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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?
The accountant is likely to be:
A major user of the computer output
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Ch. 21: AIS Development Strategies
21.2 In a Midwest city of 45,000, a computer was purchased and in-house programmers began
developing programs. Four years later, only one incomplete and poorly functioning
application had been developed, none of software met users’ minimum requirements, and the
hardware and the software frequently failed. Why do you think the city was unable to
produce quality, workable software? Would the city have been better off purchasing
software? Could the city have found software that met its needs? Why or why not?
Certainly not all instances of use or failure to use packaged software are as dramatic or as clear-cut
as this. Nor in all cases will packaged software meet the functional requirements at a reasonable
cost in an acceptable time frame. A careful evaluation of packaged software, however, can result in
a system that performs admirably and cost effectively for data processing users.
a. Some possible reasons why the city was unable to produce a quality, workable system are:
Poor management.
b. The city would have been better off purchasing canned software for the following reasons:
They could have saved themselves a great deal of money.
c. There are certainly enough cities, and hence a large enough market, for there to be quality
software available. A city of 45,000 shouldn’t have an overly complex system, such that none
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©2018 Pearson Education, Inc.
Accounting Information Systems
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:
The need for a feasibility study to determine whether a new system is technically,
economically, and operationally feasible for Fender’s dealership.
Advantages of a turnkey system
Less expensive than internally built systems and the total package may be better priced.
Takes less time and human resources to develop and run.
Disadvantages of a turnkey system:
Software or hardware may not be completely suited to company’s needs.
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Ch. 21: AIS Development Strategies
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 prototyping, but does not know what it is or whether it would help.
How would you explain prototyping to Sara? Include an explanation of its advantages and
disadvantages as well as when its use is appropriate.
Prototyping is an approach to systems design in which a simplified working model of a system is
developed that 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 advantages of prototyping include:
Better definition of user needs
Some of the disadvantages of prototyping include:
Requires a significant amount of users’ time
Prototyping is appropriate when
there is a high level of uncertainty about what is needed
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©2018 Pearson Education, Inc.
Accounting Information Systems
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:
Tradition: Grace has been at the business for 30 years and the old way of doing things has
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:
Recognize that it may be hard to convince Grace. Therefore, you must plan your strategy well.
Be aware of potential problems and seek to avoid them.
Be sensitive to the feelings and reactions of persons affected by the change. Inform Mr. Grace
Having Grace very involved in the project will help him feel like the ideas that are instituted are
You must provide honest feedback to Grace on all suggestions. Tell him which of his and his
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Ch. 21: AIS Development Strategies
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)
Lower cost of development. Some estimates indicate a software package may cost
between 1/20 and 1/5 of the estimated cost of in-house development.
Software is more reliable. Other users have used the system, providing more “testing” in
a live environment.
Disadvantages of canned (packaged software)
It may not be possible to find a package that meets the users’ unique and specific needs.
Operating procedures and practices constraints may require business process changes.
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Accounting Information Systems
Advantages of Custom Software
Software that exactly meets (at least theoretically) the user’s needs.
Disadvantages of Custom Software
Most costly software development approach.
Quality programmers may be expensive, hard to find, etc.
Advantages of Modified Software
Software that is more likely to meet user’s needs than canned software.
Disadvantages of Modified Software
May be hard to find programmers willing to modify code.
b. Recommend a course of action for Don and support your decision.
There isn’t enough information to reach a definitive answer. It is probable that supporters for
all three approaches can be found when discussing this in class. Letting the students support
By way of summary: Generally, packaged software is best if it is available and of acceptable
quality, versatility, etc. If the software is acceptable to Otno (that is, it is sufficiently close to
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Ch. 21: AIS Development Strategies
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?
The contractor did not fully understand what was required because the agency had not
Project phases were not approved before the next phase began. When the conceptual
The contract did not contain acceptance-testing procedures and criteria.
Documentation standards were never developed and documentation was poor, causing
Extensive changes were made by the agency. The contract was amended 13 times to
In summary, the problems were caused by poor planning, poor problem definition, inadequate
system specifications, poor project management, and poor communication.
How could the agency have better managed the systems development project?
Done a better job of defining what the system was to accomplish.
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Accounting Information Systems
Negotiated a better price upfront
What could the contractor have done differently?
Refused to begin until an adequate problem definition and system requirements were
developed.
b. Can we conclude from this case that organizations should not have custom software
written for them? Explain your answer.
No, we cannot generalize that companies should not have custom software developed for
21.3 Conduct a search (using written materials, the Internet, electronic databases, etc.) for
successful and failed implementations of information systems. Per your professor’s
instructions, prepare an oral or written summary of a successful and a failed
implementation. Include in your summary the approach used to acquire or develop the
system (purchase software, develop it, modify it, outsource it).
Student answers will vary depending upon what they find.
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Ch. 21: AIS Development Strategies
21.4 Mark Mitton, the liaison to the IS department, has eliminated all but the best three systems.
Mark developed a list of required features, carefully reviewed each system, talked to other
users, and interviewed appropriate systems representatives. Mark used a point-scoring system
to assign weights to each requirement. Mark developed Table 21-4 to help him select the best
system.
a. Use a spreadsheet to develop a point-scoring matrix and determine which system Mark
should select.
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