Accounting Information Systems 9 th Edition

Learning Objectives • Describe how organizations purchase application software, vendor services, and hardware. • Explain how information system departments develop custom software. • Explain how end-users develop, use, and control computer-based information systems. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Learning Objectives • Explain why organizations outsource their information systems, and evaluate the benefits and risks of this strategy. • Explain the principles and challenges of business process reengineering. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Learning Objectives • Describe how prototypes are used to develop an AIS, and discuss the advantages and disadvantages of doing so. • Explain what computer-aided software engineering is and how it is used in systems development. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Introduction • Ann Christy was elated that the new system Shoppers Mart (SM) needed was approved. • She needed answers to the following questions: • Was the software she needed available for her to purchase? If so, how should she approach the process of buying hardware and software and selecting a vendor? ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Introduction • How do companies go about developing software in-house, and is this the best approach for SM? • How extensively should the system make use of end-user-developed software? • If the company decided to develop the system in-house, should it try and speed up the development process by using prototyping or computer-assisted software engineering? ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Introduction • Should SM just make the needed improvements to its existing system, or should it consider reengineering its business processes and then develop a system to support the new processes? • Was outsourcing the information system a viable alternative to obtaining a new system? Did the benefits outweigh its risks? ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Introduction • This chapter discusses three ways to obtain a new information system: purchasing prewritten software, developing software in-house, and hiring an outside company (outsourcing). • It also presents ways of speeding up or improving the development process – business process reengineering, prototyping and computer-aided software engineering (CASE) tools. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Learning Objective 1 Describe how organizations purchase application software, vendor services, and hardware. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Purchase Software • Canned software is written by software development companies and is sold on the open market to a broad range of users with similar requirements. • Turnkey systems are a combination of software and hardware sold as a package. The vendor installs the entire system and user needs only to “turn the key”. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Purchase Software, continued The Internet has given companies a new way to acquire software: Application service providers (ASPs) host Web-based software on their computers and deliver the software to their clients over the Internet. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Purchasing Software and The SDLC • Companies that buy rather than develop AIS software still go through the systems development life cycle (SDLC). • Systems analysis • Conceptual design • Physical design • Implementation and conversion • Operation and maintenance ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Can package be modified? Will package meet needs? The Systems Acquisition Process Investigate software packages No No Develop software internally Yes Yes Send RFP for software and hardware Yes Send RFP for hardware, if necessary Evaluate proposal Select best combination ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Development by In-House IS Department • Most often, organizations develop their own custom software, because canned software that fit their specific needs is not available. • Developing custom software is difficult and error-prone. • It also consumes a great deal of time and resources. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Custom Software Development by an Outside Company When contracting with an outside organization, a company should maintain control over the development process. Some guidelines: • Carefully select a developer • Sign a contract • Plan and monitor each step • Maintain effective communication • Control all costs ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Learning Objective 3 Explain how end users develop, use, and control computer-based information systems. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

End-User-Developed Software • End-user computing (EUC) is the hands-on development, use, and control of computer-based information systems by users. • With the advent of inexpensive PCs and powerful, inexpensive software, users began developing their own systems to create and store data, access and download company data, and share data and computer resources in networks. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

End-User-Developed Software • Examples of end user development uses: • Retrieving information from company databases to produce simple reports or to answer one-time queries • Performing “what if” sensitivity or statistical analyses • Developing applications using prewritten software (spreadsheet or database system) • Preparing schedules and lists, such as depreciation schedules, accounts receivable aging, and loan amortizations ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Benefits of End-User-Developed Software Benefits of End-User Computing User creation, control, and implementation Systems that meet user needs Timeliness Freeing up IS resources Versatility and ease of use ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Risks of End-User-Developed Software Risks of End-User Computing Logic and development errors Inadequately tested applications Inefficient systems Poorly controlled and documented systems Systems incompatibility Duplication of systems Increased costs ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Managing and Controlling End-User Computing • Organizations use several different approaches to mange and control end-user computing. For example, a help desk can encourage, support, coordinate and control end-user activities. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Functions of a Help Desk What are some duties of the help desk? • Providing hot-line assistance to help resolve problems • Serving as a clearinghouse for information, coordination, and assistance training end users, and providing corresponding technical maintenance and support • Evaluating new end-user hardware and software products • Assisting with application development • Developing and implementing standards • Controlling corporate data ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Learning Objective 4 Explain why organizations outsource their information systems, and evaluate the benefits and risks of this strategy. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Outsource the System • What is outsourcing? • It is hiring an outside company to handle all or part of an organization’s data processing activities. • In a mainframe outsourcing agreement, the outsourcers buy their client’s computers and hire all or most of the client’s employees. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Outsource the System • In a client/server or PC outsourcing agreement, an organization outsources a particular service, a segment of its business, a particular function, or PC support. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Outsource the System Benefits of Outsourcing A business and information solution Asset utilization Access to greater expertise and more advanced technology Lower costs Improved development time Elimination of peaks and valleys usage Facilitation of downsizing ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Outsource the System Risks of Outsourcing Inflexibility Loss of control of system and/or data Reduced competitive advantage Locked-in system Unfulfilled goals Possibility of poor service ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Business Processes Reengineering • What is business process reengineering (BPR)? • It is the thorough analysis and complete redesign of business process and information systems to achieve performance improvements. • It is a process that challenges traditional organizational values and cultures associated with underperformance. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Business Processes Reengineering • BPR reduces a company to its essential business processes and focuses on whythey are done rather than on the details of how they are done. • It completely reshapes organizational work practices and information flows to take advantage of technological advancements. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Principles of Reengineering • What are the seven principles of business processing reengineering? • Organize around outcomes, not tasks. • Require those who use the output to perform the process. • Require those who produce information to process it. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Principles of Reengineering • Centralize and disperse data. • Integrate parallel activities • Empower workers, use built-in controls, and flatten the organization chart. • Capture data once, at its source. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Learning Objective 6 Describe how prototypes are used to develop an AIS, and discuss the advantages and disadvantages of doing so. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Prototyping • What is prototyping? • an approach to systems design in which a simplified working model of a system is developed. • A prototype, or “first draft,” is quickly and inexpensively built and provided to users for testing. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Prototyping • What four steps are involved in developing a prototype? • Identify basic systems requirements. • Develop an initial prototype that meets the agreed-on requirements. • Users identify changes, developers make changes, and the system is turned over to the user. • Use the system approved by the users. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Benefits of Prototyping Advantages of Prototyping Better definition of user needs Higher user involvement and satisfaction Faster development time Fewer errors More opportunity for changes Less costly ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Disadvantages of Prototyping Disadvantages of Prototyping Significant user time Less efficient use of system resources Incomplete systems development Inadequately tested and documented systems Negative behavioral reactions Unending development ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Learning Objective 7 Explain what computer-aided software engineering is and how it is used in systems development. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Computer-Aided Software Engineering (CASE) • CASE is an integrated package of computer-based tools that automate important aspects of the software development process. • CASE tools are used to plan, analyze, design, program, and maintain an information system. • They are also used to enhance the efforts of managers, users, and programmers in understanding information needs. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Computer-Aided Software Engineering (CASE) • CASE tools do not replace skilled designers; instead they provide a host of self-integrated tools that give developers effective support for all SDLC phases. • CASE software typically has tools for strategic planning, project and system management, database design, screen and report layout, and automatic code generation. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Computer-Aided Software Engineering (CASE) Advantages of CASE Technology Improved productivity Improved program quality Cost savings Improved control procedures Simplified documentation ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Computer-Aided Software Engineering (CASE) Disadvantages of CASE Technology Incompatibility Cost Unmet expectations ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Case Conclusion • What did Ann Christy decide? • against outsourcing the AIS • What did she think about prototyping? • that it would not work well • What did she think about reengineering? • that the system did not need reengineering ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Case Conclusion • What were her options? • purchase a system or design one in-house. • No matter which approach she chose, Ann wanted to facilitate as much end-user development as was practical and useful. ©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart

Accounting Information Systems 9 th Edition