End User Development

End user development is growing in popularity

It is estimated that most organizations have a five year back-log of requests for
new proposed systems
Organizations are empowering employees to develop small-scale systems
themselves
End User Development Cycle

Prototyping is the process of building a model that demonstrates the features of a

proposed product, service, or system
Systems Support Phase
Provide a formal mechanism for system review
Provide mechanism for requesting changes
Evaluate proposed system changes
Initiate system changes
Systems Support: Seek Answers Frequently to these Questions
1.Does this system still support the overall
business goals?
2.Do modifications need to be made to this system
in light of changes to business processes?
End-User Development Trends

Increasingly powerful desktop hardware

Declining hardware costs
Increasingly diverse software capabilities
Increasingly computer-literate population

 Backlog of IS projects
Development speed
Business orientation
Small applications
Control
Apparent cost savings
EUD Problems
Additional spending
Hardware
Software
Training
Support
Neglecting other duties
Limited managerial technical skills
Documentation
Security
Advantages of End User Development
Encourages active user participation
Improves requirements determination
Strengthens user sense of ownership
Increases speed of systems development
Disadvantages of End User Development
Inadequate expertise leads to underdeveloped systems
Lack of organizational focus creates "privatized" system
Insufficient analysis and design leads to subpar systems
Lack of documentation of a system may lead to its being short lived
Examples of end-user development include the creation and modification of:

3D models created with end-user oriented tools and approaches such as Sketchup
Animation scripts used by graphic artists to describe characters, environments and
how characters move to produce an intended animation
Configuration files that blur the line between programs and data (e.g., email filters
are sequenced lists of criteria and actions to take)
Arguably, contributions to open source projects where users of a software package
contribute their own code for inclusion in the main package in some cases,
end-users participate as full-fledged developers
Game modifications to introduce users' own characters, environments, etc.
many recent games are distributed with modification in mind
Interaction scripts used in CRM call centres
Process models used in workflow applications
Prototypes and domain-specific programs written by businesspeople, engineers,
and scientists to demonstrate or test specific theories
Scientific models used in computer simulation
Scripts and macros added to extend or automate office productivity suites and
graphics applications.
Simulations created using application definition software

Simultaneous editing of many related items either through a batch process

specified by the end user or by direct manipulation, like those available in the
Lapis text editor and multi edit.
Spreadsheet models, e.g., used for budgeting or risk analysis
Visual programming in the form of visual languages such as AgentSheets,
LabVIEW or LEGO Mindstorms.
Web pages - plain HTML or HTML and scripting

Outsourcing:
Another alternative to developing a computer system
Delegation of work to a group outside of your organization for:
A specified period of time
A specified cost
A specified level of service
The main reasons for outsourcing in order of importance are:
1. Reduce and control operating costs
2. Improve company focus
3. Gain access to world-class capabilities
4. Free internal resources for other purposes
5. Resources are not available internally
6. Accelerate reengineering benefits
7. Function difficult to manage/out of control
8. Make capital funds available
9. Share risks
10. Cash infusion
How Outsourcing Compares to SDLC
Organization turns over much of the design, construction, implementation, and
support steps to another organization
Organization is still responsible for:
Investigation
Analysis
Creating a request for proposal
Outsourcing Cycle

A System May be Targeted for Outsourcing When:

It is determined that the in-house IT specialists do not have enough time or

resources to build a system
The organization does not possess the expertise to develop a given system
It is determined that it is cheaper to buy prewritten horizontal or vertical market
software than it is to develop it from scratch.

Building a Request for Proposal (RFP)

RFP is a formal document that outlines the logical requirements for the proposed
system and invites outsourcing vendors to bid on its development
RFP can be long and complex, requiring months to create. Do not rush through it

Evaluating an RFP
Evaluate all bids and decide on which outsourcing vendor to use
Once the vendor is decided upon, a lengthy and legal process follows during
which a legally binding document must be developed that both organizations sign
stating:
exactly what work is to be carried out
how and when payments will be made
project time frame
how your organization can get out of the contract if the outsourcing
vendor does not live up to its end
Test and Accept the Outsource Solution
Steps performed during testing and acceptance:
software is completely tested
Train users
Convert old information to the new system
Convert users to the new system
If the software does not perform according to the specifications DO NOT accept
the system. Have the outsourcer fix the problem(s) immediately
Systems Support and Relationship Evaluation
Perform a periodic review of the system

Provide a formal mechanism through which users can request changes, and
evaluate their worth
Reevaluate your relationship with the outsourcing vendor

Advantages/Disadvantages of Outsourcing:

TRANSACTION PROCESSING APPLICATIONS:

Information systems generally are classified into five categories: office information
systems, transaction processing systems, management information systems, decision
support systems, and expert systems.
Transaction Processing Systems
A transaction processing system (TPS) is an information system that captures and
processes data generated during an organizations day-to-day transactions. A transaction
is a business activity such as a deposit, payment, order or reservation.
Clerical staff typically perform the activities associated with transaction processing,
which include the following:

1.

Recording a business activity such as a students registration, a customers

order, an employees timecard or a clients payment.

2.

Confirming an action or triggering a response, such as printing a students

schedule, sending a thank-you note to a customer, generating an employees
paycheck or issuing a receipt to a client.

3.

Maintaining data, which involves adding new data, changing existing data, or
removing unwanted data.

Transaction processing systems were among the first computerized systems developed to
process business data a function originally called data processing. Usually, the TPS
computerized an existing manual system to allow for faster processing, reduced clerical
costs and improved customer service.
The first transaction processing systems usually used batch processing. With batch
processing, transaction data is collected over a period of time and all transactions are
processed later, as a group. As computers became more powerful, system developers
built online transaction processing systems. With online transaction processing
(OLTP) the computer processes transactions as they are entered. When you register for
classes, your school probably uses OLTP. The registration administrative assistant enters
your desired schedule and the computer immediately prints your statement of classes.
The invoices, however, often are printed using batch processing, meaning all student
invoices are printed and mailed at a later date.
Today, most transaction processing systems use online transaction processing. Some
routine processing tasks such as calculating paychecks or printing invoices, however, are
performed more effectively on a batch basis. For these activities, many organizations still
use batch processing techniques.
BASIC ACCOUNTING APPLICATIONS:
An accounting information system (AIS) is a structure that a business uses to collect,
store, manage, process, retrieve and report its financial data so that it can be used by
accountants, consultants, business analysts, managers, chief financial officers (CFOs),
auditors and regulatory and tax agencies. In particular, specially trained accountants work
with AIS to ensure the highest level of accuracy in a company's financial transactions and
recordkeeping and to make financial data easily available to those who legitimately need
access to it, all while keeping data intact and secure. This article will describe the primary
components of an AIS and some of its real-life applications.
Components of an Accounting Information System
Accounting information systems generally consist of six main parts: people, procedures
and instructions, data, software, information technology infrastructure and internal
controls. Let's look at each component in detail.
People
The people in an AIS are simply the system users. Professionals who may need to use an
organization's AIS include accountants, consultants, business analysts, managers, chief
financial officers and auditors. (Learn more in What does a chief financial officer Do?)

An AIS helps the different departments within a company work together. For example,
management can establish sales goals for which staff can then order the appropriate
amount of inventory. The inventory order notifies the accounting department of a new
payable. When sales are made, sales people can enter customer orders, accounting can
invoice customers, the warehouse can assemble the order, the shipping department can
send it off, and the accounting department gets notified of a new receivable. The
customer service department can then track customer shipments and the system can
create sales reports for management. Managers can also see inventory costs, shipping
costs, manufacturing costs and so on.
With a well-designed AIS, everyone within an organization who is authorized to do so
can access the same system and get the same information. An AIS also simplifies getting
information to people outside of the organization when necessary. For example,
consultants might use the information in an AIS to analyze the effectiveness of the
company's pricing structure by looking at cost data, sales data and revenue. Also, auditors
can use the data to assess a company's internal controls, financial condition and
compliance with the Sarbanes-Oxley Act (SOX). (Find out more on accounting
regulations; check out Financial History: The Rise of Modern Accounting.)
The AIS should be designed to meet the needs of the people who will be using it. The
system should also be easy to use and should improve, not hinder, efficiency.
Procedure and Instructions
The procedure and instructions of an AIS are the methods it uses for collecting, storing,
retrieving and processing data. These methods will be both manual and automated, and
the data can come from both internal sources (e.g., employees) and external sources (e.g.,
customers' online orders). Procedures and instructions will be coded into AIS software;
they should also be "coded" into employees through documentation and training.
Procedures and instructions must be followed consistently to be effective.
To store information, an AIS must have a database structure such as structured query
language (SQL), a computer language commonly used for databases. The AIS will also
need various input screens for the different types of system users and different types of
data entry, as well as different output formats to meet the needs of different users and
different types of information. (Does a job as a financial sleuth sound interesting to you?
Learn more in Uncovering A Career In Forensic Accounting.)
Data
The data contained in an AIS is all the financial information pertinent to the
organization's business practices. Any business data that impacts the company's finances
should go into an AIS. The data included in an AIS will depend on the nature of the
business, but it may consist of the following:

sales orders
customer billing statements
sales analysis reports
purchase requisitions
vendor invoices

check registers
general ledger
inventory data
payroll information
timekeeping
tax information

This data can then be used to prepare accounting statements and reports such as accounts
receivable aging, depreciation/amortization schedules, trial balance, profit and loss, and
so on. Having all this data in one place - in the AIS - facilitates a business's
recordkeeping, reporting, analysis, auditing and decision-making activities. For the data
to be useful, it must be complete, correct and relevant.
On the other hand, examples of data that would not go into an AIS include memos,
correspondence, presentations and manuals. These documents might have a tangential
relationship to the company's finances, but excluding the standard footnotes, they are not
really part of the company's financial recordkeeping.
Software
The software component of an AIS is the computer programs used to store, retrieve,
process and analyze the company's financial data. Before there were computers, AISs
were manual, paper-based systems, but today, most companies are using computer
software as the basis of the AIS. Small businesses might use Intuit's Quickbooks, Sage
Peachtree Accounting, or Microsoft's Small Business Accounting but there are many
others. Small to mid-sized businesses might use SAP's Business One. Mid-sized and large
businesses might use Microsoft's Dynamics GP, Sage Group's MAS 90 or MAS 200,
Oracle's Peoplesoft or Epicor Financial Management.
Quality, reliability and security are key components of effective AIS software. Managers
rely on the information it outputs to make decisions for the company, and they need highquality information to make sound decisions.
AIS software programs can be customized to meet the unique needs of different types of
businesses. If an existing program does not meet a company's needs, software can also be
developed in-house with substantial input from end users or can be developed by a thirdparty company specifically for the organization. The system could even be outsourced to
a specialized company.
For publicly traded companies, no matter what software program and customization
options the business chooses, Sarbanes-Oxley regulations will dictate the structure of the
AIS to some extent. This is because SOX regulations establish internal controls and
auditing procedures that public companies must comply with.
Information Technology Infrastructure
Information technology infrastructure is just a fancy name for the hardware used to
operate the accounting information system. Most of these hardware items are things a
business would need to have anyway - they include personal computers, servers, printers,
surge protectors, routers, storage media, and possibly a backup power supply. In addition
to cost, factors to consider in selecting hardware include speed, storage capability and

whether it can be expanded and upgraded. (Thinking about becoming an accountant?

Read, Shopping For An Accounting Certification.)
Perhaps most importantly, the hardware selected for an AIS must be compatible with the
intended software. Ideally, it would be not just compatible, but optimal, a clunky system
will be much less helpful than a speedy one. One way businesses can easily meet
hardware and software compatibility requirements is by purchasing a turnkey system that
includes both the hardware and the software that the business needs. Purchasing a turnkey
system means, theoretically, that the business will get an optimal combination of
hardware and software for its AIS.
A good AIS should also include a plan for maintaining, servicing, replacing and
upgrading components of the hardware system, as well as a plan for the disposal of
broken and outdated hardware so that sensitive data is completely destroyed.
Internal Controls
The internal controls of an AIS are the security measures it contains to protect sensitive
data. These can be as simple as passwords or as complex as biometric identification. An
AIS must have internal controls to protect against unauthorized computer access and to
limit access to authorized users which includes some users inside the company. It must
also prevent unauthorized file access by individuals who are allowed to access only select
parts of the system. (For more on personal safety, check out Protecting Your Financial
Documents From Disaster.)
An AIS contains confidential information belonging not just to the company but also to
its employees and customers. This data may include Social Security numbers, salary
information, credit card numbers, and so on. All of the data in an AIS should be
encrypted, and access to the system should be logged and surveilled. System activity
should be traceable as well.
An AIS also needs internal controls that protect it from computer viruses, hackers and
other internal and external threats to network security. Furthermore, it must be protected
from natural disasters and power surges that can cause data loss. (Learn how you can get
a job in this field, read A Guide To Careers In Accounting Information Systems.)
AISs In Real Life
We've seen how a well-designed AIS allows a business to run smoothly on a day-to-day
basis or hinders its operation if the system is poorly designed. A third use for an AIS is
that when a business is in trouble, the data in its AIS can be used to uncover the story of
what went wrong. The cases of WorldCom and Lehman Brothers provide two examples.
In 2002, WorldCom internal auditors Eugene Morse and Cynthia Cooper used the
company's AIS to uncover $4 billion in fraudulent expense allocations and other
accounting entries. Their investigation led to the termination of CFO Scott Sullivan as
well as new legislation. (section 404 of the Sarbanes-Oxley Act, which regulates
companies' internal financial controls and procedures. (Does a job as a financial sleuth
sound interesting to you? Learn more in Uncovering A Career In Forensic Accounting.)
When investigating the causes of Lehman's collapse, a review of its AIS and other data

systems was a key component, along with document collection and review and witness
interviews. The search for the causes of the company's failure "required an extensive
investigation and review of Lehman's operating, trading, valuation, financial, accounting
and other data systems," according to the 2,200-page, nine-volume examiner's report.
Lehman's systems provide an example of how an AIS should not be structured. Examiner
Anton R. Valukas's report states, "At the time of its bankruptcy filing, Lehman
maintained a patchwork of over 2,600 software systems and applications ... Many of
Lehman's systems were arcane, outdated or non-standard."
The examiner decided to focus his efforts on the 96 systems that appeared most relevant,
and the examination required training, study and trial and error just to learn how to use
the systems. (Also check out Case Study: The Collapse of Lehman Brothers, and An
Inside Look At Internal Auditors.)
Valukas's report also noted, "Lehman's systems were highly interdependent, but their
relationships were difficult to decipher and not well documented. It took extraordinary
effort to untangle these systems to obtain the necessary information."
Conclusion
The six components of an AIS all work together to help key employees collect, store,
manage, process, retrieve, and report their financial data. Having a well-developed and
maintained accounting information system that is efficient and accurate is an
indispensable component of a successful business.
ACCOUNTING SOFTWARE:
Accounting software is application software that records and processes accounting
transactions within functional modules such as accounts payable, accounts receivable,
payroll, and trial balance. It functions as an accounting information system. It may be
developed in-house by the company or organization using it, may be purchased from a
third party, or may be a combination of a third-party application software package with
local modifications. It varies greatly in its complexity and cost.
The market has been undergoing considerable consolidation since the mid-1990s, with
many suppliers ceasing to trade or being bought by larger groups.
Accounting software is typically composed of various modules, different sections dealing
with particular areas of accounting. Among the most common are:[2][3][4][5]
Core modules
Accounts receivablewhere the company enters money received
Accounts payablewhere the company enters its bills and pays money it owes
General ledgerthe company's "books"
Billingwhere the company produces invoices to clients/customers
Stock/inventorywhere the company keeps control of its inventory
Purchase orderwhere the company orders inventory
Sales orderwhere the company records customer orders for the supply of
inventory
Bookkeepingwhere the company records collection and payment

APPLICATION FOR BUDJETING AND PLANNING:

The Budget Office provides a number of information systems tools to help campus units
track, manage, and plan their financial resources and commitments.
Financial Managers Workbench (FMW) is the application used to manage the campus
permanent budget and staffing commitments. In addition to its role as a transaction
system, FMW is a highly flexible software tool well suited to budgeting and planning
applications.

The system provides access to multi-year permanent budget information at both

the transaction level and summary/roll-up level aiding both analysis and research;
Integration of detailed monthly distribution of payroll expense (DOPE) data with
summary FIS operating ledger data to facilitate monitoring and forecasting of
your current year operating budget.

Data extracted from the financial (FIS), budget (FMW), personnel (PPS), student
(SIS/AIS), course (SCiiPI) and facilities (FacLink) campus systems are aggregated in the
UC Santa Cruz Data Warehouse to enable staff to use information in analysis and
decision-making; providing standard and ad hoc reports to peers; and meeting their unit's
business objectives.
Information systems optimized to meet budget and resource management/planning needs
also includes:

Infoview XI web accessible report-reading and writing tool. Offers a full suite
of certified reports for each subject area to ensure information is interpreted
consistently; the tool also allows staff to write and run custom reports specific to
their unit's planning requirements.

Training on each of these systems is available through Data Management Services a

unit of Planning and Budget.