Beruflich Dokumente
Kultur Dokumente
SM 13.1
that what is most important is what the top bosses say is most important. Then too, top
managers also play an important role as supervisors of successful operational activities and
top management's long-range planning and controlling functions are critical to organizational
success. Furthermore, top management requires a large variety of decision-making
information.
Unless the study team gives careful thought and consideration to top management's systems
goals, the likelihood of an effective information system will be small. In addition, the systems
goals of operating management for the coming year are difficult to develop without taking into
consideration top management's systems goals. Finally, if top management's systems goals
are not effectively satisfied, it is unlikely that operating management's systems goals could be
effectively developed.
Finally, it is possible to argue that the most important goals to satisfy are operating
management system goals. This argument rests on the notion that only operational goals are
meaningful. For example, providing managers with the right information is a strategic
objective which only becomes meaningful when it is restated as provide Manager X with
Payroll Report Y every Monday morning.
13-4.
The purpose of a feasibility evaluation is to determine whether or not a specific new
or modified system is technically, operationally, schedule, legally, and economically feasible
i.e., that the system is justifiable and practical in each of these five areas. For this reason, the
feasibility evaluation should precede the preparation of a systems specifications report
because the data for this report comes from the findings of the feasibility evaluation work (as
well as the findings from the detailed systems design work). A systems specifications report
should be prepared for only those system designs that are totally feasiblei.e., technical,
operational, schedule, legal, and economic feasible.
13-5.
This question requires students to imagine what cash benefits and costs an
organization might incur when creating an online ordering system. We outline potential
benefits and costs below.
Note to Instructor: Most students cannot imagine that everything isnt already computerized
and online. However, if you think about such simple applications as address books, recipe
files, stamp or doll collections, or the businesses of struggling mom-and-pop shops, manual
applications still abound. Before discussing this problem, therefore, it might be interesting to
ask the class what manual or non-online applications they can think of.
Potential cash benefits:
a) Reduced clerical errors
b) Increased ability to generate customized sales reports
c) Reduced costs of creating and distributing managerial reports
d) Reduced clerical costs and paper usage
e) Round-the-clock customer ordering capabilities
f) Reduced lost sales and inconvenience caused by stock-outs
g) Increased sales to both new and existing customers
h) Ability to notify customers of shipping times or problems more quickly through collected
email addresses
i) Better customer services
j) Better market planning
k) More efficient management control
SM 13.2
SM 13.3
SM 13.4
Only after the steering committee decides that the new system is totally feasible can the
design team work on the detailed specifications. Some of the items included in the systems
specifications report (that probably would not appear in a feasibility evaluation) are:
a) Historical background information regarding the client company's operating activities
b) Detailed information about the problems in the client company's present data
processing system
c) Detailed descriptions of the consultants (or study teams) systems design proposals
d) Indication of what the consultants expect the computer vendors to include in their
proposals to the client company
e) Request for a time schedule from vendors or system developers concerning their
implementation of a new system into the client company
13-8.
When establishing controls, an implementation team should also design effective
audit trails, develop general and application controls for the new computerized system, and
create good documentation for the system. Because these controls will affect both the form
and content of a company's computer files, the team should create and implement these
controls before converting accounting data files to alternate formats.
13-9.
Under direct conversion, the organization immediately discontinues using its old
system as soon as the new system is installed. Direct conversion may be appropriate when (1)
there are many weaknesses in the old system and almost any change is likely to be an
improvement, (2) there are only minor or simple revisions to the company's current system, (3)
well-tested PC software or hardware is acquired and only a small number of users are
involved, or (4) there are drastic differences between the new system and the old system.
Compared with parallel or modular conversion, the major advantages of direct conversion are
(1) cost, and (2) time savings. Direct conversion saves costs because it is relatively
inexpensivethe changeover is immediate. Direct conversion saves time because no time is
lost between the changeovers from one system to another. The major disadvantage of direct
conversion is the possibility that the new system does not function well after it is implemented.
This can be very disruptive, costly, and even fatal.
Under parallel conversion, an organization operates both its old system and its new system
simultaneously for a certain period of time in order to test the new system and compare
outputs. The implementation team will investigate differences and either request or make
revisions in the new system as required. The major advantage of parallel conversion is that it
protects a companys business processes if the new system does not work properly or fails
completely. The major disadvantage of parallel conversion is cost. Because both the old and
the new system will process almost all of its accounting transactions throughout the conversion
period, organizational facilities and personnel must handle the double-processing workload.
This usually leads to overtime work and other extra costs.
Under modular conversion, an implementation team decomposes an AIS into smaller units or
modules. The implementation team then installs the new system "piecemeal" for the specific
units associated with the activity. As individual modules are successfully tested and installed,
further units are then implemented and tested until the entire system is successfully
implemented. The major advantage of modular conversion, therefore, is that the team can
identify specific problems early and correct them before implementing the remainder of the
system. Because the implementation process takes place on a step-by-step basis, there is a
high probability that the complete system will function well. The major disadvantage of
modular conversion is that it takes a long time to complete the entire implementation process,
thus increasing organizational costs.
SM 13.5
13-10.
Both Gantt charts and PERT network diagrams are useful tools for scheduling,
monitoring, and managing the activities required to implement a new accounting information
system (see Figures 13-11 and 13-12 of the text). Of the two, PERT is the more important
project management tool. It allows project leaders to plan complex implementation projects,
estimate the completion times of these projects, identify the activities on critical paths, and
examine what-if scenarios in which managers reallocate project resources from some
activities to others. Gantt charts are simpler and easier to understand, but they do not indicate
the precedence relationships between the various activities as do PERT network diagrams. For
this reason, project managers are more likely to use Gantt charts for simple applications, or to
illustrate actual-versus-planned completion times of the activities in larger PERT projects.
13-11.
When an organization installs a new accounting system, its managers hope that it
will eliminate all the old problems and not create new ones. However, as the new system
operates on a day-to-day basis, some of the company's original systems problems may
reoccur or new problems may develop. The purpose of the follow-up phase of a systems study
is to evaluate the new system and determine what problems still exist.
A new system should help a company achieve its general systems goals, top management
systems goals, and operating management systems goals. Through follow-up analysis work,
an implementation team attempts to identify those goals that the new system does not help
management achieve. Systems revisions will then be required in these areas. Similarly, new
revisions may be needed due to internal and/or external environmental changes, or because
the new system no longer provides the types of information required by the company's
management.
Some specific examples of follow-up work are:
1) Determine whether top management and operating management are satisfied with both
the content and the timeliness of the output reports received from the information
processing subsystem
2) Evaluate the system controls of the system to ensure they function properly
3) Observe employee work performances to determine if the new system helps them
perform their assigned job functions effectively
4) Determine whether processing functions are performed adequately, and also if output
schedules for both internal and external reports under the new system are met
5) Talk with local area network users to determine these users satisfaction with the
information they are accessing from the network
6) Test computer security, privacy, and confidentiality controls to ensure that the new
system meets or exceeds expectations in this area
The implementation team will prepare a follow-up review report at the end of its follow-up work,
which it then submits to the companys steering committee. It is up to the steering committee
to decide what to do next.
13-12.
Three major ways that an organization can acquire software are: (1) by acquiring or
leasing it from one or more independent vendors, (2) by developing the software in-house, and
(3) by outsourcing the data processing tasks required by the system. Technically, however, this
last option more refers to accomplishing system tasks than acquiring software.
SM 13.6
Rather than reinvent the wheel, most organizations obtain their operating systems,
communications, and utility program software from outside vendors. The one remaining type of
software is application software. When a company has very specific data processing
requirements and no available commercial software can satisfy its needs, an organization
typically has no choice but to write its own. However, this advantage of in-house
development also carries over even when commercial software is availablei.e., the fact that
the software is customized to meet the organization's specific processing requirements.
Because vendor software is usually written for a larger market, it may require considerable
modifications to satisfy the organization's data processing needs. The counter argument is
that canned software typically costs much less than custom-developed software, and thus, the
question is usually whether the costs of purchasing or leasing the initial software, plus the
modification costs, are still cheaper than the in-house development alternative.
Which approach is better? Depending upon their individual experiences, some students may
prefer to acquire software from an independent vendor whereas other students will favor inhouse development. Those students recommending an independent vendor for the acquisition
of software often give "lower cost" as the major reason for favoring the independent vendor
over the in-house development, but this is not always so. It depends upon the specific
software needs of the organization. As a practical matter, however, most companies today
prefer to purchase existing software than develop their own. Also, as we noted in earlier
chapters, existing software typically incorporates best practices, which often requires
companies to reengineer some of their processes. While this represents a cost in terms of time
and money, successful BPR initiatives can sometimes reap significant advantages for
companies over the long run (i.e., in terms of cost savings due to more efficient and effective
processes).
13-13.
Business process outsourcing (BPO) means just thatoutsourcing the tasks
required to perform a specific business function. An example is preparing the weekly company
payroll. Typically in such circumstances, the vendor uses its own software, labor, and materials
to perform the job. Knowledge process outsourcing (KPO) means hiring an outside vendor to
perform a knowledge-oriented task. An example is developing software according to client
specifications or performing a particular research task.
Companies outsource business processes, such as back-office accounting functions, for a
variety of reasons. As noted in the text, the number one reason companies outsource is cost.
Globalization means that any company anywhere in the world may contract with anyone,
located anywhere, to perform the required work. Because labor rates vary around the globe,
labor-intensive tasks that may be done more cheaply elsewhere have the potential for
outsourcing. Other reasons mentioned in the textbook include convenience, the ability to
depend upon an outside vendor to handle large changes in processing volume, the availability
of expertise not found in-house, and relief from the pressures of keeping current with
technology.
Problems
13-14.
SM 13.7
Lilly Li Apparel
Note to Instructor: This problem asks students to identify four problems with the system. Here
are six of them.
Problems
1. New cashiers are awkward in their
use of the POS system.
2. Printing sales tickets seems to take
too long.
3. Automatic opening of the cash
Remedies
1. Conduct POS training for new cashiers.
2. Replace the existing printers with faster
models, or speed the processing of sales
transactions leading to the printing.
3. Test the voltages sent to the cash drawers
SM 13.8
drawers is erratic.
4. The four-digit STN is inadequate
for the number of merchandise
items, resulting in frequent dumps
of information for discontinued
items to make room for new items.
13-16.
Here are areas where an online, real-time computer system might help the managerial decision
making for a professional football team:
a) The system could be useful in maintaining up-to-the minute counts of attendance
during game days as well as counts by category, e.g., general admission, box seats,
VIP, complimentary, etc.
b) The system would be able to take ticket orders for future gamesan important
capability if seats for a certain future game were limited and there were several sales
centers for such seats scattered about the ball park or the city.
c) For such sports teams as baseball, basketball, and football, the system could be useful
in simulating various game-playing situations that could happen during a game and
providing statistics about the success of each outcome.
d) For all types of athletic teams, the system could help maintain current inventory records
for such critical items such as medical and athletic supplies that are needed by the
team.
SM 13.9
e) For all types of athletic teams, a real-time system could be useful to aid the projections
of future attendance at games and to help forecast future cash flows as well as other
budgetary activities (such as forecasts of future capital expansion).
f) For professional baseball, basketball, and football teams that draw heavily upon college
graduates when seeking new players, the system could provide current information
about each year's available college graduates as well as future college graduates and
their unique qualifications. Also, the computer system could maintain information about
which players have already been signed to contracts by other teams, which individuals
are still free agents, and which teams are competing for these free agents.
13-17.
Cook Consultants
Students typically dont like Mays suggestion. True, implementing the new system on time is
important, and can probably be completed much faster under direct conversion than parallel
conversion. However, meeting this date at the expense of installing an inefficient or untested
system should normally be avoided. Because The Samuel Company is making major changes
to its system, there is a strong likelihood that various problems may occur. Direct conversion
means that the old system will be discontinued immediately after the new system is
implemented. If problems occur with the new system, these problems may be costly, such as
losing customers, wasting employee time, and will normally be more difficult to solve if the old
system is gone. Furthermore, a company can have serious difficulties maintaining accurate
data files if only the new system is operative and problems with the new system corrupt the
data in these files.
Under parallel conversion, both the old system and the new system operate simultaneously for
a period of time until managers believe the new system is free of errors. The problem with
parallel conversion is that it takes more time than direct conversion. However, the likelihood is
much greater that, under parallel conversion, the new system will operate more efficiently and
effectively. For these reasons, parallel conversion should be used even though it may delay
the systems implementation schedule.
13-18.
A preliminary Investigation
Although this problem is open-ended, the authors have had great success encouraging
students to examine the information system of specific companies and requiring them to report
their findings in class. One common difficulty is the fact that the study of even the smallest
systems tends to be a large and complex undertaking. This is a useful lesson, however, for
understanding scope creep, and certainly points out the difference between in-class theory
and real-world practice. As a practical matter, however, instructors should urge their students to
look at very simple systems in very small companies.
13-19.
SM 13.10
d. The five paths through the network (and their completion times) are: (1) AEHIJ (55), (2)
AEGJ (50), (3) BFHIJ (58), (4) BFGJ (53), and (5) BCDJ (48). The critical path is BFHIJ
because it is the longest path through the network.
e. Activity F can only begin after the company completes activity B. If Activity B requires 14
weeks to complete, then activity F can begin at the beginning of week 15.
f. The two paths leading to activity G are AE (requiring 18 weeks) and BF (requiring 21
weeks). Because activity G requires the completion of both activities E and F, the
earliest start time for activity G is the beginning of week 22.
g. From Part (d) of this question, we know that the entire project can be completed in 58
weeks. If activity J requires 26 weeks to complete, then we can subtract 26 from 58 to
get 32. This means that the latest start time for activity J is at the end of week 32, or
the beginning of week 33.
h. This part of the problem continues part (g). We know that activity J must start no later
than the beginning of week 33. Because activity G requires 6 weeks to complete, we
can subtract 6 from 33 to get 27. Thus, the latest start time for activity G is the
beginning of week 27.
i. From part (f) of this problem we know that the earliest start time for activity G is the
beginning of week 22. From part (h) of this problem, we know that the latest start time for
activity G is the beginning of week 27. Subtracting, we obtain the slack time for this
activity: 5 weeks.
13-20.
a.
b.
c.
d.
e.
f.
Activity G (convert data files) is scheduled to begin at the beginning of week 22 and end
6 weeks later (the end of week 27).
Activity I (test computer software) is scheduled to begin at the beginning of week 28 and
end 5 weeks later (the end of week 32).
The Gantt chart shows that the actual time to complete activity A (prepare the physical
site) was 11 weeks. This was less than the 17 weeks originally planned for it.
The Gantt chart shows that the actual time to complete activity B (determine the
functional changes) was 16 weeks. This was more than the 14 weeks originally planned
for it.
Activity E (acquire and install computer equipment) can only begin after the company
completes activity A. Because the company was able to complete activity A early (in 11
weeks), it can also begin activity E earlyi.e., at the start of week 12.
Activity C (select and assign personnel) can only begin after the company completes
activity B (determine the functional changes). According to the Gantt chart, there was a
delay in completing this activity, which was completed at the end of week 16. Thus,
activity C can actually begin at the start of week 17.
Case Analyses
13-21.
SM 13.11
The mainframe programs, partially because they have existed for a long time, are
debugged, and, therefore, cheaper than new microcomputer software
A centralized computing environment leads to better control of applications, program
development, data files, computer operations, and quality standards with greater
uniformity
SM 13.12
Note to Instructor: In the solution below, the word dysfunctional" refers to a negative
contribution toward the company's operating efficiency and the word functional refers to a
positive contribution toward the company's operating efficiency.
1. Indicate whether each of the four reactions cited in the text contribute positively or
negatively to the Wright Companys operating effectiveness.
1) If the reports contain information that requires immediate attention, any delay in action
is likely to be dysfunctional. If the reports continue to accumulate with no action taking
place (e.g., the department heads do not catch up during the lulls), this definitely is
dysfunctional behavior.
2) Generating too many reports or generating so many of them that managers take the
wrong action is a dysfunctional response and a good example of information overload.
The department heads were unable to assimilate the supplied information properly, and
therefore they either did not use it or used it incorrectly.
3) Delaying action until reminded by someone can be dysfunctional. If delays continually
take place and result in complications and/or delays in other departments, this lack of
action is dysfunctional.
4) Seeking information from external sources can be both functional and dysfunctional.
Gathering information from alternative sources can be dysfunctional because the
formal system is not producing the information in a usable form and the process of
developing information from other sources probably has a cost. However, the fact that
the department heads generate needed information from other sources might be taken
as a functional response to the problem.
2. For each negative reaction, recommend alternative procedures that the Wright Company
can employ.
The dysfunctional behavior that occurred in Wright Company is most likely a direct result of
management's failure to recognize that information systems are dynamic. Once a system
is designed and implemented, it should be continually reviewed to acknowledge and
incorporate any changes. It does not make sense to attack these problems piecemeal.
Instead, a follow-up systems study committee composed of both systems staff and users
should be established to review the present system and to interview users about their
information needs and uses of the systems outputs.
During the systems survey review, the committee should focus on the information needed
by department heads, the content, form, and formats this information should take, and the
timing of the information. Unnecessary reports should be eliminated, and individual reports
should be redesigned to include only relevant information. Once revised, the reporting
system should be reviewed periodically to make sure it is functioning smoothly and to make
necessary corrections.
13-23.
SM 13.13
1-2.
First, the most obvious addition is a date field at the top of the report that indicates the
day the report was created. This should help managers better identify individual reports
and updates. Within the body of the report, the format for the account titles and their order
of presentation in the first column will not change, and data will still be presented for both
the current month and year-to-date. To help management review results and planning
operations, however, we recommend that Kenbart add three new columns (original,
revised, and flexed revised) under both the Month and the Year-to-Date headings as
shown below. Furthermore, we recommend that the report include a current outlook
column. An example of the revised format for the Profit Plan Report is shown below. Some
additional notes are:
The Original Plan and Revised Plan columns are included for reference purposes.
These two plans were the predecessor of the Flexed Revised Plan and may be
useful in tracing changes.
The Flexed Revised Plan is the most current plan and is the one to which Actual
Results should be compared. A comparison of Actual Results to this plan yields the
Over/Under Plan calculations in dollar and percentage amounts.
The Current Outlook column was not included in the original report but has been added
here and should give management an idea of what the results for the year are
expected to be.
KENBART COMPANY
PROFIT PLAN REPORT
DATE OF REPORT: xx/xx/xx
ACCOUNT
TITLE
*_______
_____MONTH_____
ORIGINAL
PLAN
REVISED
PLAN
_________*
FLEXED
REVISED
PLAN
*____
OVER/
UNDER
$
%
ACTUAL
RESULTS
_ YEAR-TO-DATE____________*
ORIGINAL
PLAN
FLEXED
REVISED
PLAN
REVISED
PLAN
ACTUAL
RESULTS
OVER/
UNDER
$
%
SALES
.
.
NET
INCOME
13-24.
Required modifications
Ease of use
Internal controls
Flexibility
Vendor support
Meg's Ratings
Fritzs Ratings
Equal
Vendor
Vendor
Vendor
Vendor
Weights
0.2
0.6
0.4
0.6
0.6
0.2
1.6
0.6
0.8
1.2
0.2
0.6
0.8
0.4
0.8
0.2
0.8
0.6
1.4
0.3
1.4
0.6
1.8
SM 13.14
Vendor
Vendor
Meg's Ratings
Vendor
Vendor
CURRENT
OUTLOOK
SM 13.15
3.8
5.8
Required modifications
Ease of use
Internal controls
Flexibility
Vendor support
Meg's Ratings
Fritzs Ratings
Meg's Ratings
Compromise
Vendor
Vendor
Vendor
Vendor
Vendor
Vendor
Vendor
Vendor
Weights
0.2
0.6
0.4
0.6
0.6
0.3
2.4
0.9
1.2
1.8
0.1
0.3
0.4
0.2
0.4
0.1
0.4
0.5
0.3
0.7
0.3
2.1
1.5
0.9
2.7
5.8
3.7
3.2
6.2
Meg's Ratings
Combined Weights
Combined Results
Compromise
Vendor
Vendor
Vendor
Vendor
Vendor
Vendor
Vendor
Vendor
Weights
Required modifications
0.2
2.5
0.6
0.5
Ease of use
0.3
4.5
1.8
1.35
Internal controls
0.1
2.5
0.25
0.4
Flexibility
0.1
3.5
0.35
0.6
Vendor support
0.3
1.5
2.1
4.5
4.95
4. These exercises suggest that even the most objective numerical analyses are subject to
such problems as assumptions, subjective ratings of underlying data, and compromises in
choices if more than one person assigns ratings. They also suggest that important criteria
may be omitted from the analysesfor example, the reputation of the vendor, the length of
the support contract, the convenience or inconvenience of access to the vendors support
staff or facilities, and the availability of off-shore help desk support.
SM 13.16