ACC 564 Assignment 4 Changing the AIS

CHANGE THE AIS

1

Changing the AIS Professor Daniel Acheampong ACC 564 Accounting Information Systems December 16, 21!

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Change the AIS An efficient accounting information system can help an organi"ation create an a#$antage among competitors% As technology an# information security techni&ues a#$ance, an acco unting information system may may nee# up#ating% 'or an organi"ation to protect protect their assets an# financial information, their accounting information information system (ill nee# to impro$e also% A#e&uate accounting information system (hich is reliable can eliminate ris) an# pro$i#e information security% *hen an organi"ation has better internal controls, it ma)es them lo(er ris)s an# ha$e more opportunity for lo(er borro(ing (ith cre#itors% +reat internal control sets sets up goo# corporate go$ernance in an organi"ation% If an organi"ation ma)es the #ecision to change or #e$elop a ne( accounting information system, it may incur issues or e$en fail% Accor#ing to omney - Steinbart, companies ha$e e.perience# the follo(ing #ifficulties (hen #e$eloping an AIS/

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De$elopment re&uests are so numerous that pro0ects are bac)logge# for years% sers #isco$er that the ne( AIS #oes not meet their nee#s% De$elopment ta)es so long the system no longer meets company nee#s% sers #o not a#e&uately specify their nee#s because they #o not )no( (hat they

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nee# or they cannot communicate the nee#s to systems #e$elopers% Changes are #ifficult to ma)e after re&uirements are fro"en%

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he failure of an accounting information system can be #etrimental to a business an# costly% 3lue Cross 3lue Shiel# spent 2 million #ollars on a soft(are #e$elopment for a ne( system% he system faile# to to (or) properly inclu#ing sen#ing chec)s to a none.istent to(n an# o$er pai# 6 million for #uplicate billing% 'rom (hat I ha$e researche#, the system faile# for the follo(ing reasons/

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An implementation plan consists of implementation tas)s, e.pecte# completion #ates, cost estimates, an# (ho is responsible for each tas) omney - Steinbart, 2127% *hen an organi"ation #eci#es a ne( accounting system is nee#e#, a plan shoul# be #e$elope#% he plan shoul# start (ith (hat the organi"ation nee#s from the system, (hat internal controls are re&uire#, an# proper maintenance maintenance once system is is implemente#% 8$ery organi"ation has constraints on (hat an accounting information system (ill be able to han#le (hen implemente#% A strategy strategy (ith the implementation inclu#ing the e.amination e.a mination of the e.isting system shoul# alle$iate some of those constraints% 8n# users shoul# be engage# eng age# an# ha$e input in the implementation process to ensure the en# pro#uct is usable% u sable% 9anagement must set a stan#ar# for employees in an organi"ation on the importance of an accounting information system an# its maintenance% he human element, (hich is often the most significant problem a company encounters in implementing a system, can be impro$e# by obser$ing the follo(ing gui#elines omney - Steinbart, 2127/ • • • • • • • • • • •

:btain management support% 9eet user nee#s In$ol$e users Allay fears, an# stress ne( opportunities A$oi# emotionalism Pro$i#e training ee.amine performance e$aluation ;eep communication lines open est the system ;eep the system simple, an# humani"e it Control users< e.pectations

9any of the users (ill fin# these items time consuming but it (ill be cost effecti$e for the

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ne( system re#uces chaos an# frustration% frustration% *hen users are not a#e&uately traine#, the company (ill not achie$e the e.pecte# benefits an# return on its in$estment omney - Steinbart, 2127% 2 127% 3lue Cross 3lue Shiel# e.perience# user input error (hich contribute# to the hun#re#s of chec)s that (ere maile# to a to(n that #i# not e.ist% Prior to implementing the ne( system, any users shoul# ha$e been traine# on the the system an# also utili"e# utili"e# in the testing% he users coul# ha$e i#entifie# the issues (ith incomplete #ata being entere# an# helpe# #e$elope# a control (hich (oul# ha$e re&uire# $ali# information% Any ne( system must be teste# prior to being place# in pro#uction an# a$ailable a$a ilable for use% esting esting all soft(are to ensure that the ne( soft(are is compatible (ith e.isting har#(are or soft(are an# #etermine (hether the har#(are an# soft(are can han#le the nee#e# $olume of transactions Arens el al%, 217% *ith *ith 3lue Cross 3lue Shiel#, their system (as release# release# (ithout being teste# #ue to the #e$elopers< promise of #eli$ering the system (ithin 1= months% Documents, an# reports, user input, controls, operating an# processing proce#ures, capacity limits, reco$ery proce#ures, an# computer programs shoul# all be teste# in realistic circumstances omney - Steinbart, 2127% he tas) of implementing a ne( system can be #aunting an# it re&uires preparation an# time% I un#erstan# this because in my employment (ith a pre$ious company, ne( accounting system (as implemente#% implemente#% he planning of the #esign, implementation implementation an# operation of the system (as an almost 15 month process% *ith this system, the #e$elopers spent time (ith each user that (oul# use a #ifferent section of the system to fully un #erstan# ho( they use# the system% heir un#erstan#ing create# a better pro#uct pro#uct an# (hen the system (as teste# by users,

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'inally (ith this last attempt an# proper testing, an efficient accounting system (as #e$elope# an# the company increase# pro#ucti$ity% Se$eral employees commen#e# the success of the ne( system (as because of the numerous hours spent testing an# ma)ing sure the system (as a#e&uate for the business nee#s% 9anagement has the responsibility of ma)ing the proper p roper #ecisions pertaining to the controls of their organi"ation an# its accounting information systems% In the case of a system failure, senior management has a high le$el of responsibility% *ith *ith this responsibility, some managers may place pressure on #e$elopers #e $elopers to e.pe#ite the system% It is important for managers to be present an# accountable accou ntable for the system pro0ect from the beginning% 3ut a##e# pressure can set the system for failure so, they nee# to be clear an# concise on (hat the system nee#s are an# ha$e realistic e.pectations% A ne( accounting system (ill ha$e problems an# setbac)s (hen in the #esign, implementation an# operation phase, but if management is supporting each section, there (ill be success% 9ost managers are not going to un#erstan# u n#erstan# the technical #e$elopment of the system but it is important to )eep them inform of (hat is happening in each phase of the system% If the #e$elopers in the 3lue Cross 3lue Shiel# case (oul# ha$e fully un#erstan# ho( the system (as going to be use#, they coul# ha$e possibly pre$ente# the system failure% failure% he poor #esign of the the system (as the most significant failure% 3lue Cross coul# ha$e as)e# for a realistic time line for the system to be teste# an# implemente#% If they ha# they may not ha$e lost !5,  policyhol#ers (ho (ere frustrate# (ith the ina#e&uate system% An organi"ation can implement best best practices to pre$ent or re#uce system failure% 3est

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costing, target costing or #irect costing reports in the costing function 3ragg, 2> 7% 3est  practices can help an organi"ation to align themsel$es properly (ith their strategic strategic plans% hey can also help eliminate transaction errors (ithin an accoun ting system to further increase efficiencies% he reason is that best practices ha$e such a large impact on o$erall efficiencies, they unleash a large number of e.cess e. cess people (ho can then (or) on other strategic issues, as (ell as re#uce a company?s compan y?s cash re&uirements, releasing more cash for in$estment in strategic targets 3ragg, 2>7% I ha$e i#entifie# the follo(ing four practices an organi"ation can use to assist in success of a system implementation/ • • • •

user in$ol$ement e.ecuti$e management support clear statement of re&uirements realistic e.pectations

As I mentione# earlier, management has thoroughly support the ne( system an# its implementation% 9anagers (ill nee# to be in$ol$e# in #esign, implementation, an# operation of the accounting information system% heir presence (ill reassure e$eryone in the organi"ation that the system (ill increase pro#ucti$ity an# employees (ill be more (illing to a#apt to the change% ser in$ol$ement is a $ital section of the testing of the system an# also its operation% he users (ill ha$e the responsibility of reporting an# i#entifying any issues (ith the system after implementation% :$er the life of a typical system, !@ of the (or) ta)es place #uring #e$elopment, an# >@ is spent on soft(are mo#ifications an# up#ates omney - Steinbart 2127%

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accounting system is in place (ith the proper controls, it (ill typically i#entify inefficiencies of other #epartments% I#entifying inefficiencies (ithin a business an# helps a company to re#uce them (hile increasing profits% A (ell#e$elope# accounting system allo(s an organi"ation to a#apt to consumer, mar)et an# regulatory #eman#s% :rgani"ations nee# to be resourceful in #e$eloping an# implementing a reliable accounting system% In or#er to fully accomplish this, a foun#ation foun #ation of principles (ill nee# to be establishe#% I39 #e$elope# 1 principlesB organi"ations organi"ations can utili"e in or#er to successfully implement a financial financial management system% 'rom those principles, principles, I choose three that (ill (ill help a company in their efforts to ha$e an effecti$e accounting information system% he first is to simplify processes in your organi"ation by streamlining business  processes% 8.cessi$e business processes can create a complicate# an# con$olute# system that is more #ifficult to use than your pre$ious system% If a more complicate# system is create#, it coul# (aste time an# #ecrease efficiencies% A #ecrease in efficiency (ill al(ays lea# to costs (hich #iminish profits% e.t, commit resources to the entire process of changing or implementing a ne( system% he last thing an organi"ation (ants to #o is run out of money or  people% Changing an accounting information system can be costly but ha$ing the appropriate human resources on the pro0ect is 0ust as important% A large amount of time (ill spent on the

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of i#entifying ho( the system system has impacte# the organi"ation organi"ation an# their #uties% he re$ie( coul# also fin# other areas of the system (hich nee# further mo#ification% In a##ition to the re$ie( by the users, a re$ie( of the specifications pro$i#e# by b y the #e$elopers (ill help ensure the the re&uire# (or) (as complete#% he full process of #esigning an# implementing a ne( system ta)es months if not years% It is (ise to go bac) an# an # re$ie( (hat the organi"ation re&ueste# an# compare those specifications to the en# pro#uct%

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eferences Arens, A%, 8l#er, % E%, - 3easley, 9% 21% Au#iting an# assurance ser$ices/ 21 custom e#ition 1!th e#%7% pper Sa##le i$er, E/ Pearson 3ragg, Ste$en 9% 2>% Accounting 3est Practices% 5th e#% Fobo)en, E/ Eohn *iley - Sons Inc% omney, 9%3%, Steinbart, P%E% P%E% 212% Accounting Information Systems% 12th e#% pper Sa##le Sa## le i$er, E/ Pearson%