Accounting Information Accounting Information SystemSystem

ByBy

Rizwan WaheedRizwan Waheed

M.Com 710

Evaluating Alternatives and Evaluating Alternatives and StrategiesStrategies

This chapter includes the evaluation of alternative This chapter includes the evaluation of alternative solutions , the preparation of the system solutions , the preparation of the system requirement document and the presentation of the requirement document and the presentation of the system requirements document to management, it system requirements document to management, it also describes several systems development tools , also describes several systems development tools , techniques , and strategies , including techniques , and strategies , including prototyping , computer-aided s/w engineering prototyping , computer-aided s/w engineering (CASE) tools , system flowcharts and state (CASE) tools , system flowcharts and state transition diagrams.transition diagrams.

Evaluating S/W AlternativesEvaluating S/W Alternatives Make or buy decisionMake or buy decision

– The choice b/w developing s/w in-house and The choice b/w developing s/w in-house and purchasing s/w is often called make or buy decisionpurchasing s/w is often called make or buy decision

Software packageSoftware package– A s/w package is purchased or leased from another A s/w package is purchased or leased from another

company company In-house softwareIn-house software

– Is developed by the company’s own IS (information Is developed by the company’s own IS (information System) departmentSystem) department

Companies that specialize in developing s/w for Companies that specialize in developing s/w for sale are called sale are called S/W publishers or S/W vendersS/W publishers or S/W venders

Horizontal applicationHorizontal application– A software package that can be used by A software package that can be used by

many different types of organizationsmany different types of organizations

Vertical applicationVertical application– A software package developed to handle A software package developed to handle

information requirements for a specific information requirements for a specific type of business is called vertical type of business is called vertical applicationapplication

Why we develop S/W In-HouseWhy we develop S/W In-House

Satisfy unique requirementsSatisfy unique requirements– Commercially available s/w do not meet their unique Commercially available s/w do not meet their unique

requirementsrequirements Minimize changes in business procedures and Minimize changes in business procedures and

policiespolicies Meet constraints of the existing systemMeet constraints of the existing system

– Any new s/w that is installed must work with existing Any new s/w that is installed must work with existing systemsystem

Meet constraints of existing technologyMeet constraints of existing technology– The new s/w must be compatible with the existing h/w The new s/w must be compatible with the existing h/w

and operating environmentsand operating environments

Develop internal resources and capabilitiesDevelop internal resources and capabilities– Many firms feel that in-house IS resources and Many firms feel that in-house IS resources and

capabilities provide a competitive advantage capabilities provide a competitive advantage because they can respond quickly when because they can respond quickly when business problems or opportunities arisebusiness problems or opportunities arise

Reasons for Buying a s/w PackagesReasons for Buying a s/w Packages Lower CostsLower Costs Require less time to implementRequire less time to implement

– When we purchase a package , it is already has been When we purchase a package , it is already has been designed , tested, programmed and documented designed , tested, programmed and documented

Proven reliability and benchmarksProven reliability and benchmarks Implemented by other companiesImplemented by other companies Require less technical development staffRequire less technical development staff

– Less programmers and system analyst requires in IS Less programmers and system analyst requires in IS departmentdepartment

Future upgrades provided by the vendorFuture upgrades provided by the vendor

Customizing s/w packages Customizing s/w packages

You must decide weather to build your own s/w or You must decide weather to build your own s/w or to acquire a s/w package that can be customized to acquire a s/w package that can be customized to meet your specifications.to meet your specifications.

The three ways to customize a s/w packages are The three ways to customize a s/w packages are

1.1. For some s/w packages , you might be able to For some s/w packages , you might be able to purchase a basic package that can be customized purchase a basic package that can be customized to suit your needs, many s/w vendors offer basic to suit your needs, many s/w vendors offer basic packages that are available in standard versions , packages that are available in standard versions , with add-on components that can be configured with add-on components that can be configured individually . (e.g HR system)individually . (e.g HR system)

2.2. You may be able to negotiate directly with the You may be able to negotiate directly with the s/w vendor to make enhancements to meet your s/w vendor to make enhancements to meet your systems need by paying extra fee for the changessystems need by paying extra fee for the changes

3.3. Purchase the package and make your own Purchase the package and make your own modifications. This option might be attractive modifications. This option might be attractive when the product come close to satisfying your when the product come close to satisfying your requirements and the vendor will not make the requirements and the vendor will not make the requested changes.the disadvantage of this requested changes.the disadvantage of this approach is that system analysts and approach is that system analysts and programmers might be unfamiliar with the s/w programmers might be unfamiliar with the s/w and will need time to learn the package and make and will need time to learn the package and make the modification correctlythe modification correctly

Other S/W AlterntivesOther S/W Alterntives

OutsourcingOutsourcing– Is the use of outside companies to handle a portion of Is the use of outside companies to handle a portion of

a company’s workload on a temporary or long-term a company’s workload on a temporary or long-term basisbasis

– A contract personnel firm supplies technical help for A contract personnel firm supplies technical help for specific periods of time at a set ratespecific periods of time at a set rate

– Another type of outsourcing involve the joint Another type of outsourcing involve the joint development of a customized vertical application development of a customized vertical application package where a company works together wit an package where a company works together wit an outside software vendoroutside software vendor

– A major disadvantage of outsourcing is that it raises A major disadvantage of outsourcing is that it raises concerns about job security concerns about job security

End-user systemsEnd-user systems– Are applications that can be operated and mnaged by Are applications that can be operated and mnaged by

end-users on their own.end-users on their own. Enterprise computingEnterprise computing

– Is an overall information management strategy that Is an overall information management strategy that supports group, departmental and total company supports group, departmental and total company information needs . The key is the effective integration information needs . The key is the effective integration of information resources so that users have controlled of information resources so that users have controlled access to the mainframe data they need to support access to the mainframe data they need to support local system. Many enterprise-computing systems are local system. Many enterprise-computing systems are based on a design concept called client/server based on a design concept called client/server architecture architecture