Chapter 20

Systems Design,
and Operation

FOSTER School of Business Acctg

• The last four phases (2-5) in SDLC:
– 1. Systems Analysis (Chapter 18)
– 2. Conceptual Design
– 3. Physical Design
– 4. Implementation and Conversion
– 5. Operation and Maintenance

FOSTER School of Business Acctg

• Questions to be addressed in this chapter
– What are the activities that take place in the
conceptual design phase of the systems
development life cycle (SDLC)?
– What activities take place in the physical
systems design phase?
– What happens during the systems
implementation and conversion process?
– What activities occur in the systems operation
and maintenance process?
FOSTER School of Business Acctg

• Accountants must understand the entire
systems development process, because
they are involved in several ways:
– Helping to specify their needs.
– As members of the development team.
– As auditors after the fact.
• Accountants also help keep the project on
track by:
– Evaluating and measuring benefits.
– Measuring costs.
– Ensuring the project stays on schedule.
FOSTER School of Business Acctg

a general framework is created for implementing user requirements and solving the problems identified in the analysis phase. CONCEPTUAL SYSTEMS DESIGN • In the conceptual systems design phase. FOSTER School of Business Acctg 320 5 . • The three main steps are: – Evaluate design alternatives. – Prepare the conceptual systems design report. – Prepare design specifications.

e. keyboard. For example: • Should a document be hard-copy or sent by EDI? • Should the company use a large centralized mainframe or some form of distributed processing? • What form should data entry take. CONCEPTUAL SYSTEMS DESIGN • Evaluating design alternatives – There are many design decisions that must be made. POS devices? • Data storage FOSTERmedium.. School of Business Acctg file access?6 320 . structure. optical character recognition.g.

CONCEPTUAL SYSTEMS DESIGN • Also. there are many ways to approach the systems development process: – Packaged software – In-house development – End-user development – Outsourcing • The company also chooses between: – Modifying or enhancing existing software – Replacing existing software – Reengineering its business processes FOSTER School of Business Acctg 7 320 .

when. the project team develops the more detailed conceptual design specifications for the following elements: • Output (prepared first to meet user’s needs) • Data storage (what data. type of file) • Input (where. CONCEPTUAL SYSTEMS DESIGN • Prepare design specifications – Once a design has been selected. & how to collect data) FOSTER School of Business Acctg 320 8 .

• Communicate how management and user information needs will be met. • Help the steering committee assess system feasibility. CONCEPTUAL SYSTEMS DESIGN • Prepare the conceptual systems design report – A conceptual systems design report is prepared at the end of the conceptual design phase to: • Guide physical system design activities. FOSTER School of Business Acctg 9 320 .

– Phases include: • Designing output • Creating files and databases • Designing input • Writing computer programs • Developing procedures • Building in controls Let’s look at each of these phases. user-oriented requirements of conceptual design are translated into detailed specifications used to code and test computer programs. Physical Systems Design • During the physical systems design phase. next FOSTER School of Business Acctg 10 320 . the company determines how the conceptual AIS design is to be implemented. – The broad.

• Special-purpose analysis reports have no prespecified content or format and are not prepared on a regular schedule. • Demand reports have a prespecified content and format but are prepared only on request. Physical Systems Design Output Design: • Output usually fits into one of the following four categories: • Scheduled reports have a prespecified content and format and are prepared on a regular basis. FOSTER School of Business Acctg 11 320 . • Triggered exception reports have a prespecified content and format but are prepared only in response to abnormal conditions.

Physical Systems Design File and Database Design: • Data needs to be stored in compatible formats to help avoid the problem of having incompatible systems that makes it impossible to share information and prepare reports. disc)? • Is processing batch. deleted and updated? FOSTER School of Business Acctg 12 320 . • What is the medium (tape. manual or real-time? • What is the size of the database? • How is the database maintained? • When will information be added.

but it is still important. FOSTER School of Business Acctg 13 320 . Physical Systems Design Input Design: • How does data get in the system? Is it through printed forms? Or is it through online entry? • Forms design: more and more companies are moving away from paper documents.

FOSTER School of Business Acctg 14 320 .g. + enter left to right & top to bottom. + easy movement across the screen. + avoid clutter (e. limit number of menu options). accurately and completely. Physical Systems Design Computer screen design: it is more efficient to enter data directly into the computer than on paper for subsequent entry. Design considerations: + data should be entered quickly.. + enter data in the same order as displayed on paper. group related data.

  Programs subdivided into small. FOSTER School of Business Acctg 15 320 . Physical Systems Design Program development: is one of the most time- consuming activities in the SDLC. they should understand how software is created. well-defined modules are a process called structured programming.   Although accountants need not be computer programmers.   To improve software quality. organizations should develop programming standards.

Step 4 Test the program. Step 1 is performed as a part of the systems analysis phase of the SDLC. Debugging is discovering and eliminating program errors.   Step 3 Write program instructions (code). After a program is coded.  Step 2 is done during conceptual systems design and may carry over to the beginning of physical design. is conducted to discover programming errors.   FOSTER School of Business Acctg 16 320 .Physical Systems Design--Program Design Eight steps for developing software: (Program Design) Step 1 Determine user needs. Cost a lot more to debug later rather than sooner. a visual and mental review. Systems analysts consult with users and agree on software requirements. referred to as desk checking. This is when the computer code (or program instructions) is written. Step 2 Develop a plan. A development plan is produced and documented.

All system components. Step 7 is completed during systems implementation and conversion. or values such as tax rates. Steps 5 and 6 are begun in systems design.17 320 changes in input. are combined and the company begins to use the system. file content. include requests FOSTER School for Acctg of Business new or revised reports. Program documentation is often used to train users. Factors that require existing programs to be revised. referred to as program maintenance. including the programs. Documentation explains how programs work and is used to help correct and resolve errors.Physical Systems Design--Program Design continued Step 5 Documents the program. Step 6 Train program users. Step 8 Use and modify the system. . but most of the work is done during systems implementation. Step 7 Install the system.

Physical Systems Design --Procedures Design • Procedures design – Individuals who interact with a newly- designed AIS need procedures to cover: • Input preparation • Transaction processing • Error detection and correction • Controls • Reconciliation of balances • Database access • Output preparation and distribution • Computer operator instructions FOSTER School of Business Acctg 18 320 .

Physical Systems Design --Procedures Design • The procedures may be written by: – Development teams. • Procedures may take the form of: – System manuals – User instruction classes – Training materials – Online help screens FOSTER School of Business Acctg 19 320 . – Users. or – Teams representing both groups.

processing. These controls should: • Minimize errors. and accuracy. • Detect and correct errors when they do occur. efficiency.20 320 . Physical Systems Design --Controls Design • Controls design – Improperly controlled input. (garbage in. – Accountants play FOSTER aBusiness School of vitalAcctg role in this area. and database functions produce information of questionable value. garbage out) – Controls must be built into an AIS to ensure its effectiveness.

Physical Systems Design --Controls Design Important control concerns that must be addressed include: (more detail in chapters 6-9) – Validity – Authorization – Accuracy – Security – Numerical control – Availability – Maintainability – Integrity – Audit trail (can you trace transaction from source to final output and back)FOSTER School of Business Acctg 21 320 .

FOSTER School of Business Acctg 22 320 . a physical systems design report is prepared. Physical Systems Design --Design report • Physical systems design report – At the end of the physical design phase. – This report serves as the basis for management’s decision whether to proceed to implementation. summarizing what was accomplished.

– Phases include: • Developing a plan • Preparing the site • Installing and testing hardware and software • Selecting and training personnel • Completing documentation • Testing the system FOSTER School of Business Acctg 23 320 . SYSTEMS IMPLEMENTATION AND CONVERSION • Systems implementation – Systems implementation is the process of installing hardware and software and getting the AIS up and running.

including: – Creation of new departments. SYSTEMS IMPLEMENTATION AND CONVERSION • Implementation planning – An implementation plan consists of: • Implementation tasks • Expected completion dates • Cost estimates • Specification of the person(s) responsible for each task • AIS changes may require adjustments to the company’s organizational structure. – Elimination or downsizing of existing departments. FOSTER School of Business Acctg 320 24 .

FOSTER School of Business Acctg 25 320 . • Site preparation is a lengthy process and should begin well ahead of the installation date. storage. such as: – Fire protection – Emergency power supply • Space for equipment. etc. SYSTEMS IMPLEMENTATION AND CONVERSION • Site preparation: A large computer may require changes such as: • New electrical outlets • Data communications facilities • Humidity controls • Special lighting • Air-conditioning • Security measures. and offices.

the company will not achieve the expected return on investment. SYSTEMS IMPLEMENTATION AND CONVERSION Select and train personnel: • When training is insufficient. FOSTER School of Business Acctg 26 320 . • The hidden cost is that users will turn to their coworkers who have mastered the system for help. Results in: – Less productive coworkers – Increased costs • Effective training includes: – Hardware and software skills – Orientation to new policies and operations • The training should be scheduled just before systems testing and conversion.

SYSTEMS IMPLEMENTATION AND CONVERSION • Types of staff training include: – Technical training from vendors – Self-study manuals – Computer-aided instruction – Videotape presentations – Role-playing – Case studies – Experimenting with the AIS under the guidance of experienced users FOSTER School of Business Acctg 27 320 .

users manual) FOSTER School of Business Acctg 28 320 . SYSTEMS IMPLEMENTATION AND CONVERSION Complete Documentation: Three types of documentation must be prepared for new systems: – Development documentation (describes new AIS) – Operations documentation (operating schedules. security. file-retention requirements) – User documentation (how to use system.

– All of the following should be given a trial run in realistic circumstances. SYSTEMS IMPLEMENTATION AND CONVERSION Test the system: – Inadequate system testing has contributed to the failure of systems. • Documents and reports • User input • Operating and control procedures • Processing procedures • Computer programs – Should also test: • Capacity limits • Backup and recovery procedures FOSTER School of Business Acctg 29 320 .

Users develop the acceptance criteria and make a decision whether to accept the AIS. SYSTEMS IMPLEMENTATION AND CONVERSION • Three common forms of testing include: – Walk-throughs (step-by-step reviews of procedures or program logic.) • Even software purchased from an outside vendor must be tested thoroughly before installation.) – Acceptance tests (use copies of real transactions and files rather than hypothetical ones.) – Processing test transactions (valid and erroneous data are processed to determine if transactions are processed appropriately. FOSTER School of Business Acctg 30 320 .

ongoing part of the system. including: • Hardware • Software • Data files • Procedures – The process is complete when the new AIS has become a routine. SYSTEMS IMPLEMENTATION AND CONVERSION Systems conversion – Conversion is the process of changing from the old AIS to the new. – Many elements must be converted. FOSTER School of Business Acctg 31 320 .

operates the old and new system simultaneously for a period of time. d. Phase-in conversion -.. Parallel conversion -.gradually replaces elements (modules) of the old AIS with a new one. but may be cost effective). FOSTER School of Business Acctg 32 320 . location) of the organization. Direct conversion -.g. SYSTEMS IMPLEMENTATION AND CONVERSION Systems Conversion a. b. c.implements a system just in one part (e. Pilot conversion -.immediately terminate the old AIS when the new one is introduced (risky.

• A file or database format may be changed. FOSTER School of Business Acctg 33 320 . – The difficulty and magnitude is easy to underestimate.g. tedious. – Data files may need to be modified in three ways: • Files may be moved to a different storage medium (e. fields added or deleted). and expense. tape to disk). SYSTEMS IMPLEMENTATION AND CONVERSION Data Conversion: – Data conversion can be time- consuming...g. • Data content may be changed (e.

This completes the process. FOSTER School of Business Acctg 34 320 . • A post-implementation review should be conducted to ensure the new AIS meets its planned objectives. OPERATIONS AND MAINTENANCE • The last step in the SDLC is to operate and maintain the new system.

Post-implementation review Addresses the following: --does the system meet objectives? --are the users satisfied? --what were the actual costs? --is it reliable. accurate. timely? --are the users trained? --is documentation complete and accurate? --recommendations for improving the new system --recommendations for improving the systems development process FOSTER School of Business Acctg 35 320 .

• Studies show that over the life of a system. only 30% of the work takes place during development. FOSTER School of Business Acctg 36 320 . The remaining 70% is spent on maintaining the system (mostly software modifications & updates).

A and B FOSTER School of Business Acctg 37 320 . Conceptual systems design report B. _______ specifications must be prepared first. Post-implementation review report D. Input B. 747) In the conceptual design phase of the systems development life cycle. Data processing   Multiple Choice 2 (pg. 762) Assumptions and unresolved problems are included in the following report(s): A. Output C. Physical systems design report C. All of the above E.  A. Data storage D. QUIZ Multiple Choice 1 (pg.

750) The following consideration(s) are involved in the file and database design. Program E. Controls FOSTER School of Business Acctg 38 320 . QUIZ Multiple Choice 3  (pg. Output C.  A. A and C   Multiple Choice 4  (751) “Is additional training necessary?” is a concern to be answered during _______ design. A. Use B. Input B. Files and database D. Medium D. Operations C.

B and C FOSTER School of Business Acctg 39 320 . Controls   Multiple Choice 6 (pg. 752)   _________ development is one of the most time consuming activities in the SDLC. Output C. A. QUIZ Multiple Choice 5 (pg. Input B. Develop a plan B. 752-3)   ____________ is done during systems design and is completed during systems implementation. Write program instructions D. Files and database D. Program E. All of the above E. Desk checking C. A.

Development team B. 759) The first step in the data conversion process is: A. and any data inaccuracies and remove any inconsistencies. All of the above E. B. Check data for completeness. QUIZ  Multiple Choice 7 (pg. Decide which data files need to be converted. C. System users C. Conduct data conversion D. A and B   Multiple Choice 8 (pg. Validate new files FOSTER School of Business Acctg 40 320 . 758) Walk-throughs are conducted by: A. Programmers D.

Case 1 Gouge. Cheatum & Holdup. a legal firm. but the information is not recorded into the system for billing the client. Several discussions among the partners revealed that a lot of time is spent on the telephone with clients. has a problem: most of the general partners are having a difficult time recording all the time spent on client matters for billing purposes. REQUIRED: Discuss some alternatives to fix the problem. FOSTER School of Business Acctg 41 320 . It is estimated that only 70% of the actual time is billed.

REQUIRED: Discuss some alternatives to solve the problem. It normally takes four days between the time the order is taken and the time the ad appears in the newspaper. All advertising orders are taken by salespeople at the customers’ places of business. At the end of three days. FOSTER School of Business Acctg 42 320 . Recently. all advertising orders are processed in a batch. Case 2 The Daily Express Newspaper Company serves a small community and derives a considerable amount of revenue from advertising. a competitive newspaper has offered faster service to its customers.