Chapter 20

Systems Design,
Implementation,
and Operation

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 Overview
The last four phases (2-5) in SDLC:
1. Systems Analysis (Chapter 18)
2. Conceptual Design
3. Physical Design
4. Implementation and Conversion
5. Operation and Maintenance

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 Overview
Questions to be addressed in this chapter
include:
What are the activities that take place in the
conceptual design phase of the systems
development life cycle (SDLC)?
What activities take place in the physical
systems design phase?
What happens during the systems
implementation and conversion process?
What activities occur in the systems operation
and maintenance process?
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 Introduction
Accountants must understand the entire
systems development process, because
they are involved in several ways:
Helping to specify their needs.
As members of the development team.
As auditors after the fact.
Accountants also help keep the project on
track by:
Evaluating and measuring benefits.
Measuring costs.
Ensuring the project stays on schedule.
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 CONCEPTUAL SYSTEMS
DESIGN
In the conceptual systems design
phase, a general framework is
created for implementing user
requirements and solving the
problems identified in the analysis
phase.
The three main steps are:
Evaluate design alternatives.
Prepare design specifications.
Prepare the conceptual systems design
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 CONCEPTUAL SYSTEMS
DESIGN
Evaluating design alternatives
There are many design decisions that
must be made. For example:
Should a document be hard-copy or sent by
EDI?
Should the company use a large centralized
mainframe or some form of distributed
processing?
What form should data entry take, e.g.,
keyboard, optical character recognition, POS
devices?
Data storage
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 CONCEPTUAL SYSTEMS
DESIGN
Also, there are many ways to approach the
systems development process:
Packaged software
In-house development
End-user development
Outsourcing
The company also chooses between:
Modifying or enhancing existing software
Replacing existing software
Reengineering its business processes
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 CONCEPTUAL SYSTEMS
DESIGN
Prepare design specifications
Once a design has been selected,
the project team develops the
more detailed conceptual design
specifications for the following
elements:
Output (prepared first to meet users
needs)
Data storage (what data, type of file)
Input (where, when, & how to collect
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 CONCEPTUAL SYSTEMS
DESIGN
Prepare the conceptual systems
design report
A conceptual systems design report
is prepared at the end of the conceptual
design phase to:
Guide physical system design activities.
Communicate how management and user
information needs will be met.
Help the steering committee assess system
feasibility.
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 Physical Systems Design
During the physical systems design phase, the
company determines how the conceptual AIS
design is to be implemented.
The broad, user-oriented requirements of
conceptual design are translated into detailed
specifications used to code and test computer
programs.
Phases include:
Designing output
Creating files and databases
Designing input
Writing computer programs
Developing procedures
Building in controls
Lets look at each of these phases, next

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 Physical Systems Design
Output Design:
Output usually fits into one of the following four categories:

Scheduled reports have a prespecified content and format and

are prepared on a regular basis.

Special-purpose analysis reports have no prespecified content

or format and are not prepared on a regular schedule.

Triggered exception reports have a prespecified content and

format but are prepared only in response to abnormal conditions.

Demand reports have a prespecified content and format but are

prepared only on request.

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 Physical Systems Design
File and Database Design:
Data needs to be stored in compatible formats to
help avoid the problem of having incompatible
systems that makes it impossible to share
information and prepare reports.

What is the medium (tape, disc)?

Is processing batch, manual or real-time?
What is the size of the database?
How is the database maintained?
When will information be added, deleted and
updated?
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 Physical Systems Design
Input Design:
How does data get in the system? Is
it through printed forms? Or is it
through online entry?
Forms design: more and more
companies are moving away from
paper documents, but it is still
important.

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 Physical Systems Design
Computer screen design: it is more efficient to enter
data directly into the computer than on paper for
subsequent entry.
Design considerations:
+ data should be entered quickly, accurately and
completely.
+ enter data in the same order as displayed on paper.
+ enter left to right & top to bottom, group related
data.
+ easy movement across the screen.
+ avoid clutter (e.g., limit number of menu options).

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 Physical Systems Design
Program development: is one of the most time-
consuming activities in the SDLC.

Programs subdivided into small, well-defined modules

are a process called structured programming.

To improve software quality, organizations should

develop programming standards.

Although accountants need not be computer

programmers, they should understand how software is
created.
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Physical Systems Design--Program
Design
Eight steps for developing software: (Program Design)
Step 1 Determine user needs. Systems analysts consult with users and agree
on software requirements. Step 1 is performed as a part of the systems analysis
phase of the SDLC.

Step 2 Develop a plan. A development plan is produced and documented.

Step 2 is done during conceptual systems design and may carry over to the
beginning of physical design.

Step 3 Write program instructions (code). This is when the computer code
(or program instructions) is written.

Step 4 Test the program. Debugging is discovering and eliminating program

errors. After a program is coded, a visual and mental review, referred to as desk
checking, is conducted to discover programming errors. Cost a lot more to
debug later rather than sooner.

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Physical Systems Design--Program
Design continued
Step 5 Documents the program. Documentation explains
how programs work and is used to help correct and resolve
errors.

Step 6 Train program users. Program documentation is

often used to train users. Steps 5 and 6 are begun in
systems design, but most of the work is done during
systems implementation.

Step 7 Install the system. All system components, including

the programs, are combined and the company begins to
use the system. Step 7 is completed during systems
implementation and conversion.

Step 8 Use and modify the system. Factors that require

existing programs to be revised, referred to as program
maintenance, include requests
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changes in input, file content, or values such as tax rates;
 Physical Systems Design
--Procedures Design
Procedures design
Individuals who interact with a newly-
designed AIS need procedures to cover:
Input preparation
Transaction processing
Error detection and correction
Controls
Reconciliation of balances
Database access
Output preparation and distribution
Computer operator instructions
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 Physical Systems Design
--Procedures Design
The procedures may be written by:
Development teams;
Users; or
Teams representing both groups.
Procedures may take the form of:
System manuals
User instruction classes
Training materials
Online help screens
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 Physical Systems Design
--Controls Design
Controls design
Improperly controlled input, processing,
and database functions produce
information of questionable value.
(garbage in, garbage out)
Controls must be built into an AIS to
ensure its effectiveness, efficiency, and
accuracy. These controls should:
Minimize errors.
Detect and correct errors when they do
occur.
Accountants play
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 Physical Systems Design
--Controls Design
Important control concerns that must
be addressed include: (more detail in
chapters 6-9)
Validity
Authorization
Accuracy
Security
Numerical control
Availability
Maintainability
Integrity
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 Physical Systems Design
--Design report
Physical systems design report
At the end of the physical design phase,
a physical systems design report is
prepared, summarizing what was
accomplished.
This report serves as the basis for
managements decision whether to
proceed to implementation.

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 SYSTEMS IMPLEMENTATION AND
CONVERSION
Systems implementation
Systems implementation is the process
of installing hardware and software and
getting the AIS up and running.
Phases include:
Developing a plan
Preparing the site
Installing and testing hardware and
software
Selecting and training personnel
Completing documentation
Testing the system
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 SYSTEMS IMPLEMENTATION AND
CONVERSION
Implementation planning
An implementation plan consists of:
Implementation tasks
Expected completion dates
Cost estimates
Specification of the person(s) responsible for
each task
AIS changes may require adjustments
to the companys organizational
structure, including:
Creation of new departments.
Elimination or downsizing of existing
departments.
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 SYSTEMS IMPLEMENTATION AND
CONVERSION
Site preparation: A large computer may require
changes such as:
New electrical outlets
Data communications facilities
Humidity controls
Special lighting
Air-conditioning
Security measures, such as:
Fire protection
Emergency power supply
Space for equipment, storage, and offices, etc.
Site preparation is a lengthy process and
should begin well ahead of the installation
date.
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 SYSTEMS IMPLEMENTATION AND
CONVERSION
Select and train personnel:
When training is insufficient, the company will
not achieve the expected return on investment.
The hidden cost is that users will turn to their
coworkers who have mastered the system for
help. Results in:
Less productive coworkers
Increased costs
Effective training includes:
Hardware and software skills
Orientation to new policies and operations
The training should be scheduled just before
systems testing and conversion.
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 SYSTEMS IMPLEMENTATION AND
CONVERSION
Types of staff training include:
Technical training from vendors
Self-study manuals
Computer-aided instruction
Videotape presentations
Role-playing
Case studies
Experimenting with the AIS under the
guidance of experienced users
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 SYSTEMS IMPLEMENTATION AND
CONVERSION
Complete Documentation:
Three types of documentation must be
prepared for new systems:
Development documentation (describes new
AIS)
Operations documentation (operating
schedules, security, file-retention
requirements)
User documentation (how to use system, users
manual)
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 SYSTEMS IMPLEMENTATION AND
CONVERSION
Test the system:
Inadequate system testing has contributed to
the failure of systems.
All of the following should be given a trial run in
realistic circumstances.
Documents and reports
User input
Operating and control procedures
Processing procedures
Computer programs
Should also test:
Capacity limits
Backup and recovery procedures

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 SYSTEMS IMPLEMENTATION AND
CONVERSION
Three common forms of testing include:
Walk-throughs (step-by-step reviews of procedures or program
logic.)
Processing test transactions (valid and erroneous data are
processed to determine if transactions are processed appropriately.)
Acceptance tests (use copies of real transactions and files
rather than hypothetical ones. Users develop the acceptance
criteria and make a decision whether to accept the AIS.)

Even software purchased from an outside

vendor must be tested thoroughly before
installation.
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 SYSTEMS IMPLEMENTATION AND
CONVERSION
Systems conversion
Conversion is the process of changing from
the old AIS to the new.
Many elements must be converted, including:
Hardware
Software
Data files
Procedures
The process is complete when the new AIS has
become a routine, ongoing part of the system.

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 SYSTEMS IMPLEMENTATION AND
CONVERSION
Systems Conversion
a. Direct conversion -- immediately terminate the
old AIS when the new one is introduced (risky,
but may be cost effective).
b. Parallel conversion -- operates the old and new
system simultaneously for a period of time.
c. Phase-in conversion -- gradually replaces
elements (modules) of the old AIS with a new
one.
d. Pilot conversion -- implements a system just in
one part (e.g., location) of the organization.
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 SYSTEMS IMPLEMENTATION AND
CONVERSION
Data Conversion:
Data conversion can be time-
consuming, tedious, and expense.
The difficulty and magnitude is easy to
underestimate.
Data files may need to be modified in
three ways:
Files may be moved to a different storage
medium (e.g., tape to disk).
Data content may be changed (e.g., fields
added or deleted).
A file or database format may be changed.
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 OPERATIONS AND
MAINTENANCE
The last step in the SDLC is to
operate and maintain the new
system.
A post-implementation review
should be conducted to ensure the
new AIS meets its planned
objectives. This completes the
process.

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 Post-implementation
review
Addresses the following:
--does the system meet objectives?
--are the users satisfied?
--what were the actual costs?
--is it reliable, accurate, timely?
--are the users trained?
--is documentation complete and accurate?
--recommendations for improving the new system
--recommendations for improving the systems development
process

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 Studies show that over the life of a
system, only 30% of the work takes
place during development. The
remaining 70% is spent on
maintaining the system (mostly
software modifications & updates).

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 QUIZ
Multiple Choice 1 (pg. 747)
In the conceptual design phase of the systems development life cycle, _______
specifications must be prepared first.

A. Input
B. Output
C. Data storage
D. Data processing

Multiple Choice 2 (pg. 762)

Assumptions and unresolved problems are included in the following report(s):

A. Conceptual systems design report

B. Physical systems design report
C. Post-implementation review report
D. All of the above
E. A and B

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 QUIZ
Multiple Choice 3 (pg. 750)
The following consideration(s) are involved in the file and database design.
A. Use
B. Operations
C. Medium
D. A and C

Multiple Choice 4 (751)

Is additional training necessary? is a concern to be answered during
_______ design.
A. Input
B. Output
C. Files and database
D. Program
E. Controls

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 QUIZ
Multiple Choice 5 (pg. 752)

_________ development is one of the most time consuming activities in the SDLC.

A. Input
B. Output
C. Files and database
D. Program
E. Controls

Multiple Choice 6 (pg. 752-3)

____________ is done during systems design and is completed during systems

implementation.
A. Develop a plan
B. Desk checking
C. Write program instructions
D. All of the above
E. B and C

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 QUIZ
Multiple Choice 7 (pg. 758)
Walk-throughs are conducted by:
A. Development team
B. System users
C. Programmers
D. All of the above
E. A and B

Multiple Choice 8 (pg. 759)

The first step in the data conversion process is:
A. Check data for completeness, and any data inaccuracies and
remove any inconsistencies.
B. Decide which data files need to be converted.
C. Conduct data conversion
D. Validate new files
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 Case 1
Gouge, Cheatum & Holdup, a legal firm, has a problem:
most of the general partners are having a difficult time
recording all the time spent on client matters for
billing purposes. It is estimated that only 70% of the
actual time is billed. Several discussions among the
partners revealed that a lot of time is spent on the
telephone with clients, but the information is not
recorded into the system for billing the client.

REQUIRED: Discuss some alternatives to fix the

problem.

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 Case 2
The Daily Express Newspaper Company serves a small
community and derives a considerable amount of
revenue from advertising. All advertising orders are
taken by salespeople at the customers places of
business. At the end of three days, all advertising orders
are processed in a batch. It normally takes four days
between the time the order is taken and the time the ad
appears in the newspaper. Recently, a competitive
newspaper has offered faster service to its customers.

REQUIRED: Discuss some alternatives to solve the

problem.

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