Developing and

Implementing Effective
Accounting Information
Systems

Chapter
13-1
 Developing and Implementing Effective
Accounting Information Systems

Introduction
System Development Life Cycle
Systems Planning
Systems Analysis
Detailed Systems Design
Implementation, Follow-Up, and Maintenance
Chapter
13-2
 Introduction

Purpose of IT Governance
 Ensure IT is used effectively, efficiently, and
strategically

Study of IT Systems
 Planning and analysis through development
 Design, Development, and Implementation
 Maintenance of AIS applications
Chapter
13-3
 Systems Development
Life Cycle

Systems Study
 Systems Development Work
 Formal investigation of an existing information
system

Performance of Study
 In-house professionals (large organizations)
 Hire outside consultants (smaller companies)

Chapter
13-4
 Four Stages in the Systems
Development Life Cycle

Planning and Investigation

 Preliminary investigation of current system
 Organize a systems study team
 Develop strategic plans

Analysis of Current System

 Identifyinformation needs
 Strengths and weaknesses

Chapter
13-5
 Four Stages in the Systems
Development Life Cycle

Design
 Changes that eliminate weak points
 Preserve the strengths

Implementation, Follow-up, and Maintenance

 Resource acquisition
 Training employees
 Identify new problems and correct

Chapter
13-6
Systems Development
Life Cycle

Chapter
13-7
 Systems Planning

Planning for Success

 Approach specific organizational problems from a
broad point of view
 Use an interdisciplinary study team for evaluation of
systems
 Study team works closely with steering committee

Broad Viewpoint in a Systems Study

 Align study with mission and strategic goals and
objectives
Chapter
13-8
 Systems Planning

The Study Team and the Steering Committee

 Interdisciplinarystudy team
 Communicate closely with management
 Appoint a steering committee

Investigating Current Systems

 Preliminary investigation to identify issues
 Consider alternatives
 Make recommendations
Chapter
13-9
 Systems Analysis

Purpose
 Become familiar with current system (AS-IS system)
 Identify inputs and outputs
 Identify strengths and weaknesses
 Make recommendations (TO-BE system)

Study Team Activities

 Identifyand understand system goals
 Perform a systems survey
 Report findings Chapter
13-10
Systems Analysis Procedures

Chapter
13-11
 Understanding
Organizational Goals

General Systems Goals

 Benefitsshould exceed the costs
 Create output that helps make better decisions
 Allows for optimal access to information
 Accommodates changing information needs

Chapter
13-12
 Understanding
Organizational Goals

Top Management Systems Goals

 Long-range budget planning data
 Periodic performance reports
 Short-range operating performance

Operating Management Systems Goals

 Well-definednarrow organization areas
 Current year decisions

Chapter
13-13
 Systems Survey Work

Systems Survey
 Allows for a more complete understanding
 Strengths and weaknesses of current system

Understanding the Human Element and

Potential Behavioral Problems
 Employee resistance to change
 Gain full cooperation and support

Chapter
13-14
 Systems Survey Work

Data Gathering
 Review existing documentation or create new
materials
 Observe the current system in operation
 Use questionnaires and surveys
 Review internal control procedures
 Interview systems participants

Chapter
13-15
Information Gathering Strategies

 Document Analysis
 Observation
 Questionnaires
 Interviews
 Joint Application Design (JAD) sessions

Chapter
13-16
 Data Analysis

Components
 Create summary statistics
 Systems documentation

Time Period
 Longer thanpreliminary investigation
 May provide interim reports

Conclusions
 Final
systems analysis report
Chapter
 Submit to steering committee 13-17
Evaluating System Feasibility

Technical Feasibility
 Required technical resources
 Technical skills of current employees

Operational Feasibility
 Compatibility with current environment
 Capabilities of current employees

Chapter
13-18
Evaluating System Feasibility

Schedule Feasibility
 Estimate time needed for implementation

Legal Feasibility
 Conflicts between system and legal obligations

Economic Feasibility
 Cost-benefit analysis
 Difficulties estimating implementation costs
Chapter
13-19
Steps in the Systems Design Phase

Chapter
13-20
 Detailed Systems Design

Designing System Outputs, Processes and

Inputs
Prototyping
The Systems Specifications Report
Choosing an Accounting Information System
Outsourcing

Chapter
13-21
Detailed Systems Design

Chapter
13-22
 Designing System Outputs,
Processes, and Inputs

System Outputs
 Determine necessary outputs and format
 Create better outputs
 Hard-copy versus Soft-copy

Process Design
 Identify necessary processing procedures
 Utilize tools to model computer processes

Chapter
13-23
 Designing System Outputs,
Processes, and Inputs

Designing System Inputs

 Identify and describe data elements
 Specify how data items must be coded
 Determine source of each data element
 Streamline data entry tasks

Chapter
13-24
 Prototyping

Concepts
 Develop a simplified model of proposed system
 Scaled-down, experimental version

Usefulness and Challenges

 Helps address issues of challenging projects
 Can create distrust and perception concerns
 Not recommended for traditional AIS
applications
Chapter
13-25
Steps in Prototyping

Chapter
13-26
 The Systems
Specifications Report

Systems Specifications Report

 Summary of findings
 Submitted to steering committee for review,
comment, and approval

The Make-or-Buy Decision

 Developsystem within the organization
 Outsource development of system
 Canned software or Turnkey system
Chapter
13-27
 Choosing an AIS

Selection Criteria
 The performance capability of each proposed
system
 Costs and benefits of each proposed system
 Maintainability of each proposed system
 Compatibility of each proposed system with
existing systems
 Vendor support

Chapter
13-28
 Choosing an AIS

Point-Scoring Analysis
 Used to evaluate possibly solutions
 Identifies point value for each criteria

Selecting a Finalist

Making a Final Decision

Chapter
13-29
Point-Scoring Analysis

Chapter
13-30
 Outsourcing

Business Process Outsourcing

 Wide range of possible activities
 Routine function to entire operation

Knowledge Process Outsourcing

 Contract to perform research or other knowledge-
related work

Chapter
13-31
 Outsourcing

Advantages
 Company can focus on core competencies
 More efficient use of time and resources
 Cost savings

Disadvantages
 Inflexibility
of contractual relationships
 Loss of control
 Loss of competitive advantages
Chapter
13-32
 Implementation, Follow-Up,
and Maintenance

Implementation Activities

Managing IT Implementation Projects

Postimplementation Review

System Maintenance

Chapter
13-33
 Implementation Activities

Prepare the physical site

Determine functional changes

Select and assign personnel
Train personnel
Acquire and install computer equipment
Chapter
13-34
 Implementation Activities

Establish internal controls

Convert data files

Acquire computer software
Test computer software
Convert to the new system
Chapter
13-35
 Managing IT
Implementation Projects

Project Management Software

 Operates on desktop or notebook computers
 Aids in the management of implementation
projects
 Divides project into simpler activities
 Estimates time and cost of activities

Chapter
13-36
 Postimplementation Review

Reevaluate new system’s effectiveness

 Talk with personnel about satisfaction levels
 Talk with end users about satisfaction levels
 Evaluate control procedures and effectiveness
 Observe employee work performance
 Evaluate computer processing functions
 Determine output schedule timing and
effectiveness
Chapter
13-37
 System Maintenance

System Maintenance
 Performed by IT function
 Continues tasks created by initial follow-up study

Responsibilities
 Identifyerrors and anomalies
 Estimate costs of fixing items
 Perform necessary modifications

Chapter
13-38
 BEHAVIORAL ASPECTS OF CHANGE

• The best system will fail without the

support of the people it serves.
• So the behavioral aspects of change are
crucial.
• You need to be aware of and sensitive to
the types of behavioral problems that can
result from change.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 39 of 151
 BEHAVIORAL ASPECTS OF CHANGE

• Why Behavioral Problems Occur

– Employees will tend to view change as good if
they believe it will affect them positively and
vice versa.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 40 of 151
 BEHAVIORAL ASPECTS OF CHANGE

• To minimize adverse behavioral reactions,

it helps to understand why resistance
occurs:
– Personal characteristics and background
• Employees are more likely to accept change if they are:
– Young;
– Highly educated; or
– Comfortable with technology.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 41 of 151
 BEHAVIORAL ASPECTS OF CHANGE

• To minimize adverse behavioral reactions,

it helps to understand why resistance
occurs:
– Personal characteristics and background
– Manner in which change is introduced
• The rationale used to sell the system may need to vary with the job
responsibilities of the employees involved.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 42 of 151
 BEHAVIORAL ASPECTS OF CHANGE

• To minimize adverse behavioral reactions,

it helps to understand why resistance
occurs:
– Personal characteristics and background
– Manner in which change is introduced
– Experience with prior changes
• Fool me once, shame on me . . .
• Let’s see if I even give you a second
chance.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 43 of 151
 BEHAVIORAL ASPECTS OF CHANGE

• To minimize adverse behavioral reactions,

it helps to understand why resistance
occurs:
– Personal characteristics and background
– Manner in which change is introduced
– Experience with prior changes
– Top management support

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 44 of 151
 BEHAVIORAL ASPECTS OF CHANGE

• To minimize adverse behavioral reactions,

it helps to understand why resistance
occurs:
– Personal characteristics and background
– Manner in which change is introduced
– Experience with prior changes
– Top management support
– Communication

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 45 of 151
 BEHAVIORAL ASPECTS OF CHANGE

• To minimize adverse behavioral reactions,

it helps to understand why resistance
occurs:
– Personal characteristics and background
– Manner in which change is introduced
– Experience with prior changes
• Employees may be too emotionally
– Top management supportattached to their duties, i.e., “sacred
– Communication cows.”
– Biases and natural resistance to change

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 46 of 151
 BEHAVIORAL ASPECTS OF CHANGE

• To minimize adverse behavioral reactions,

it helps to understand why resistance
occurs:
– Personal characteristics and background
– Manner in which change is introduced
– Experience with prior changes
– Top management support
– Communication • Disturbances often create negative
– Biases and natural resistance
feelings. to change
– Disruptive nature of the change process

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 47 of 151
 BEHAVIORAL ASPECTS OF CHANGE

• To minimize adverse behavioral reactions,

it helps to understand why resistance
occurs:
– Personal characteristics and background
– Manner in which change is introduced
– Experience with prior changes
– Top management
• May include
support
fear of:
– Communication
– The unknown
– Biases and –natural
Failure resistance to change
– Disruptive nature
– Technology
of the change process
– Fear – Losing respect or status
– Losing their jobs

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 48 of 151
 BEHAVIORAL ASPECTS OF CHANGE

• How People Resist AIS Changes

– Resistance to change often takes one of
three forms:
• Aggression
• Behavior intended to destroy, cripple, or weaken the system’s
effectiveness.
• Examples: Increased error rates, disruptions, or deliberate
sabotage.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 49 of 151
 BEHAVIORAL ASPECTS OF CHANGE

• How People Resist AIS Changes

– Resistance to change often takes one of
three forms:
• Aggression
• Projection
• Blaming the new system for any and every unpleasant
occurrence, i.e., the system becomes a scapegoat.
• To preserve the integrity of the system, these criticisms must be
controlled or answered.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 50 of 151
 BEHAVIORAL ASPECTS OF CHANGE

• How People Resist AIS Changes

– Resistance to change often takes one of
three forms:
• Aggression
• Projection
• Avoidance
• “If I don’t use this thing, maybe it will go away!”

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 51 of 151