Core Concepts of ACCOUNTING INFORMATION SYSTEMS Moscove, Simkin & Bagranoff John Wiley & Sons, Inc. Developed by: S. Bhattacharya, Ph.D. Florida Atlantic University

Chapter 15 Systems Study: Implementation, Follow-up and Maintenance Introduction Systems Implementation Systems Follow Up and Maintenance Outsourcing

Systems Implementation Systems Implementation is often called the “action” phase of a systems study because the recommended changes from the prior analysis, design, and development work are now put into operation.

What can go wrong during implementation? The new system is not fully developed or tested, but is installed anyway. The organization fails to budget sufficient time, money, and related resources to the installation tasks of the project. Complete system and application documentation is lacking, causing confusion and misunderstandings. Users are forced to use the system without adequate training.

What can go wrong during implementation? The implementation team fails to test the new system, which turns out to have major “bugs” in it. After the initial installation is completed, the organization fails to evaluate the system’s performance, especially against the original objectives. The organization fails to allocate sufficient resources for system maintenance. Over time, the system deteriorates and becomes ineffective.

Implementation Activities Prepare the Physical Site - accountants are concerned about incremental costs. Determine the Functional Changes - includes analysis of job function changes and types of data that will be processed and reported. Select and Assign Personnel - new system may require added personnel, job reengineering, or terminating employees.

Train Personnel - computer vendor personnel and implementation team can help train personnel. Acquire and Install Computer Equipment – implementation team and computer vendor’s employees help to install the new computer equipment. Establish Internal Controls - cost- effective general and application controls should be built into the system. Implementation Activities

Convert Data Files - data files may have to be converted to newer, more useful formats. Acquire Computer Software –Software acquired from an independent vendor is called canned software. –Hardware and software combined in one package is called a turnkey system. Implementation Activities

Test Computer Programs - programs must be tested regardless of where they came from or who wrote them. Three methods for testing computer software are: –Unit testing – individual programs of a system are each tested as separate components. –Process testing - hypothetical test transactions and hypothetical file records are developed that represent all valid processing and all conceivable errors. –Acceptance test - test transactions and acceptance criteria in processing these transactions with a computer program are developed by system’s users. Implementation Activities

Conversion - there are several conversion methods: Direct conversion - the old system is immediately discontinued when the new system is implemented. Parallel conversion - both the new and old system operate simultaneously for a certain period of time. Modular conversion (or pilot conversion) - consists of testing and converting the new system one module at a time. Implementation Activities

Program Evaluation and Review Technique (PERT) PERT (Program Evaluation and Review Technique) is a technique for scheduling and monitoring the activities in large projects. Project leader –prepares a list of system implementation activities –identifies the prerequisite activities that must be completed before others can start –and estimates the amount of time required to complete each activity.

PERT Charts The longest path of completion of a project is the critical path. The slack time describes the amount of delay time that can occur in each noncritical activity and still not delay the entire project.

Gantt Charts A Gantt Chart is useful in scheduling and tracking activities required in implementation. Gantt charts are straightforward, easy to understand, and best suited for projects that are not highly complex. The Gantt chart is good for comparing planned to actual times for the implementation activities that must be performed.

Systems Follow-up and Maintenance The purpose of follow-up and maintenance is to monitor the new system and make sure that it continues to satisfy the three levels of organizational goals: –General systems goals –Top management systems goals –Operating management systems goals

Steps in Evaluation of System’s Effectiveness Talk to management and end users to ascertain satisfaction with the new system. Determine that controls are functioning properly. Observe employees’ work performance. Evaluate whether computer processing functions are being performed efficiently and effectively. Determine whether output schedules for reports are being met.

The Follow-up Review Report A post-implementation review report summarizes the implementation team’s findings. If the team is satisfied that the new system is working satisfactorily, no further revisions are required. If follow-up studies reveal that problems still exist in the new system, the team will communicate these findings to the steering committee.

Systems Maintenance Systems maintenance continues the tasks created by the initial follow-up study, except that experts from the company’s IT subsystem now perform the modifications exclusively. Most systems costs involve maintenance. Therefore, smart systems teams try to develop or acquire flexible systems.

Outsourcing Under outsourcing, a company needing data processing services hires an outside organization to handle all or part its data processing services. The degree to which a company outsources may range from routine assistance with a single application to running the entire IT department.

Advantages of Outsourcing Attractive Business Solution Effective Use of Assets Lower Costs Avoid Seasonal Fluctuations Facilitates Downsizing

Disadvantages of Outsourcing It could be difficult for a company to break its contract, resulting in inflexibility. The company may lose control of its information system and be exposed to possible abuse. Over the long run, a company may lose sight of its information needs and how the system can provide it with competitive advantage.

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Chapter 15