CHAPTER 21
AIS DEVELOPMENT STRATEGIES
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
21.1 What is the accountant’s role in the computer acquisition process? Should the accountant
play an active role, or should all the work be left to computer experts? In what aspects of
computer acquisition might an accountant provide a useful contribution?
With these responsibilities, the accountant must be actively involved in the computer acquisition
process. The accountant’s role is probably best carried out by participating on a team or committee
together with computer experts, systems analysts, production personnel, engineers, managers, and
21.3 You are a systems consultant for Ernst, Price, and Deloitte, CPAs. At your country club’s
annual golf tournament, Frank Fender, an automobile dealer, describes a proposal from
Turnkey Systems and asks for your opinion. The system will handle inventories, receivables,
payroll, accounts payable, and general ledger accounting. Turnkey personnel would install
the $40,000 system and train Fender’s employees. Identify the major themes you would touch
on in responding to Fender. Identify the advantages and disadvantages of using a turnkey
system to operate the organization’s accounting system.
Major themes that should be touched upon in responding to Fender’s inquiry include:
If students only suggest they obtain more information on this vendor and its hardware and
software, then they are missing the point of the case. It is important to take a more general and
systematic approach to the system acquisition decision, rather than making a “yes-no” decision on
only this one system.
Advantages of a turnkey system
Disadvantages of a turnkey system:
21.4 Sara Jones owns a rapidly growing retail store that faces stiff competition due to poor
customer service, late and error-prone billing, and inefficient inventory control. To continue
its growth, its AIS must be upgraded but Sara is not sure what it wants the AIS to accomplish.
Sara has heard about prototype, but does not know what it is or whether it would help. How
would you explain prototype to Sara? Include an explanation of its advantages and
disadvantages as well as when its use is appropriate.
Prototype is an approach to systems design in which a simplified working model of an information
system is developed. In essence, a prototype is a scaled-down, experimental version of the system
requested by the users.
The last step is making the system operational. The two choices are to use the already developed
prototype or to use the prototype as a model for developing a new system.
Some of the disadvantages of prototype include:
Prototype is appropriate when
There is a high likelihood of failure.
21.5 Clint Grace has been business over 30 years and has definite ideas about
how his ten retail stores should be run. He is financially conservative and is reluctant
to make expenditures that do not have a clear financial payoff. Store profitability has
declined sharply and customer dissatisfaction is high. Store managers never know
how much inventory is on hand and when purchases are needed until a shelf is empty.
Clint asks you to determine why profitability has declined and to recommend a
solution. You determine that the current AIS is inefficient and unreliable and that
company processes and procedures are out of date. You believe the solution is to
redesign the systems and business processes using BPM. What are some challenges
you might face in redesigning the system? How will you present your
recommendations Clint?
Business process management (BPM) is a systematic approach to continuously improving and
optimizing an organization’s business processes. Grace may be resistant to BPM and its attendant
changes and new technology because:
Student answers as to how to present the recommendations to Clint Grace will vary depending on
the perception of the student. However, some general guidelines are:
SUGGESTED ANSWERS TO THE PROBLEMS
21.1 Don Otno has been researching software options but cannot decide among three alternatives.
Don started his search at Computers Made Easy (CME) and almost wished he had looked no
further. Steve Young, the manager of CME, appeared knowledgeable and listened attentively
to Don’s problems, needs, and concerns. Steve had software and hardware that would, with a
few exceptions, meet Don’s needs. Don could start using the system almost immediately. The
system’s price was unexpectedly reasonable.
After three hours at Custom Designed Software (CDS), Don left convinced that they could
produce exactly what he needed. Cost and time estimates were not established, but CDS
assured him that the cost would be reasonable and that the software would be complete in a
few months.
At Modified Software Unlimited (MSU), the owner said that customized software was very
good but expensive and that canned software was inexpensive but rarely met more than a few
needs. The best of both worlds could be achieved by having MSU modify the package that
came closest to meeting Don’s needs.
Don returned to CME and asked Steve about customized and modified software. Steve
expressed enough concerns about both that Don came full circle—to thinking canned software
was best. That night, Don realized he could not make an objective decision. He was swayed by
whichever vendor he was talking with at the time. The next morning he called you for help.
In practice, a system study must be conducted to determine what Don Otno needs before a credible
decision can be made about these alternatives.
a. List the advantages and disadvantages of each vendor’s approach.
Advantages of canned (packaged software)
Disadvantages of canned (packaged software)
Advantages of Custom Software
Disadvantages of Custom Software
Advantages of Modified Software
b. Recommend a course of action for Don and support your decision.
21.2 A federal agency signed a 15-month contract for $445,158 for a human resources/payroll
system. After 28 months and no usable software, the agency canceled the contract and
withheld payment for poor performance. A negotiated settlement price of $970,000 was
agreed on. The project experienced the following problems:
The contractor did not understand what software was desired. The RFP did not have fully
developed user requirements or system specifications, and user requirements were never
adequately defined and frozen. Changes delayed completion schedules and caused
disagreements about whether new requirements were included in the original scope of
work.
The contract did not specify systems requirements or performance criteria, and the
terminology was vague. The contract was amended 13 times to add or delete requirements
and to reimburse the contractor for the extra costs resulting from agency caused delays.
The amendments increased the cost of the contract to $1,037,448.
The contractor complained of inexcusable agency delays, such as taking too much time to
review items submitted for approval. The agency blamed the delays on the poor quality of
the documentation under review.
The agency did not require each separate development phase to be approved before work
continued. When the agency rejected the general system design, the contractor had to
scrap work already completed.
a. What caused the problems?
How could the agency have better managed the systems development project?
What could the contractor have done differently?
b. Can we conclude from this case that organizations should not have custom software
written for them? Explain your answer.
21.3 Wong Engineering Corp (WEC) operates in 25 states and three countries. WEC faced a
crucial decision: choosing network software that would maximize functionality,
manageability, and end-user acceptance of the system. WEC developed and followed a
four-step approach:
Step 1. Develop evaluation criteria. WEC organized a committee that interviewed users and
developed the following evaluation criteria:
Ease of use
Scope of vendor support
Ease of network management and administration
Cost, speed, and performance
Ability to access other computing platforms
Security and control
Fault tolerance and recovery abilities
Ability to connect workstations to the network
Global naming services
Upgrade and enhancement options
Vendor stability
WEC organized the criteria into the following four categories and prioritized them.
Criteria vital to short-term and long-term business goals were given a 5. “Wish list”
criteria were weighted a 3. Inapplicable criteria were given a 1.
1. Business criteria: overall business, economic, and competitive issues
2. Operational criteria: tactical issues and operating characteristics
3. Organizational criteria: networks’ impact on the information systems structure
4. Technical criteria: hardware, software, and communications issues
Step 2. Define the operating environment. Several data-gathering techniques were used to
collect information from which an information systems model was developed. The
model revealed the need to share accounting, sales, marketing, and engineering data
at three organizational levels: district, division, and home office. District offices
needed access to centralized financial information to handle payroll. WEC needed a
distributed network that allowed users throughout the organization to access
company data.
Step 3. Identify operating alternatives. Using the criteria from step 1, committee members
evaluated each package and then compared notes during a roundtable discussion.
Step 4. Test the software. The highest-scoring products were tested, and the product that fit
the organization’s needs the best was selected.
a. Discuss the committee’s role in the selection process. How should committee members
be selected? What are the pros and cons of using a committee to make the selection?
A committee with qualified people from all affected areas has the following advantages:
b. What data-gathering techniques could WEC use to assess user needs? To select a
vendor?
What data-gathering techniques could WEC use to select a vendor?
c. What is the benefit of analyzing the operating environment before selecting the
software?
What data-gathering techniques help a company understand the operating
environment?
d. In selecting a system using the point-scoring method, how should the committee resolve
scoring disputes? List at least two methods.
e. Should a purchase decision be made on the point-scoring process alone? What
other procedure(s) should the committee employ in making the final selection?