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Chapter 20

Chapter 20. Systems Design, Implementation, and Operation. Overview. The last four phases (2-5) in SDLC: 1. Systems Analysis (Chapter 18) 2. Conceptual Design 3. Physical Design 4. Implementation and Conversion 5. Operation and Maintenance. Overview.

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Chapter 20

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  1. Chapter 20 Systems Design, Implementation, and Operation FOSTER School of Business Acctg 320

  2. Overview • The last four phases (2-5) in SDLC: • 1. Systems Analysis (Chapter 18) • 2. Conceptual Design • 3. Physical Design • 4. Implementation and Conversion • 5. Operation and Maintenance FOSTER School of Business Acctg 320

  3. Overview • Questions to be addressed in this chapter include: • What are the activities that take place in the conceptual design phase of the systems development life cycle (SDLC)? • What activities take place in the physical systems design phase? • What happens during the systems implementation and conversion process? • What activities occur in the systems operation and maintenance process? FOSTER School of Business Acctg 320

  4. Introduction • Accountants must understand the entire systems development process, because they are involved in several ways: • Helping to specify their needs. • As members of the development team. • As auditors after the fact. • Accountants also help keep the project on track by: • Evaluating and measuring benefits. • Measuring costs. • Ensuring the project stays on schedule. FOSTER School of Business Acctg 320

  5. CONCEPTUAL SYSTEMS DESIGN • In the conceptual systems design phase, a general framework is created for implementing user requirements and solving the problems identified in the analysis phase. • The three main steps are: • Evaluate design alternatives. • Prepare design specifications. • Prepare the conceptual systems design report. FOSTER School of Business Acctg 320

  6. CONCEPTUAL SYSTEMS DESIGN • Evaluating design alternatives • There are many design decisions that must be made. For example: • Should a document be hard-copy or sent by EDI? • Should the company use a large centralized mainframe or some form of distributed processing? • What form should data entry take, e.g., keyboard, optical character recognition, POS devices? • Data storage medium, structure, file access? • Frequency of updates? FOSTER School of Business Acctg 320

  7. CONCEPTUAL SYSTEMS DESIGN • Also, there are many ways to approach the systems development process: • Packaged software • In-house development • End-user development • Outsourcing • The company also chooses between: • Modifying or enhancing existing software • Replacing existing software • Reengineering its business processes FOSTER School of Business Acctg 320

  8. CONCEPTUAL SYSTEMS DESIGN • Prepare design specifications • Once a design has been selected, the project team develops the more detailed conceptual design specifications for the following elements: • Output (prepared first to meet user’s needs) • Data storage (what data, type of file) • Input (where, when, & how to collect data) • Processing procedures and operations (steps) FOSTER School of Business Acctg 320

  9. CONCEPTUAL SYSTEMS DESIGN • Prepare the conceptual systems design report • A conceptual systems design report is prepared at the end of the conceptual design phase to: • Guide physical system design activities. • Communicate how management and user information needs will be met. • Help the steering committee assess system feasibility. FOSTER School of Business Acctg 320

  10. Physical Systems Design • During the physical systems design phase, the company determines how the conceptual AIS design is to be implemented. • The broad, user-oriented requirements of conceptual design are translated into detailed specifications used to code and test computer programs. • Phases include: • Designing output • Creating files and databases • Designing input • Writing computer programs • Developing procedures • Building in controls Let’s look at each of these phases, next FOSTER School of Business Acctg 320

  11. Physical Systems Design Output Design: • Output usually fits into one of the following four categories: • Scheduled reports have a prespecified content and format and are prepared on a regular basis. • Special-purpose analysis reports have no prespecified content or format and are not prepared on a regular schedule. • Triggered exception reports have a prespecified content and format but are prepared only in response to abnormal conditions. • Demand reports have a prespecified content and format but are prepared only on request. FOSTER School of Business Acctg 320

  12. Physical Systems Design File and Database Design: • Data needs to be stored in compatible formats to help avoid the problem of having incompatible systems that makes it impossible to share information and prepare reports. • What is the medium (tape, disc)? • Is processing batch, manual or real-time? • What is the size of the database? • How is the database maintained? • When will information be added, deleted and updated? FOSTER School of Business Acctg 320

  13. Physical Systems Design Input Design: • How does data get in the system? Is it through printed forms? Or is it through online entry? • Forms design: more and more companies are moving away from paper documents, but it is still important. FOSTER School of Business Acctg 320

  14. Physical Systems Design Computer screen design: it is more efficient to enter data directly into the computer than on paper for subsequent entry. Design considerations: + data should be entered quickly, accurately and completely. + enter data in the same order as displayed on paper. + enter left to right & top to bottom, group related data. + easy movement across the screen. + avoid clutter (e.g., limit number of menu options). FOSTER School of Business Acctg 320

  15. Physical Systems Design Program development:is one of the most time-consuming activities in the SDLC. Programs subdivided into small, well-defined modules are a process called structured programming. To improve software quality, organizations should develop programming standards. Although accountants need not be computer programmers, they should understand how software is created. FOSTER School of Business Acctg 320

  16. Physical Systems Design--Program Design Eight steps for developing software: (Program Design) Step 1Determine user needs. Systems analysts consult with users and agree on software requirements. Step 1 is performed as a part of the systems analysis phase of the SDLC. Step 2 Develop a plan. A development plan is produced and documented. Step 2 is done during conceptual systems design and may carry over to the beginning of physical design. Step 3 Write program instructions (code). This is when the computer code (or program instructions) is written. Step 4 Test the program. Debugging is discovering and eliminating program errors. After a program is coded, a visual and mental review, referred to as desk checking, is conducted to discover programming errors. Cost a lot more to debug later rather than sooner. FOSTER School of Business Acctg 320

  17. Physical Systems Design--Program Design continued Step 5 Documents the program. Documentation explains how programs work and is used to help correct and resolve errors. Step 6 Train program users. Program documentation is often used to train users. Steps 5 and 6 are begun in systems design, but most of the work is done during systems implementation. Step 7 Install the system. All system components, including the programs, are combined and the company begins to use the system. Step 7 is completed during systems implementation and conversion. Step 8 Use and modify the system. Factors that require existing programs to be revised, referred to as program maintenance, include requests for new or revised reports; changes in input, file content, or values such as tax rates; error detection; and conversion to new hardware. Step 8 is part of the operation and maintenance phase. FOSTER School of Business Acctg 320

  18. Physical Systems Design--Procedures Design • Procedures design • Individuals who interact with a newly-designed AIS need procedures to cover: • Input preparation • Transaction processing • Error detection and correction • Controls • Reconciliation of balances • Database access • Output preparation and distribution • Computer operator instructions FOSTER School of Business Acctg 320

  19. Physical Systems Design--Procedures Design • The procedures may be written by: • Development teams; • Users; or • Teams representing both groups. • Procedures may take the form of: • System manuals • User instruction classes • Training materials • Online help screens FOSTER School of Business Acctg 320

  20. Physical Systems Design--Controls Design • Controls design • Improperly controlled input, processing, and database functions produce information of questionable value. (garbage in, garbage out) • Controls must be built into an AIS to ensure its effectiveness, efficiency, and accuracy. These controls should: • Minimize errors. • Detect and correct errors when they do occur. • Accountants play a vital role in this area. FOSTER School of Business Acctg 320

  21. Physical Systems Design--Controls Design Important control concerns that must be addressed include: (more detail in chapters 6-9) • Validity • Authorization • Accuracy • Security • Numerical control • Availability • Maintainability • Integrity • Audit trail (can you trace transaction from source to final output and back) FOSTER School of Business Acctg 320

  22. Physical Systems Design--Design report • Physical systems design report • At the end of the physical design phase, a physical systems design report is prepared, summarizing what was accomplished. • This report serves as the basis for management’s decision whether to proceed to implementation. FOSTER School of Business Acctg 320

  23. SYSTEMS IMPLEMENTATION AND CONVERSION • Systems implementation • Systemsimplementation is the process of installing hardware and software and getting the AIS up and running. • Phases include: • Developing a plan • Preparing the site • Installing and testing hardware and software • Selecting and training personnel • Completing documentation • Testing the system FOSTER School of Business Acctg 320

  24. SYSTEMS IMPLEMENTATION AND CONVERSION • Implementation planning • An implementation plan consists of: • Implementation tasks • Expected completion dates • Cost estimates • Specification of the person(s) responsible for each task • AIS changes may require adjustments to the company’s organizational structure, including: • Creation of new departments. • Elimination or downsizing of existing departments. • Changes even in the data processing department. FOSTER School of Business Acctg 320

  25. SYSTEMS IMPLEMENTATION AND CONVERSION • Site preparation: A large computer may require changes such as: • New electrical outlets • Data communications facilities • Humidity controls • Special lighting • Air-conditioning • Security measures, such as: • Fire protection • Emergency power supply • Space for equipment, storage, and offices, etc. • Site preparation is a lengthy process and should begin well ahead of the installation date. FOSTER School of Business Acctg 320

  26. SYSTEMS IMPLEMENTATION AND CONVERSION Select and train personnel: • When training is insufficient, the company will not achieve the expected return on investment. • The hidden cost is that users will turn to their coworkers who have mastered the system for help. Results in: • Less productive coworkers • Increased costs • Effective training includes: • Hardware and software skills • Orientation to new policies and operations • The training should be scheduled just before systems testing and conversion. FOSTER School of Business Acctg 320

  27. SYSTEMS IMPLEMENTATION AND CONVERSION • Types of staff training include: • Technical training from vendors • Self-study manuals • Computer-aided instruction • Videotape presentations • Role-playing • Case studies • Experimenting with the AIS under the guidance of experienced users FOSTER School of Business Acctg 320

  28. SYSTEMS IMPLEMENTATION AND CONVERSION Complete Documentation: Three types of documentation must be prepared for new systems: • Development documentation (describes new AIS) • Operations documentation (operating schedules, security, file-retention requirements) • User documentation (how to use system, users manual) FOSTER School of Business Acctg 320

  29. SYSTEMS IMPLEMENTATION AND CONVERSION Test the system: • Inadequate system testing has contributed to the failure of systems. • All of the following should be given a trial run in realistic circumstances. • Documents and reports • User input • Operating and control procedures • Processing procedures • Computer programs • Should also test: • Capacity limits • Backup and recovery procedures FOSTER School of Business Acctg 320

  30. SYSTEMS IMPLEMENTATION AND CONVERSION • Three common forms of testing include: • Walk-throughs(step-by-step reviews of procedures or program logic.) • Processing test transactions (valid and erroneous data are processed to determine if transactions are processed appropriately.) • Acceptance tests (use copies of real transactions and files rather than hypothetical ones. Users develop the acceptance criteria and make a decision whether to accept the AIS.) • Even software purchased from an outside vendor must be tested thoroughly before installation. FOSTER School of Business Acctg 320

  31. SYSTEMS IMPLEMENTATION AND CONVERSION Systems conversion • Conversion is the process of changing from the old AIS to the new. • Many elements must be converted, including: • Hardware • Software • Data files • Procedures • The process is complete when the new AIS has become a routine, ongoing part of the system. FOSTER School of Business Acctg 320

  32. SYSTEMS IMPLEMENTATION AND CONVERSION Systems Conversion a. Direct conversion -- immediately terminate the old AIS when the new one is introduced (risky, but may be cost effective). b. Parallel conversion -- operates the old and new system simultaneously for a period of time. c. Phase-in conversion -- gradually replaces elements (modules) of the old AIS with a new one. d. Pilot conversion -- implements a system just in one part (e.g., location) of the organization. FOSTER School of Business Acctg 320

  33. SYSTEMS IMPLEMENTATION AND CONVERSION Data Conversion: • Data conversion can be time-consuming, tedious, and expense. • The difficulty and magnitude is easy to underestimate. • Data files may need to be modified in three ways: • Files may be moved to a different storage medium (e.g., tape to disk). • Data content may be changed (e.g., fields added or deleted). • A file or database format may be changed. FOSTER School of Business Acctg 320

  34. OPERATIONS AND MAINTENANCE • The last step in the SDLC is to operate and maintain the new system. • A post-implementation review should be conducted to ensure the new AIS meets its planned objectives. This completes the process. FOSTER School of Business Acctg 320

  35. Post-implementation review Addresses the following: --does the system meet objectives? --are the users satisfied? --what were the actual costs? --is it reliable, accurate, timely? --are the users trained? --is documentation complete and accurate? --recommendations for improving the new system --recommendations for improving the systems development process FOSTER School of Business Acctg 320

  36. Studies show that over the life of a system, only 30% of the work takes place during development. The remaining 70% is spent on maintaining the system (mostly software modifications & updates). FOSTER School of Business Acctg 320

  37. QUIZ Multiple Choice 1 (pg. 747) In the conceptual design phase of the systems development life cycle, _______ specifications must be prepared first. A. Input B. Output C. Data storage D. Data processing Multiple Choice 2 (pg. 762) Assumptions and unresolved problems are included in the following report(s): A. Conceptual systems design report B. Physical systems design report C. Post-implementation review report D. All of the above E. A and B FOSTER School of Business Acctg 320

  38. QUIZ Multiple Choice 3 (pg. 750) The following consideration(s) are involved in the file and database design. A. Use B. Operations C. Medium D. A and C Multiple Choice 4 (751) “Is additional training necessary?” is a concern to be answered during _______ design. A. Input B. Output C. Files and database D. Program E. Controls FOSTER School of Business Acctg 320

  39. QUIZ Multiple Choice 5 (pg. 752) _________ development is one of the most time consuming activities in the SDLC. A. Input B. Output C. Files and database D. Program E. Controls Multiple Choice 6 (pg. 752-3) ____________ is done during systems design and is completed during systems implementation. A. Develop a plan B. Desk checking C. Write program instructions D. All of the above E. B and C FOSTER School of Business Acctg 320

  40. QUIZ Multiple Choice 7 (pg. 758) Walk-throughs are conducted by: A. Development team B. System users C. Programmers D. All of the above E. A and B Multiple Choice 8 (pg. 759) The first step in the data conversion process is: A. Check data for completeness, and any data inaccuracies and remove any inconsistencies. B. Decide which data files need to be converted. C. Conduct data conversion D. Validate new files FOSTER School of Business Acctg 320

  41. Case 1 Gouge, Cheatum & Holdup, a legal firm, has a problem: most of the general partners are having a difficult time recording all the time spent on client matters for billing purposes. It is estimated that only 70% of the actual time is billed. Several discussions among the partners revealed that a lot of time is spent on the telephone with clients, but the information is not recorded into the system for billing the client. REQUIRED: Discuss some alternatives to fix the problem. FOSTER School of Business Acctg 320

  42. Case 2 The Daily Express Newspaper Company serves a small community and derives a considerable amount of revenue from advertising. All advertising orders are taken by salespeople at the customers’ places of business. At the end of three days, all advertising orders are processed in a batch. It normally takes four days between the time the order is taken and the time the ad appears in the newspaper. Recently, a competitive newspaper has offered faster service to its customers. REQUIRED: Discuss some alternatives to solve the problem. FOSTER School of Business Acctg 320

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