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System Planning and Development

(Part I)
Prepared by: Dr. Savanid (Nui) Vatanasakdakul
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Understand the roles of accountants, analysis teams, and
steering committees in system studies;
Understand why system analysis must understand the
strategic and operational goals of a company;
Be able to help plan and complete the analysis and design
phases of a system study;
Be able to evaluate alternative system proposals and make a
selection or choose to outsource;
Be familiar with the activities required to implement and
maintain a large information system.
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Their current system is inefficient
Two or more formally separate accounting
systems need to be combined
The power of the Internet is causing many
firms to scramble to develop a web presence
Etc.
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1. Investigation
2. Analysis
3. Design
4. Implementation
5. Maintenance &
review
o Each of these
stages has a
predefined input
and output
o Outputs of one
stage provide input
for next stage
Systems development lifecycle represents a
very structured and methodical way of doing
development projects
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Systems Planning and the
Initial Investigation
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System approach to planning
1) approaching organizational problems from a broad
point of view
2) utilizing an interdisciplinary study team to evaluate
an organizations information systems
3) having the companys steering committee work
with the study team in all phases of work
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When performing a systems study, the
participants should use a systems approach
that is, a broad point of view.
A broad viewpoint will identify the goals top
management really desired and find the real
problems of the current AIS.
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The use of an interdisciplinary study team
follows from the importance of a broad
viewpoint when performing a systems study.
The team can provide knowledge of several
disciplines and serve as a team of
specialists.
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Who might be chosen as study team
members?
___________
___________
___________
___________
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Who might be chosen as study team
members?
IT specialist
Middle-level manager
Operational supervisor
Accountant
Auditor
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The Steering Committee interfaces between
the client companys management and the
study team.
A steering committee requires that top
management focus on the study and
development, ensures that top management
will be involved, and helps ensure that the
newly designed system is one that the
company wants and needs.
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The first task of a systems study is to
perform a preliminary investigation of the
information system in question and to advise
the steering committee of its findings.
An important part of this investigation is to
separate symptoms from causes.
The deliverable of this phase is the
preliminary investigation report.
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In a feasibility evaluation, the design team
determines the practicality of alternative
proposals.
Example of feasibility studies
Financial
Legal
Schedule
Technical
Strategic
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The technical feasibility of any proposed
system attempts to answer the question:
What technical resources are required by a
particular system?
Hardware and software are two components
of the question.
Need to also determine if
current employees possess the
technical skills.
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The operational feasibility of any proposed
system attempts to answer the question:
How consistent will the tasks and procedures
of the new system be with those of the old
system?
Operational feasibility is mostly a human
relations study because it is strongly oriented
toward people problems.
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Schedule feasibility involves estimating how
long it will take a new or revised system to
become operational and communicating this
information to the steering committee.
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Legal feasibility is largely concerned with
whether there will be any conflict between a
newly proposed system and the
organizations legal obligations.
Revised systems should comply with
applicable federal and state statutes about
financial reporting and other contractual
obligations.
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Economic feasibility focuses on projecting
which, if any, of the proposed computerized
systems are expected to be cost-effective.
The design team should perform a cost-
benefit analysis on each proposed system.
A cost-effective system is one whose
anticipated benefits are expected to exceed
its anticipated costs.
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Projected costs and benefits are often
converted to their present values by using
capital budgeting techniques.
The benefits of a computerized data
processing system are often difficult to
quantify monetarily.
The costs are usually based on accountants
estimates.
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Outline 3 reasons why do organisations need
accountants in system development process?
__________________
__________________
__________________
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Systems Analysis
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The basic purpose of the Systems Analysis
phase is to study a system in depth.
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Phase 1: Understand the systems goals
Phase 2: Systems survey to acquire
sufficient information relating to current
systems problems
Phase 3: Suggest possible solutions to
solve the systems problems through a
systems analysis report
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The companys information systems goals
can be investigated at three levels.
General System Goals
Top Management Systems Goals
Operating Management Systems Goals
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Cost awareness
Relevant output
Simplified structure
Flexible structure
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Much of the information required by top
management is for long-range planning and
controlling functions.
Long-range planning requires external
information.
The study team should ascertain whether
needs of top management are being satisfied
by companys current information system.
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Decision-making functions of operating
managers relate to well-defined and narrower
organizational areas than those of top
management.
Most of their decisions are for the current
business year and information required is
generated internally.
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A Systems Surveys objective is to enable the
study team to obtain a complete
understanding of the companys current
operational information system and
environment.
Of special importance is identifying
strengths and weaknesses of the
current system.
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Many people resist changes to their jobs.
The systems study should gain cooperation
and support of employees or it will not be
effective.
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Review of documentation
Observation of the current system
Using questionnaires to determine user and
perhaps customer satisfaction
Review of internal control procedures
Conducting interviews with individual system
participants
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The final procedure in systems analysis is to
communicate the consultants systems
survey work in a Final Systems Analysis
Report.
Report should be submitted to steering
committee.
The report should contain all
information needed by management
to make a sound decision
concerning the proposed design.
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Systems Design and Selection
If the clients steering committee reacts
positively toward the recommendations, the
organization moves forward with systems
design.
Prior to preparing a detailed design for a
computerized information system, the
consultants should conduct a feasibility
evaluation.
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Select particular
vendor proposal
Submit systems specification
report to vendors
Develop application
inhouse
Submit systems specification
report to internal IT department
Prepare systems
specification report
Prepare detailed systems
design
Perform feasibility evaluation
Buy Make
Perform feasibility evaluation
Prepare detailed systems design
Prepare systems specifications report
Submit systems specifications report to
computer vendors or internal IT department.
Select particular computer vendor proposal or
develop application in-house.
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The design team prepare a Detailed System Design
for the general systems plan.
Detailed System Design includes specifying
outputs, processing procedures, and inputs for the
new system.
This becomes the blueprint for
creating or acquiring the new system.
From an accounting standpoint, one of the most
important elements in a new system is
_________________.
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Control requirements
Processes
Data Elements
Data Structure
Inputs
Outputs
Documentation
Constraints
Controls
Reorganizations
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An AIS should be designed to meet users
information needs; thus, output
specifications must by prepared first.
The design team should use data gathered
from the prior systems analysis work to help
decide what kinds of reports are needed.
Outputs should be classified according to
functional area requesting them.
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Process design involves identifying the
processing procedures required to produce
the outputs.
Tools available to model processes are
ER diagrams, structure charts, system
flowcharts, data flow diagrams, program
flowcharts, and process maps.
Common to all of these design
methodologies is the idea of a structured,
top-down design.
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Team must identify and describe each data
element in the systems design as well as
specify the way data items must be coded.
The design team must also determine the
source for each data element.
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The Systems Specifications Report includes
detailed information about the system design
proposal.
After the steering committee approves the
detailed design work, it now faces a
control requirement.
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The performance capability of each proposed
system in relation to its cost.
The costs and benefits of each proposed
system.
The maintainability of each proposed system.
The compatibility of each
proposed system with existing
systems.
Vendor Support
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Implementation,
Follow-up and Maintenance
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Systems Implementation is often called the
action phase of a systems study because the
recommended changes from the prior analysis,
design, and development work are now put
into operation.
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Prepare the Physical Site - accountants are
concerned about incremental costs.
Determine the Functional Changes - includes
analysis of job function changes and types of
data that will be processed and reported.
Select and Assign Personnel - new
system may require added
personnel, job reengineering,
or terminating employees.
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Train Personnel - computer vendor
personnel and implementation team can help
train personnel.
Acquire and Install Computer Equipment
implementation team and computer vendors
employees help to install the new computer
equipment.
Establish Internal Controls - cost-
effective general and application
controls should be built into
the system.
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Convert Data Files - data files may have to be
converted to newer, more useful formats.
Acquire Computer Software
Software acquired from an independent vendor is
called canned software.
Hardware and software combined in one package is
called a turnkey system.
Test Computer Software - programs must be
tested regardless of where they came from or
who wrote them.
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Conversion - there are several conversion
methods:
Direct conversion - the old system is immediately
discontinued when the new system is implemented.
Parallel conversion - both the new and old system
operate simultaneously for a certain period of time.
Modular conversion (or pilot conversion) - consists
of testing and converting the new system one
module at a time.
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The purpose of follow-up and maintenance is
to monitor the new system and make sure
that it continues to satisfy the three levels of
organizational goals:
General systems goals
Top management systems goals
Operating management systems goals
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Stair, R. and Reynolds G. (2006), Fundamentals of
Information Systems, 3
rd
Edition, Thompson, USA
Bagranoff, N. and Simkin, M. and Strand, S. (2008),
Core Concepts of Accounting Information Systems,
10
th
Edition, John Wiley & Sons, New York
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