AIS Romney 2006 Slides 19 AIS Development Strategies

C HAPTER 19
AIS Development Strategies
© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 1 of 171
INTRODUCTION
• Questions to be addressed in this chapter include:
– How do organizations buy software, hardware, and
vendor services?
– How do information systems departments develop
custom software?
– How do end users develop, use and control
computer-based information systems?
– Why do organizations outsource their information
systems, and what are the benefits and risks of doing
so?
– How are prototypes used to develop an AIS, and what
are the advantages and disadvantages?
– What is computer-aided software engineering, and
how is it used in systems development?
INTRODUCTION
• Companies can experience a number of

difficulties in developing an AIS, including:
– Projects are backlogged for years because of the high
demand for resources.
– The newly designed system doesn’t meet user needs.
– The process takes so long that by the time it’s
complete, it’s obsolete.
– Users can’t adequately specify their needs.
– Changes to the AIS are often difficult to make after
requirements have been written into the
specifications.
INTRODUCTION
• We’ll be discussing how to obtain a new information

system by:
– Purchasing prewritten software;
– Developing software in-house; or
– Outsourcing.
• We’ll also discuss how to hasten or improve the
development process through:
– Business process reengineering
– Prototyping
– Computer-aided software engineering (CASE) tools
INTRODUCTION

system by:
– Purchasing prewritten software
– Developing software in-house; or
– Outsourcing.
– Prototyping
PURCHASING PREWRITTEN SOFTWARE
• In the early days of computers,

companies were rarely able to buy
software to meet their needs.
• But commercially available packages
are now outpacing custom-developed
software as old systems are replaced.
• Canned software is sold on the open

market to a broad range of users with
similar requirements.
– Some companies sell hardware and software
together as a package.
• These systems are called turnkey systems.
• Many are written by vendors who specialize in a
particular industry.
– A major problem with canned software:

• It often does not meet all of a company’s
information needs.
• Can be overcome by modifying the canned
software.
– Usually best done by the vendor.
– Unauthorized modifications may render the
program unreliable and unstable.
• Companies can also acquire software through

application service providers (ASPs).
– ASPs host web-based software and deliver it to
clients over the Internet.
– Companies don’t have to buy, install, or maintain
canned software; they simply “rent” it.
– If you used an online version of a package like Turbo-
Tax to prepare your taxes, that’s a consumer version
of renting software over the Internet.
– Advantages of ASPs:
• Reduction of software costs and administrative
overhead.
• Automated software upgrades.
• Scalability as the business grows.
• Global access to information.
• Access to skilled IT personnel.
• Ability to focus on core financial competencies
rather than IT.
• Purchasing Software and the SDLC:

– Companies that buy rather than develop
software still follow the SDLC process,
including:
• Systems analysis
 They conduct an initial investigation,
systems survey, and feasibility study, as
well as determining AIS requirements.

including:
• Conceptual design
• An important aspect is determining
whether software that meets AIS
requirements is already available.
• If so, a make-or-buy decision must be
made.

including:
• Systems analysis • If software is purchased,
program design and coding
• Conceptual design can be omitted.
• Physical design • But software modifications
may be needed.
• Companies also may design
inputs, outputs, files, and
control procedures.
• These activities must still take place,
including:
• Purchasing Software
– Selecting andpersonnel
and training the SDLC:
– Companies – Installing and testing hardware and software
that buy rather than develop
– Documenting procedures
– Converting from old to new AIS
including:
• However, the software modules do not
have to be developed and tested.
• Conceptual
• And design
the computer programs do not need
• Physical
todesign
be documented.
• Implementation and conversion

including:
• Conceptual design
• Physical design
• Implementation and conversion
• Operation and maintenance
• The AIS is operated like any other software.
• The vendor usually maintains the software.
• Selecting a Vendor
– Deciding whether to make or buy software
can be made independently of the decision to
acquire hardware, service, maintenance, and
other AIS resources.
– And the preceding resources can be bought
independently of the software.
– But hardware and vendor decisions may
depend on the software decisions.
• Vendors can be found by:

– Looking in phone book
– Obtaining referrals
– Scanning computer or trade magazines
– Attending conferences
– Using search organizations
• Beware of fly-by-night companies that can
leave your organization high and dry.
• Acquiring Hardware and Software

– Once AIS requirements have been defined,
the organization can buy software and
hardware.
– Companies needing only a PC and some
office software can usually complete their own
research and make a selection.
• When buying large or complex systems, a

request for proposal (RFP) should be
prepared:
– The RFP is an invitation to bidders to propose
a system by a specific date.
– Each proposal is evaluated.
– Finalists are investigated in depth.
• The formal approach is important for

several reasons:
– Saves time • The same information is
provided to all bidders.

several reasons:
– Saves time
– Simplifies the decision-making process
• The bidders all respond in the
same format and based on
the same information.

several reasons:
– Saves time
– Reduces errors • Less likely to look over
important factors in
evaluating proposals.

several reasons:
– Saves time
– Reduces errors
– Avoids potential for disagreement
• Both parties have the same
expectations and information
in writing.
• When an RFP is solicited based on exact

hardware and software specifications:
– Total costs are usually lower.
– Less time is required for vendor preparation
and company evaluation.
– However, the vendor cannot recommend
alternatives.
• A generalized RFP contains a problem

definition and requests a system that
meets specific performance objectives and
requirements.
– Leaves technical issues to the vendor.
– However, makes it more difficult to evaluate
proposals.
– May produce more costly bids.
• Usually, the more information a company provides

to the vendors, the better their chances of
receiving a system that meets their requirements.
– Detailed specifications should include:
• Required applications
• Inputs and outputs
• Files and databases
• Frequency and methods of file updating and inquiry
• Unique characteristics or requirements
– Be sure to distinguish between mandatory and desirable
requirements.
• Evaluating Proposals and Selecting a System

– Eliminate any proposals that:
• Are missing important information.
• Fail to meet minimum requirements.
• Are ambiguous.
– Those that pass the preliminary screening should be
compared with the proposed AIS requirements to
determine:
• If they meet all mandatory requirements.
• How many desirable requirements they meet.
– Finalists can be invited to demo their system using
company-supplied data.
• In reviewing the proposals, you need to

evaluate:
– Hardware
– Software
– Vendors

evaluate:
– Hardware
– Software
– Vendors
• Criteria to evaluate hardware include:

• Cost • Availability
• Ability to run required • Compatibility with existing
software hardware, software, and
• Processing speed and peripherals
capabilities • Performance compared to
• Secondary storage competitors
capability • Cost and availability of
• Input and output speeds support and maintenance
• Communication capabilities • Warrantees and guarantees
• Expandability • Financing arrangements
• Recency of technology • Ability to meet mandatory
requirements

evaluate:
– Hardware
– Software
– Vendors
• Criteria to evaluate software include:

• Conformity with • User-friendliness
specifications • Ability to be demonstrated
• Need for modification and test-driven
• Performance (speed, • Warranties
accuracy, reliability) • Flexibility and
• Use by other companies maintainability
• Satisfaction of other users • Capability for online inquiry
• Documentation of files and records
• Compatibility with existing • Vendor upgrades
software

evaluate:
– Hardware
– Software
– Vendors
• Criteria to evaluate vendors include:

• Size • Reputation for reliability
• Financial stability and and dependability
security • Hardware and software
• Experience support and maintenance
• Quality of support and • Implementation and
warranties installation support
• Regularity of updates • Quality and responsiveness
of personnel
• Ability to provide financing
• Willingness to provide
• Willingness to sign
training
contract
• Responsiveness and
• Willingness to provide
timeliness of support
references
• Approaches to comparing system

performance:
– Benchmark problem
– Point scoring
– Requirements costing

performance:
– Point scoring
• Benchmark problem
– The new AIS performs a data processing task
with input, processing, and output jobs typical
of what would be required of the new system.
– Processing times are calculated and
compared.
– The AIS with the lowest time is judged most
efficient.

performance:
– Point scoring
• Point scoring:
– A weight is assigned to each criterion used to
evaluate the system, based on the relative
importance of that criterion.
– Each criterion is rated for each product.
– Each rating is multiplied times the weight
assigned to the criterion to develop a
weighted score.
– The weighted scores are added for each
product.
• EXAMPLE:
– Zorba Co. is evaluating systems offered by three
different vendors: Able Co., Baker Co., and Cook Co.
– Zorba has determined three criteria that they will use
to evaluate the different systems: cost, speed, and
vendor reliability.
– They have provided the following weights to each
criteria, with vendor reliability being the most critical:
• Vendor reliability—9
• Cost—6
• Speed—4
• Zorba examined the packages offered by the three vendors and rated them based
on these three criteria. Ratings were from 1-5 with 5 being the highest score.
Criteria Able Co. Baker Co. Cook Co.

Vendor reliability (9) 2 5 4
Cost (6) 5 3 4
Speed (4) 3 4 2
 The weighted scores are then computed by multiplying

the rating given to each vendor on each criterion times
the weight assigned to that criterion.
Vendor reliability (9) X 2 = 5 4
Cost (6) 5 3 4
Speed (4) 3 4 2
WEIGHTED SCORES
Cost (6) 30 18 24
Speed (4) 12 16 8
• The weighted scores for each company are

summed:
– Able = 60 points
– Baker = 79 points
– Cook = 68 points
• Based on the preceding scores, the bid would
probably be awarded to Baker Co.
WEIGHTED SCORES
Cost (6) 30 18 24
Speed (4) 12 16 8
• The preceding example is a simplification.

In a real-life scenario, several factors
would be different:
– There would probably be many more criteria
being considered.
– Several people would be rating the criteria,
and the final scores for each vendor would
probably be a composite of those individual
scores.

performance:
– Point scoring
• Requirements costing:
– Estimates cost of purchasing or developing
features that are not included in a particular
AIS.
– The total AIS cost is calculated by adding the
acquisition cost to the purchasing and
development costs.
– Total cost = cost of system with all required
features.
• To verify that the AIS that looks best on

paper is actually the best in practice:
– Test-drive the software.
– Contact other users for references.
– Evaluate vendor personnel.
– Confirm details of the proposal.
INTRODUCTION

system by:
– Developing software in-house
– Outsourcing
– Prototyping
DEVELOPING SOFTWARE IN-HOUSE
• Despite the availability of good canned

software, many organizations develop
their own because:
– Their requirements are unique; or
– Their size and complexity necessitates a
custom package.
• Developing custom software is difficult and
error prone and consumes much time and
resources.
• The most difficult hurdles:

– Lack of time.
– Complexity of desired system.
– Poor requirements and systems planning.
– Inadequate communication and cooperation
between departments and users.
– Lack of qualified staff.
– Poor senior executive support.
• After end users define their requirements,

the analysts:
– Work with the end users to determine the
format of paper and screen outputs.
– Identify:
• Data required for each input.
• Data to be retained in files.
– Develop detailed program specs to be
interpreted and coded by programmers.
• The process requires much discipline and

management supervision.
• Accountants may help as project
supervisors, users, or development team
members.
• Custom software is usually developed and

written in-house.
– Alternately, organizations may engage an
outside company to develop a package or
assemble one from their inventory of modules.
– These modules are adapted, combined, and
organized to form a customized product that
meets specific requirements.
• When contracting with an outside organization,

maintain control over development and observe
the following guidelines:
– Carefully select a developer
• Look for:
– Experience in the industry
– A good understanding of:
• Business in general
• How your company
conducts business

– Sign a contract to clearly define responsibilities

– Plan and monitor each step
• Design all aspects in detail.
• Include frequent checkpoints.

– Maintain effective and frequent communication

– Maintain effective and frequent communication
– Control all costs
• Cash outflows should be minimized until
the project is completed and accepted.
• Information systems consultants suggest that

clients develop their own software only if it
provides a significant competitive advantage.
– Payroll and A/R systems are not good candidates for
in-house development.
– There might be significant benefits to developing
sophisticated product manufacturing software.
• If there is no significant competitive advantage,
buy software from an outside supplier.
– Trend appears to be in that direction.
• There is no pat answer to the make-or-buy
decision.
• Another approach to developing software

in-house is to take the lion’s share of the
effort out of the hands of the IS
department and place it in the laps of the
ultimate information users.
• End-User Developed Software

– End-user computing (EUC) is the hands-on
development, use, and control of computer-based
information systems by users.
– With EUC, individuals use IT to meet their own IS
needs rather than rely on systems professionals.
– Why?
• The demand for information systems has grown
exponentially since the introduction of the computer.
• One solution to meeting these needs is to have end users
meet their own information needs.
• Technology has evolved to automate

much of the system development process.
Factors contributing to EUC are:
– Increased computer literacy.
– Easier-to-use programming languages.
– Inexpensive PCs.
– A variety of powerful and inexpensive
software packages.
• Consequently, users have begun to

develop their own systems to:
– Create and store data.
– Access and download company data.
– Share data and computer resources in
networks.
• As end users began to meet their initial

needs, two things happened:
– Users realized computers could be used to
meet more and more information needs.
– Increased access to data created many new
uses and needs for information.
• Result: A tremendous growth in end-user
computing that is expected to continue.
• EUC has altered the role of the IS staff:

– They continue to develop and maintain transaction
processing systems and company-wide databases
from which end users draw information.
– They provide users with technical advice and
operational support and make as much information
available to them as possible.
– While the support work has increased for the IS staff,
this work is counter-balanced by a decreased demand
for traditional IS services.
– EUC may make up 75-95% of all IS processing by
2010.
• Because accountants will be end users, they
need an understanding of EUC concepts.
• Appropriate End-User Development and

Use
– End user development (EUD) happens when
information users (e.g., managers, accountants,
auditors) develop their own applications using
computer specialists as advisors.
• Inappropriate for complex systems.
• Not used for large-scale processing, such as payroll,
receivables, payables, general ledger, or inventory.
– End user development may be most

appropriate for:
• Retrieving info from company databases to
produce simple reports or answer single queries.
• Performing “what if,” sensitivity, or statistical
analyses.
• Developing applications that use prewritten
software (e.g., spreadsheet or database software).
• Preparing schedules (such as aging of accounts)
and lists.
• Benefits of end-user computing:

– User creation, control, and implementation
• Users control the development process, decide
what info needs are important, and if a system
should be developed.
• Ownership helps them build better systems.

– Systems that meet user needs
• Because users discover flaws that systems people
would not catch.
• Also, the communication problem between user 
analyst  programmer are avoided.

– Timeliness
 Much of the expensive and time-consuming cost-
benefit analysis, requirements definitions, and red
tape are reduced.

– Timeliness
– Freeing up systems resources
• The IS department can exert time and resources
on other information and maintenance activities.
• Reduces both visible and invisible backlog of
systems development projects.

– Timeliness
– Freeing up systems resources
– Versatility and ease of use
• Most EUC software is easy to understand and use.
• With a laptop, the work can be done at home or
almost anywhere.
• Risks of end-user computing:

– Logic and development errors
• End users are inexperienced in systems development.
• Consequently, they are more likely to make errors and less
likely to recognize them.
• They may:
– Solve wrong problem
– Poorly define systems requirements
– Apply inappropriate analytical methods
– Use wrong software
– Use incomplete or outdated information
• Errors are often caused by faulty logic, formulas, or software
commands.

– Inadequately tested applications
• Users probably won’t test rigorously.
• They tend not to recognize the need for testing, the difficulty,
or the time involved.
• Tend to have grossly inflated opinions of how error-free their
systems are.

– Inefficient systems
• They get the job done but aren’t always efficient.

– Poorly controlled and documented
systems
• Many end users don’t implement controls to protect their
system
• Systems are often poorly documented because they think
it’s unimportant
• They fail to realize that others cannot understand the
system without documentation.

– Poorly controlled and documented systems
– System incompatibilities
• Some companies add end-user equipment without
considering the technological implications.
• May end up with a diversity of hardware and
software that is difficult to support or network.

• If end users aren’t aware that others have similar information
needs, duplication occurs.
– Poorly •controlled
Inexperiencedand documented
users may also bite off moresystems
than they can
chew, wasting time and resources.
– System incompatibilities
– Duplication of systems and data and
wasted resources

– Inefficient
• Buying PCs for multitudes of workers is costly.
systems
• Regular updating of hardware and software is also
– Poorly controlled
expensive. and documented systems
• EUC also increases costs if it diverts users from their
– System primary
incompatibilities
jobs.
• EUC can increase demands on the company mainframe
– Duplication of systems and data and wasted
and IS staff for support.
resources
– Increased costs
• To achieve proper balance between

maximizing the benefits of end user
systems and minimizing the risks:
– Systems analysts can act as advisers and
require user-created systems to be reviewed
and documented prior to use.
– Users can be trained in systems analysis so
they can identify and adequately meet their
needs, as well as reviewing the work of
others.
• Organizations use several approaches to

managing and controlling EUC.
– If you give the systems department control over EUC:
• Growth of EUC is discouraged
• The organization is denied most of its benefits
• It’s not in the company’s best long-term interests.
– However, if there are no controls over the tools that
can be purchased or how they can be used:
• Chaos can result
• The system can be difficult to support
• Best to provide enough guidance and

support to adequately control the system
but allow users flexibility.
• A help desk can encourage, support,
coordinate, and control end-user activities.
– One level of help desk employees might be
trained with scripted answers.
– A higher level might handle more complicated
issues.
• Help desk duties include:

– Providing hotline assistance to solve problems.
– Serving as a clearinghouse for information, coordination,
and assistance.
– Training end users how to use specific hardware and
software, and providing technical maintenance and
support.
– Evaluating new end-user hardware and software products.
– Assisting with application development.
– Developing and implementing standards for:
• Hardware and software purchases to ensure compatibility.
• Documentation and application testing.
• Overseeing security issues such as fraud, software piracy,
and viruses.
INTRODUCTION

system by:
– Outsourcing
– Prototyping
OUTSOURCE THE SYSTEM
• Outsourcing is hiring an outside company

to handle all or part of an organization’s
data processing activities.
– In a mainframe outsourcing agreement:
• The outsourcers buy the client’s computers and
hire all or most of the client’s employees.
• Then operate and manage the entire system on
the client’s site or migrate it to the outsourcer’s
computers.
• Many of these contracts have terms of 10 or more
years and cost from hundreds of thousands to
millions of dollars a year.
– In a client/server or a PC outsourcing
agreement the organization outsources:
• A particular service (e.g., help desk services);
• A segment of its business
• A particular function; or
• PC support.
• Examples of outsourced activities:

– Installation
– Training
– Maintenance
– Help desk
– Technical support
• The Growth in Outsourcing

Applications
– Outsourcing was initially used for
standardized applications such as payroll,
accounting, and purchasing.
– Also used by companies that were struggling
to survive and wanted a quick cash infusion
from selling their hardware.
• Kodak and Xerox were very successful at

cutting capital expenditures and other
costs, which motivated others to outsource
their systems.
• Now many Fortune 500 companies
outsource some or all of there IS.
• Most companies that outsource use

several different companies rather than a
single source in order to:
– Increase flexibility
– Foster competition
– Reduce costs
• Most companies do not outsource:
– Strategic management of their IT environment
– Business process management
– IT architecture
• Benefits of outsourcing:
– Provides a business solution
• Allows companies to concentrate on their core competencies.
– Asset utilization
• Companies can improve cash position and reduce
expenses by selling their computers to an
outsourcer.
– Access to greater experience and more
advanced technology
• The cost and time to stay at the cutting edge of
technology is escalating rapidly.
OUTSOURCE
• OutsourcingTHE SYSTEM
can reduce IS costs by 15-30
percent.
• Outsourcers can pass along savings
from:
– Provides a –business solution
Standardizing applications
– Buying hardware at bulk prices
– Splitting development and maintenance costs
– Access to greater
betweenexperience
projects and more
advanced technology
– Operating at higher volumes
– Lower costs
advanced technology
– Lower costs
– Improved development time
• Experienced specialists can often develop and
implement a system faster and more efficiently.
• Can also help the company cut through some of
the internal politics.
advanced technology
• Companies with seasonal fluctuations don’t have
– Lower costs
to staff an IT force or maintain hardware for peak
– Improvedperiods.
development time
– Elimination of peaks-and-valleys usage
advanced technology
– Lower costs
• Companies with in-house systems that downsize
– Improved development time
are often left with an unnecessarily large AIS
– Elimination of peaks-and-valleys usage
function.
– Facilitation of downsizing
• Risks of outsourcing:
– Inflexibility
• Many outsourcing contracts are for 10 years.
• If the company is dissatisfied, has problems, or
goes through extensive structural changes, the
contract is difficult and/or costly to break.
– Inflexibility
– Loss of control
• The company may lose control of its system and data.
• Also risk of confidential data being shared with others.
– Inflexibility
– Loss of control
– Reduced competitive advantage
• Companies can lose a fundamental understanding of
their IS needs and how the system can provide it with
competitive advantages.
• Outsourcers are not as motivated to meet the client’s
competitive challenges.
• Can be mitigated significantly by outsourcing the
portion of business processes considered standard
(e.g., payroll, accounts receivable) and customizing the
portion that provides
© 2006 Prentice Hall Business Publishing
competitive advantage.
Accounting Information Systems, 10/e Romney/Steinbart
100 of 171
– Inflexibility
– Loss of control
– Locked in system
• It is expensive and difficult to reverse outsourcing.
– Inflexibility
– Loss of control
– Locked in system
– Unfulfilled goals
• Many outsourcing goals and benefits are never realized.
– Inflexibility
– Loss of control
• Some companies complain of poor service from
their outsourcers,
– Reduced competitive particularly
advantagewith respect to:
– Slow or no responsiveness to changing business
– Lockedconditions.
in system
– Poorly planned migration to new technologies.
– Unfulfilled goals
– Poor service
INTRODUCTION

system by:
– Outsourcing
– Prototyping
BUSINESS PROCESS REENGINEERING
• Business process reengineering (BPR) is

the analysis and redesign of business
processes and information systems to
achieve significant performance
improvements.
– Reduces a company to its essential business
processes
– Reshapes organizational work practices and
information flows to take advantage of
technological advancements.
• BPR:
– Simplifies the system.
– Makes it more effective.
– Improves a company’s quality and service.
• BPR software has been developed to help
automate many BPR tasks
• Michael Hammer has set forth several principles

that help organizations successfully reengineer
business processes:
- Organize around outcomes, not tasks.
• DO AWAY WITH: Assigning different parts of a business
process to different people, with the resulting handoffs,
delays, and errors.
• INSTEAD: Each person’s job is designed around an
objective, outcome, or process rather than a task needed
to complete a process.

business processes:
- Require those who use the output to perform the
process.
 Michael Hammer has set forth several principles

business processes:
process.
- Require those who produce information to
process it.
• You centralize operations to achieve economies
of scale and eliminate redundancy.
• You decentralize operations to be more
responsive to customers and provide better
business processes:
service
- Organize around outcomes,
• With technology, not tasks.
you don’t have to choose
- Require those who use
– Corporate-wide the output
databases to perform
centralize data the
process.
– Telecommunications technology disburses it to the
organization.
- Require those who produce information to process it.
- Centralize AND disperse data.
• Michael Hammer has set forth several principles that

help organizations successfully reengineer business
processes:
- Require those who use the output to perform the process.
-  Example:
Require those In
whodeveloping a new product,
produce information includeit.on the
to process
development team at least one person from each involved
- Centralize AND disperse data.
department, so the right hand will know what the left hand
- Integrate parallel
is doing and theactivities.
process will be smoothly integrated.

• In a traditional system, there is a layer of worker
business processes:
bees and several layers of manager bees,
- Organize
auditoraround
bees, outcomes,
and controllernot tasks.
bees.
- Require those who usesystem,
the output
• In a reengineered thetopeople
perform the do the
who
process.
work have decision-making responsibility.
- Require those who
– Information produce enables
technology information to process it.
their decision
- accuracy.
Centralize AND disperse data.
– Controls are built into the process itself.
- Integrate parallel activities.
- Empower workers, use built-in controls, and
flatten the organization chart.

business processes:
process.
- Require those who produce information to process it.
- Centralize
• InsteadAND disperse
of having each data.
functional area running its own AIS
- Integrate parallelthe
and entering activities.
same data, use source data automation,
EDI, etc.
- Empower to capture
workers, usedata electronically
built-in controls, at theflatten
and source and
disburse it tochart.
the organization where it needs to be used.
- Capture data once—at its source.
• Underlying reengineering is the efficient

and effective use of the latest information
technology, e.g.:
– Radio- and satellite-based communications
– Powerful handheld computers
– Image processing that lets multiple users
handle a document simultaneously.
– Active documents.
• Challenges Faced by Reengineering Efforts:

– Many BPR efforts fail or fall short of their objectives.
A company must overcome the following obstacles:
• Tradition
• “We’ve always done it this way!”
• Success requires changes in culture and beliefs.

• Tradition
• Resistance
• Change is always met with resistance.
• Requires continual reassurance, persuasion, and
support.

• Tradition
• Resistance
• Time and cost requirements
• Two or more years are required to complete BPR.

• Tradition
• Resistance
• Lack of management support
• Managers are nervous about the “big hype--few
results” syndrome.
• Without their support, the effort will fail.

• Tradition
• Resistance
• Skepticism
• BPR is sometimes viewed as just the same picture
in a different frame.

• Tradition
• Resistance
• Skepticism
• Retraining
• The necessary retraining costs time and dollars.

• Tradition
• Resistance
• Skepticism
• Retraining
• Controls
• Cannot skip the inclusion of controls to ensure
reliability and integrity.
INTRODUCTION

system by:
– Outsourcing
– Prototyping
PROTOTYPING
• Prototyping is an approach to systems design in

which a simplified working model of a system is
developed.
– The prototype (first draft) is built quickly at low cost
and provided to users for experimentation.
– Playing with the prototype allows users to determine
what they do and do not like.
– Developers modify the system in response to user
comments and re-present it to them.
– The iterative process continues until users are
satisfied that the system meets their needs.
PROTOTYPING
• The basic premise is that it’s easier for

people to express what they like or dislike
than to imagine what they want in a
system.
– In another words, it helps to have a straw man
to aim at.
– Even a simple system that is not fully
functional demonstrates features far better
than graphics and verbiage.
PROTOTYPING
• Developers who use prototyping still go through

the systems development life cycle.
• But prototyping allows them to expedite some
analysis and design.
• For example, prototyping captures user needs
and helps developers and users make many
conceptual and physical design decisions.
• Current practice leans heavily toward
prototyping so that projects can be completed
quickly.
PROTOTYPING
• Four steps are involved in developing a

prototype:
– STEP ONE: Identify basic requirements
– STEP TWO: Develop an initial prototype
– STEP THREE: Repeated iterations
– STEP FOUR: Use the system
PROTOTYPING

prototype:
PROTOTYPING
• The first step is to identify basic

requirements by meeting with users to
agree on the size and scope of the system
and decide what it should include and
exclude.
– Developer and users also determine:
• Decision-making and transaction processing
outputs.
• Inputs and data needed to produce those outputs.
– The emphasis is on what outputs should be
produced rather than how.
PROTOTYPING
– The developer must ensure:

• User expectations are realistic
• Their basic information requirements are met.
– The designer uses the information
requirements to develop cost, time, and
feasibility estimates for alternative AIS
solutions.
PROTOTYPING

prototype:
PROTOTYPING
• The second step involves developing an

initial prototype that meets the agreed-on
requirements.
– Emphasize speed and low cost rather than
efficiency of operation.
– The goal is to implement the prototype within
a short time period.
PROTOTYPING
• Because of time constraints, some aspects are

sacrificed. For example, at this point, you
ignore:
– Nonessential functions
– System controls
– Exception handling
– Validation of input data
– Processing speed
– Efficiency considerations
PROTOTYPING
• Users must see and use tentative versions of:

– Data entry display screens
– Menus
– Input prompts
– Source documents
• They must also:
– Respond to prompts
– Query the system
– Judge response times
– Issue commands
PROTOTYPING
• When the prototype is finished, the

developer returns to the users and
demonstrates the system.
• Users are instructed to:
– Experiment.
– Comment on what they do and do not like.
PROTOTYPING

prototype:
PROTOTYPING
• The third step involves repeated iterations

of:
– Users identifying changes.
– Developers making the changes.
– The system being turned back to users for
next round.
• This step continues until users are
satisfied—usually 4-6 iterations.
PROTOTYPING

prototype:
PROTOTYPING
• The final step involves using the system

approved by the users.
• An approved prototype is typically used in
one of two ways.
PROTOTYPING
• Half of the prototypes are turned into fully

functional systems referred to as
operational prototypes.
– To make them operational, the developer
must:
• Add needed controls.
• Improve operational efficiency.
• Provide backup and recovery.
• Integrate the prototype with the systems with which
it interfaces.
PROTOTYPING
• Changes may be necessary to allow the

program to:
– Accept real input.
– Access real data files.
– Process data.
– Make necessary computations and
calculations.
– Produce real output.
PROTOTYPING
• When it’s not practical to modify the

prototype to make a fully functional
system, non-operational or throwaway
prototypes can be used in several ways:
– They may be discarded, and the systems
requirements identified in the process of
building them can be used to develop a new
system.
• If so, the SDLC is followed to develop the system,
and the prototype is a model.
PROTOTYPING
– Alternately, they may be used as the initial

prototype for an expanded system designed
to meet needs of many users.
– As a final alternative, if users and developers
decide the system is unsalvageable, the
prototype can be discarded completely.
PROTOTYPING
• When to Use Prototyping

– Prototyping supports rather than replaces the SDLC.
– It is appropriate when:
• Users don’t fully understand their needs, or the needs
change rapidly
• System requirements are difficult to define
• System inputs and outputs are not known
• The task to be performed is unstructured or semi-structured
• Designers are uncertain about what technology to use
• The system is crucial and needed quickly
• The risk of developing the wrong system is high
PROTOTYPING
• The users’ reactions to the new system are important
development considerations
• Many design strategies must be tested
• The design staff has little experience developing this type of
system or application
• The system will be used infrequently so that processing
efficiency is not crucial
PROTOTYPING
• Good candidates for prototyping:

– Decision support systems
– Executive information systems
– Expert systems
– Information retrieval systems
– Systems that involve experimentation and
trial-and-error development
– Systems in which requirements evolve as the
system is used
PROTOTYPING
• Prototyping is usually inappropriate for:

– Large or complex systems that:
• Serve major organizational components; or
• Cross numerous organizational boundaries.
– Standard AIS components, such as:
• Accounts receivable
• Accounts payable
• Inventory management
PROTOTYPING
• Advantages of Prototyping:
– Better definition of user needs
• Because of intensive end-user involvement.
PROTOTYPING
– Higher user involvement and satisfaction
PROTOTYPING
– Faster development time
• It may take days or weeks to get a prototype up vs. a
year or more for a traditional system.
PROTOTYPING
– Fewer errors
• Errors are detected early because the users
experiment with each version.
• It’s also easy to identify and terminate an infeasible
AIS early.
PROTOTYPING
– Fewer errors
– More opportunity for changes
PROTOTYPING
– Fewer errors
– More opportunity for changes
– Less costly
• Some for 10-20% of the cost of traditional systems.
PROTOTYPING
• Disadvantages of Prototyping:
– Significant user time
PROTOTYPING
– Less efficient use of system resources
• Shortcuts in developing the system may
result in:
– Poor performance and reliability
– High maintenance and support costs
PROTOTYPING
– Incomplete system development
PROTOTYPING
– Inadequately tested and documented
systems • Who wants to do that stuff?
PROTOTYPING
– Inadequately tested and documented systems
– Negative behavioral reactions
• If the prototype is discarded, users may be upset about using it
and losing it.
• May also be dissatisfied if all their suggestions are not
incorporated or if they have to go through too many iterations.
PROTOTYPING
– Inadequately tested and documented systems
– Negative behavioral reactions
– Never-ending development
• If not managed properly, the development could get stuck in a terminal loop.
INTRODUCTION
• We’ll be discussing how to obtain a new
information system by:
– Outsourcing
– Prototyping
Computer-Aided Software Engineering
(CASE) Tools
• Traditionally, software developers have created
software to simplify the work of others, but not
for themselves.
• Computer-aided software (or systems)
engineering (CASE) tools are an integrated
package of computer-based tools that automate
important aspects of the software development
process.
– Used to plan, analyze, design, program, and maintain
an information system.
– Also used to enhance efforts of managers, users, and
programmers in understanding information needs.
(CASE) Tools
• CASE tools do not replace skilled
designers, but provide developers with
effective support for all SDLC phases.
• CASE software typically includes tools for:
– Strategic planning
– Project and system management
– Database design
– Screen and report layout
– Automatic code generation
(CASE) Tools
• Advantages of CASE technology:
– Increased productivity
• Can generate bug-free code from system
specifications.
• Can automate repetitive tasks.
(CASE) Tools
– Improved program quality
• Can simplify enforcement of structured
development standards, which:
– Improves quality of development.
– Reduces threat of serious design errors.
• Can check internal accuracy of design
and detect inconsistencies.
(CASE) Tools
– Cost savings
• Cost savings of up to 80-90% are possible.
(CASE) Tools
– Cost savings
– Improved control procedures
• Encourages development early in the
design process of:
– System controls
– Security measures
– System auditability
– Error handling procedures
(CASE) Tools
– Cost savings
– Improved control procedures
– Simplified documentation
 Automatically documents as the system
development progresses.
(CASE) Tools
• Problems with CASE technology:
– Incompatibility
• Some tools don’t interact effectively with
some systems.
(CASE) Tools
– Incompatibility
– Cost • Some packages > $360,000.
(CASE) Tools
– Incompatibility
– Cost
– Unmet expectations
• Only 37% of CIOs believe they achieved expected
benefits.
SUMMARY AND CONCLUSIONS
• You’ve learned:
– How organizations buy software, hardware,
and vendor services.
– How information systems departments
develop custom software.
– How end users develop, use and control
computer-based information systems.
– Why organizations outsource their information
systems, as well as the benefits and risks of
doing so.
SUMMARY AND CONCLUSIONS
• You’ve also learned:

– What reengineering processes entail and
when they are appropriate.
– How prototypes are used to develop an AIS
and when it is advantageous to do so.
– What computer-aided software engineering is
and how it’s used in systems development.

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C HAPTER 19

AIS Development Strategies

• Companies can experience a number of

• We’ll be discussing how to obtain a new information

• We’ll be discussing how to obtain a new information

• In the early days of computers,

• Canned software is sold on the open

– A major problem with canned software:

• Companies can also acquire software through

• Purchasing Software and the SDLC:

• Purchasing Software and the SDLC:

• Purchasing Software and the SDLC:

• Purchasing Software and the SDLC:

• Vendors can be found by:

• Acquiring Hardware and Software

• When buying large or complex systems, a

• The formal approach is important for

• The formal approach is important for

• The formal approach is important for

• The formal approach is important for

• When an RFP is solicited based on exact

• A generalized RFP contains a problem

• Usually, the more information a company provides

• Evaluating Proposals and Selecting a System

• In reviewing the proposals, you need to

• In reviewing the proposals, you need to

• Criteria to evaluate hardware include:

• In reviewing the proposals, you need to

• Criteria to evaluate software include:

• In reviewing the proposals, you need to

• Criteria to evaluate vendors include:

• Approaches to comparing system

• Approaches to comparing system

• Approaches to comparing system

Criteria Able Co. Baker Co. Cook Co.

 The weighted scores are then computed by multiplying

• The weighted scores for each company are

• The preceding example is a simplification.

• Approaches to comparing system

• To verify that the AIS that looks best on

• We’ll be discussing how to obtain a new information

• Despite the availability of good canned

• The most difficult hurdles:

• After end users define their requirements,

• The process requires much discipline and

• Custom software is usually developed and

• When contracting with an outside organization,

• When contracting with an outside organization,

• When contracting with an outside organization,

• When contracting with an outside organization,

• When contracting with an outside organization,

• Information systems consultants suggest that

• Another approach to developing software

• End-User Developed Software

• Technology has evolved to automate

• Consequently, users have begun to

• As end users began to meet their initial

• EUC has altered the role of the IS staff:

• Appropriate End-User Development and

– End user development may be most