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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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
a. Some possible reasons why the city was unable to produce a quality, workable system are:
• Poor management.
• Inexperienced systems analysts and programmers.
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.
• They could have implemented the system much faster.
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
An adequate turnkey system was available and it would have saved the city nearly $500,000. In
fact, the city’s annual data processing costs exceeded the annual costs of the new turnkey system.
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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.
• The need to identify the dealership’s needs and prepare specifications based on those needs.
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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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 an
information system is developed. In essence, a prototype is a scaled-down, experimental version of
the system requested by the users.
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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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
been a part of his life. Changing a lifestyle is very difficult.
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.
You must be able to sell Grace on the benefits of BPM for his ten stores.
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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.
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.
Disadvantages of canned (packaged software)
• It may not be possible to find a package that meets the users’ unique and specific needs.
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fails.
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.
• May be illegal to modify the software.
Ch. 21: AIS Development Strategies
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
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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.
a. What caused the problems?
• The contractor did not fully understand what was required because the agency had not
fully developed user requirements or system specifications when it issued the RPF.
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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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
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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
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
Step 2. Define the operating environment. Several data-gathering techniques were used to
collect information from which an information systems model was developed. The
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?
The evaluation committee selected a network operating system and other software to support
the organization’s distributed structure. They developed and followed a four-step approach:
1. Develop evaluation criteria.
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A committee with qualified people from all affected areas has the following advantages:
• Encourages planning. An effective team effort requires planning to ensure the
system meets the needs of the business. The result: compromise in the planning stage
and not during implementation.
Problems that may arise from using a committee include a longer development time,
interdepartmental competition for resources, and irresolvable selection process conflicts.
b. What data-gathering techniques could WEC use to assess user needs? To select a
vendor?
• Interviews with users
What data-gathering techniques could WEC use to select a vendor?
• Library research
c. What is the benefit of analyzing the operating environment before selecting the
software?
It is difficult to select the proper software if you do not know how it is to be used and what
What data-gathering techniques help a company understand the operating
environment?
• Interviews
Accounting Information Systems
d. In selecting a system using the point-scoring method, how should the committee resolve
scoring disputes? List at least two methods.
Disputes often arise when using committees. To resolve point scoring disputes, the
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?
Seldom is a system selected based on point scoring alone. The scores are used to select the
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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.
Based on the point-scoring evaluation, project number one should be selected. Project #1
scored 6645 points, project #2 scored 6370 points, and project #3 scored 6530 points.
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b. Susan Shelton did not agree with Mark’s weightings and suggested the following
changes:
Flexibility
60
Reputation and reliability
50
Quality of support utilities
10
Graphics capability
10
When the changes are made, which vendor should Mark recommend?
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c. Mark’s manager suggested the following changes to Susan’s weightings:
Reputation and reliability
90
Installation assistance
40
Will the manager’s changes affect the decision about which system to buy?
Based on further revisions by his manager, Mark should now select project #2. Project 1
scored 6055 points, project #2 scored 6550 points, and project #3 scored 6490 points.
Experience with similar systems
40
Training assistance
65
Internal memory size
10
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d. What can you conclude about point scoring from the changes made by Susan and
Mark’s manager? Develop your own weighting scale to evaluate the software packages.
What other selection criteria would you use? Be prepared to discuss your results with
the class.
The most significant conclusion is that the results of the point-scoring methods are highly
e. What are the weaknesses of the point-scoring method?
Care must be taken when to avoid placing too much emphasis on a point-scoring outcome.