasibility. The first step in the SDLC is to develop a systems strategy ANS: T 16. System maintenance is often viewed as the first phase of a new development cycle. protection from fraud and errors will influence the schedule feasibility analysis d. most organizations will seek a pre-coded commercial software package rather than develop a systems in-house. All of the steps in the Systems Development Life Cycle apply to software that is developed in-house and to commercial software.

operational feasibility study b. software acquisition costs b. site preparation d. Protection from inadvertent disclosures of confidential information is part of the detailed a. data conversion c. systems design ANS: C 6. The testing of individual program modules is a part of a. programming ANS: B 5. Site preparation costs include all of the following except a. crane used to install equipment b. economic feasibility study ANS: C 3. supplies d. When implementing a new system. insurance c. a systems design cost d. legal feasibility study d. schedule feasibility study c. economic feasibility study ANS: D 4. schedule feasibility study c. a data conversion cost c. freight charges c. a recurring cost b. data conversion costs d. systems design costs c. operational feasibility study b. Examples of recurring costs include a. programming costs ANS: D 8. a programming cost ANS: B . A cost-benefit analysis is a part of the detailed a. software acquisition b.2. the costs associated with transferring data from one storage medium to another is an example of a. Examples of one-time costs include all of the following except a. reinforcement of the building floor ANS: C 7. personnel costs d. legal feasibility study d. hardware acquisition b.

are of relatively little importance in making information system decisions c. opinion surveys b. more efficient operations d. reduced equipment maintenance ANS: C 11. are easily measured b. site preparation b. faster response to competitor actions ANS: C 10. might increase revenues c. A tangible benefit a. review of accounting transaction data ANS: D 14. professional judgment d. might decrease costs d. data conversion . more current information c. reduction in supplies and overhead c. increased customer satisfaction b. simulation models c. when measured. programming and testing d. An example of an intangible benefit is a. the systems selection report c. Which technique is least likely to be used to quantify intangible benefits? a. reduced inventories d. can be measured and expressed in financial terms b. Intangible benefits a. expansion into other markets b. the report of systems analysis b. One time costs include all of the following except a. The formal product of the systems evaluation and selection phase of the Systems Development Life Cycle is a. insurance c.9. the systems plan ANS: B 15. do not lend themselves to manipulation ANS: C 13. the detailed system design d. are sometimes estimated using customer satisfaction surveys d. An example of a tangible benefit is a. all of the above ANS: D 12.

operational feasibility c.ANS: B 16. Strategic systems planning is important because the plan a. data conversion b. schedule feasibility b. will eliminate any crisis component in systems development c. the user is not involved in the development of the system b. assigning priorities b. conceptual feasibility c. schedule feasibility ANS: B 21. Recurring costs include all of the following except a. The degree of compatibility between the firm’s existing procedures and personnel skills and the requirements of the new system is called a. supplies ANS: A 17. all of the above ANS: A 20. technical feasibility b. provides a static goal to be attained within a five-year period d. software maintenance c. The systems steering committee is responsible for all of the following except a. budgeting funds for systems development ANS: C 19. insurance d. analyzing the technical feasibility of the project d. operational feasibility c. provides authorization control for the Systems Development Life Cycle b. system requirements are not clearly specified c. operational feasibility d. economic feasibility . legal feasibility ANS: B 22. technical feasibility b. system development techniques are ineffective ANS: C 18. All of the following are reasons why new systems fail except a. schedule feasibility d. The ability of a system to protect individual privacy and confidentiality is an example of a. legal feasibility d. Project feasibility includes all of the following except a. determining whether and when to terminate systems projects c. systems analysts rely on prototyping models d.

all of the above are advantages of surveying the current system ANS: A 28. it pinpoints the causes of the current problems d. Systems analysis involves all of the following except a. system development team members include representatives from end-user departments ANS: D 26.ANS: C 23. does not include a review of the current system c. links the objectives of the proposed system to the system’s scheduling requirements d. surveying the current system c. The systems analysis report does not a. is performed by the internal auditor ANS: C 27. formally state the goals and objectives of the system . supplies an input to the project planning activity c. Which step is not used to evaluate a systems proposal? An analysis of the project’s a. The systems project proposal a. ability to eliminate nonessential activities and costs c. it highlights elements of the current system that are worth preserving c. Reasons that a new systems implementation may be unsuccessful include all of the following except a. feasibility factors b. end users do not understand the strategic merits of the new system c. it constrains the generation of ideas about the new system b. identifies user needs and specifies system requirements d. redesigning bottleneck activities d. prioritizes the proposal in relation to other system proposals ANS: A 24. gathering facts b. provides management with a basis for deciding whether or not to proceed with the project b. organizational restructuring required by the new system results in displaced workers b. identify user needs b. Typically a systems analysis a. use of Computer Aided Software Engineering (CASE) tools in developing the system proposal ANS: D 25. A disadvantage of surveying the current system is a. ability to provide a competitive advantage to the firm d. employees are not trained to use the system d. reviewing key documents ANS: C 29. results in a formal project schedule b. specify requirements for the new system c.

Project planning includes all of the following except a. specifying system objectives b. logistic feasibility d. economic feasibility c. a. selecting hardware vendors d. suggest inclusion of advanced audit features d. Aspects of project feasibility include all of the following except a. specify the system processing methods ANS: D 30. selecting the programming techniques to be used d. all similarities and differences between competing systems are highlighted b. preparing a formal project proposal c. resolving conflicts that arise from a new system c. structure diagrams are commonly used . observation b. designing the system outputs b. task participation c. ensure mandated procedures are part of the design ANS: B 32. The role of the steering committee includes a.d. Which of the following is not a tool of systems analysts? a. personal interviews ANS: C 36. prepare data gathering questionnaires c. After the systems analysis phase of the System Development Life Cycle (SDLC) is complete. specify audit trail requirements b. producing a project schedule ANS: C 34. an evaluation of the new system c. audit reports d. the conceptual design of the new system b. technical feasibility b. the company will have a formal systems analysis report on a. When developing the conceptual design of a system. users’ needs and requirements for the new system d. approving the accounting procedures to be implemented ANS: B 33. The accountant’s role in systems analysis includes all of the following except a. schedule feasibility ANS: C 35. a comparison of alternative implementation procedures for the new system ANS: C 31.

a cost-benefit analysis. Recurring costs include: hardware maintenance. and outputs that distinguish one alternative from another are identified ANS: D 37. List at least three one-time costs and three recurring costs in system development. the accountant is responsible to make sure that the accounting conventions that apply to the module are considered by the system designers ANS: A SHORT ANSWER 1. 5. processes. while ____________________ benefits cannot be easily measured and/or quantified. and a list and explanation of intangible benefits for each alternative design. ____________________ benefits can be measured and expressed in financial terms. Why is it important that the systems professionals who design a project not perform the detailed feasibility study of the project? ANS: Objectivity is essential to the fair assessment of each project design. Shorter payback projects are often desirable. Why is the payback method often more useful than the net present value method for evaluating systems projects? ANS: Because of brief product life cycles and rapid advances in technology. ANS: Tangible. data conversion. insurance. ANS: One time costs include: hardware acquisition. the internal auditor is responsible to confirm that embedded audit modules are included in the conceptual design d. intangible 4. The role of the accountant/internal auditor in the conceptual design phase of the Systems Development Life Cycle includes all of the following except a. programming and testing. the effective lives of information system tends to be short. The steering committee uses this report to select a system. software maintenance. site preparation. training. an independent systems professional should perform the study.c. personnel costs. the format for input screens and source documents is decided d. To ensure objectivity. 3. software acquisition. . system design. 2. inputs. What is a systems selection report? ANS: A systems selection report is a formal document that consists of a revised feasibility study. supplies. the accountant is responsible to ensure that audit trails are preserved c. the accountant is responsible for designing the physical system b.

ANS: data sources. Explain an advantage of surveying the current system when preparing a systems analysis for a new systems project. resource costs. ANS: Reactive management responds to problems only when they reach a crisis state and can no longer be ignored. List two ways that a systems project can contribute to the strategic objectives of the firm. provide a method of differentiating the product or service from the competitors. controls. transaction volumes. ANS: A new system can improve the operational performance by eliminating nonessential activities and costs. bottlenecks.6. information users. 7. Second. problem resolution is generally suboptimal. data flows. error rates. What is the Internal Business Process Perspective? ANS: Metrics based on this perspective allow the manager to know how well their business is running. Contrast reactive and proactive management styles. Accountants are often tasked with the legal requirements associated with developing the internal control system and securing information from inappropriate disclosure. It shows that the proposed new system complements the strategic direction of the firm. 11. and provide information that will help improve management decision-making. 13. What are two purposes of the systems project proposal? ANS: First. In this situation. the proposal outlines the linkage between the objectives of the proposed system and the business objectives of the firm. What is the Learning and Growth Perspective? . processes. List four types of facts that should be gathered during an analysis of a system. This allows adequate time for planning and implementing solutions. This enables management to evaluate the perceived problem along with the proposed system as a feasible solution. Proactive management is alert for early signs of problems and actively looks for ways to improve the organization’s systems. and whether its products and services conform to customer requirements. data stores. 10. 8. and redundant operations 12. it summarizes the findings of the study conducted to this point into a general recommendation for a new or modified system. ANS: Legal feasibility identifies conflicts between the proposed system and the company’s ability to discharge its legal responsibilities. Explain why accountants are interested in the legal feasibility of a new systems project. ANS: An analysis of the current system: will identify what aspects of the current system should be retained will facilitate the conversion from the old to the new system may uncover causes of reported problems 9.

What does assessing user feedback involve? ANS: 1. specifying system objectives 4. When a company is doing financially well. such as improved decision making capabilities.e. Give an example. represent costs which will not be eliminated if the system is scrapped. An example would be an annual software support fee for purchased software. Many times the benefits are intangible. Poor performance from this perspective predicts of future decline. 15. Distinguish between escapable and inescapable costs. tend to have more tangible and estimable costs and benefits. An example would be an overhead charge for office space in a building which is owned by the company. why is the Customer Perspective measure important? ANS: These are leading indicators: if customers are not satisfied. and they cease to exist when the system ceases to exist. these costs will be allocated to the remaining departments. defining the problem 3. on the other hand. The Customer Perspective includes objective measurements such as customer retention rate. The first step in the SDLC is to develop a systems strategy. i. even though the current financial picture may look good. Explain the five stages of the systems development life cycle? ANS: Systems Strategy. . as well as more subjective criteria such as market research and customer satisfaction surveys. determining project feasibility 5. These needs reflect the organizations current position relative to where it needs to be long term to maintain strategic advantage. purchase of a new piece of equipment. Inescapable costs. 17. ANS: Escapable costs are directly related to the system. Why is cost-benefit analysis more difficult for information systems than for many other types of investments organizations make? ANS: The benefits of information systems are oftentimes very difficult to assess. If the system ceases to exist.ANS: Learning and growth constitute the essential foundation for success of any organization. preparing a formal project proposal ESSAY 1. If the system ceases to exist. recognizing the problem 2. maintenance costs may be difficult to predict. 16. This may be derived from the organization’s mission statement. an analysis of competitive pressures on the firm. This perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement 14. which requires an understanding the strategic business needs of the organization. they will eventually find other suppliers that will meet their needs. Most other investments that organizations make. Also. the support for the software will no longer be necessary. and the nature of current and anticipated market conditions.

such as modifying an application to produce a new report or more extensive. Maintenance may be relatively trivial. It provides feedback both from internal business processes and external outcomes to continuously improve strategic performance. The system would need to be implemented prior to the start of the new season. Maintenance involves both acquiring and implementing the latest software versions of commercial packages and making in-house modifications to existing systems to accommodate changing user needs. providing user training and education classes. When the nature of the project and the needs of the user permit. Maintenance and Support. A question would be-Is it cost feasible to purchase equipment to automate sales? Legal feasibility identifies any conflicts with the proposed system and the company’s ability to discharge its legal responsibilities. can they be hired? Schedule feasibility pertains to whether the firm can implement the project within an acceptable time frame. ANS: Technical feasibility is an assessment as to whether the system can be developed under existing technology or if new technology is needed. Project initiation is the process by which systems proposals are assessed for consistency with the strategic systems plan and evaluated in terms of their feasibility and cost-benefit characteristics. . some organizations have such unique information needs that they can only be adequately met through internal development. Define the feasibility measures that should be considered during project analysis and give an example of each. most organizations will seek a pre-coded commercial software package rather than develop a new system from scratch. Alternative conceptual designs are considered and those selected enter the construct phase of the SDLC. An example would be a new ticket sales system for a sports team. What is the balanced scorecard? ANS: The balanced scorecard (BSC) is a management system that enables organizations to clarify their vision and strategy and translate them into action. This could include help desk services. the balanced scorecard transforms strategic planning from an academic exercise into operational tasks. can employees be trained? If not. creating user views. Commercial Packages.Project Initiation. An example might be a situation where a firm wants to completely automate the sales process. Do the firm have the right work force to operate the system? If not. and testing and implementing the completed system. designing processes and databases. The in-house development step includes analyzing user needs. A question would be-Is technology available that allows sales to be made without humans? Economic feasibility is an assessment as to the availability of funds to complete the project. 2. 3. programming the applications. An example would be a firm that is proposing a new mail order sales processing system for selling wine. Another aspect of maintenance includes a establishing a user support infrastructure. and documenting user feedback pertaining to problems and system errors. Operational feasibility shows the degree of compatibility between the firm’s existing procedures and personnel skills and the operational requirements of the new system. When fully deployed. such as programming new functionality into a system. In-House Development. As mentioned earlier.

ANS: . the iterative nature of the process. Accountants must be certain that the information system is applying accounting principles properly and that the system itself has adequate internal controls. Explain the role of accountants in the conceptual design stage. 7. poorly specified system requirements. The economic feasibility study in the detailed analysis includes a cost-benefit analysis for each alternative. What is the accountant’s role in the Systems Development Life Cycle? ANS: The information system requires a significant financial investment. The preliminary analysis is based largely on the judgment and intuition of the systems professionals. What are three problems that account for most system failures? ANS: Most system failures can be traced to three problems: a. due to communication problems between users and systems professionals. and c. Contrast the feasibility study performed in the systems analysis phase of the Systems Development Life Cycle (SDLC) with the study performed in the systems selection phase of the SDLC. accountants are auditors of the information system and determine what audit features should be designed into the system. accounting conventions and legal requirements must be met. and other accounting techniques. The auditability of a new system depends in part on its design characteristics.4. the information system gathers the data used to prepare financial statements. In the systems selection phase of the SDLC. These needs include audit trail requirements. depreciation models. Accountants are members of the SDLC development team and are expected to provide information about the requirements of the system including security needs. ANS: Accountants are responsible for the logical information flows in a new system. 6. economic feasibility. and modifying systems specifications. the same five feasibility factors are considered for the specific system features that have been conceptualized and for each conceptual design alternative. ineffective development techniques for presenting. Five aspects to project feasibility are considered: technical feasibility. b. ANS: A preliminary feasibility study for the project as a whole is performed in the systems analysis phase of the SDLC. Explain why the Systems Development Life Cycle is of interest to accountants. 5. legal feasibility. 8. What is Industry analysis and why do managers do it. Accountants have three roles in the Systems Development Life Cycle. Alternate systems considered must be properly controlled. Finally. and schedule feasibility. Also. audit trails must be preserved. lack of user involvement during critical development stages. documenting. and the need to rework parts of the system. operational feasibility. Accountants are concerned that the capital investment involved in acquiring an information system is properly handled. Any deficiencies in the information system could result in misstated financial statements. Accountants are users of the information system and as such must be able to communicate their needs to the systems designers.

ANS: A preliminary feasibility study for the project as a whole is performed in the systems needs analysis phase of the SDLC. Operational feasibility concerns the compatibility of the new and old systems. The announcement of a new system must include upper management support and an explanation of the business rationale for the system and the expected benefits for ultimate users. Why is the announcement of a new systems project so critical to project success? ANS: Change is threatening to many individuals. legal feasibility. Schedule feasibility relates to meet target deadlines. What are they? Explain the key concerns. and schedule feasibility. Alternate systems considered must be properly controlled. accounting conventions and legal requirements must be met. and potential opportunities that may impact the business’s performance. The economic feasibility study includes a cost-benefit analysis for each alternative. including personnel issues. Explain the role of accountants in the conceptual design stage. 12.Industry Analysis provides management with an analysis of the driving forces that affect their industry and their organization’s performance. In the systems evaluation and selection phase of the SDLC. The auditability of a new system depends in part on its design characteristics. Contrast the preliminary project feasibility study with the feasibility study performed in the systems evaluation and selection phase of the SDLC. The preliminary analysis is based largely on the judgment and intuition of the systems professionals. economic feasibility. A new system can be perceived as putting jobs at risk in the name of “efficiency.” as a threat to organizational structure. 13. Several feasibility issues can be raised. audit trails must be preserved. Such analysis offers a fact-based perspective on the industry’s important trends. operational. Economic feasibility relates to cost questions. and schedule. Part of systems planning is a project feasibility study. Classify each of the following as either a one-time or recurring costs: training personnel initial programming and testing system design-one hardware costs software maintenance costs site preparation rent for facilities data conversion from old system to new system insurance costs . 10. the same five feasibility factors are considered for the specific system features that have been conceptualized and for each conceptual design alternative. economic. operational feasibility. legal. 11. Five aspects to project feasibility are considered: technical feasibility. Legal feasibility relates to the firm’s ability to discharge is legal responsibilities under the proposed system. Technical feasibility relates to whether the proposed system can be developed with existing technology or requires new. 9. and as requiring job skills that some users fear they lack. significant risks. ANS: Accountants are responsible for the logical information flows in a new system. ANS: The key feasibility issues include: technical.

The analysis helps in developing strategic options. weaknesses and core competencies. Products/Services and Customers. ANS: Competency Analysis provides a complete picture of the organization’s effectiveness as seen via four strategic filters: Resources. What is competency analysis and why do managers do it. which are based on an understanding of the future environment and firm’s core competencies. Strategic opportunities may include market entry options or new product development options. . Infrastructure.installation of original equipment hardware upgrades ANS: training personnel-one-time initial programming and testing-one-time system design-one-time hardware costs-one-time software maintenance costs-recurring site preparation-one-time rent for facilities-recurring data conversion from old system to new system-one-time insurance costs-recurring installation of original equipment-one-time hardware upgrades-recurring 14. By assessing these factors. an organization can develop an accurate view of its relative strengths.

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