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

2. Chapter 12 Systems Study: System Design and Selection
Introduction
The Feasibility Evaluation
Detailed Systems Design
Selecting a Final System

3. Introduction
If the client’s steering committee reacts positively toward the recommendations, the organization moves forward with systems design.
Prior to preparing a detailed design for a computerized information system, the consultants should conduct a feasibility evaluation.

4. The Feasibility Evaluation
In a feasibility evaluation, the design team determines the practicality of alternative proposals.
For each system alternative, the design team must examine five feasibility areas:
Technical
Operational
Schedule
Legal
Economic

5. Steps in the Systems Design Phase of a Systems Study
Buy
Make

6. Steps in the Systems Design Phase of a Systems Study
Perform feasibility evaluation
Prepare detailed systems design
Prepare systems specifications report
Submit systems specifications report to computer vendors or internal IT department.
Select particular computer vendor proposal or develop application in-house.

7. Technical Feasibility
The technical feasibility of any proposed system attempts to answer the question: “What technical resources are required by a particular system?”
Hardware and software are two components of the question.
Need to also determine if current employees possess the technical skills.

8. Operational Feasibility
The operational feasibility of any proposed system attempts to answer the question: “How consistent will the tasks and procedures of the new system be with those of the old system?”
Operational feasibility is mostly a human relations study because it is strongly oriented toward “people problems.”

9. Schedule Feasibility
Schedule feasibility involves estimating how long it will take a new or revised system to become operational and communicating this information to the steering committee.

10. Legal Feasibility
Legal feasibility is largely concerned with whether there will be any conflict between a newly proposed system and the organization’s legal obligations.
Revised systems should comply with applicable federal and state statutes about financial reporting and other contractual obligations.

11. Economic Feasibility
Economic feasibility focuses on projecting which, if any, of the proposed computerized systems are expected to be cost-effective.
The design team should perform a cost-benefit analysis on each proposed system.
A cost-effective system is one whose anticipated benefits are expected to exceed its anticipated costs.

12. Costs and Benefits
Projected costs and benefits are often converted to their present values by using capital budgeting techniques.
The benefits of a computerized data processing system are often difficult to quantify monetarily.
The costs are usually based on accountant’s estimates.

13. Examples of Costs and Benefits
Benefits of a system
Reduced Clerical Costs
Enhanced Sales
Better Customer Service
Costs of a system
Initial Computer Hardware and Software
Additional IT Staff
Operation Costs

14. Final Feasibility Report
The design team will make complete feasibility evaluations for each system proposal.
When the team completes evaluations, it submits a final feasibility report to the steering committee.
This report summarizes its work and makes recommendations.

15. Detailed Systems Design
Consultants prepare a Detailed System Design for the general systems plan.
Detailed System Design includes specifying outputs, processing procedures, and inputs for the new system.
This becomes the “blueprint” for creating or acquiring the new system.

16. Examples of Detailed Requirements for a System Proposal
Processes
Data Elements
Data Structure
Inputs
Outputs
Documentation
Constraints
Controls
Reorganizations

17. Designing System Outputs
An AIS should be designed to meet users’ information needs; thus, output specifications must by prepared first.
The design team should use data gathered from the prior systems analysis work to help decide what kinds of reports are needed.
Outputs should be classified according to functional area requesting them.

18. Process Design
Process design involves identifying the processing procedures required to produce the outputs.
Tools available to model processes are ER diagrams, structure charts, system flowcharts, data flow diagrams, program flowcharts, and process maps.
Common to all of these design methodologies is the idea of a structured, top-down design.

19. Process Design
Object-oriented design methods are gaining popularity because:
They employ the Unified Modeling Language
They are especially adapted to designing the event-driven systems
Case Tools assist systems designers in drawing various diagrams and charts.

20. Designing System Inputs
Team must identify and describe each data element in the systems design as well as specify the way data items must be coded.
The design team must also determine the source for each data element.

21. Prototyping
Prototyping means developing a simplified working model, or prototype, of a proposed information system.
The prototype is scaled-down and experimental.
It is built quickly with minimal expense.

22. Prototyping Development Steps
Identify information systems requirements
Develop initial prototype
Test and revise
Obtain user signoff of the approved prototype

23. Advantages of Prototyping
Results in better definition of users’ needs and requirements than does the traditional systems development approach
Can be developed in short period of time
Errors detected and eliminated early in the development process

24. Disadvantages of Prototyping
Users may not be willing to devote extensive time to experimenting with prototype.
May result in inadequate testing and documentation.
May cause behavioral problems with system users.

25. Systems Specifications Report
The Systems Specifications Report includes detailed information about the system design proposal.
After the steering committee approves the detailed design work, it now faces a make-or-buy decision.

26. Information Included in Systems Specification Report
Historical background information about company’s operating activities
Detailed information about the problems in the company’s current data processing system
Detailed descriptions of the systems design proposals
Indication of what the vendors should include in their proposals
Time schedule for implementing the new system

27. Key Factors in Selection of Vendor Proposals
The performance capability of each proposed system in relation to its cost.
The costs and benefits of each proposed system.
The maintainability of each proposed system.
The compatibility of each proposed system with existing systems.
Vendor Support

28. Making a Final Decision
Point-Scoring Analysis can be used to evaluate packages that meet most of a company’s major requirements.
Evaluation committee assigns potential points to each of the evaluation criteria based on its relative importance.
Provides an object means of selecting final system.

29. Copyright Copyright 2005 John Wiley & Sons, Inc. All rights reserved.
Reproduction or translation of this work beyond that permitted in
Section 117 of the 1976 United States Copyright Act without the
express written permission of the copyright owner is unlawful.
Request for further information should be addressed to the
Permissions Department, John Wiley & Sons, Inc. The purchaser may
make backup copies for his/her own use only and not for distribution
or resale. The Publisher assumes no responsibility for errors,
omissions, or damages, caused by the use of these programs or from the use of the information contained herein.

30. Chapter 12