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Accounting Information Systems:
Essential Concepts and ApplicationsFourth Edition by Wilkinson, Cerullo, Raval,
and Wong-On-Wing
Chapter 14: Systems
Development
Slides Authored bySomnath Bhattacharya, Ph.D.
Florida Atlantic University
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Interaction of Systems
Development with Accounting
1) Assigning both the controller and the information
systems manager to the steering committee
2) Assigning accountants to systems project teams
3) Assigning persons who are knowledgeable in both
accounting and information technology to serve as
coordinators between the accounting and information
systems functions 4) Establishing an internal audit group, staffed by
accountants and systems-oriented auditors
5) Establishing data control groups within accounting
departments
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Approaches to Systems
Development
Top-Down versus Bottom-up
In-House versus Outsourcing
Re-engineering
Prototyping
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Objectives of Strategic
Systems Planning
Integrate the information system developmentwith the firms overall planning processesEnsure orderly development of systems
projects, making efficient use of availableresourcesRecognize changing priorities and newly arising
conditions as well as increasing informational
demandsIncorporate improvements in informationtechnology as they become relevant to thefirms needs and promise greater benefits thanthe cost outlays
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Survey of the Present
System
Scope
Data Types and Sources
Behavioral IssuesCommunicate openly with the persons
to be affected by the system project
Encourage participation by the affected personsthroughout the survey
Emphasize the positive aspects of the project andexplain that the resulting system can better meet theusers needs
Reduce the fears of employees and managers by
establishing and publicizing fair personnel policies
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A Checklist for Analyzing
Information Systems - I
Are tasks and responsibilities clearly defined andassigned?Are tasks and responsibilities distributed
effectively among employees and organizationalunits?Are the policies and procedures understood and
followed?
Does the productivity of the clerical employeesappear to be satisfactorily high?Do the various organizational units cooperate
and coordinate well in maintaining smooth flowsof data?
Figure 14-8
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Does each product achieve its intendedobjective?Are redundant processing operations being
performed?How necessary is the result accomplished by
each operation?Do unnecessary delays occur in obtaining
and/or processing data?Do any operations cause bottlenecks in the flow
of data?Are the number of errors that occur in each
operation minimized?Figure 14-8 Continued
A Checklist for Analyzing
Information Systems - II
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A Checklist for Analyzing
Information Systems - III
Are physical operations adequately planned andcontrolled?Is the capacity of the information system
sufficient to handle the average volumes of datawithout large backlogs?Are the peak volumes of data handled
adequately?
How easily does the system adapt toexceptional occurrences and growth in use?How necessary is each document?Is each document suitably designed for efficient
use?Figure 14-8 Continued
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A Checklist for Analyzing
Information Systems - IV
Are all copies of documents necessary?Can reports be prepared easily from the files
and documents?
Does unnecessary duplication occur in files,records, and reports?Are files easily accessible and kept up-to-date?Are sound performance standards developed
and kept up-to-date?
Is data processing equipment being usedeffectively?Is the system of internal control adequate?Do the informal flows of data and information
harmonize with the formal flows?Figure 14-8 Continued
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A List of Information
Systems Capabilities
Efficient and hence economical operationsAdequate capacity for expected growth
Timeliness in responding to inquiries andproviding reportsReliability of system hardware and softwareAccurate, up-to-date, and relevant information
Security of the data and system facilitiesFlexibility and adaptability to changes and newdemandsSimplicity, and hence user-friendliness
Figure 14-9
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One-time Costs for a New or Improved
Computer-based Information System - I
System Design CostsDetailed design
Programming
System Installation and Conversion CostsSystem and program testing
File conversion
Retraining of displaced employees
Training of newly hired analysts, programmers, andoperators
Inefficiencies caused by learning new equipment andprocedures
Figure 14-15
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One-time Costs for a New or Improved
Computer-based Information System - II
System Site Preparation CostsConstruction of wiring and piping systems
Construction of electrical power supply
Construction of air-conditioning system
Construction of sprinkler system
Construction of other miscellaneous facilities, such asfalse flooring, file storage vault, and special lighting
Figure 14-15 Continued
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One-time Costs for a New or Improved
Computer-based Information System - III
System Hardware CostsCentral processing unit
Additional processors
Secondary storage devices
Input-output devices
Data communications equipment
Terminals
Peripheral equipment, such as key-to-disk devices
Transportation of equipment
Figure 14-15 Continued
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One-time Costs for a New or Improved
Computer-based Information System - IV
System Software CostsOperating system, utility routines, compilers
Data communications softwareApplication program packages
Data management software packages
Decision model software packages
Outside computer time-sharing rentals
Figure 14-15 Continued
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Recurring Costs Related to a Computer-
Based Information System - I
Computer Operations Costs
Salaries for computer supervisors, operators,technicians, data-entry clerks, librarians, securityguards, and others
Supplies, including forms, paper, ribbons, and tape
Utilities, including power, water, and telephone
Rentals of computer hardwareSoftware purchases and upgrades
Communications equipment and services
Backup equipment and services
Figure 14-16
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Recurring Costs Related to a Computer-
Based Information System - II
Information System Maintenance CostsSalaries for systems analysts, programmers, repair
technicians, and others
Replacement parts and upgrades
Printing costs for documentation
Information System Administration CostsSalaries of systems management, data-base
administrator, internal auditors, secretaries, andothers
Insurance
Taxes
Space and building occupancy costs
Figure 14-16 Continued
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Typical Conceptual Design
Specifications - I
System Components
Output
Features
Name
Purpose
Distribution to users
Contents
General format
Frequency or triggerTimeliness
Output medium
Figure 14-17
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Typical Conceptual Design
Specifications - II
System Components
Data base
FeaturesFile or table name
File or table type
File size
Contents of record or table
Record or table layout
File organization methodStorage medium
Data characteristics
Updating frequency
Data structureFigure 14-17 Continued
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Typical Conceptual Design
Specifications - III
System Components
Data processing
Features
Sequence of steps or
runs
Processing modes,
cycles, volumes
Modes of data
communicationProcessing capabilities
at each physical
location
Figure 14-17 Continued
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Typical Conceptual Design
Specifications - IV
System Components
Data input
Features
Name
Purpose
Source
Method of collecting data
Volume (peak and
average)
Contents (data elements)
General format
Data entry methodFigure 14-17 Continued
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Typical Conceptual Design
Specifications - V
System Components
Control and security
Features
Type
Purpose
Specific system
components affected
method of correcting
error or establishingsecurity
Figure 14-17 Continued
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Systems Acquisition
Options
Purchasing versus leasing
Single vendors versus multiple vendors
In-house system versus outsourcingcomputing services
In-house software development versuscommercial software packages
Types of commercial software
General accounting systems
Turnkey software systems
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Advantages of Commercial
Software
Products available without lengthydevelopmental periods
Soundly designed and well-testedand thus efficient and reliable
Reasonable pricing
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Limitations of Commercial
Software
Generalized in nature
Acquiring firm is dependent on the
software vendor for supportand maintenance andupgrades
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The Sequence in Designing
System Components
Design Controls
& Security Measures
DesignInformation
Outputs
Designdata base
Design DataProcessing
Operations
Design
Data Inputs
Figure 14-19
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A List of Design Principles
Foster system objectives
Incorporate reasonable tradeoffs
Focus on functional requirements
Serve multiple purposes
Relate to users concerns
Provide a tailored product
Integrate system modules and componentsAvoid design excesses
Apply sound methodology
Figure 14-20
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System Justification & Selection in the
Systems Development Life Cycle
Systems
Planning
Systems
Analysis
Systems
Design
Systems
Operations
Determinationof DesignFeasibility
Solicitation ofHardware and
Software Proposals
Evaluation ofSystem
Proposals
Selection ofSystem Hardwareand Software
Systems Justification & Selection
Figure 14-21
A Li t f R
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A List of Resource
Specifications - I
Systems Design Specifications
Output
Data-baseProcessing
Input
Control & security
Figure 14-22
A Li t f R
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A List of Resource
Specifications - II
Hardware SpecificationsProcessor speeds and capabilitiesSecondary storage capacities and access
capabilities
Input-output speeds and capabilitiesCompatibility featuresModularity featuresError detection and correction techniquesData communication capabilitiesSpecial features, such as multiprogramming and
virtual storagemaximum allowable downtime as a percentage of
total time
Figure 14-22 Continued
A Li t f R
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A List of Resource
Specifications - III
Software SpecificationsProgramming languages and compilersUtility packages
Application packagesOperating system capabilitiesData management packages
System Support SpecificationsProgramming assistance
Training programsTest facilities and time availableBackup facilitiesMaintenance assistance
Figure 14-22 Continued
T h i f P l
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Techniques for Proposal
Evaluation
The benchmark problem technique
Simulation model technique
Weighted-Rating analysistechnique
S t I l t ti
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Systems Implementation:
Preliminary Actions
Establish implementationplans and controls
Gantt chart
Network diagrams
Recognize behavioral concerns
Review the organization of
the project team
Complete arrangement for selectedsystem resources
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Implementation Activities - I
Personnel selection and training
Physical site preparation
Detailed system designOutput design
Database design
Input designProcessing design
Controls design
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Application software development
Coding
Structured programmingSoftware testing
Desk checking
String testingSystem testing
Acceptance testing
Implementation Activities - II
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Standards development
System components
PerformanceDocumentation
Documentation
File conversion
Implementation Activities - III
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System conversion: cutover
Direct conversion approach
Parallel operation approachModular conversion approach
Phased conversion approach
User signoff
Implementation Activities - IV
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Systems Operations
Fine tuning
Post-implementation evaluationTo assess the degree to which the
objectives of the system project have been met
To spot any additional modifications that might beneeded in the newly designed system
To evaluate the project teams performance, both in
terms of a quality product and adherence to theproject schedule and work plan
To serve as the basis for improving future systemsdevelopments and accuracy of cost and benefitestimates
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A Framework Pertaining to the Control
of System-Related Resources
Measurement of Resource Usage
* Personnel Time Reporting Systems
* Computer-oriented Monitoring
Systems
* Effectiveness Monitoring Systems
Chargeback Systems* Chargeback Rates* Usage Measurements by
DepartmentTaskProjectComputer System
Performance Evaluation Systems* Personnel performance by
Clerks & OperatorsSystems professionalsSystems managers
* Equipment performance* Information system performance
EfficiencyEffectiveness
Cost accounting
& control reportsPerformance
reportsFigure 14-27
Accounting Information Systems:
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Copyright 2000 John Wiley & Sons, Inc. All rights reserved.
Reproduction or translation of this work beyond that permitted in
Section 117 of the 1976 United States Copyright Act without the express
written permission of the copyright owner is unlawful. Request for
further information should be addressed to the Permissions Department,
John Wiley & Sons, Inc. The purchaser may make back-up copies forhis/her own use only and not for distribution or resale. The publisher
assumes no responsibility for errors, omissions, or damages, caused by
the use of these programs or from the use of the information contained
herein.
Accounting Information Systems:
Essential Concepts and ApplicationsFourth Edition by Wilkinson, Cerullo,
Raval, and Wong-On-Wing