1. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart1 of 172 C HAPTER 19 AIS Development Strategies

2. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart2 of 172 INTRODUCTION Questions to be addressed in this chapter include: –How do organizations buy software, hardware, and vendor services? –How do information systems departments develop custom software? –How do end users develop, use and control computer-based information systems? –Why do organizations outsource their information systems, and what are the benefits and risks of doing so? –How are prototypes used to develop an AIS, and what are the advantages and disadvantages? –What is computer-aided software engineering, and how is it used in systems development?

3. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart3 of 172 INTRODUCTION Companies can experience a number of difficulties in developing an AIS, including: –Projects are backlogged for years because of the high demand for resources. –The newly designed system doesn’t meet user needs. –The process takes so long that by the time it’s complete, it’s obsolete. –Users can’t adequately specify their needs. –Changes to the AIS are often difficult to make after requirements have been written into the specifications.

4. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart4 of 172 INTRODUCTION We’ll be discussing how to obtain a new information system by: –Purchasing prewritten software; –Developing software in-house; or –Outsourcing. We’ll also discuss how to hasten or improve the development process through: –Business process reengineering –Prototyping –Computer-aided software engineering (CASE) tools

5. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart5 of 172 INTRODUCTION We’ll be discussing how to obtain a new information system by: –Purchasing prewritten software –Developing software in-house; or –Outsourcing. We’ll also discuss how to hasten or improve the development process through: –Business process reengineering –Prototyping –Computer-aided software engineering (CASE) tools

6. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart6 of 172 PURCHASING PREWRITTEN SOFTWARE In the early days of computers, companies were rarely able to buy software to meet their needs. But commercially available packages are now outpacing custom-developed software as old systems are replaced.

7. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart7 of 172 PURCHASING PREWRITTEN SOFTWARE Canned software is sold on the open market to a broad range of users with similar requirements. –Some companies sell hardware and software together as a package. These systems are called turnkey systems. Many are written by vendors who specialize in a particular industry.

8. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart8 of 172 PURCHASING PREWRITTEN SOFTWARE –A major problem with canned software: It often does not meet all of a company’s information needs. Can be overcome by modifying the canned software. –Usually best done by the vendor. –Unauthorized modifications may render the program unreliable and unstable.

9. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart9 of 172 PURCHASING PREWRITTEN SOFTWARE Companies can also acquire software through application service providers (ASPs). –ASPs host Web-based software and deliver it to clients over the Internet. –Companies don’t have to buy, install, or maintain canned software; they simply “rent” it. –If you used an online version of a package like Turbo- Tax to prepare your taxes, that’s a consumer version of renting software over the Internet.

10. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart10 of 172 PURCHASING PREWRITTEN SOFTWARE –Advantages of ASPs: Reduction of software costs and administrative overhead. Automated software upgrades. Scalability as the business grows. Global access to information. Access to skilled IT personnel. Ability to focus on core financial competencies rather than IT.

11. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart11 of 172 PURCHASING PREWRITTEN SOFTWARE Purchasing software and the SDLC: –Companies that buy rather than develop software still follow the SDLC process, including: Systems analysis  They conduct an initial investigation, systems survey, and feasibility study, as well as determining AIS requirements.

12. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart12 of 172 PURCHASING PREWRITTEN SOFTWARE Purchasing software and the SDLC: –Companies that buy rather than develop software still follow the SDLC process, including: Systems analysis Conceptual design An important aspect is determining whether software that meets AIS requirements is already available. If so, a make-or-buy decision must be made.

13. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart13 of 172 PURCHASING PREWRITTEN SOFTWARE Purchasing software and the SDLC: –Companies that buy rather than develop software still follow the SDLC process, including: Systems analysis Conceptual design Physical design If software is purchased, program design and coding can be omitted. But software modifications may be needed. Companies also may design inputs, outputs, files, and control procedures.

14. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart14 of 172 PURCHASING PREWRITTEN SOFTWARE Purchasing software and the SDLC: –Companies that buy rather than develop software still follow the SDLC process, including: Systems analysis Conceptual design Physical design Implementation and conversion These activities must still take place, including: –Selecting and training personnel –Installing and testing hardware and software –Documenting procedures –Converting from old to new AIS However, the software modules do not have to be developed and tested. And the computer programs do not need to be documented.

15. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart15 of 172 PURCHASING PREWRITTEN SOFTWARE Purchasing software and the SDLC: –Companies that buy rather than develop software still follow the SDLC process, including: Systems analysis Conceptual design Physical design Implementation and conversion Operation and maintenance The AIS is operated like any other software. The vendor usually maintains the software.

16. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart16 of 172 PURCHASING PREWRITTEN SOFTWARE Selecting a vendor –Deciding whether to make or buy software can be made independently of the decision to acquire hardware, service, maintenance, and other AIS resources. –And the preceding resources can be bought independently of the software. –But hardware and vendor decisions may depend on the software decisions.

17. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart17 of 172 PURCHASING PREWRITTEN SOFTWARE Vendors can be found by: –Looking in phone book –Obtaining referrals –Scanning computer or trade magazines –Attending conferences –Using search organizations Beware of fly-by-night companies that can leave your organization high and dry.

18. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart18 of 172 PURCHASING PREWRITTEN SOFTWARE Acquiring hardware and software –Once AIS requirements have been defined, the organization can buy software and hardware. –Companies needing only a PC and some office software can usually complete their own research and make a selection.

19. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart19 of 172 PURCHASING PREWRITTEN SOFTWARE When buying large or complex systems, a request for proposal (RFP) should be prepared: –The RFP is an invitation to bidders to propose a system by a specific date. –Each proposal is evaluated. –Finalists are investigated in depth.

20. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart20 of 172 PURCHASING PREWRITTEN SOFTWARE The formal approach is important for several reasons: –Saves time The same information is provided to all bidders.

21. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart21 of 172 PURCHASING PREWRITTEN SOFTWARE The formal approach is important for several reasons: –Saves time –Simplifies the decision-making process The bidders all respond in the same format and based on the same information.

22. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart22 of 172 PURCHASING PREWRITTEN SOFTWARE The formal approach is important for several reasons: –Saves time –Simplifies the decision-making process –Reduces errors Less likely to look over important factors in evaluating proposals.

23. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart23 of 172 PURCHASING PREWRITTEN SOFTWARE The formal approach is important for several reasons: –Saves time –Simplifies the decision-making process –Reduces errors –Avoids potential for disagreement Both parties have the same expectations and information in writing.

24. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart24 of 172 PURCHASING PREWRITTEN SOFTWARE When an RFP is solicited based on exact hardware and software specifications: –Total costs are usually lower. –Less time is required for vendor preparation and company evaluation. –However, the vendor cannot recommend alternatives.

25. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart25 of 172 PURCHASING PREWRITTEN SOFTWARE A generalized RFP contains a problem definition and requests a system that meets specific performance objectives and requirements. –Leaves technical issues to the vendor. –However, makes it more difficult to evaluate proposals. –May produce more costly bids.

26. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart26 of 172 PURCHASING PREWRITTEN SOFTWARE Usually, the more information a company provides to the vendors, the better their chances of receiving a system that meets their requirements. –Detailed specifications should include: Required applications Inputs and outputs Files and databases Frequency and methods of file updating and inquiry Unique characteristics or requirements –Be sure to distinguish between mandatory and desirable requirements.

27. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart27 of 172 PURCHASING PREWRITTEN SOFTWARE Evaluating proposals and selecting a system –Eliminate any proposals that: Are missing important information. Fail to meet minimum requirements. Are ambiguous. –Those that pass the preliminary screening should be compared with the proposed AIS requirements to determine: If they meet all mandatory requirements. How many desirable requirements they meet. –Finalists can be invited to demo their system using company-supplied data.

28. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart28 of 172 PURCHASING PREWRITTEN SOFTWARE In reviewing the proposals, you need to evaluate: –Hardware –Software –Vendors

29. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart29 of 172 PURCHASING PREWRITTEN SOFTWARE In reviewing the proposals, you need to evaluate: –Hardware –Software –Vendors

30. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart30 of 172 PURCHASING PREWRITTEN SOFTWARE Criteria to evaluate hardware include: Cost Ability to run required software Processing speed and capabilities Secondary storage capability Input and output speeds Communication capabilities Expandability Recency of technology Availability Compatibility with existing hardware, software, and peripherals Performance compared to competitors Cost and availability of support and maintenance Warrantees and guarantees Financing arrangements Ability to meet mandatory requirements

31. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart31 of 172 PURCHASING PREWRITTEN SOFTWARE In reviewing the proposals, you need to evaluate: –Hardware –Software –Vendors

32. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart32 of 172 PURCHASING PREWRITTEN SOFTWARE Criteria to evaluate software include: Conformity with specifications Need for modification Performance (speed, accuracy, reliability) Use by other companies Satisfaction of other users Documentation Compatibility with existing software User-friendliness Ability to be demonstrated and test-driven Warranties Flexibility and maintainability Capability for online inquiry of files and records Vendor upgrades

33. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart33 of 172 PURCHASING PREWRITTEN SOFTWARE In reviewing the proposals, you need to evaluate: –Hardware –Software –Vendors

34. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart34 of 172 PURCHASING PREWRITTEN SOFTWARE Criteria to evaluate vendors include: Size Financial stability and security Experience Quality of support and warranties Regularity of updates Ability to provide financing Willingness to sign contract Willingness to provide references Reputation for reliability and dependability Hardware and software support and maintenance Implementation and installation support Quality and responsiveness of personnel Willingness to provide training Responsiveness and timeliness of support

35. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart35 of 172 PURCHASING PREWRITTEN SOFTWARE Approaches to comparing system performance: –Benchmark problem –Point scoring –Requirements costing

36. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart36 of 172 PURCHASING PREWRITTEN SOFTWARE Approaches to comparing system performance: –Benchmark problem –Point scoring –Requirements costing

37. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart37 of 172 PURCHASING PREWRITTEN SOFTWARE Benchmark problem –The new AIS performs a data processing task with input, processing, and output jobs typical of what would be required of the new system. –Processing times are calculated and compared. –The AIS with the lowest time is judged most efficient.

38. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart38 of 172 PURCHASING PREWRITTEN SOFTWARE Approaches to comparing system performance: –Benchmark problem –Point scoring –Requirements costing

39. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart39 of 172 PURCHASING PREWRITTEN SOFTWARE Point scoring: –A weight is assigned to each criterion used to evaluate the system, based on the relative importance of that criterion. –Each criterion is rated for each product. –Each rating is multiplied times the weight assigned to the criterion to develop a weighted score. –The weighted scores are added for each product.

40. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart40 of 172 PURCHASING PREWRITTEN SOFTWARE Example: –Zorba Co. is evaluating systems offered by three different vendors: Able Co., Baker Co., and Cook Co. –Zorba has determined three criteria that they will use to evaluate the different systems: cost, speed, and vendor reliability. –They have provided the following weights to each criteria, with vendor reliability being the most critical: Vendor reliability—9 Cost—6 Speed—4

41. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart41 of 172 PURCHASING PREWRITTEN SOFTWARE  Zorba examined the packages offered by the three vendors and rated them based on these three criteria. Ratings were from 1–5 with 5 being the highest score. CriteriaAble Co.Baker Co.Cook Co. Vendor reliability (9)254 Cost (6)534 Speed (4)342

42. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart42 of 172 PURCHASING PREWRITTEN SOFTWARE  The weighted scores are then computed by multiplying the rating given to each vendor on each criterion times the weight assigned to that criterion. CriteriaAble Co.Baker Co.Cook Co. Vendor reliability (9)254 Cost (6)534 Speed (4)342 WEIGHTED SCORES CriteriaAble Co.Baker Co.Cook Co. Vendor reliability (9)184536 Cost (6)301824 Speed (4)12168 X =

43. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart43 of 172 PURCHASING PREWRITTEN SOFTWARE The weighted scores for each company are summed: –Able = 60 points –Baker = 79 points –Cook = 68 points Based on the preceding scores, the bid would probably be awarded to Baker Co. WEIGHTED SCORES CriteriaAble Co.Baker Co.Cook Co. Vendor reliability (9)184536 Cost (6)301824 Speed (4)12168

44. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart44 of 172 PURCHASING PREWRITTEN SOFTWARE The preceding example is a simplification. In a real-life scenario, several factors would be different: –There would probably be many more criteria being considered. –Several people would be rating the criteria, and the final scores for each vendor would probably be a composite of those individual scores.

45. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart45 of 172 PURCHASING PREWRITTEN SOFTWARE Approaches to comparing system performance: –Benchmark problem –Point scoring –Requirements costing

46. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart46 of 172 PURCHASING PREWRITTEN SOFTWARE Requirements costing: –Estimates cost of purchasing or developing features that are not included in a particular AIS. –The total AIS cost is calculated by adding the acquisition cost to the purchasing and development costs. –Total cost = cost of system with all required features.

47. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart47 of 172 PURCHASING PREWRITTEN SOFTWARE To verify that the AIS that looks best on paper is actually the best in practice: –Test-drive the software. –Contact other users for references. –Evaluate vendor personnel. –Confirm details of the proposal.

48. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart48 of 172 INTRODUCTION We’ll be discussing how to obtain a new information system by: –Purchasing prewritten software –Developing software in-house –Outsourcing We’ll also discuss how to hasten or improve the development process through: –Business process reengineering –Prototyping –Computer-aided software engineering (CASE) tools

49. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart49 of 172 DEVELOPING SOFTWARE IN-HOUSE Despite the availability of good canned software, many organizations develop their own because: –Their requirements are unique; or –Their size and complexity necessitates a custom package. Developing custom software is difficult and error prone and consumes much time and resources. The GAO reports that 31% of federal government IT projects are poorly planned or do not meet intended objectives.

50. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart50 of 172 DEVELOPING SOFTWARE IN-HOUSE The most difficult hurdles: –Lack of time. –Complexity of desired system. –Poor requirements and systems planning. –Inadequate communication and cooperation between departments and users. –Lack of qualified staff. –Poor senior executive support.

51. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart51 of 172 DEVELOPING SOFTWARE IN-HOUSE After end users define their requirements, the analysts: –Work with the end users to determine the format of paper and screen outputs. –Identify: Data required for each input. Data to be retained in files. –Develop detailed program specs to be interpreted and coded by programmers.

52. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart52 of 172 DEVELOPING SOFTWARE IN-HOUSE The process requires much discipline and management supervision. Accountants may help as project supervisors, users, or development team members.

53. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart53 of 172 DEVELOPING SOFTWARE IN-HOUSE Custom software is usually developed and written in-house. –Alternately, organizations may engage an outside company to develop a package or assemble one from their inventory of modules. –These modules are adapted, combined, and organized to form a customized product that meets specific requirements.

54. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart54 of 172 DEVELOPING SOFTWARE IN-HOUSE When contracting with an outside organization, maintain control over development and observe the following guidelines: –Carefully select a developer Look for: –Experience in the industry –A good understanding of: Business in general How your company conducts business

55. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart55 of 172 DEVELOPING SOFTWARE IN-HOUSE When contracting with an outside organization, maintain control over development and observe the following guidelines: –Carefully select a developer –Sign a contract to clearly define responsibilities

56. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart56 of 172 DEVELOPING SOFTWARE IN-HOUSE When contracting with an outside organization, maintain control over development and observe the following guidelines: –Carefully select a developer –Sign a contract to clearly define responsibilities –Plan and monitor each step Design all aspects in detail. Include frequent checkpoints.

57. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart57 of 172 DEVELOPING SOFTWARE IN-HOUSE When contracting with an outside organization, maintain control over development and observe the following guidelines: –Carefully select a developer –Sign a contract to clearly define responsibilities –Plan and monitor each step –Maintain effective and frequent communication

58. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart58 of 172 DEVELOPING SOFTWARE IN-HOUSE When contracting with an outside organization, maintain control over development and observe the following guidelines: –Carefully select a developer –Sign a contract to clearly define responsibilities –Plan and monitor each step –Maintain effective and frequent communication –Control all costs Cash outflows should be minimized until the project is completed and accepted.

59. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart59 of 172 DEVELOPING SOFTWARE IN-HOUSE Information systems consultants suggest that clients develop their own software only if it provides a significant competitive advantage. –Payroll and A/R systems are not good candidates for in-house development. –There might be significant benefits to developing sophisticated product manufacturing software. If there is no significant competitive advantage, buy software from an outside supplier. –Trend appears to be in that direction. There is no pat answer to the make-or-buy decision.

60. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart60 of 172 DEVELOPING SOFTWARE IN-HOUSE Another approach to developing software in-house is to take the lion’s share of the effort out of the hands of the IS department and place it in the laps of the ultimate information users.

61. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart61 of 172 DEVELOPING SOFTWARE IN-HOUSE End-user developed software –End-user computing (EUC) is the hands-on development, use, and control of computer-based information systems by users. –With EUC, individuals use IT to meet their own IS needs rather than rely on systems professionals. –Why? The demand for information systems has grown exponentially since the introduction of the computer. One solution to meeting these needs is to have end users meet their own information needs.

62. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart62 of 172 DEVELOPING SOFTWARE IN-HOUSE Technology has evolved to automate much of the system development process. Factors contributing to EUC are: –Increased computer literacy. –Easier-to-use programming languages. –Inexpensive PCs. –A variety of powerful and inexpensive software packages.

63. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart63 of 172 DEVELOPING SOFTWARE IN-HOUSE Consequently, users have begun to develop their own systems to: –Create and store data. –Access and download company data. –Share data and computer resources in networks.

64. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart64 of 172 DEVELOPING SOFTWARE IN-HOUSE As end users began to meet their initial needs, two things happened: –Users realized computers could be used to meet more and more information needs. –Increased access to data created many new uses and needs for information. Result: A tremendous growth in end-user computing that is expected to continue.

65. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart65 of 172 DEVELOPING SOFTWARE IN-HOUSE EUC has altered the role of the IS staff: –They continue to develop and maintain transaction processing systems and company-wide databases from which end users draw information. –They provide users with technical advice and operational support and make as much information available to them as possible. –While the support work has increased for the IS staff, this work is counter-balanced by a decreased demand for traditional IS services. –EUC may make up 75–95% of all IS processing by 2010. Because accountants will be end users, they need an understanding of EUC concepts.

66. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart66 of 172 DEVELOPING SOFTWARE IN-HOUSE Appropriate end-user development and use –End user development (EUD) happens when information users (e.g., managers, accountants, auditors) develop their own applications using computer specialists as advisors. Inappropriate for complex systems. Not used for large-scale processing, such as payroll, receivables, payables, general ledger, or inventory.

67. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart67 of 172 DEVELOPING SOFTWARE IN-HOUSE –End user development may be most appropriate for: Retrieving info from company databases to produce simple reports or answer single queries. Performing “what if,” sensitivity, or statistical analyses. Developing applications that use prewritten software (e.g., spreadsheet or database software). Preparing schedules (such as aging of accounts) and lists.

68. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart68 of 172 DEVELOPING SOFTWARE IN-HOUSE Benefits of end-user computing: –User creation, control, and implementation Users control the development process, decide what info needs are important, and if a system should be developed. Ownership helps them build better systems.

69. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart69 of 172 DEVELOPING SOFTWARE IN-HOUSE Benefits of end-user computing: –User creation, control, and implementation –Systems that meet user needs Because users discover flaws that systems people would not catch. Also, the communication problem between user  analyst  programmer are avoided.

70. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart70 of 172 DEVELOPING SOFTWARE IN-HOUSE Benefits of end-user computing: –User creation, control, and implementation –Systems that meet user needs –Timeliness  Much of the expensive and time-consuming cost- benefit analysis, requirements definitions, and red tape are reduced.

71. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart71 of 172 DEVELOPING SOFTWARE IN-HOUSE Benefits of end-user computing: –User creation, control, and implementation –Systems that meet user needs –Timeliness –Freeing up systems resources The IS department can exert time and resources on other information and maintenance activities. Reduces both visible and invisible backlog of systems development projects.

72. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart72 of 172 DEVELOPING SOFTWARE IN-HOUSE Benefits of end-user computing: –User creation, control, and implementation –Systems that meet user needs –Timeliness –Freeing up systems resources –Versatility and ease of use Most EUC software is easy to understand and use. With a laptop, the work can be done at home or almost anywhere.

73. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart73 of 172 DEVELOPING SOFTWARE IN-HOUSE Risks of end-user computing: –Logic and development errors End users are inexperienced in systems development. Consequently, they are more likely to make errors and less likely to recognize them. They may: –Solve wrong problem –Poorly define systems requirements –Apply inappropriate analytical methods –Use wrong software –Use incomplete or outdated information Errors are often caused by faulty logic, formulas, or software commands.

74. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart74 of 172 DEVELOPING SOFTWARE IN-HOUSE Risks of end-user computing: –Logic and development errors –Inadequately tested applications Users probably won’t test rigorously. They tend not to recognize the need for testing, the difficulty, or the time involved. Tend to have grossly inflated opinions of how error-free their systems are.

75. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart75 of 172 DEVELOPING SOFTWARE IN-HOUSE Risks of end-user computing: –Logic and development errors –Inadequately tested applications –Inefficient systems They get the job done but aren’t always efficient.

76. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart76 of 172 DEVELOPING SOFTWARE IN-HOUSE Risks of end-user computing: –Logic and development errors –Inadequately tested applications –Inefficient systems –Poorly controlled and documented systems Many end users don’t implement controls to protect their system. Systems are often poorly documented because they think it’s unimportant. They fail to realize that others cannot understand the system without documentation.

77. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart77 of 172 DEVELOPING SOFTWARE IN-HOUSE Risks of end-user computing: –Logic and development errors –Inadequately tested applications –Inefficient systems –Poorly controlled and documented systems –System incompatibilities Some companies add end-user equipment without considering the technological implications. May end up with a diversity of hardware and software that is difficult to support or network.

78. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart78 of 172 DEVELOPING SOFTWARE IN-HOUSE Risks of end-user computing: –Logic and development errors –Inadequately tested applications –Inefficient systems –Poorly controlled and documented systems –System incompatibilities –Duplication of systems and data and wasted resources If end users aren’t aware that others have similar information needs, duplication occurs. Inexperienced users may also bite off more than they can chew, wasting time and resources.

79. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart79 of 172 DEVELOPING SOFTWARE IN-HOUSE Risks of end-user computing: –Logic and development errors –Inadequately tested applications –Inefficient systems –Poorly controlled and documented systems –System incompatibilities –Duplication of systems and data and wasted resources –Increased costs Buying PCs for multitudes of workers is costly. Regular updating of hardware and software is also expensive. EUC also increases costs if it diverts users from their primary jobs. EUC can increase demands on the company mainframe and IS staff for support.

80. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart80 of 172 DEVELOPING SOFTWARE IN-HOUSE To achieve proper balance between maximizing the benefits of end user systems and minimizing the risks: –Systems analysts can act as advisers and require user-created systems to be reviewed and documented prior to use. –Users can be trained in systems analysis so they can identify and adequately meet their needs, as well as reviewing the work of others.

81. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart81 of 172 DEVELOPING SOFTWARE IN-HOUSE Organizations use several approaches to managing and controlling EUC. –If you give the systems department control over EUC: Growth of EUC is discouraged. The organization is denied most of its benefits. It’s not in the company’s best long-term interests. –However, if there are no controls over the tools that can be purchased or how they can be used: Chaos can result The system can be difficult to support.

82. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart82 of 172 DEVELOPING SOFTWARE IN-HOUSE Best to provide enough guidance and support to adequately control the system but allow users flexibility. A help desk can encourage, support, coordinate, and control end-user activities. –One level of help desk employees might be trained with scripted answers. –A higher level might handle more complicated issues.

83. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart83 of 172 DEVELOPING SOFTWARE IN-HOUSE Help desk duties include: –Providing hotline assistance to solve problems. –Serving as a clearinghouse for information, coordination, and assistance. –Training end users how to use specific hardware and software, and providing technical maintenance and support. –Evaluating new end-user hardware and software products. –Assisting with application development. –Developing and implementing standards for: Hardware and software purchases to ensure compatibility. Documentation and application testing. Overseeing security issues such as fraud, software piracy, and viruses.

84. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart84 of 172 INTRODUCTION We’ll be discussing how to obtain a new information system by: –Purchasing prewritten software –Developing software in-house –Outsourcing We’ll also discuss how to hasten or improve the development process through: –Business process reengineering –Prototyping –Computer-aided software engineering (CASE) tools

85. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart85 of 172 OUTSOURCE THE SYSTEM Outsourcing 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 the client’s computers and hire all or most of the client’s employees. Then operate and manage the entire system on the client’s site or migrate it to the outsourcer’s computers. Many of these contracts have terms of 10 or more years and cost from hundreds of thousands to millions of dollars a year.

86. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart86 of 172 OUTSOURCE THE SYSTEM –In a client/server or a PC outsourcing agreement the organization outsources: A particular service (e.g., help desk services); A segment of its business; A particular function; or PC support.

87. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart87 of 172 OUTSOURCE THE SYSTEM Examples of outsourced activities: –Installation –Training –Maintenance –Help desk –Technical support

88. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart88 of 172 OUTSOURCE THE SYSTEM The growth in outsourcing applications –Outsourcing was initially used for standardized applications such as payroll, accounting, and purchasing. –Also used by companies that were struggling to survive and wanted a quick cash infusion from selling their hardware.

89. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart89 of 172 OUTSOURCE THE SYSTEM Kodak and Xerox were very successful at cutting capital expenditures and other costs, which motivated others to outsource their systems. Now many Fortune 500 companies outsource some or all of there IS. Outsourcing business processes is the fastest growing IT trend—large and small companies are jumping on the band wagon.

90. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart90 of 172 OUTSOURCE THE SYSTEM Most companies that outsource use several different companies rather than a single source in order to: –Increase flexibility –Foster competition –Reduce costs Most companies do not outsource: –Strategic management of their IT environment –Business process management –IT architecture

91. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart91 of 172 OUTSOURCE THE SYSTEM Benefits of outsourcing: –Provides a business solution Allows companies to concentrate on their core competencies.

92. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart92 of 172 OUTSOURCE THE SYSTEM Benefits of outsourcing: –Provides a business solution –Asset utilization Companies can improve cash position and reduce expenses by selling their computers to an outsourcer.

93. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart93 of 172 OUTSOURCE THE SYSTEM Benefits of outsourcing: –Provides a business solution –Asset utilization –Access to greater experience and more advanced technology The cost and time to stay at the cutting edge of technology is escalating rapidly.

94. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart94 of 172 OUTSOURCE THE SYSTEM Benefits of outsourcing: –Provides a business solution –Asset utilization –Access to greater experience and more advanced technology –Lower costs Outsourcing can reduce IS costs by 15– 30% because of economies of scale and lower costs of outsourcers. IBM outsources project management and programming to China where labor costs are 1/3 of U.S. costs.

95. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart95 of 172 OUTSOURCE THE SYSTEM Benefits of outsourcing: –Provides a business solution –Asset utilization –Access to greater experience and more advanced technology –Lower costs –Improved development time Experienced specialists can often develop and implement a system faster and more efficiently. Can also help the company cut through some of the internal politics.

96. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart96 of 172 OUTSOURCE THE SYSTEM Benefits of outsourcing: –Provides a business solution –Asset utilization –Access to greater experience and more advanced technology –Lower costs –Improved development time –Elimination of peaks-and-valleys usage Companies with seasonal fluctuations don’t have to staff an IT force or maintain hardware for peak periods.

97. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart97 of 172 OUTSOURCE THE SYSTEM Benefits of outsourcing: –Provides a business solution –Asset utilization –Access to greater experience and more advanced technology –Lower costs –Improved development time –Elimination of peaks-and-valleys usage –Facilitation of downsizing Companies with in-house systems that downsize are often left with an unnecessarily large AIS function.

98. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart98 of 172 OUTSOURCE THE SYSTEM Risks of outsourcing –Many outsourcing contracts fail to meet expectations for reasons including: –Inflexibility Many outsourcing contracts are for 10 years. If the company is dissatisfied, has problems, or goes through extensive structural changes, the contract is difficult and/or costly to break.

99. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart99 of 172 OUTSOURCE THE SYSTEM Risks of outsourcing: –Inflexibility –Loss of control The company may lose control of its system and data. Also risk of confidential data being shared with others.

100. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart100 of 172 OUTSOURCE THE SYSTEM Risks of outsourcing: –Inflexibility –Loss of control –Reduced competitive advantage Companies can lose a fundamental understanding of their IS needs and how the system can provide it with competitive advantages. Outsourcers are not as motivated to meet the client’s competitive challenges. Can be mitigated significantly by outsourcing the portion of business processes considered standard (e.g., payroll, accounts receivable) and customizing the portion that provides competitive advantage.

101. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart101 of 172 OUTSOURCE THE SYSTEM Risks of outsourcing: –Inflexibility –Loss of control –Reduced competitive advantage –Locked in system It is expensive and difficult to reverse outsourcing.

102. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart102 of 172 OUTSOURCE THE SYSTEM Risks of outsourcing: –Inflexibility –Loss of control –Reduced competitive advantage –Locked in system –Unfulfilled goals Many outsourcing goals and benefits are never realized.

103. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart103 of 172 OUTSOURCE THE SYSTEM Risks of outsourcing: –Inflexibility –Loss of control –Reduced competitive advantage –Locked in system –Unfulfilled goals –Poor service Some companies complain of poor service from their outsourcers, particularly with respect to: –Slow or no responsiveness to changing business conditions. –Poorly planned migration to new technologies.

104. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart104 of 172 OUTSOURCE THE SYSTEM Risks of outsourcing: –Inflexibility –Loss of control –Reduced competitive advantage –Locked in system –Unfulfilled goals –Poor service –Increased risk Increased risks include loss of market position, loss of human capital, and reputation impairment among others.

105. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart105 of 172 INTRODUCTION We’ll be discussing how to obtain a new information system by: –Purchasing prewritten software –Developing software in-house –Outsourcing We’ll also discuss how to hasten or improve the development process through: –Business process reengineering –Prototyping –Computer-aided software engineering (CASE) tools

106. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart106 of 172 BUSINESS PROCESS REENGINEERING Business process reengineering (BPR) is the analysis and redesign of business processes and information systems to achieve significant performance improvements. –Reduces a company to its essential business processes. –Reshapes organizational work practices and information flows to take advantage of technological advancements.

107. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart107 of 172 BUSINESS PROCESS REENGINEERING BPR: –Simplifies the system. –Makes it more effective. –Improves a company’s quality and service. BPR software has been developed to help automate many BPR tasks.

108. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart108 of 172 BUSINESS PROCESS REENGINEERING Michael Hammer has set forth several principles that help organizations successfully reengineer business processes: -Organize around outcomes, not tasks. DO AWAY WITH: Assigning different parts of a business process to different people, with the resulting handoffs, delays, and errors. INSTEAD: Each person’s job is designed around an objective, outcome, or process rather than a task needed to complete a process.

109. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart109 of 172 BUSINESS PROCESS REENGINEERING Michael Hammer has set forth several principles that help organizations successfully reengineer business processes: -Organize around outcomes, not tasks. -Require those who use the output to perform the process.

110. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart110 of 172 BUSINESS PROCESS REENGINEERING  Michael Hammer has set forth several principles that help organizations successfully reengineer business processes: -Organize around outcomes, not tasks. -Require those who use the output to perform the process. -Require those who produce information to process it.

111. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart111 of 172 BUSINESS PROCESS REENGINEERING Michael Hammer has set forth several principles that help organizations successfully reengineer business processes: -Organize around outcomes, not tasks. -Require those who use the output to perform the process. -Require those who produce information to process it. -Centralize AND disperse data. You centralize operations to achieve economies of scale and eliminate redundancy. You decentralize operations to be more responsive to customers and provide better service With technology, you don’t have to choose. –Corporate-wide databases centralize data. –Telecommunications technology disburses it to the organization.

112. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart112 of 172 BUSINESS PROCESS REENGINEERING Michael Hammer has set forth several principles that help organizations successfully reengineer business processes: -Organize around outcomes, not tasks. -Require those who use the output to perform the process. -Require those who produce information to process it. -Centralize AND disperse data. -Integrate parallel activities.  Example: In developing a new product, include on the development team at least one person from each involved department, so the right hand will know what the left hand is doing and the process will be smoothly integrated.

113. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart113 of 172 BUSINESS PROCESS REENGINEERING Michael Hammer has set forth several principles that help organizations successfully reengineer business processes: -Organize around outcomes, not tasks. -Require those who use the output to perform the process. -Require those who produce information to process it. -Centralize AND disperse data. -Integrate parallel activities. -Empower workers, use built-in controls, and flatten the organization chart. In a traditional system, there is a layer of worker bees and several layers of manager bees, auditor bees, and controller bees. In a reengineered system, the people who do the work have decision-making responsibility. –Information technology enables their decision accuracy. –Controls are built into the process itself.

114. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart114 of 172 BUSINESS PROCESS REENGINEERING Michael Hammer has set forth several principles that help organizations successfully reengineer business processes: -Organize around outcomes, not tasks. -Require those who use the output to perform the process. -Require those who produce information to process it. -Centralize AND disperse data. -Integrate parallel activities. -Empower workers, use built-in controls, and flatten the organization chart. -Capture data once—at its source. Instead of having each functional area running its own AIS and entering the same data, use source data automation, EDI, etc. to capture data electronically at the source and disburse it to where it needs to be used.

115. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart115 of 172 BUSINESS PROCESS REENGINEERING Underlying reengineering is the efficient and effective use of the latest information technology, e.g.: –Radio- and satellite-based communications. –Powerful handheld computers. –Image processing that lets multiple users handle a document simultaneously. –Active documents.

116. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart116 of 172 BUSINESS PROCESS REENGINEERING Challenges faced by reengineering efforts: –Many BPR efforts fail or fall short of their objectives. A company must overcome the following obstacles: Tradition “We’ve always done it this way!” Success requires changes in culture and beliefs.

117. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart117 of 172 BUSINESS PROCESS REENGINEERING Challenges Faced by Reengineering Efforts: –Many BPR efforts fail or fall short of their objectives. A company must overcome the following obstacles: Tradition Resistance Change is always met with resistance. Requires continual reassurance, persuasion, and support.

118. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart118 of 172 BUSINESS PROCESS REENGINEERING Challenges Faced by Reengineering Efforts: –Many BPR efforts fail or fall short of their objectives. A company must overcome the following obstacles: Tradition Resistance Time and cost requirements Two or more years are required to complete BPR.

119. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart119 of 172 BUSINESS PROCESS REENGINEERING Challenges faced by reengineering efforts: –Many BPR efforts fail or fall short of their objectives. A company must overcome the following obstacles: Tradition Resistance Time and cost requirements Lack of management support Managers are nervous about the “big hype—few results” syndrome. Without their support, the effort will fail.

120. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart120 of 172 BUSINESS PROCESS REENGINEERING Challenges Faced by Reengineering Efforts: –Many BPR efforts fail or fall short of their objectives. A company must overcome the following obstacles: Tradition Resistance Time and cost requirements Lack of management support Skepticism BPR is sometimes viewed as just the same picture in a different frame.

121. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart121 of 172 BUSINESS PROCESS REENGINEERING Challenges Faced by Reengineering Efforts: –Many BPR efforts fail or fall short of their objectives. A company must overcome the following obstacles: Tradition Resistance Time and cost requirements Lack of management support Skepticism Retraining The necessary retraining costs time and dollars.

122. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart122 of 172 BUSINESS PROCESS REENGINEERING Challenges faced by reengineering efforts: –Many BPR efforts fail or fall short of their objectives. A company must overcome the following obstacles: Tradition Resistance Time and cost requirements Lack of management support Skepticism Retraining Controls Cannot skip the inclusion of controls to ensure reliability and integrity.

123. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart123 of 172 INTRODUCTION We’ll be discussing how to obtain a new information system by: –Purchasing prewritten software –Developing software in-house –Outsourcing We’ll also discuss how to hasten or improve the development process through: –Business process reengineering –Prototyping –Computer-aided software engineering (CASE) tools

124. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart124 of 172 PROTOTYPING Prototyping is an approach to systems design in which a simplified working model of a system is developed. –The prototype (first draft) is built quickly at low cost and provided to users for experimentation. –Playing with the prototype allows users to determine what they do and do not like. –Developers modify the system in response to user comments and re-present it to them. –The iterative process continues until users are satisfied that the system meets their needs.

125. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart125 of 172 PROTOTYPING The basic premise is that it’s easier for people to express what they like or dislike than to imagine what they want in a system. –In another words, it helps to have a straw man to aim at. –Even a simple system that is not fully functional demonstrates features far better than graphics and verbiage.

126. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart126 of 172 PROTOTYPING Developers who use prototyping still go through the systems development life cycle. But prototyping allows them to expedite some analysis and design. For example, prototyping captures user needs and helps developers and users make many conceptual and physical design decisions. Current practice leans heavily toward prototyping so that projects can be completed quickly.

127. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart127 of 172 PROTOTYPING Four steps are involved in developing a prototype: –STEP ONE: Identify basic requirements –STEP TWO: Develop an initial prototype –STEP THREE: Repeated iterations –STEP FOUR: Use the system

128. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart128 of 172 PROTOTYPING Four steps are involved in developing a prototype: –STEP ONE: Identify basic requirements –STEP TWO: Develop an initial prototype –STEP THREE: Repeated iterations –STEP FOUR: Use the system

129. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart129 of 172 PROTOTYPING The first step is to identify basic requirements by meeting with users to agree on the size and scope of the system and decide what it should include and exclude. –Developer and users also determine: Decision-making and transaction processing outputs. Inputs and data needed to produce those outputs. –The emphasis is on what outputs should be produced rather than how.

130. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart130 of 172 PROTOTYPING –The developer must ensure: User expectations are realistic. Their basic information requirements are met. –The designer uses the information requirements to develop cost, time, and feasibility estimates for alternative AIS solutions.

131. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart131 of 172 PROTOTYPING Four steps are involved in developing a prototype: –STEP ONE: Identify basic requirements –STEP TWO: Develop an initial prototype –STEP THREE: Repeated iterations –STEP FOUR: Use the system

132. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart132 of 172 PROTOTYPING The second step involves developing an initial prototype that meets the agreed-on requirements. –Emphasize speed and low cost rather than efficiency of operation. –The goal is to implement the prototype within a short time period.

133. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart133 of 172 PROTOTYPING Because of time constraints, some aspects are sacrificed. For example, at this point, you ignore: –Non-essential functions –System controls –Exception handling –Validation of input data –Processing speed –Efficiency considerations

134. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart134 of 172 PROTOTYPING Users must see and use tentative versions of: –Data entry display screens –Menus –Input prompts –Source documents They must also: –Respond to prompts –Query the system –Judge response times –Issue commands

135. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart135 of 172 PROTOTYPING When the prototype is finished, the developer returns to the users and demonstrates the system. Users are instructed to: –Experiment. –Comment on what they do and do not like.

136. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart136 of 172 PROTOTYPING Four steps are involved in developing a prototype: –STEP ONE: Identify basic requirements –STEP TWO: Develop an initial prototype –STEP THREE: Repeated iterations –STEP FOUR: Use the system

137. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart137 of 172 PROTOTYPING The third step involves repeated iterations of: –Users identifying changes. –Developers making the changes. –The system being turned back to users for next round. This step continues until users are satisfied—usually 4 to 6 iterations.

138. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart138 of 172 PROTOTYPING Four steps are involved in developing a prototype: –STEP ONE: Identify basic requirements –STEP TWO: Develop an initial prototype –STEP THREE: Repeated iterations –STEP FOUR: Use the system

139. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart139 of 172 PROTOTYPING The final step involves using the system approved by the users. An approved prototype is typically used in one of two ways.

140. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart140 of 172 PROTOTYPING Half of the prototypes are turned into fully functional systems referred to as operational prototypes. –To make them operational, the developer must: Add needed controls. Improve operational efficiency. Provide backup and recovery. Integrate the prototype with the systems with which it interfaces.

141. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart141 of 172 PROTOTYPING Changes may be necessary to allow the program to: –Accept real input. –Access real data files. –Process data. –Make necessary computations and calculations. –Produce real output.

142. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart142 of 172 PROTOTYPING When it’s not practical to modify the prototype to make a fully functional system, non-operational or throwaway prototypes can be used in several ways: –They may be discarded, and the systems requirements identified in the process of building them can be used to develop a new system. If so, the SDLC is followed to develop the system, and the prototype is a model.

143. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart143 of 172 PROTOTYPING –Alternately, they may be used as the initial prototype for an expanded system designed to meet needs of many users. –As a final alternative, if users and developers decide the system is unsalvageable, the prototype can be discarded completely.

144. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart144 of 172 PROTOTYPING When to use prototyping –Prototyping supports rather than replaces the SDLC. –It is appropriate when: Users don’t fully understand their needs, or the needs change rapidly. System requirements are difficult to define. System inputs and outputs are not known. The task to be performed is unstructured or semi-structured. Designers are uncertain about what technology to use. The system is crucial and needed quickly. The risk of developing the wrong system is high.

145. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart145 of 172 PROTOTYPING The users’ reactions to the new system are important development considerations. Many design strategies must be tested. The design staff has little experience developing this type of system or application. The system will be used infrequently so that processing efficiency is not crucial.

146. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart146 of 172 PROTOTYPING Good candidates for prototyping: –Decision support systems. –Executive information systems. –Expert systems. –Information retrieval systems. –Systems that involve experimentation and trial-and-error development. –Systems in which requirements evolve as the system is used.

147. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart147 of 172 PROTOTYPING Prototyping is usually inappropriate for: –Large or complex systems that: Serve major organizational components; or Cross numerous organizational boundaries. –Standard AIS components, such as: Accounts receivable Accounts payable Inventory management

148. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart148 of 172 PROTOTYPING Advantages of prototyping: –Better definition of user needs Because of intensive end-user involvement.

149. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart149 of 172 PROTOTYPING Advantages of prototyping: –Better definition of user needs –Higher user involvement and satisfaction

150. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart150 of 172 PROTOTYPING Advantages of prototyping: –Better definition of user needs –Higher user involvement and satisfaction –Faster development time It may take days or weeks to get a prototype up vs. a year or more for a traditional system.

151. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart151 of 172 PROTOTYPING Advantages of prototyping: –Better definition of user needs –Higher user involvement and satisfaction –Faster development time –Fewer errors Errors are detected early because the users experiment with each version. It’s also easy to identify and terminate an infeasible AIS early.

152. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart152 of 172 PROTOTYPING Advantages of prototyping: –Better definition of user needs –Higher user involvement and satisfaction –Faster development time –Fewer errors –More opportunity for changes

153. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart153 of 172 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 Some for 10–20% of the cost of traditional systems.

154. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart154 of 172 PROTOTYPING Disadvantages of prototyping: –Significant user time

155. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart155 of 172 PROTOTYPING Disadvantages of prototyping: –Significant user time –Less efficient use of system resources Shortcuts in developing the system may result in: –Poor performance and reliability –High maintenance and support costs

156. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart156 of 172 PROTOTYPING Disadvantages of prototyping: –Significant user time –Less efficient use of system resources –Incomplete system development

157. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart157 of 172 PROTOTYPING Disadvantages of prototyping: –Significant user time –Less efficient use of system resources –Incomplete system development –Inadequately tested and documented systems Who wants to do that stuff?

158. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart158 of 172 PROTOTYPING Disadvantages of prototyping: –Significant user time –Less efficient use of system resources –Incomplete system development –Inadequately tested and documented systems –Negative behavioral reactions If the prototype is discarded, users may be upset about using it and losing it. May also be dissatisfied if all their suggestions are not incorporated or if they have to go through too many iterations.

159. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart159 of 172 PROTOTYPING Disadvantages of prototyping: –Significant user time –Less efficient use of system resources –Incomplete system development –Inadequately tested and documented systems –Negative behavioral reactions –Never-ending development If not managed properly, the development could get stuck in a terminal loop.

160. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart160 of 172 INTRODUCTION We’ll be discussing how to obtain a new information system by: –Purchasing prewritten software –Developing software in-house –Outsourcing We’ll also discuss how to hasten or improve the development process through: –Business process reengineering –Prototyping –Computer-aided software engineering (CASE) tools

161. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart161 of 172 Computer-Aided Software Engineering (CASE) Tools Traditionally, software developers have created software to simplify the work of others, but not for themselves. Computer-aided software (or systems) engineering (CASE) tools are an integrated package of computer-based tools that automate important aspects of the software development process. –Used to plan, analyze, design, program, and maintain an information system. –Also used to enhance efforts of managers, users, and programmers in understanding information needs.

162. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart162 of 172 Computer-Aided Software Engineering (CASE) Tools CASE tools do not replace skilled designers, but provide developers with effective support for all SDLC phases. CASE software typically includes tools for: –Strategic planning –Project and system management –Database design –Screen and report layout –Automatic code generation

163. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart163 of 172 Computer-Aided Software Engineering (CASE) Tools Advantages of CASE technology: –Increased productivity Can generate bug-free code from system specifications. Can automate repetitive tasks.

164. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart164 of 172 Computer-Aided Software Engineering (CASE) Tools Advantages of CASE technology: –Increased productivity –Improved program quality Can simplify enforcement of structured development standards, which: –Improves quality of development. –Reduces threat of serious design errors. Can check internal accuracy of design and detect inconsistencies.

165. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart165 of 172 Computer-Aided Software Engineering (CASE) Tools Advantages of CASE technology: –Increased productivity –Improved program quality –Cost savings Cost savings of up to 80–90% are possible.

166. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart166 of 172 Computer-Aided Software Engineering (CASE) Tools Advantages of CASE technology: –Increased productivity –Improved program quality –Cost savings –Improved control procedures Encourages development early in the design process of: –System controls –Security measures –System auditability –Error handling procedures

167. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart167 of 172 Computer-Aided Software Engineering (CASE) Tools Advantages of CASE technology: –Increased productivity –Improved program quality –Cost savings –Improved control procedures –Simplified documentation  Automatically documents as the system development progresses.

168. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart168 of 172 Computer-Aided Software Engineering (CASE) Tools Problems with CASE technology: –Incompatibility Some tools don’t interact effectively with some systems.

169. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart169 of 172 Computer-Aided Software Engineering (CASE) Tools Problems with CASE technology: –Incompatibility –Cost Some packages > $360,000.

170. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart170 of 172 Computer-Aided Software Engineering (CASE) Tools Problems with CASE technology: –Incompatibility –Cost –Unmet expectations Only 37% of CIOs believe they achieved expected benefits.

171. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart171 of 172 SUMMARY AND CONCLUSIONS You’ve learned: –How organizations buy software, hardware, and vendor services. –How information systems departments develop custom software. –How end users develop, use, and control computer-based information systems. –Why organizations outsource their information systems, as well as the benefits and risks of doing so.

172. © 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart172 of 172 SUMMARY AND CONCLUSIONS You’ve also learned: –What reengineering processes entail and when they are appropriate. –How prototypes are used to develop an AIS and when it is advantageous to do so. –What computer-aided software engineering is and how it’s used in systems development.