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

FOSTER School of Business Acctg 320 1

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

• 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?

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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


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.



• 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?



• 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



• 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)



• 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.


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 controlsLet’s look at each of these phases, next


Physical Systems DesignOutput 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.


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?



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.



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).



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.


Physical Systems Design--Program Design

Eight steps for developing software: (Program Design)

Step 1 Determine 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.


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.


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


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


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.


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)


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.


SYSTEMS IMPLEMENTATION AND CONVERSION

• Systems implementation– Systems implementation 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



• 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.



• 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.



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.



• 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



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)



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



• 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.



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.



Systems Conversiona. 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.



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.


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.


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


• 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).


QUIZMultiple 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 reportB. Physical systems design reportC. Post-implementation review reportD. All of the aboveE. A and B

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QUIZMultiple Choice 3 (pg. 750)The following consideration(s) are involved in the file and database design.A. UseB. OperationsC. MediumD. A and C Multiple Choice 4 (751)“Is additional training necessary?” is a concern to be answered during _______ design. A. Input B. OutputC. Files and databaseD. ProgramE. Controls

FOSTER School of Business Acctg 320


QUIZMultiple Choice 5 (pg. 752) _________ development is one of the most time consuming activities in the SDLC.

A. InputB. OutputC. Files and databaseD. ProgramE. Controls Multiple Choice 6 (pg. 752-3) ____________ is done during systems design and is completed during systems implementation.A. Develop a planB. Desk checkingC. Write program instructionsD. All of the aboveE. B and C


QUIZ Multiple Choice 7 (pg. 758)Walk-throughs are conducted by:A. Development teamB. System usersC. ProgrammersD. 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 conversionD. Validate new files


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.


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.

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