Implementation of an Effective Accounting Information System
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A systems study or systems development work
begins with a formal investigation of an existing information system to
identify strengths and weaknesses.
Systems Development Life Cycle
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Who actually performs a systems study?
In-house professionals (large organizations)
Hire outside consultants (smaller companies)
This varies from company to company as well as among projects.
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Planning and InvestigationPreliminary investigation of current systemOrganize a systems study teamDevelop strategic plans
Analysis of Current System Identify information needsStrengths and weaknesses
Four Stages in the Systems Development Life Cycle
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Risk Assessment and Security Policies
DesignChanges that eliminate weak points Preserve the strengths
Implementation, Follow-up, and MaintenanceResource acquisitionTraining employees Identify new problems and correct
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Systems Development Life Cycle
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Applications PortfolioEnterprise systemSpecialized information systems for functional
areas
Impacts of Systems StudiesWork flowsData gathering and recording tasksEmployee responsibilitiesRewards of managers
Systems Studies and AISs
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Planning and Investigationa preliminary investigation of the current systemorganizing a systems study team, and developing strategic plans.
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Systems Planning and Investigation involves
Planning for Success1. approach problems from a broad point of view, 2. use an interdisciplinary study team to evaluate
information systems, and 3. make the study team work closely with a steering
committee
1.Broad Viewpoint in a Systems Study• a systems approach aligned with mission, goals,
and objectives.
Systems Planning and Investigation
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2.The Study Team and the Steering Committee◦ top management personnel critical to the
success of a new system.
Investigating Current Systems reports◦ the problems or objectives the study team
identified,◦ solutions or alternatives it investigated, and ◦ further course(s) of action it recommends.
Systems Planning and Investigation
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The preliminary investigation separates the symptoms from the causes, considers alternatives to the current system, attempts to estimate the costs and benefits, and recommends desired alternatives.
The study team submitsthis report to the company
steering committee.
The Preliminary Investigation
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The Study Team consists of interdisciplinary specialists
◦ the importance of a broad viewpoint◦ interdisciplinary knowledge
communicates ◦ closely with company’s managers◦ meaningfully to provide solutions
The Study Team
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The Steering Committee interfaces between the company’s management
and the study team includes top management personnel like
◦ the controller, ◦ the vice president of finance, ◦ the top-level information systems manager ◦ one or more staff auditors, and ◦ the CEO (for very important projects)
may disband the study team and do nothing, perform further preliminary investigations, or proceed to the formal systems analysis stage
The Steering Committee
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SYSTEMS ANALYSIS
The basic purpose of the systems analysis phase is to examine a system in depth. The study team will familiarize itself with the company’s current operating system, identify specific inputs and outputs, identify system strengths and weaknesses, and eventually make recommendations for further work.
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Understanding Organizational Goals
Special importance is determining which goals are not being achieved under the present system and why this happens. Organization goals include:
1) general systems goals,
2) top management systems goals, and
3) operating management systems goals.
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General Systems Goals
General systems goals apply to most organization’s information systems and help an AIS contribute to an efficient and effective organization.
The study team must determine whether the current information system helps to achieve general systems goals.
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Top Management Systems Goals
Provide top managers with long-range budget planning data so they can make effective strategic decisions regarding future product-line sales or comparable business activities.
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Operating Management Systems Goals
Much of the information required for operating managers’ decisions is generated internally as a by-product of processing a company’s accounting data.
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Systems Survey Work
The objective of a systems survey is to enable the study team to obtain a more complete understanding of the company’s current operational information system and its environment. The overall objective is to retain the system’s strengths while eliminating the system’s weaknesses, especially those weaknesses causing problems in the current system.
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Data Gathering A systems survey requires the study team
to gather data about the existing system. There are several ways of doing this, including:
Review Existing Documentation Observe the Current System in Operation Use Questionnaires and Surveys Review Internal Control Procedures Interview System Participants
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Data Analysis
Systems analysis work necessarily takes longer than a preliminary investigation. The most important deliverable from the analysis portion of the systems study, is the final systems analysis report, which signals the end of the analysis phase of the systems study.
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Evaluating System Feasibility
Feasibility evaluation where the design team determines the practicality of alternative proposals.
The design team must examine five feasibility areas:
1) technical feasibility,
2) operational feasibility,
3) schedule feasibility,
4) legal feasibility, and
5) economic feasibility.
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Technical Feasibility
The technical feasibility of any proposed system attempts to answer the question, ‘‘What technical resources are required by a particular system?’’
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Operational Feasibility
The operational feasibility of a proposed system examines its compatibility with the current operating environment.
Operational-feasibility analysis is mostly a human relations study because it is strongly oriented toward ‘‘people problems.’’
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Schedule Feasibility
Timeliness is important. Schedule feasibility requires the design team to estimate how long it will take a new or revised system to become operational and to communicate this information to the steering committee.
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Legal Feasibility
A new or revised system should comply with all applicable federal and state statutes about financial reporting requirements, as well as the company’s contractual obligations.
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Economic Feasibility
Through economic feasibility evaluation, the design team attempts to assess whether the anticipated benefits of the system exceed its projected costs.
This analysis takes into account all costs, including indirect costs such as time spent by current employees on implementing the new system. The point of the economic feasibility analysis is to get a ‘‘best estimate’’ of the worthiness of a project.
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SYSTEM DESIGN
the process of defining the
architecture, components, modules,
interfaces, and data for a system to
satisfy specified requirements.
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D ESIGNING SYST EM OUTPUT S, PRO CESSES, AN D IN PUTS
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System Outputs. *The design team will use the data gathered from
the prior systems analysis work to help it decide what kinds of outputs are needed as well as the formats that these outputs should have. Process Design
* identify the processing procedures required to produce them. This involves deciding which application programs are necessary and what data processing tasks each program should perform.Designing System Inputs
* Once the design team has specified the outputs and processing procedures for a new project, its members can think about what data the system must collect to satisfy these output and processing requirements
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PROTOTYPINGdeveloping a simplified model of a proposed
information system. A prototype is a scaled-down,
experimental version of a nonexistent information
system that a design team can develop cheaply
and quickly for user-evaluation purposes
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SYSTEMS SPECIF ICAT IONS REPORT.
After the design team completes its work of
specifying the inputs, outputs, and processing
requirements of the new system, the members
will summarize their findings here.
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CHOOSING AN ACCOUNTING
INFORMATION SYSTEM
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SELECTION CRITERIA
The Performance Capability of Each Proposed System
Costs and Benefits of Each Proposed System
Maintainability of Each Proposed System
Compatibility of Each Proposed System with Existing Systems
Vendor Support
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POINT-SCORING ANALYSIS
A technical approach for evaluating
hardware or software that meets most
of a company’s major requirements
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OUTSOURCINGOutsourcing is an effective cost-saving strategy when
used properly. It is sometimes more affordable to
purchase a good from companies with comparative
advantages than it is to produce the good internally
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Chapter 13-36
Implementation, Follow-Up, and Maintenance
Implementation Activities
Managing IT Implementation Projects
Postimplementation Review
System Maintenance
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Chapter 13-37
Implementation Activities
Prepare the physical site
Determine functional changes
Select and assign personnel
Train personnel
Acquire and install computer equipment
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Chapter 13-38
Implementation Activities
Establish internal controls
Convert data files
Acquire computer software
Test computer software
Convert to the new system
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Chapter 13-39
Managing IT Implementation Projects
Program Evaluation and Review Technique• Also known as PERT• Helps identify critical paths• Recognize areas where slack time occurs
Gantt Charts• Useful for scheduling and tracking• Easy to understand• Best suited for projects lacking complexity
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Chapter 13-40
PERT
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Chapter 13-41
Gantt Chart
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Chapter 13-42
Managing IT Implementation Projects
Project Management Software• Operates on desktop or notebook computers
• Aids in the management of implementation projects
• Divides project into simpler activities• Estimates time and cost of activities
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Chapter 13-43
Postimplementation Review
Reevaluate new system’s effectiveness• Talk with personnel about satisfaction levels
• Talk with end users about satisfaction levels
• Evaluate control procedures and effectiveness
• Observe employee work performance• Evaluate computer processing functions• Determine output schedule timing and effectiveness
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Chapter 13-44
System Maintenance
System Maintenance• Performed by IT function• Continues tasks created by initial follow-up study
Responsibilities• Identify errors and anomalies• Estimate costs of fixing items• Perform necessary modifications
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Chapter 13-45
System Maintenance Costs