Transcript Chapter 9
Chapter 13
Managing the
Systems
Development
Life Cycle
Accounting Information Systems, 5th edition
James A. Hall
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The Systems Development
Life Cycle (SDLC)
Logical sequence of activities used to:
identify new systems needs
develop new systems to support those needs
SDLC is a model for reducing risk through
planning, execution, control, and
documentation
SDLC major phases
1.
2.
3.
4.
5.
Systems strategy
Project initiation
In-house development
Commercial packages
Maintenance & support
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Chapter 14
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Systems Development Life Cycle
Business Needs and
Strategy
Legacy Situation
Business Requirements
1. Systems Strategy
- Assessment
- Develop Strategic Plan
System Interfaces, Architecture and
User Requirements
Ch13
Feedback:
User requests for New Systems
High Priority Proposals undergo
Additional Study and Development
2. Project Initiation
- Feasibility Study
- Analysis
- Conceptual Design
- Cost/Benefit Analysis
Ch13
Feedback:
User requests for System
Improvements and Support
Selected System Proposals go
forward for Detailed Design
3. In-house Development
- Construct
- Deliver
4. Commercial Packages
- Configure
- Test
- Roll-out
Ch14
New and Revised Systems
Enter into Production
5. Maintenance & Support
- User help desk
- Configuration Management
- Risk Management & Security
Ch14
Ch14
Overview of Phases 1 and 2
Phase 1 - Systems Strategy
Understand strategic needs of organization
Examine organization’s mission statement
analyze competitive pressures on the firm
examine current and anticipated market conditions
Consider information systems’ implications pertaining
to legacy systems (flat file systems)
consider concerns registered through user feedback
produce a strategic plan for meeting these various and
complex needs
Produce timetable for implementation
Overview of Phases 1 and 2
Phase 2 - Project Initiation
assess systems proposals for consistency with strategic
systems plan
evaluate feasibility and cost-benefit characteristics of
proposals
consider alternative conceptual designs
Select design to enter the construct phase of SDLC
examine whether proposal will require in-house
development, a commercial package, or both
Participants in Systems
Development
Systems Professionals (for internally developed systems)
Systems analysts
Systems designers
Programmers
End Users
Managers
Operations personnel
Accountants *
Internal auditors *
Stakeholders
Accountants *
Internal auditors *
External auditors
Note Accountants &
Internal Auditors fill
multiple roles.
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Systems Steering
Committee
Provides guidance, reviews status of systems projects
Typically includes CEO, CFO, CIO, senior
management from user areas and computer
services, and internal auditor.
Typical responsibilities are:
resolving conflicts
reviewing projects and assigning priorities
budgeting funds
reviewing status of projects
determining whether projects should be continued
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Systems Strategy
Objective: link individual systems projects
or applications to strategic objectives of
firm.
STRATEGIC OBJECTIVES OF THE FIRM
Business
Plan
Systems
Plan
Systems
Projects
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1. Strategy Stage
Assess strategic information needs
Develop strategic systems plan
Create action plans
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Strategic Information Needs
Overview of business strategy
Vision & mission – formal mission statement
Industry & competency analysis
Legacy systems – often mixture of old & new
technologies – systems that have evolved over
time.
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User Feedback
Identifying user needs is fundamental to everything
else
During phase 1, pertains to substantial problems,
not minor systems modifications
Five key phases at this point in SDLC:
recognizing problem
defining problem
specifying system objectives
determining preliminary project feasibility
preparing a formal project proposal
User Feedback:
Recognizing the Problem
The need for a new, improved information system
is manifested through various symptoms.
Symptoms may seem vague and innocuous or go
unrecognized initially.
The point at which the problem is recognized is
often a function of management’s philosophy.
reactive management - responds to problems only
when there is a crisis
proactive management - alert to subtle signs of
problems and aggressively looks for ways to improve
User Feedback:
Defining the Problem
Managers and end users should…
avoid leaping to a single definition of a problem
keep an open mind and gather facts before deciding
learn to intelligently interact with systems professionals
An interactive process between managers/end
users and systems professionals is necessary to
arrive at an accurate problem definition.
The next three stages of the end user feedback process
involve this interactive process.
User Feedback:
Specifying System Objectives
Strategic objectives of firm and operational
objectives of the information systems must
be compatible.
At this point, objectives only need to be
defined in general terms.
Preliminary Project
Feasibility
Schedule feasibility
Technical feasibility
Operational feasibility
Legal feasibility
Economic feasibility
Rearrange author’s
TELOS into a word
you can recognize:
STOLE
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User Feedback:
Preliminary Project Feasibility-STOLE
Schedule feasibility – can project be completed by
an acceptable time period?
Technical feasibility - is the necessary technology
available?
Operational feasibility - can procedural changes be
made to make the system work?
Legal feasibility – does system fall within legal
boundaries?
Economic feasibility – are funds available and
appropriate for the system?
User Feedback:
Preparing Formal Project Proposal
A systems project proposal provides management
with basis for deciding whether or not to proceed
with project.
It summarizes findings of the study and makes
general recommendation.
It outlines the linkage between objectives of the
proposed system and the business objectives of
the firm.
Decision based on greatest benefits with lowest
costs
2. Project Initiation
A. Systems analysis
B. Alternative conceptual designs
C. Systems evaluation and selection
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Project Initiation
The second phase in SDLC involves:
Understanding users’ needs and problems
proposing multiple alternative solutions
assessing alternatives in terms of feasibility
and cost-benefit characteristics
Selecting best option and proceeding to
construct phase
examining whether the selected option will
require in-house development, a commercial
package, or both
A. Systems Analysis
A business problem must be fully understood
before a solution can be formulated.
A defective analysis will lead to a defective
solution.
Systems analysis is a 2-step process
1. Survey
2. Analysis of users’ needs
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Survey Current System
Advantages of surveying current system
Identifies aspects of old system that should
be kept
Aids in planning implementation of new
system
May help determine cause of problems
Disadvantages
May stifle (discourage) new ideas
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Facts to Gather in Survey/Analysis
Facts about systems:
Transaction volumes
Data sources
Users
Data stores
Processes
Data flows
Controls
Error rates
Resource costs
Bottlenecks & redundant operations
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Fact-gathering techniques
Observation
Task participation
Interviews
Review key documents
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Analysis Step
Systems analysis is an intellectual process that is
commingled with fact gathering.
A formal systems analysis report, prepared and
presented to Steering Committee, should contain:
reasons for system analysis
scope of study
problem identified with current system
statement of user requirements
resource implications
recommendations
B. Conceptualization of
Alternative Designs
Purpose: produce alternative conceptual
solutions that satisfy requirements identified
during systems analysis
Help to reach consensus between users and systems
professionals on alternative designs
How much detail should be included?
enough to highlight differences between critical
features of competing systems, not the similarities
Examples: inputs, outputs, processes and any special
features
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C. Systems Evaluation & Selection
Formal mechanism for selecting
one system from set of alternative
conceptual designs.
Selection process is two steps:
Detailed feasibility study
• Similar to Preliminary feasibility study, but
more details
Cost-benefit analysis
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Cost-Benefit Analysis:
Identify Costs
Cost-Benefit Analysis:
Identify Benefits—Tangible
Identify Benefits—
Intangible
Comparing Costs and
Benefits
Two methods commonly used for evaluating the
costs and benefits of information systems:
Net Present Value Method: deduct the present value of
costs from the present value of benefits over the life of the
project.
The optimal choice is the project with the greatest net
present value.
Payback Method: do break-even analysis of total costs
(one-time costs plus present value of recurring costs) and
total benefits (present value of benefits). After the breakeven point, the system earns future profits.
The optimal choice is the project with the greatest future
profits.
How Should We Get the
System?
Once optimal system is selected, decide how
to acquire it:
develop the system in-house: best for systems that
need to meet unique and proprietary business
needs
Obviously only for large organizations
purchase commercial software: best for systems
that are expected to support “best industry
practices”
a mix of first two approaches: make in-house
modifications, to varying degrees, of commercial
system to meet the organization’s unique needs
Announcing the New System
Project…
can be the most delicate aspect of the SDLC.
End user support is critical to success.
All end users need to be made to understand
the objectives of the new system.
End users and managers who view the new
system as a potential benefit to their jobs,
rather than a threat, are more likely to
cooperate with the project.
Why Are Accountants
Involved with SDLC?
Creation/purchase of IS
consumes significant resources
and has financial resource
implications.
Quality of AISs and their output
rests directly on SDLC activities
that produce them.
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How are Accountants
Involved with SDLC?
As Users
As members of
development team
As Auditors
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The Role of the Accountant…
Systems Strategy
Help reduce risk of creating unneeded, unwanted,
inefficient, ineffective systems
Conceptual Design
Control implications
Auditability of system
Systems Selection
Economic feasibility
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