Accounting

Information
Systems
9th Edition
Marshall B. Romney
Paul John Steinbart

2003 Prentice Hall Business Publishing,

Accounting Information Systems, 9/e, Romney/Steinbart

17-1

AIS Development
Strategies
Chapter 17

2003 Prentice Hall Business Publishing,

Accounting Information Systems, 9/e, Romney/Steinbart

17-2

Learning Objectives
1.

2.

3.

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,

17-3

Learning Objectives
4.

5.

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,

17-4

Learning Objectives
6.

7.

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,

17-5

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,

17-6

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,

17-7

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,

17-8

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,

17-9

Learning Objective 1
Describe how organizations
purchase application software,
vendor services, and
hardware.

2003 Prentice Hall Business

Publishing,

17-10

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,

17-11

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,

17-12

Purchasing Software
and The SDLC

Companies that buy rather than

develop AIS software still go through
the systems development life cycle
(SDLC).
1.
2.
3.
4.
5.

Systems analysis
Conceptual design
Physical design
Implementation and conversion
Operation and maintenance
2003 Prentice Hall Business
Publishing,

17-13

The Systems Acquisition Process

Investigate
software
packages

Will package
meet needs?
Yes
Send RFP for
Yes
software
and
hardware

Evaluate
proposal

No

Can package
be modified?

No

Develop
software
internally

Yes
Send RFP for
hardware,
if necessary
Select best
combination
2003 Prentice Hall Business
Publishing,

17-14

Learning Objective 2
Explain how information
system departments
develop custom software.

2003 Prentice Hall Business

Publishing,

17-15

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,

17-16

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,

17-17

Learning Objective 3
Explain how end users
develop, use, and control
computer-based information
systems.

2003 Prentice Hall Business

Publishing,

17-18

End-User-Developed
Software

End-user computing (EUC) is the hands-on

development, use, and control of computerbased 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,

17-19

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,

17-20

Benefits of End-UserDeveloped 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,

17-21

Risks of End-UserDeveloped 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,

17-22

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,

17-23

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,

17-24

Learning Objective 4
Explain why organizations
outsource their information
systems, and evaluate the
benefits and risks of this
strategy.

2003 Prentice Hall Business

Publishing,

17-25

Outsource the System

What is outsourcing?
It

is hiring an outside company to

handle all or part of an organizations
data processing activities.

In a mainframe outsourcing
agreement, the outsourcers buy their
clients computers and hire all or most
of the clients employees.
2003 Prentice Hall Business
Publishing,

17-26

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,

17-27

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,

17-28

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,

17-29

Learning Objective 5
Explain the principles and
challenges of business
process reengineering.

2003 Prentice Hall Business

Publishing,

17-30

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,

17-31

Business Processes
Reengineering
BPR reduces a company to its
essential business processes and
focuses on why they 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,

17-32

Principles of Reengineering

What are the seven principles

of business processing
reengineering?
1.
2.
3.

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,

17-33

Principles of Reengineering
4.
5.
6.

7.

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,

17-34

Challenges Faced by
Reengineering Efforts
What are some of the obstacles to
reengineering efforts?
Tradition

Resistance

Time

requirements

Risk

Lack

of management support

Skepticism

Retraining

Controls

2003 Prentice Hall Business

Publishing,

17-35

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,

17-36

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,

17-37

Prototyping

What four steps are involved in developing

a prototype?
1.
2.
3.

4.

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,

17-38

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,

17-39

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,

17-40

Learning Objective 7
Explain what computer-aided
software engineering is and
how it is used in systems
development.

2003 Prentice Hall Business

Publishing,

17-41

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,

17-42

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,

17-43

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,

17-44

Computer-Aided Software
Engineering (CASE)
Disadvantages of CASE Technology
Incompatibility
Cost
Unmet expectations

2003 Prentice Hall Business

Publishing,

17-45

Case Conclusion

What did Ann Christy decide?

What did she think about prototyping?

against outsourcing the AIS

that it would not work well

What did she think about reengineering?

that the system did not need reengineering

2003 Prentice Hall Business

Publishing,

17-46

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,

17-47

End of Chapter 17

2003 Prentice Hall Business

Publishing,

17-48