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Chapter 17

Acquiring and Implementing


Accounting Information Systems

Accounting Information Systems 7e


Ulric J. Gelinas and Richard Dull

Copyright 2008 Thomson Southwestern, a part of The Thomson Corporation. Thomson, the Star logo, and
South-Western are trademarks used herein under license.

Learning Objectives
Describe the systems
acquisition/development process and
its major phases and steps.
Understand the differences in the
process for purchased, versus
internally developed systems.
Understand the nature and importance
of the accountants involvement in
systems development and acquisition
projects.
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IT Project Success Rates


28% success
72%:
Stopped before completion (IRS, Post Office,
etc.)
Materially late
Materially over budget
Missing required features

Reason #1 lack of user involvement


(Standish Group recent report)
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Why Systems Fail


Lack of senior management support and
involvement
Shifting user needs
Development of strategic systems
New technologies
Lack of standard systems development
methodology
Overworked or under-trained development staff
Resistance to change
Lack of user participation
Inadequate testing and user training
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Todays Business Environment


Users demand more robust services
Pengguna menuntut jasa yang lebih sempurna
Customers want quicker response
Pelanggan ingin yang merespon dengan cepat
Customers want more flexible interfaces
pelanggan ingin hubungan yg bflexible
Organizations are more internally connected

Organizations are more externally connected (supply chain)


Competition is fierce
New technologically based opportunities

Accountants Roles in System


Development
System user
Business process owner
Member of development team
designer and tester
Implementation project manager
Systems analyst obtaining
requirements
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Systems Development Life Cycle


Analysis:
Develop
Specs for a
new or
revised
system

Systems Development Life Cycle


Design:
Develop an
appropriate
system
manifestation

Systems Development Life Cycle


Implementation:
Begin using
the new
system

Systems Development Life Cycle


Operations:
Use the new
system

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1.0 Conducting the Systems


Survey
Determine the nature and the extent of
each reported problem or opportunity.
Determine the scope of the problem or
opportunity.
Propose a course of action that might
solve the problem or take advantage of the
opportunity.
Determine the feasibility of any proposed
development.
Devise a detailed plan for conducting the
analysis step.
Develop a summary plan for the entire
development project.
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Systems Survey Tools

Existing documentation
Interviews
Surveys
Observation

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2.0 Structured Systems


Analysis
Define the problem precisely
Devise alternative designs (solutions)
Choose and justify one of these
alternative design solutions
Develop logical specifications for the
selected design (DFDs, flowcharts, etc.)
Develop the physical requirements for the
selected design
Develop the budget for the next two
systems development phases: systems
design and systems implementation
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Structured Systems Analysis


Deliverables
Current logical data flow diagram
User requirements
Proposed system logical data flow
diagram
Proposed system physical data flow
diagram
Cost/effectiveness study
Proposed system recommendation
Approved systems analysis document
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Cost/Benefit Analysis
Which alternative best accomplished
the goals?
Which alternative achieves the goals
for the least cost?

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Cost/Benefit Analysis
Direct costs
Direct benefits
Indirect costs
Indirect benefits difficult to
measure
Tangible versus intangible costs and
benefits
Recurring versus nonrecurring costs

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3.0 Systems Selection


developed versus acquired
Determine what
computer software
design will implement
the logical
specification
Determine what
computer hardware
will satisfy the
physical requirements
Contract for
development
resources

Determine which
acquired system will
best meet the users
needs
Determine (with the
vendors assistance)
what hardware will be
needed
Contract with the
vendor
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Systems Selection Cont.


Choose acquisition financing
methods that are in the best interest
of the organization (purchase, rent,
or lease equipment)
Determine appropriate acquisition
ancillaries (maintenance
agreements, licensing, revision
procedures, etc.)
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Approved Configuration Plan


Chosen software configuration and
expected performance specifications.
Chosen hardware type, manufacturer, and
model
Items to be included in the hardware
contracts
Results of testing alternative software
design and hardware resources.
Assessment of financing and outsourcing
alternatives.
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Internal vs. External System Sources

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Vendor Proposals

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4.0 Structured Systems Design


Develop a plan and budget that will
ensure an orderly and controlled
implementation of the new system
Develop an implementation test plan
that ensures that the system is
reliable, complete, and accurate

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Structured System Design


Cont.
Develop a user manual that
facilitates efficient and effective use
of the new system by operations and
management personnel
Develop a training program that
ensures that users and support
personnel are adequately trained
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5.0 Systems Implementation


developed versus acquired
Complete, as
Become familiar
necessary, the
with the acquired
design
system
Write, test, and
Obtain vendor
document the
documentation and
programs and
training
procedures
Customize the
Complete the
documentation and
preparation of user
training
manuals and other
documentation and
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training

5.0 System Implementation


developed versus acquired
Thoroughly test
the system
Convert
procedures and
data
Implement hooks
to existing
systems

Thoroughly test
the system
Convert
procedures and
data
Implement hooks
to existing
systems
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Implementation Strategies
Parallel costly but safest
Direct riskiest and cheapest
Modular most common

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Systems Implementation Approaches

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Systems Implementation Steps


Complete or update the system design or
obtain system documentation from vendor
Acquire hardware and software
Test system
Configure system especially important with
acquired software
Train operators and users
Conduct conversion
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6.0 Post Implementation Review


Goals
Determine if the user is satisfied with the
new system
Identify how well the systems achieved
performance corresponds to the
performance requirements, recommending
improvements if necessary
Evaluate the quality of the new systems
documentation, training programs, and data
conversions
Ascertain that the organizations project
management framework and SDLC were
followed during development
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Post Implementation Review Goals


Cont.
Recommend improvements to the systems
development/acquisition standards manual if
necessary
Improve the cost/effectiveness analysis process by
reviewing cost projections and benefit estimations
and determining the degree to which these were
achieved
Make any other recommendations that might improve
the operation of the system or the development of
other information systems

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7.0 System Maintenance Types


Corrective. Maintenance performed to
correct errors (17% of maintenance costs)
Perfective. Maintenance conducted to
improve the performance of an application
(60% of maintenance costs)
Adaptive. Maintenance that adjusts
applications so that they reflect changing
business needs and environmental
changes (18% of maintenance costs)

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Systems Maintenance Goals


Accomplish system changes quickly and efficiently
Prevent system changes from causing other system
problems
Make system changes that are in the organization's
overall best interest
Perfect systems development and systems
maintenance procedures by collecting and using
information about system changes
Supplant systems maintenance with the systems
survey if requested changes are significant or if they
would destroy the system

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Accountants Involvement
User Test and operate
Analyst On analysis team
Purchaser On selection team
Implementer Conversion and
configuration
Consultant Outside expert
Internal Auditor Monitor process and
evaluate controls
External Auditor Audit it

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Summary
Need an SD(A)LC methodology
Logical steps analysis, design,
implementation, operation
Today almost all operational systems are
purchased
If purchased, need external access to data
for reporting
If purchased, need way to feed data
to/from the system
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