The Distributed Model

Distributed Data Processing (DDP) - involves

reorganizing central IT function into small IT units that
are placed under the control of end users

Two alternatives:
Alternative A: Variant of centralized model with terminals or
microcomputers distributed to end users for handling input and
output
Alternative B: Distributes all computer services to the end users
where they operate as stand alone units.
 Distributed Data Processing
Alternative A is actually a
variant of the centralized Accounting Marketing
model. Function Function
This eliminates the need for
Centralized
centralized data conversion Computer Services
groups. Since the users now Database
System
perform this tasks. System Development
Processing
development, computer
operations, and database
administration remain
centralized. Finance Production
Function Function
 Distributed Data Processing
Alternative B is a significant
departure from the
centralized model. This Accounting Marketing
alternative distributes all Function Function
computer services to the
end users, where they
operate as standalone units.
The result is the elimination
of the central IT function
Finance Production
from the organizational Function Function
structure.
 Risks Associated with DDP
1. Inefficient Use of Resources
a) Risk of mismanagement of organization wide IT
resources by end users
b) Increase the risk of operational inefficiencies because of
redundant task being performed within the end-user
committee
c) Risk of incompatible hardware and software among end-
user functions.
2. Destruction of Audit Trails
End user inadvertently delete one of the files, the audit
trails could be destroyed and unrecoverable. If an end user
inserts transaction errors into an audit trail file, it could
become corrupted.
 Risks Associated with DDP
3. Inadequate Segregation of Duties
IT Services to users may result in the creation of small
independent units that do not permit the desired
separation of incompatible functions
4. Hiring Qualified Professionals
The risks of programming errors and system failures
increases directly with the level of employee
incompetence.
5. Lack of Standards
Operation of DDP System are made tolerable only if
such standards are consistently applied.
 Advantages Associated with DDP
1. Cost Reductions
Data can be edited and entered by the end user, thus
eliminating the centralized task of data preparation. Application
complexity can be reduced, thus reduces system development
and maintenance cost.
2. Improved Cost Control Responsibility
Improved management attitude more than outweigh any
additional costs incurred from distributing these resource.
3. Improved User Satisfaction
Users want to become more active involved in developing and
implementing their own systems.
4. Backup Flexibility
Back up computing facilities to protect against potential
disasters such as fires, floods, sabotage and earthquakes.
 Controlling the DDP Environment
1. Implement a Corporate IT Function
The Corporate IT group provides system
development and database management for
entity-wide systems in addition to technical advice
and expertise to the distributed IT Community.
2. Central Testing of Commercial Software and
Hardware
Test results can be distributed to user areas as
standards for guiding acquisition decisions.
 Controlling the DDP Environment
3. User Services
Valuable feature of the corporate group is its user
services function.
4. Standard-Setting Body
Corporate group can contribute to this goal by
establishing and distributing to user areas appropriate
standards for system development, programming, and
documentation.
5. Personnel Review
The involvement of the corporate group in
employment decisions can render a valuable service
to the organization.
 Audit Procedures for the DDP
Audit procedures in a centralized IT organization:
Review relevant documentation to determine if individuals or groups are
performing incompatible functions.
Review systems documentation and maintenance records to verify
maintenance programmers are not designers.
Observe to determine if segregation policy is being followed.
Review relevant documentation to determine if individuals or groups are
performing incompatible duties.
Verify corporate policies and standards are published and provided to
distributed IT units.
Verify compensating controls are in place when needed.
Review system documentation to verify applications, procedures and
database are in accordance with standards.