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Chapter 13

Chapter 13. Managing the Systems Development Life Cycle. Accounting Information Systems, 5 th edition James A. Hall. The Systems Development Life Cycle (SDLC). Logical sequence of activities used to: identify new systems needs develop new systems to support those needs

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Chapter 13

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  1. Chapter 13 Managing the Systems Development Life Cycle Accounting Information Systems, 5th edition James A. Hall

  2. The Systems Development Life Cycle (SDLC) • Logical sequence of activities used to: • identify new systems needs • develop new systems to support those needs • SDLC is a model for reducing risk through planning, execution, control, and documentation

  3. SDLC major phases • Systems strategy • Project initiation • In-house development • Commercial packages • Maintenance & support Chapter 13 Chapter 14 5 major phases

  4. Systems Development Life Cycle Business Needs and Strategy Legacy Situation Business Requirements 1. Systems Strategy - Assessment - Develop Strategic Plan Ch13 Feedback:User requests for New Systems System Interfaces, Architecture and User Requirements High Priority Proposals undergo Additional Study and Development 2. Project Initiation - Feasibility Study - Analysis - Conceptual Design - Cost/Benefit Analysis Ch13 Feedback:User requests for System Improvements and Support Selected System Proposals go forward for Detailed Design 3. In-house Development - Construct- Deliver 4. Commercial Packages - Configure - Test - Roll-out Ch14 Ch14 New and Revised Systems Enter into Production 5. Maintenance & Support - User help desk - Configuration Management - Risk Management & Security Ch14

  5. Overview of Phases 1 and 2 • Phase 1 - Systems Strategy • Understand strategic needs of organization • Examine organization’s mission statement • analyze competitive pressures on the firm • examine current and anticipated market conditions • Consider information systems’ implications pertaining to legacy systems (flat file systems) • consider concerns registered through user feedback • produce a strategic plan for meeting these various and complex needs • Produce timetable for implementation

  6. Overview of Phases 1 and 2 • Phase 2 - Project Initiation • assess systems proposals for consistency with strategic systems plan • evaluate feasibility and cost-benefit characteristics of proposals • consider alternative conceptual designs • Select design to enter the construct phase of SDLC • examine whether proposal will require in-house development, a commercial package, or both

  7. Participants in Systems Development • Systems Professionals(for internally developed systems) • Systems analysts • Systems designers • Programmers • End Users • Managers • Operations personnel • Accountants * • Internal auditors * • Stakeholders • Accountants * • Internal auditors * • External auditors Note Accountants & Internal Auditors fill multiple roles.

  8. Systems Steering Committee • Provides guidance, reviews status of systems projects • Typically includesCEO, CFO, CIO, senior management from user areas and computer services, and internal auditor. • Typical responsibilities are: • resolving conflicts • reviewing projects and assigning priorities • budgeting funds • reviewing status of projects • determining whether projects should be continued

  9. STRATEGIC OBJECTIVES OF THE FIRM Business Plan Systems Projects Systems Plan Systems Strategy • Objective: link individual systems projects or applications to strategic objectives of firm.

  10. 1. Strategy Stage • Assess strategic information needs • Develop strategic systems plan • Create action plans

  11. Strategic Information Needs • Overview of business strategy • Vision & mission – formal mission statement of organization • Industry • Competency analysis – what is the organization’s competitive advantage? • Legacy systems – often mixture of old & new technologies – systems that have evolved over time.

  12. User Feedback • Identifying user needs is fundamental to everything else • During phase 1, pertains to substantial problems,not minor systems modifications • Five key phases at this point in SDLC: • recognizing problem • defining problem • specifying system objectives • determining preliminaryproject feasibility • preparing a formal project proposal

  13. User Feedback: Recognizing the Problem • The need for a new, improved information system is manifested through various symptoms. • Symptoms may seem vague and innocuous or go unrecognized initially. • The point at which the problem is recognized is often a function of management’s philosophy. • reactive management - responds to problems only when there is a crisis • proactive management - alert to subtle signs of problems and aggressively looks for ways to improve

  14. User Feedback: Defining the Problem • Managers and end users should… • avoid leaping to a single definition of a problem • keep an open mind and gather facts before making decision • learn to interact with systems professionals • An interactive process between managers/end users and systems professionals is necessary to arrive at an accurate problem definition. • The next three stages of the end user feedback process involve this interactive process.

  15. User Feedback:Specifying System Objectives • Strategic objectives of firm and operational objectives of the information systems must be compatible. • At this point, objectives only need to be defined in general terms.

  16. Preliminary Project Feasibility Rearrange author’s TELOS into a word you can recognize: STOLE • Schedule feasibility • Technical feasibility • Operational feasibility • Legal feasibility • Economic feasibility S T O L E

  17. User Feedback:Preliminary Project Feasibility-STOLE • Schedule feasibility – can project be completed by an acceptable time period? • Technical feasibility - is the necessary technology available? • Operational feasibility - can procedural changes be made to make the system work? • Legal feasibility – does system fall within legal boundaries? • Economic feasibility– are funds available and appropriate for the system?

  18. User Feedback:Preparing Formal Project Proposal • Systems project proposal helps management decide whether or not to proceed with project. • Proposal summarizes findings of the study and makes general recommendation. • Proposal specifies link between objectives of the proposed system and the business objectives of the firm. • Decision should be based on greatest benefits with lowest costs

  19. 2. Project Initiation • Systems analysis • Alternative conceptual designs • Systems evaluation and selection

  20. Project Initiation • The second phase in SDLC involves: • Understanding users’ needs and problems • proposing multiple alternative solutions • assessing alternatives in terms of feasibility and cost-benefit characteristics • Selecting best option and proceeding to construct phase • examining whether the selected option will require in-house development, a commercial package, or both

  21. A. Systems Analysis • A business problem must be fully understood before a solution can be formulated. • A defective analysis will lead to a defective solution. • Systems analysis is a 2-step process • Survey • Analysis of users’ needs

  22. Survey Current System • Advantages of surveying current system • Identifies aspects of old system that should be kept • Aids in planning implementation of new system • May help determine cause of problems • Disadvantages • May discourage new ideas

  23. Facts to Gather in Survey/Analysis • Facts about systems: • Transaction volumes • Data sources • Users • Data stores • Processes • Data flows • Controls • Error rates • Resource costs • Bottlenecks & redundant operations

  24. Fact-gathering techniques • Observation • Task participation • Interviews • Review key documents

  25. Analysis Step • Systems analysis is an intellectual process that is commingled with fact gathering. • A formal systems analysis report, prepared and presented to Steering Committee, should contain: • reasons for system analysis • scope of study • problem identified with current system • statement of user requirements • resource implications • recommendations

  26. B. Conceptualization of Alternative Designs • Purpose: produce alternative conceptual solutions that satisfy requirements identified during systems analysis • Help to reach consensus between users and systems professionals on alternative designs • How much detail should be included? • enough to highlight differences between critical features of competing systems, not the similarities • Examples: inputs, outputs, processes and any special features

  27. C. Systems Evaluation & Selection • Formal mechanism for selecting one system from set of alternative conceptual designs. • Selection process is two steps: • Detailed feasibility study • Similar to Preliminary feasibility study, but more details • Cost-benefit analysis

  28. Cost-Benefit Analysis: Identify Costs

  29. Cost-Benefit Analysis: Identify Benefits—Tangible

  30. Cost-Benefit Analysis: Identify Benefits—Intangible

  31. Comparing Costs and Benefits • Two methods commonly used for evaluating the costs and benefits of information systems: • Net Present Value Method: deduct the present value of costs from the present value of benefits over the life of the project. • The optimal choice is the project with the greatest net present value. • Payback Method: do break-even analysis of total costs (one-time costs plus present value of recurring costs) and total benefits (present value of benefits). After the break-even point, the system earns future profits. • The optimal choice is the project with the greatest future profits.

  32. How Should We Get the System? • Once optimal system is selected, decide how to acquire it: • develop the system in-house: best for systems that need to meet unique and proprietary business needs • Only makes sense for large organizations • purchase commercial software: best for systems that are expected to support “best industry practices” • a mix of first two approaches: make in-house modifications, to varying degrees, of commercial system to meet the organization’s unique needs

  33. Announcing the New System Project… • can be the most delicate aspect of the SDLC. • End user support is critical to success. • All end users need to be made to understand the objectives of the new system. • End users and managers who view the new system as a potential benefit to their jobs, rather than a threat, are more likely to cooperate with the project.

  34. Why Are Accountants Involved with SDLC? • Creation/purchase of IS consumes significant resources and has financial resource implications. • Quality of AISs and their output rests directly on SDLC activities that produce them.

  35. How are Accountants Involved with SDLC? • As Users • As members of development team • As Auditors

  36. The Role of the Accountant… • Systems Strategy • Help reduce risk of creating unneeded, unwanted, inefficient, ineffective systems • Conceptual Design • Control implications • Auditability of system • Systems Selection • Economic feasibility

  37. The End

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