Chapter 14

1. Chapter 14 Construct, Deliver, and Maintain Systems Projects Accounting Information Systems, 5th edition James A. Hall

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

3. 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

4. Overview of Phases 3, 4 and 5 • Phase 3 - In-House Development • appropriate when organizations have unique information needs • steps include: • analyzing user needs • designing processes and databases • creating user views • programming the applications • testing and implementing the completed system

5. Overview of Phases 3, 4 and 5 • Phase 4 - Commercial Packages • when acceptable, most organizations will seek commercial software package • advantages: • lower initial cost • shorter implementation time • better controls • rigorous testing by the vendor • risks: • must adequately meet end users’ needs • must be compatible with existing systems

6. Overview of Phases 3, 4 and 5 • Phase 5 - Maintenance and Support • acquiring and implementing the latest software versions of commercial packages • making in-house modifications to existing systems to accommodate changing user needs • may be relatively trivial, such as modifying an application to produce a new report, or more extensive, such as programming new functionality into a system

7. Phase 3In-house Development

8. 3 problems that account for most system failures… • Poorly specified systems requirements communication problems time pressures • Lack of user involvement in systems development/selection 3. Ineffective development techniques (for internally developed systems) systems developer end user

9. Prototyping • Provides preliminary working version of the system • Built quickly and relatively inexpensively with the intention it will be modified • End users work with the prototype and make suggestions for changes. • A better understanding of the true requirements of the system is achieved.

10. Computer-Aided Software Engineering (CASE) • CASE technology uses computer systems to build computer systems. • CASE tools are commercial software products consisting of highly integrated applications that support a wide range of SDLC activities.

11. PERT charts • Used to show relationship among key activities of a systems project • Probably used more for in-house development (than commercial software acquisition)

12. Project Evaluation and Review Technique (PERT) Deliver Phase Construct Phase D G A-D 3 Weeks Purchase Equipment Install and Test Equipment D-F 2 Weeks Prepare Documentation F-G 3 Weeks G-I 3 Weeks Train Personnel A-B 4 Weeks B-F 5 Weeks F-I 3 Weeks Design Data Model Create Data Structures Convert Data Files A B F I Test Programs H-I 4 Weeks E-F 3 Weeks Design Process Cut Over to New System A-C 4 Weeks F-H 4 Weeks C-E 5 Weeks Test System Code Programs C E H PERT charts show the relationship among key activities that constitute the construct and delivery process.

13. Structured Design Approach • A disciplined way of designing systems from the top down • Starts with the “big picture” of the proposed system and gradually decomposes it into greater detail so that it may be fully understood • Utilizes data flow diagrams (DFDs) and structure diagrams (not necessary to study DFDs)

14. Systems Design • Follows a logical sequence of events: • model the business process and design conceptual views • design normalized database tables • design physical user views (output and input views) • develop process modules • specify system controls • perform system walkthroughs

15. Data Modeling • Formalizes data requirements of the business process as conceptual model • Entity-relationship diagram (ERD) • primary tool for data modeling • used to depict the entities or data objects in system • Each entity in ER diagram is a candidate for a conceptual user view that must be supported by database.

16. Normalization • User views in data modelmust be supported by normalized database tables. • Normalization of database tables: • A process of organizing tables so that entities are represented unambiguously • Eliminates data redundancies and associated anomalies • Depends on the extent that the data requirements of all users have been properly specified in the data model • The resulting databases will support multiple user views • More detail in chapter 9 about data normalization

17. Physical User Views: Output Views • Output is the information produced by the system to support user tasks and decisions. • Output attributes: -relevant -summarization -except orientation -timely-accurate-complete-concise

18. Designing Hard Copy Input • Items to Consider: • How will the document be handled? • How long will the form be stored and in what type of environment? • How many copies are required? • What size form is necessary? • Non-standard form can cause printing and storage problems.

19. Designing System Controls • The last step in the detailed design phase • Need to consider: • computer processing controls • data base controls • manual controls over input to and output from the system • operational environment controls • Allows the design team to review, modify, and evaluate controls with a system-wide perspective that did not exist when each module was being designed independently

20. Systems Walkthrough • Usually performed by the development team • Ensure that design is free from conceptual errors that could become programmed into the final system • Some firms use a quality assurance (QA) group to perform this task. • An independent group of programmers, analysts, users, and internal auditors

21. M T E S Y S The Delivery

22. Delivering a system • Appropriate for commercial software or in-house development • Test entire system • Document the system • Designer/Programmer documentation (in-house) • Operator documentation (more centralized than distributed) • User documentation • Accountant/Auditor documentation

23. Conversion of databases • Appropriate for commercial software or in-house development • Transfer of data from old system to new system • Validate data before conversion • Reconcile data after conversion • Keep backup copies of old data!

24. Converting to New System Three approaches: • Cold turkey cutover (“Big Bang”) - firm switches to new system on particular day and simultaneously terminates old system. Riskiest approach. • Phased cutover - modules are implemented in piecemeal fashion. Risk of devastating failure can be reduced. • Parallel cutover - old system and new system are run simultaneously. Safest, yet costliest, approach.

25. Role of Accountants in Construct & Deliver Phases • Accountant should: • Provide technical expertise re: GAAP, GAAS, SEC regulations, SoX, IRS code. • Specify documentation standards • Verify control adequacy

26. Phase 4Commercial Packages

27. 4. Commercial Software • Four factors have stimulated growth of commercial software: • relatively low cost • prevalence of industry-specific vendors • growing demand by small businesses • trend of organizational downsizing and distributed data processing

28. Types of Commercial Software • Turnkey systems:completely finished and tested systems -- ready for implementation. • Backbone systems: provide basic system structure on which to build. • Vendor-supportedsystems:custom-developed and maintained by vendor for customer. • ERP systems are difficult to classify because they have characteristics of all of the above.

29. Commercial Software • Advantages • Implementation time • Cost • Reliability • Disadvantages • Dependence on vendors • Need for customized systems • Maintenance

30. Steps in Choosing a Commercial Package • Needs analysis • Send out Request for Proposals(RFP) to prospective vendors to serve as comparative basis for initial screening. • Gather facts about each vendor’s system using multiple sources and techniques. • Analyze findings and make final selection.

31. Phase 5Maintenance and Support

32. Maintenance and Support • Approximately 80% of the life and costs of SDLC • Can be outsourced or done in-house • End user support is a critical aspect of maintenance that can be facilitated by: • knowledge management - method for gathering, organizing, refining, and disseminating user input • group memory - method for collecting user input for maintenance and support

33. The Iceberg Effect

34. The End