Problems on Managing the Systems Development Life Cycle.

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Problems

1. SYSTEMS PLANNING

A new systems development project is being planned for Reindeer Christmas Supplies Company. The invoicing, cash receipts, and accounts payable modules are all going to be updated. The controller, Kris K. Ringle, is a little anxious about this project. The last systems development project that affected his department was not very successful, and the employees in the accounting department did not accept the new system very well at first. He feels that the systems personnel did not interact sufficiently with the users of the systems in the accounting department. Prepare a memo from Ringle to the head of the information systems department, Sandy Klaus. In this memo, provide some suggestions for including the accounting personnel in the systems development project. Give persuasive arguments as to why prototyping would be helpful to the workers in the accounting department.

2. PROBLEM IDENTIFICATION

Classify each of the following as a problem or a symptom. If it is a symptom, give two examples of a possible underlying problem. If it is a problem, give two examples of a possible symptom that may be detected.

a. declining profits

b. defective production process

c. low-quality raw materials

d. shortfall in cash balance

e. declining market share

f. shortage of employees in the accounts payable department

g. shortage of raw material due to a drought in the Midwest

h. inadequately trained workers

i. decreasing customer satisfaction

3. SYSTEMS DEVELOPMENT AND USER INVOLVEMENT

Kruger Designs hired a consulting firm 3 months ago to redesign the information system that the architects use. The architects will be able to use state-of-the-art computer-aided design (CAD) programs to help in designing the products. Further, they will be able to store these designs on a network server where they and other architects may be able to call them back up for future designs with similar components. The consulting firm has been instructed to develop the system without disrupting the architects. In fact, top management believes that the best route is to develop the system and then to introduce it to the architects during a training session. Management does not want the architects to spend precious billable hours guessing about the new system or putting work off until the new system is working. Thus, the consultants are operating in a back room under a shroud of secrecy.

Required

a. Do you think that management is taking the best course of action for the announcement of the new system? Why?

b. Do you approve of the development process? Why?

4. SYSTEMS ANALYSIS

Consider the following dialogue between a systems professional, Joe Pugh, and a manager of a department targeted for a new information system, Lars Meyer:

Pugh: The way to go about the analysis is to first examine the old system, such as reviewing key documents and observing the workers performing their tasks. Then we can determine which aspects are working well and which should be preserved.

Meyer: We have been through these types of projects before and what always ends up happening is that we do not get the new system we are promised; we get a modified version of the old system.

Pugh: Well, I can assure you that will not happen this time. We just want a thorough understanding of what is working well and what is not.

Meyer: I would feel much more comfortable if we first started with a list of our requirements. We should spend some time up front determining exactly what we want the system to do for my department. Then, you systems people can come in and determine what portions to salvage if you wish. Just don’t constrain us to the old system!

Required

a. Obviously these two workers have different views on how the systems analysis phase should be con- ducted. Comment on whose position you sympathize with the most.

b. What method would you propose they take? Why?

5. FACT-GATHERING TECHNIQUES

clip_image002Your company, Tractors, Inc., is employing the SDLC for its new information system. You have been chosen as a member of the development team because of your strong accounting background. This background includes a good understanding of both financial and managerial accounting concepts and required data. You also possess a great understanding of internal control activities. You

do not, however, fully understand exactly what the inter- nal auditors will need from the system in order to comply with Section 404 of the Sarbanes-Oxley Act. Lay out the fact-gathering techniques you might employ to increase your understanding of this important component of your new system.

6. SYSTEMS SELECTION

Your company, Kitchen Works, is employing the SDLC for its new information system. The company is currently performing a number of feasibility studies, including the economic feasibility study. A draft of the economic feasibility study has been presented to you for your review. You have been charged with determining whether only escapable costs have been used, the present value of cash flows is accurate, the one-time and recurring costs are correct, realistic useful lives have been used, and the in- tangible benefits listed in the study are reasonable. Although you are a member of the development team because of your strong accounting background, you have questions about whether some costs are escapable, the interest rates used to perform present value analysis, and the estimated useful lives that have been used. How might you resolve your questions?

7. COST-BENEFIT ANALYSIS

Listed in the diagram for Problem 7 are some probability estimates of the costs and benefits associated with two competing projects.

Managing the Systems Development Life Cycle-0040

a. Compute the net present value of each alternative.

Round the cost projections to the nearest month. Explain what happens to the answer if the probabilities of the recurring costs are incorrect and a more accurate estimate is as follows:

Managing the Systems Development Life Cycle-0041

b. Repeat step (a) for the payback method.

c. Which method do you think provides the best source of information? Why?

8. BALANCED SCORECARD

An organization’s IT function has the following goals:

• Improve the quality of IT solutions and services to its internal users.

• Increase the ratio of planned-to-realized benefits from systems solutions.

• Fully match IT strategy with enterprise strategies.

• Integrate information systems architectures to mini- mize database redundancy and increase systems reus- ability across the user community.

Required

Develop a BSC depicting specific measures for each of the four BSC perspectives.

Systems Development Cases

Several systems development cases that draw upon the material in this chapter and Chapter 14 are available online at www.cengage.com/accounting/hall.

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