© Copyright 2012 Pearson Education. All Rights Reserved. ACCOUNTING INFORMATION SYSTEMS The Crossroads of Accounting & IT Chapter 13 Accounting System Design © Copyright 2012 Pearson Education. All Rights Reserved.

© Copyright 2012 Pearson Education. All Rights Reserved. How Are Accounting Systems Developed in Practice Today? Meet ABC Methodology. © Copyright 2012 Pearson Education. All Rights Reserved.

© Copyright 2012 Pearson Education. All Rights Reserved. Can you imagine shopping for a new car… and the car dealer asks you if you want ….four wheels on your car? ….a steering wheel? ….an engine in the car? ….car seats? © Copyright 2012 Pearson Education. All Rights Reserved.

© Copyright 2012 Pearson Education. All Rights Reserved. Does it feel like you are “reinventing the wheel?” Wouldn’t it be more effective to start with a base model car and select options, such as a sunroof, to customize your car? © Copyright 2012 Pearson Education. All Rights Reserved.

© Copyright 2012 Pearson Education. All Rights Reserved. ABC Methodology... How accounting systems are developed in practice today... The accounting system consists of: … a baseline system that is typically purchased and then… …customized to meet the enterprise’s specific needs. © Copyright 2012 Pearson Education. All Rights Reserved.

© Copyright 2012 Pearson Education. All Rights Reserved. Accounting System Three functions of the accounting system: Store accounting data Analyze accounting data Safeguard accounting data When designing accounting systems, three functions of the accounting system must be considered. © Copyright 2012 Pearson Education. All Rights Reserved.

© Copyright 2012 Pearson Education. All Rights Reserved. 3 Keys Three keys can be used to address issues and opportunities when developing a a new accounting system: People Processes Technology The three keys of people, processes, and technology can be used to assess issues and opportunities the new accounting system presents. © Copyright 2012 Pearson Education. All Rights Reserved.

© Copyright 2012 Pearson Education. All Rights Reserved. People Who are the people involved in designing and developing an accounting system? System analysts: analysts design the system, specifying the components needed for the accounting system. Database designers: these people create the design for the accounting database. Database developers: these individuals build the database using the database design and database DBMS software. Application developers: these people are programmers who design and write the software for applications, such as accounting software. Network specialists: people who design the network for a new system. © Copyright 2012 Pearson Education. All Rights Reserved.

© Copyright 2012 Pearson Education. All Rights Reserved. Processes What are the processes involved in developing an accounting system? System development life cycle (SDLC) is a series of phases to create a system: plan, analyze, design, build, install, and deploy. System development methodology (SDM) is the order and timing of when the SDLC phases are completed. © Copyright 2012 Pearson Education. All Rights Reserved.

Technology What technology is used by the accounting system? Accounting system technology might include: Accounting software. Database and DBMS. Network and protocols. Desktop and laptop computers. Cybersecurity and technology to safeguard information assets. © Copyright 2012 Pearson Education. All Rights Reserved.

System Development Life Cycle (SDLC) The SDLC is a series of phases to create a system. Six typical phases of an SDLC for an accounting system: Plan Analyze Design Build/buy Install Deploy Notice that an easy way to remember the phases of the SDLC is PAD-BID. © Copyright 2012 Pearson Education. All Rights Reserved.

© Copyright 2012 Pearson Education. All Rights Reserved. SDLC © Copyright 2012 Pearson Education. All Rights Reserved.

System Development Methodology System Development Methodology (SDM) is an organized, systematic approach to developing a system. SDLC specifies what steps to complete SDM specifies when the steps are completed Notice the difference between the SDLC and the SDM. The SDLC specifies what steps to complete. The SDM specifies when the steps are completed. © Copyright 2012 Pearson Education. All Rights Reserved.

System Development Methodology System Development Methodologies (SDM) include: Waterfall Methodology Prototyping Methodology ABC Methodology © Copyright 2012 Pearson Education. All Rights Reserved.

Waterfall Methodology The waterfall system development methodology specifies that the phases are completed in order. For example, ALL the user requirements are collected at the beginning of the project. © Copyright 2012 Pearson Education. All Rights Reserved.

Prototyping Methodology The prototyping methodology involves collecting some of the user requirements at the beginning of the project, designing a prototype, building the prototype, obtaining feedback and then designing another prototype. This continues until the user is satisfied. © Copyright 2012 Pearson Education. All Rights Reserved.

© Copyright 2012 Pearson Education. All Rights Reserved. ABC Methodology The ABC methodology involves using the first 3 to 4 phases of the SDLC related to the baseline system. Then the baseline system can be customized, so the planning phase is revisited to update plans for customization. The customization phases may employ rapid prototyping. © Copyright 2012 Pearson Education. All Rights Reserved.

© Copyright 2012 Pearson Education. All Rights Reserved. Today, most enterprises, from small to large-scale, use a two-stage process for developing accounting systems. First, a baseline software is selected and purchased. Second, the baseline software is configured or customized to meet the enterprise’s specific needs. © Copyright 2012 Pearson Education. All Rights Reserved.

Baseline Accounting System A baseline accounting system model that can be used as a starting point is shown above. Then each of the modules can be customized to meet the enterprise’s specific needs. © Copyright 2012 Pearson Education. All Rights Reserved.

© Copyright 2012 Pearson Education. All Rights Reserved. Each of the phases is provided with additional detail. Also, there is a detailed example in the text for EspressoCoffee. © Copyright 2012 Pearson Education. All Rights Reserved.

My Connection Exercise Study Less. Learn More. Make Connections. Exercise Select an authentic enterprise or system development project of your choice. Apply the Waterfall methodology, listing the steps and order of the steps you would complete. Apply the ABC methodology, listing the steps and order of the steps you would complete. Compare and contrast the advantages and disadvantages that each methodology offers for the given selected situation. © Copyright 2012 Pearson Education. All Rights Reserved.