Accounting Systems Design & Development - Essay Example

? Accounting Systems Design & Development Table of Contents PART Short Answer Question 3 PART 2 – Case Study Question 11 References 17 PART Short Answer Question 1 (a) what is the role of the steering committee in a systems development project? Solution: Steering committee is referred to as advisory committee of the organization which consists of experts and stakeholders for offering guidance regarding the crucial issues of the company. The key issues are generally corporate objectives and policy, marketing strategy, budgetary control, allocation of resources, and also decision pertaining to large expenditures. Therefore, in an organization a steering committee plays the role of a decision maker (Shelly and Vermaat, 2010, p. 420). In the context of a system development project, the roles of the steering committee are as follows: The steering committee takes the responsibility for the feasibility of the project, developing the business plan. It ensures the scope of the project aligns with the need of the customers or the stakeholder groups. The steering committee also assists in the process of evaluation of project risks and the approaches of project risk management. The committee also provides guidance to those involved directly in the project. The guidance is offered mainly in the field of business issues related to the success of the project. (b) Discuss one advantage and one disadvantage of phased-in and direct switch-over implementation strategies. Solution: Phased-in implementation can be defined as a process of changeover from a preexisting system to a new one. The phased-in strategy has to move across a number of stages in order actually implement it. Advantages: Through the phased-in implementation process, it is possible to develop an overall implementation plan and further test it in small scale employing the production data. Apart from that, it also ensures establishing tractable and reasonable measures of success. Furthermore, it institutionalizes the process as it takes place. The changes in the process of implementation can be easily incorporated in the strategy through the process of familiarization. Also, the team members become the actual functional owners. The changes in this process are gradual and, therefore, easy to get accustomed to. Disadvantages: The biggest disadvantage of phased-in implementation strategy is that the process of implementation is very much time-consuming. Also, the implementation strategy is comparatively slower than the direct implementation strategy. The implementation process differs on a project-to-project basis. The impacts of the implementation are not visible readily and have to wait till the results appear. In this implementation strategy, it is very difficult to maintain the momentum of the team members until and unless a situation of urgency is reached. Direct Switch over Implementation Strategy The direct switch over implementation strategy is about the direct switchover from the old system to the new system (ISRD group, 2006, p. 315). Some of the advantages and disadvantages are illustrated below: Advantages: The process of implementation is extremely fast as compared to the other forms of implementation strategies. Sometimes, the implementation process is completed within a week or is implemented overnight. Disadvantages: Sometimes, huge delays may occur due to absence of any scope of reverting. The system becomes unfamiliar to the user. It does not provide any option by which the old and new systems can be compared. 2. Using the Table provided, classify the following control activities as general or application and explain your reasoning, (a) Employees have a password to gain access to the system. (b) When sales are entered the system retrieves customer details based on the customer number. (c) A check is performed to identify if all cheques can be accounted for. (d) Systems development is subject to signoff by the CIO before it can take place. (e) Virus definitions are updated daily. (f) The Sales Manager must approve all discounts for items sold below their sticker price. Solutions: Control activities are the techniques, procedures, mechanisms and policies that assist the management of an organization in reducing risk associated with a project (OFM, 2008). Some of the control activities are: Data Center and Network Operations Controls. Organizational Controls. Hardware & Software Acquisition and Maintenance Controls. Access Security Controls. Managerial controls. Application System Acquisition, Development, and Maintenance Controls. Application control, on the other hand, is applicable for the dispensation of individual accounting application. It helps to ensure accuracy and completeness of transaction processing, validity and authorization. There are a number of application controls. The most important of them are: Data Capture Controls – They make sure that all the transactions are recorded in the system of application; transactions are stored only one time, thereby diminishing data redundancy; and transactions that are rejected are identified, monitored, fixed, and entered once again into the system. Data Validation Controls – They ensure that each and every transaction that has taken place is appropriately valued. Processing Controls – The processing control makes sure that the transaction processing is appropriate. Output Controls – Output controls ensure that technical output is not dispersed or displayed to illegal users. Error Controls – Error controls make sure that the errors are addressed and submitted again to the functional system at the proper point of processing. Application controls may be downsized by the following risks of applications: Weak security. Unofficial access to information and illegal remote access. Imprecise information and incorrect or falsified data input. Misuse by certified end users. Incomplete dispensation and duplicate transactions. Untimely processing. Failure of communication system. Inadequate support and training. Option a) Employees have a password to gain access to the system b) When sales are entered, the system retrieves customer details based on the customer number c) check is performed to identify if all cheques can be accounted for d) Systems development is subject to signoff by the CIO before it can take place e) Virus definitions are updated daily f) The Sales Manager must approve all discounts for items sold below their sticker price Classification (General or Application) Application Application General General Application General Explanation It is an application control with the help of which specialized software employees are either restricted or given the access to the system. It is also an applicative control used to monitor how through specialized applications the activity is completed. It does not require any specialized application tool and, therefore, falls in the category of general control activity. It does not require any specialized application tool and, therefore, falls in the category of general control activity. It is also an applicative control as the update virus definition is only possible through applicative tools. In order to approve sales discount, it does not require any specialized application tool and, therefore, is referred to as general. 3) A sales system for a small retail store is described in the following paragraph. Using the Table provided, identify four risks within the system, the potential consequences of these risks, and controls that could be implemented to combat these risks. RISKS CONSEQUENCES CONTROLS Absence of initial Invoice Number It may result in missing of records. The retail store must have printed invoice numbers. Discretion in filling up of unit prices Actual sales value may deviate Automatic mechanism must be developed Monthly Backup of data The central server may crash any time in a month Regular backup should be taken Data updated at the end of the day Invoices may be misplaced Data must be updated on real time basis. PART 2 – Case Study Question 1 (a) Explain what technical problem caused the crash in Navitaire New Skies system. Solution: The Navitaire New Skies system was developed by Accenture being the full owner of the application. The Navitaire New Skies system was mainly developed for the purpose of facilitating check-in systems and online booking system. The application was, however, hosted by a vendor in Sydney. For the purpose of strategic decision managing and managerial report generation, Virgin Blue has connected the New Skies system with its internal server application. Now the major technical problems that are responsible for the crash of Navitaire New Skies system are as follows: Internal server failure at Navitaire. The malfunctioning of computers is hugely responsible for the system crash. However, the spokesman Colin Lippiatt of Virgin Blue highlighted that the problems were on the early stages of application implementation. Again, the final report from the Navitaire stated that the failure is caused due to the malfunction of the solid-state disk server that used to host the application of Virgin Blue. (b) Based on information available in the case, identify and explain three (3) consequences of the computer crash for Virgin Blue. Solution: Based on the information provided in the case study, the following three consequences of the computer crash have been identified. 1. Loss of Loyal Customers: The biggest consequence that the company has to face is the loss of loyal customers. Due to failure of application, around, 100,000 passengers suffered due to the cancellation of 100 odd flights. There were huge disruptions in the service of the company. The online booking system, check-in and boarding system, and reservation were all disordered. This has hugely impacted the loyalty of consumers and also raised a question regarding the confidence of the consumers. If the confidence of the customers is lost, it becomes a difficult task to get back their confidence (Lepsinger, 2010). 2. Financial Loss: The second consequence is that due to disruption of computers and failure of servers, clients of the company were unable to get access to the web services. Through the online services of Virgin Blue, one can buy tickets online (Virgin Australia, n.d.). However, due to its unavailability customers were unable to buy tickets online, thereby causing huge financial losses for the company. Apart from that, there were also financial losses in the form of customer compensation and overall cost that needs to be incurred for the purpose of regaining the customers. 3. Impact on the Relationships with service providers: The third consequence that the company has to face due to the disruptions in technical failures is that the relationship between Virgin Blue and service providers was hugely affected. It can have severe effects in the future. 2. Based on the facts in this case study, is Navitaire New Skies system a transaction processing system (TPS), Decision Support System (DSS), Management Information System (MIS), or Executive Support System (ESS)? Provide Two (2) reasons to support your selection. Solution: According to the definitions of Executive Support System (ESS), Decision Support System (DSS), Transaction Processing System (TPS) and Management Information System (MIS), it can be stated that the Navitaire New Skies system is a transaction processing system (TPS). The New Skies system resembles the functions of a transaction procession system. Transaction processing systems are mainly designed for the purpose of addressing the requests of users in the form of providing information from the database (Sommerville, 2008, p. 322). The function of the transaction processing system is to record, store, adjust and retrieve transactions of an organization. The process such as online buying of tickets falls in the category of organizational transactions and hence, it can be referred to as the transactional procession system. Secondly, the transaction process system contains features such as batch processing and real time processing, which are of high importance in an online booking system application. To cite an instance 2, users at the same time may be in the process of booking the same seat, in which case TPS prevents the occurrence by allotting the seat to only one individual. This flattens any chances of double booking and ensures data consistency. Therefore in this context, the Navitaire New Skies system can be highlighted as a TPS, as it has all the features of a transaction processing system. Hence, it can be referred to as a transaction processing system. 3. Explain whether Virgin Blue used the traditional SDLC, Joint Application Development (JAD), Application Service Provider (ASP), or Rapid Application Development (RAD) methodology for acquiring and using New Skies system for online booking and check-in purposes Justify your answer with two reasons. Solution: Virgin Blue uses the Application Service Provider (ASP) methodology for the purpose of obtaining and acquiring the New Skies system in order to facilitate online booking and check-in systems. An application service provider can be referred to as a business venture that offers services pertaining to computer technology to the customers. Software that has been offered by making use of ASP model is often referred to as Software as a Service (SaaS) or on demand software. However, in general the primary intention is to provide access to a particular application using protocols such as Post Office Protocol (POP) or Hypertext Transfer Protocol (HTTP). In this context, the function of application development has been performed by Accenture. Accenture then allowed Virgin Blue to access the software against some money. Therefore, it can be highlighted that Virgin Blue used ASP model or Application Service Provider (ASP) methodology for the purpose of obtaining and acquiring the New Skies system in order to facilitate online booking and check-in systems. Furthermore, ASP offers the customers to manage information technology operations internally, thereby reducing the total cost of ownership (TCO). Also, with the help of ASP organizations can divest the costly server based applications management and networks (SCN Education B.V, 2000, p. 14). In this context, Virgin Blue has been able to reduce the total cost in the development of new applications. Hence, it can be illustrated that the company has made use of ASP for the purpose of acquiring the New Skies system. 4. If Navitaire decides to use only one of the following diagrams to investigate the crash in New Skies system in details and in a comprehensive manner, which one is more suitable: Process Map, Document Flowchart, Data Flow Diagram, or System Flowchart (1 marks). Justify your answer with two reasons. Solution: Navitaire should consider using the Data Flow Diagram for the purpose of investigating the reason for the system crash. A data flow diagram can be defined as a pictorial representation of the data flow within the information system (Shelly, Cashman and Rosenblatt, 2009, p. 198). The primary reasons for which this system must be incorporated are as follows: 1. With the help of a data flow diagram, Navitaire can identify the position where the flow of data is getting hampered. Once the area is identified, the company can apply various methods in order to restore the application. 2. Since the areas can be visualized, the process of identification becomes further simpler. Hence, the company can use it for better results. 5. Virgin Blue is considering buying a new system to replace New Skies systems by May 2012. Virgin Blue’s main objective is to ensure their online booking and check-in services are always available for customers. They want to make sure at least until 2014 there is a minimum possible risk for another computer failure for this system. Explain which conversion method would be more suitable for this objective and why. Solution: In order to ensure that Virgin Blue’s online booking and check-in system service remains available to the customers without any failure, the company should use parallel conversion method. Parallel conversion method is about keeping the existing system along with the new system for some time after the inception of the new system (Shelly et al., 2008, p. 645). Parallel conversion will be more suitable as the company will be having a backup application, which can be useful during the process of the failure of the application currently in use. Therefore, the company can in parallel use the application until 2014 and record the performance of the new system. If the new system does not collapse in the meantime, the company can then implement it. References ISRD Group, 2006. Structured system anal and design ISRD. Noida: Tata McGraw-Hill Education. Lepsinger, R., 2010. Closing the execution gap: how great leaders and their companies get results. New Jersey: John Wiley & Sons. OFM, 2008. Control activities. [Online] Available at: [Accessed 11 September 2012]. SCN Education B.V., 2000. ASP – application service providing: the ultimate guide to hiring rather than buying applications. New York: Springer. Shelly, G. B. et al., 2008. Discovering computers 2009: complete. Connecticut: Cengage Learning. Shelly, G. B. and Vermaat, M. E., 2010. Discovering computers – fundamentals: living in a digital world. 7th ed. Connecticut: Cengage Learning. Shelly, G. B., Cashman, T. J. and Rosenblatt, H. J., 2009. Systems analysis and design. 8th ed. Connecticut: Cengage Learning. Sommerville, 2008. Software engineering. New Delhi: Pearson Education India. Virgin Australia, n.d. Bookings. [Online] Available at: [Accessed 09 September 2012]. Read More