The document discusses various strategies for developing accounting information systems (AIS), including purchasing off-the-shelf or customized software, developing systems in-house, outsourcing development to external companies, and end-user computing. It also covers prototyping systems, business process management, and using computer-aided software engineering tools to aid development. The advantages and disadvantages of each approach are presented.

1. Chapter 21
AIS Development Strategies
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2. Learning Objectives
 Describe how organizations purchase application software, vendor
services, and hardware.
 Explain how information system departments develop custom software.
 Explain how end users develop, use, and control computer- based
information systems.
 Explain why organizations outsource their information systems, and evaluate
the benefits and risks of this strategy.
 Explain the principles and challenges of business process management.
 Describe how prototypes are used to develop an AIS, and discuss the
advantages and disadvantages of doing so.
 Explain what computer-aided software engineering is and how it is used in
systems development.
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3. Ways to Obtain an AIS
 Purchase the software
 Develop software in-house
 Hire and external company to develop and maintain
new software
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4. Purchasing Software
 Off the Shelf (OTS) Canned
 System capabilities for users with similar requirements
 Turnkey System
 Hardware and software sold as a package
 Application Service Provider (ASP)
 Software is provided to user via the Internet
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5. In-House System Development
 Main criteria for in-house development
 Provides a significant competitive advantage
 Risks of in-house development
 Significant amounts of time required
 Complexity of the system
 Poor requirements defined
 Insufficient planning
 Inadequate communication and cooperation
 Lack of qualified staff
 Poor top management support
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6. End-User Computing (EUC)

Hands-on development, use, and control of computer- based information systems by
users

Advantages of EUC
 User creation, control, and implementation
 Users decide whether a system should be developed and what information is
important.
 Systems that meet user needs
 Users discover flaws that IS people do not catch.
 Many of the user-analyst-programmer communication problems in traditional
program development are avoided.
 Timeliness
 Time-consuming cost-benefit analyses, detailed requirements definitions, and
the delays and red tape of the approval process can be avoided.
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7. End-User Computing (EUC) (cont’d)

Advantages of EUC (cont’d)
 Freeing up of systems resources
 The more information needs users meet, the more time the IS department can
spend on other development and maintenance activities.
 Versatility and ease of use
 Users can change the information they produce or modify their application any
time their requirements change.

Disadvantages to EUC:
 Logic and development errors
 Inadequately tested applications
 Inefficient systems
 Poorly controlled systems
 Poorly documented systems
 Incompatible systems
 Redundant data
 Wasted resources
 Increased costs
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8. Outsourcing the System
 Hiring an outside company to handle all
or part of an organization’s data
processing activities
 Advantages:
 Strategic and economic business
solution that allows companies to
concentrate on core competencies
 Organizations improve their cash
position and reduce expenses by
selling assets to an outsourcer
 Access to greater expertise and
better technology
 Lower costs by standardizing user
applications, buying hardware at
bulk prices, splitting development
and maintenance costs between
projects, and operating at higher
volumes
 Less development time.
 Elimination of peaks-and-valleys
 Facilitates downsizing
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 Disadvantages:
 Inflexibility
 Reduced competitive
advantage
 Unfulfilled goals
 Poor service
 Increased risk
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9. Methods to Develop an AIS
 Business Process Redesign
 Prototyping
 Computer-Aided Software Engineering (CASE) Tools
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10. Business Process Redesign
 Drastic, one-time-event approach to improving and
automating business processes
 Low success rate
 Evolved into:
 Business Process Management (BPM)
 Systematic approach to continuously improving and
optimizing an organization’s business processes
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11. Prototyping
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12. Prototyping
Advantages
 Better definition of user needs
 Higher user involvement and
satisfaction
 Faster development time
 Fewer errors
 More opportunity for changes
Disadvantages
 Less efficient use of system
resources
 Inadequate testing and
documentation
 Negative behavioral reactions
 Never-ending development
 Less costly
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13. Computer-Aided Software
Engineering (CASE)
 Software to help plan, analyze, design, program, and
maintain an information system
 Strategic planning
 Project and system management
 Database design
 Screen and report layout
 Automatic code generation
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14. CASE Advantages vs. Disadvantages
 Improved productivity
 Incompatibility
 Improved program quality
 Cost
 Cost savings
 Unmet expectations
 Improved control
procedures
 Simplified documentation
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