Core Concepts of

ACCOUNTING INFORMATION SYSTEMS

Moscove, Simkin & Bagranoff

Developed by:
Marianne Bradford, Ph.D.
Bryant College

John Wiley & Sons, Inc.

 Chapter 13
Systems Study: Implementation
and Maintenance

• Introduction
• Systems Implementation
• Systems Follow Up and Maintenance
• Outsourcing
 Systems Implementation

• Systems Implementation is often called the

“action” phase of a systems study because
the recommended changes from the prior
analysis, design, and development work
are now put into operation.
 What can go wrong during
implementation?

• The new system is not fully developed or tested,

but is installed anyway.
• The organization fails to budget sufficient time,
money, and related resources to the installation
tasks of the project.
• Complete system and application
documentation is lacking, causing confusion
and misunderstandings.
• Users are forced to use the system without
adequate training.
 What can go wrong during
implementation?

• The implementation team fails to test the new

system, which turns out to have major “bugs”
in it.
• After the initial installation is completed, the
organization fails to evaluate the system’s
performance, especially against the original
objectives.
• The organization fails to allocate sufficient
resources for system maintenance. Over time,
the system deteriorates and becomes
ineffective.
 Program Evaluation and
Review Technique (PERT)

• PERT (Program Evaluation and Review

Technique) is a technique for scheduling and
monitoring the activities in large projects.
• Project leader
– prepares a list of system implementation
activities
– identifies the prerequisite activities that must be
completed before others can start
– and estimates the amount of time required to
complete each activity.
 PERT Charts

• The longest path of completion of a

project is the critical path.
• The slack time describes the amount of
delay time that can occur in each
noncritical activity and still not delay the
entire project.
 Gantt Charts

• A Gantt Chart is useful in scheduling and

tracking activities required in implementation.
• Gantt charts are straightforward, easy to
understand, and best suited for projects that are
not highly complex.
• The Gantt chart is good for
comparing planned to actual times
for the implementation activities
that must be performed.
 Implementation Activities

• Prepare the Physical Site - accountants are concerned

about incremental costs.
• Determine the Functional Changes - includes analysis
of job function changes and types of data that will be
processed and reported.
• Select and Assign Personnel - new
system may require added
personnel, job reengineering,
or terminating employees.
 Implementation Activities

• Train Personnel - computer vendor personnel and

implementation team can help train personnel.
• Acquire and Install Computer Equipment –
implementation team and computer vendor’s
employees help to install the new computer equipment.
• Establish Internal Controls - cost-
effective general and application
controls should be built into
the system.
 Implementation Activities

• Convert Data Files - data files may have to

be converted to newer, more useful formats.
• Acquire Computer Software
– Software acquired from an independent vendor
is called canned software.
– Hardware and software combined in one
package is called a turnkey system.
 Implementation Activities

• Test Computer Programs - programs must be

tested regardless of where they came from or
who wrote them.
• Three methods for testing computer software
are:
– Unit testing – individual programs of a system are
each tested as separate components.
– Process testing - hypothetical test transactions and
hypothetical file records are developed that represent
all valid processing and all conceivable errors.
– Acceptance test - test transactions and acceptance
criteria in processing these transactions with a
computer program are developed by system’s users.
 Implementation Activities

• Conversion - there are several conversion

methods:
• Direct conversion - the old system is immediately
discontinued when the new system is
implemented.
• Parallel conversion - both the new and old
system operate simultaneously for a certain
period of time.
• Modular conversion (or pilot conversion) -
consists of testing and converting the new
system one module at a time.
 Systems Follow-up and
Maintenance

• The purpose of follow-up and maintenance

is to monitor the new system and make
sure that it continues to satisfy the three
levels of organizational goals:
– General systems goals
– Top management systems goals
– Operating management systems goals
 Steps in Evaluation of
System’s Effectiveness

• Talk to management and end users to ascertain

satisfaction with the new system.
• Determine that controls are functioning properly.
• Observe employees’ work performance.
• Evaluate whether computer processing
functions are being performed
efficiently and effectively.
• Determine whether output
schedules for reports are being
met.
 The Follow-up Review Report

• A post-implementation review report

summarizes the implementation team’s
findings.
• If the team is satisfied that the new system is
working satisfactorily, no further revisions are
required.
• If follow-up studies reveal that problems still
exist in the new system, the team will
communicate these findings to the
steering committee.
 Systems Maintenance

• Systems maintenance continues the tasks created

by the initial follow-up study, except that experts
from the company’s IT subsystem now perform
the modifications exclusively.
• Most systems costs involve
maintenance.
• Therefore, smart systems teams try
to develop or acquire flexible systems.
 Outsourcing

• Under outsourcing, a company needing

data processing services hires an outside
organization to handle all or part its data
processing services.
• The degree to which a company
outsources may range from routine
assistance with a single application
to running the entire IT department.
Advantages of Outsourcing

• Attractive Business Solution

• Effective Use of Assets
• Lower Costs
• Avoid Seasonal Fluctuations
• Facilitates Downsizing
 Disadvantages of Outsourcing

• It could be difficult for a company to break its

contract, resulting in inflexibility.
• The company may loose control of
its information system and be exposed
to possible abuse.
• Over the long run, a company may
loose sight of its information needs
and how the system can provide it with
competitive advantage.
 Copyright

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Chapter 13