Stage 1: Preliminary Investigation Report
Before you begin this assignment, be sure you have read the Case Study and all assignments for this class, especially Stage 4: Final System Report.
Purpose of this Assignment
This assignment gives you the opportunity to use industry-standard methodologies for analyzing a business situation, initiating a project, and determining various aspects of feasibility of an IT project. This assignment specifically addresses the following course outcomes to enable you to:
· plan, build, and maintain systems that meet organizational strategic goals by demonstrating the use of enterprise architecture and applying enterprise governance principles and practices
· effectively communicate with stakeholders to determine, manage, and document business requirements throughout the SDLC
Assignment
The results of your systems analysis and design work in this class will be documented in a Final System Report. The purpose of the Report is to inform management of your system proposal and gain approval to proceed with the project. The Report will be developed and submitted in stages, which will be compiled at the end of class into the Final System Report. Review the outline of the Final System Report in the Stage 4 Assignment description. Note that it contains the analysis of the problem(s) and requirements, and proposes what kind of a system solution is needed. It does not propose a specific solution, but it does recommend why and how the organization should acquire the solution.
The first step in the analysis process is to create a Preliminary Investigation Report (PIR). The PIR documents the system planning phase of the System Development Life Cycle (SDLC). During the planning phase, the opportunities presented or problem(s) to be solved with an information technology system are identified, investigation into the current situation occurs, and various feasibility aspects of implementing a system are analyzed. This results in a recommendation for further action with estimated costs and schedule, and a list of benefits. Once it is completed and approved, the PIR becomes the major source document for use to begin the systems analysis phase.
To start, read the case study carefully. The case study tells you that the executives at Precision Electronics Parts, Inc., have identified a need to replace the current customer billing and payment system and re-engineer the associated processes. As you review the case study, list the most important relevant business problems and identify the information presented that you will need to complete the sections of the Preliminary Investigation Report shown below. All of the information you need to complete the projects in this class is not provided in the case study. In the discussion area of the classroom, there is a discussion titled "Case Study Interview Questions" where you can pose questions about the case study, as if you were interviewing the people in the case study.
TataKelola dan KamSiber Kecerdasan Buatan v022.pdf
Stage 1 Preliminary Investigation ReportBefore you begin th.docx
1. Stage 1: Preliminary Investigation Report
Before you begin this assignment, be sure you have read the
Case Study and all assignments for this class, especially Stage
4: Final System Report.
Purpose of this Assignment
This assignment gives you the opportunity to use industry-
standard methodologies for analyzing a business situation,
initiating a project, and determining various aspects of
feasibility of an IT project. This assignment specifically
addresses the following course outcomes to enable you to:
· plan, build, and maintain systems that meet organizational
strategic goals by demonstrating the use of enterprise
architecture and applying enterprise governance principles and
practices
· effectively communicate with stakeholders to determine,
manage, and document business requirements throughout the
SDLC
Assignment
The results of your systems analysis and design work in this
class will be documented in a Final System Report. The
purpose of the Report is to inform management of your system
proposal and gain approval to proceed with the project. The
Report will be developed and submitted in stages, which will be
compiled at the end of class into the Final System Report.
Review the outline of the Final System Report in the Stage 4
Assignment description. Note that it contains the analysis of
the problem(s) and requirements, and proposes what kind of a
system solution is needed. It does not propose a specific
solution, but it does recommend why and how the organization
should acquire the solution.
2. The first step in the analysis process is to create a Preliminary
Investigation Report (PIR). The PIR documents the system
planning phase of the System Development Life Cycle (SDLC).
During the planning phase, the opportunities presented or
problem(s) to be solved with an information technology system
are identified, investigation into the current situation occurs,
and various feasibility aspects of implementing a system are
analyzed. This results in a recommendation for further action
with estimated costs and schedule, and a list of benefits. Once
it is completed and approved, the PIR becomes the major source
document for use to begin the systems analysis phase.
To start, read the case study carefully. The case study tells you
that the executives at Precision Electronics Parts, Inc., have
identified a need to replace the current customer billing and
payment system and re-engineer the associated processes. As
you review the case study, list the most important relevant
business problems and identify the information presented that
you will need to complete the sections of the Preliminary
Investigation Report shown below. All of the information you
need to complete the projects in this class is not provided in the
case study. In the discussion area of the classroom, there is a
discussion titled "Case Study Interview Questions" where you
can pose questions about the case study, as if you were
interviewing the people in the case study organization. Any
information that you need that is not included in the case study
should be asked about in this discussion. Responses from the
faculty member on behalf of the case study organization will be
available for everyone in the class.
Using the case study and the outline and resources listed below,
develop your Preliminary Investigation Report. Approximate
lengths for each section are provided as a guideline; be sure to
provide all pertinent information. References in brackets are to
the two e-textbooks (by authors Jawahar and Conger) used in
3. this class and the page on which the explanatory information
begins.
I. Introduction (1 paragraph)
a. Brief statement of the problem or system
b. Name of person or group who initiated the investigation
c. Name of person or group who performed the investigation
II. Problem to be solved – The basis of the system request,
including an explanation of major problems or opportunities (1
paragraph)
III. Findings
a. Scope of proposed system (1 paragraph describing the system
boundaries – what is included, perhaps where it stops)
b. Constraints (1 paragraph, including a short list of constraints)
[Jawahar, p. 61]
c. Fact Finding – significant findings and conclusions (1
paragraph with more than one finding and conclusion to be
drawn; source is the case study and responses to questions
posed in the Case Study Interview Questions discussion)
d. Current Costs – cost of current system (1 short paragraph;
source is the case study and responses to questions posed in the
Case Study Interview Questions discussion)
IV. Feasibility Analysis: This is not a complete Feasibility
Report; instead it is a discussion of whether and how the
proposed systems is technically, financially and
organizationally feasible. Describe what aspects of the
organization in the case study and the proposed system make it
technically, financially and organizationally feasible. [Jawahar,
p. 65]
a. Technical Feasibility (1 paragraph)
b. Financial Feasibility (1 paragraph)
c. Organizational/Behavioral Feasibility (1 paragraph)
V. Recommendation for further action
a. An estimate of how long it would take to implement the
system and have it available for use, and a rough cost estimate
for the entire project (short paragraph with estimated time and
4. cost)
b. Expected benefits – tangible (with estimated quantification)
and intangible benefits (introductory paragraph and list of
tangible (quantified) and intangible benefits) [Conger, p. 148]
Submitting Your Assignment
Submit your document via your Assignment Folder as Microsoft
Word document, or a document that can be ready using MS
Word, with your last name included in the filename.
Use the Grading Rubric below to be sure you have covered all
aspects of the assignment.
GRADING RUBRIC:
Criteria
90-100%
Far Above Standards
80-89%
Above Standards
70-79%
Meets Standards
60-69%
Below Standards
< 60%
Well Below Standards
Possible Points
Introduction
9-10 Points
The introduction includes the statement of the problem, who
initiated and who conducted the investigation, and is clear,
5. logical, derived from the Case Study, and demonstrates a
sophisticated level of writing.
8 Points
The introduction includes the statement of the problem, who
initiated and who conducted the investigation, and is clear,
logical, derived from the Case Study, and demonstrates a clear
understanding of the course concepts.
7 Points
The introduction includes the statement of the problem, who
initiated and who conducted the investigation; is adequate, and
is derived from the Case Study.
6 Points
The background for the business case is not clear, logical and/or
derived from the Case Study. It may not include the statement
of the problem, who initiated and who conducted the
investigation.
0-5 Points
Introduction is not included, or demonstrates little effort.
10
Description of Problem
9-10 Points
The basis of the system request, including an explanation of
major problems or opportunities is provided, and is clear,
specific, and logical, appropriate to the Case Study and
demonstrates a sophisticated level of writing.
8 Points
The basis of the system request, including an explanation of
major problems or opportunities is provided, and is clear,
specific, and logical, appropriate to the Case Study and
demonstrates effective writing.
7 Points
The basis of the system request, including an explanation of
major problems or opportunities is provided, and is adequate
and appropriate to the Case Study.
6 Points
6. The basis of the system request is unclear, too general, and/or
not appropriate to the Case Study. It may not provide an
explanation of major problems or opportunities.
0-5 Points
Description of Problem is not submitted, or demonstrates little
effort.
10
Findings
18-20 Points
Findings include scope, constraints, fact finding results and
conclusions, and current system costs, and is clear, specific, and
logical, appropriate to the Case Study and demonstrates a
sophisticated level of writing.
16-17 Points
Findings include scope, constraints, fact finding results and
conclusions, and current system costs, and is clear, specific, and
logical, appropriate to the Case Study and demonstrates
effective writing.
14-15 Points
Findings include scope, constraints, fact finding results and
conclusions, and current system costs, and is adequate and
appropriate to the Case Study.
12-13 Points
Findings may not include scope, constraints, fact finding results
and conclusions, and current system costs.
0-11 Points
Findings are not provided, or demonstrates little effort.
20
Feasibility Analysis
27-30 Points
Feasibility Analysis correctly and convincingly explains the
technical, economic and organizational/ behavioral feasibility of
the proposed system. Demonstrates a sophisticated level of
writing.
24-26 Points
7. Feasibility Analysis correctly explains the technical, economic
and organizational/ behavioral feasibility of the proposed
system. Is appropriate to the case study and demonstrates
effective writing.
21-23 Points
Feasibility Analysis explains the technical, economic and
organizational/ behavioral feasibility of the proposed system.
Is appropriate to the case study.
18-20 Points
Feasibility Analysis may not explain the technical, economic
and organizational/ behavioral feasibility of the proposed
system.
0-17 Points
Feasibility Analysis is not included, or demonstrates little
effort.
30
Recommend-ation
18-20 Points
Recommendation is clear, convincing, and includes estimated
time and cost, and tangible and intangible benefits.
Demonstrates a sophisticated level of writing.
16-17 Points
Recommendation is clear, and includes estimated time and cost,
and tangible and intangible benefits. Is appropriate to the case
study and demonstrates effective writing.
14-15 Points
Recommendation includes estimated time and cost, and tangible
and intangible benefits. Is appropriate to the case study.
12-13 Points
Recommendation may not include estimated time and cost,
and/or tangible and intangible benefits.
0-11 Points
Recommend-ation is not included or demonstrates little effort.
20
Format
9-10 Points
8. Submission reflects effective organization and sophisticated
writing; follows instructions provided; uses correct structure,
grammar, and spelling; presented in a professional format; any
references used are appropriately incorporated and cited using
APA style.
8 Points
Submission reflects effective organization and clear writing;
follows instructions provided; uses correct structure, grammar,
and spelling; presented in a professional format; any references
used are appropriately incorporated and cited using APA style.
7 Points
Submission is adequate, is somewhat organized, follows
instructions provided; contains minimal grammar and/or
spelling errors; and follows APA style for any references and
citations.
6 Points
Submission is not well organized, and/or does not follow
instructions provided; and/or contains grammar and/or spelling
errors; and/or does not follow APA style for any references and
citations. May demonstrate inadequate level of writing.
0-5 Points
Document is extremely poorly written and does not convey the
information.
10
TOTAL Points Possible
100
9. Stage 1: Preliminary Investigation Report 2
IFSM 461: Systems Analysis and Design
Precision Electronic Parts, Inc.
Case Study
Introduction
This case study will be used for a series of staged assignments.
It should be thoroughly read and understood prior to working on
any of the assignments.
Setting
Precision Electronic Parts (PEP), Inc., is a small private
business that has retained you to assist in the development of a
new billing and payment system and associated processes.
Background
PEP is a small, private specialized electronics company in
Kansas. For the past 20 years, it has manufactured a wide range
of precision electronic components and replacement parts for
medical equipment used in hospitals, doctor’s offices, and
pharmacies. Last year, the company began building and
delivering custom low voltage motors that reduced electricity
costs and made older medical equipment more environmentally
friendly. More recently, PEP has added a new line of more
efficient low voltage motors that can be used in precision
equipment outside the healthcare industry.
As a result, PEP is experiencing significant increases in orders
for the motors. The manufacturing facility has been expanded,
and the sales and marketing teams have been enlarged. All of
this is straining the Ordering & Shipping Department and the
Inventory Management Department, which have received no
increase in personnel. They are meeting the challenge, but the
10. Executive Leadership Team (the CEO, COO, CFO, and CIO)
know that they are only treading water. The Finance
Department, however, is getting further and further behind in
their invoice, billing and payment processes. The Business
Administration Department has stepped up to the task, but is at
the breaking point.
IT Steering Committee
The IT Steering Committee (ITSC) at PEP is comprised of the
Executive Leadership Team, the Senior Vice President and Vice
President.
• Carolyn West is the Chief Executive Officer (CEO). She has
been at the company for 11 years. Carolyn has a background
working for and managing electronics companies. Like most
CEOs, Carolyn is focused on the strategic and long-term
business health of PEP. She chairs the IT Steering Committee.
Carolyn and the committee members jointly make decisions
about IT systems and major organizational business process
changes.
• Tim Uduak, Jr. is the Chief Operating Officer (COO) and the
son of founding partner Tim Uduak, Sr. Tim has been around
the company since its inception in one capacity or another,
except for four years of college and a 3-year break to startup his
own company. When his startup failed, Tim came back to PEP
as the SVP, Engineering & Manufacturing Operations. Last
year, he was promoted to COO. While Tim has a strategic focus
and is not technology averse, he prefers to solve business
challenges with processes rather than information technology.
• Karl Manley is the Chief Financial Officer (CFO). He has
been with the company for 9 years. Karl has a background in
accounting and finance, and is a certified public accountant
(CPA). He tends to focus on the company’s financial health to
the exclusion of all other business concerns. While Karl is
11. technology fluent, he resists new IT purchases unless there is a
clear and direct connection made between the technology
investment and improving the company’s financial profile. The
Director, Accounts Receivable (Mary Winston) and the
Director, Accounts Payable (Amy Dole) report to the CFO, and
together are responsible for the financial operations of the
business.
• Mark Temple is the Chief Information Officer (CIO) and head
of the IT Department. He provides all IT services to PEP. Prior
to being hired as the CIO, Mark was an IT manager at a large
multi-national corporation responsible for providing IT services
to their offices from the headquarters in Lincoln, Nebraska.
While in that position, Mark participated in very structured IT
processes, and developed an appreciation for working with the
operational and management divisions to ensure success of IT
projects. When he arrived at PEP, he advised the CEO, COO
and CFO that an IT Steering Committee could help ensure they
pursued the most beneficial IT projects. He is your primary
point of contact for dealing with PEP in analyzing their
processes and systems.
• Susan Black is the Senior Vice President (SVP), Engineering
& Manufacturing Operations and is Tim’s replacement. Susan
has worked for the company for 13 years. She started as a
Senior Engineer, and after six years was promoted to Director,
Engineering, where she spearheaded the successful research and
development of the low voltage motors. Susan is a champion of
information technology as long as it is clearly focused on the
core business.
• Jason Udo is the Vice President (VP), Business
Administration. He oversees all departments, except
Engineering & Manufacturing, Finance, and IT. His
responsibilities include key support functions such as Sales,
Marketing, Ordering & Shipping, Inventory, and Human
12. Resources.
The ITSC has adopted the IT governance processes
recommended by the CIO. They review proposals for IT
investments and determine where to invest their limited funds.
Each of the members has particular areas of interest, but all of
them are focused on reducing the overall cost of running the
business, increasing sales, and managing the cost of IT for the
company. The ITSC has established a series of checkpoints at
which they make go/no-go decisions on IT projects. At these
decision points the following documents are reviewed by the
ITSC:
· Preliminary Investigation Report – describes the
problem/opportunity, identifies benefits of a new system, and
reports on various aspects of feasibility of the proposed project.
· Requirements Specification – documents the requirements to
be fulfilled by the proposed system.
· Systems Design Specification – translates the requirements
into a logical design for the proposed system.
· Final System Report – compiles previous documents and lays
out the way ahead if the project is approved and funded.
As each report is approved, work on the following step begins.
This controls the amount of time and effort put into a request
for a system. For example, if the Preliminary Investigation
Report is not accepted by the ITSC, no further work is
performed on the system proposal.
Your Task
You are an independent Business and IT Systems Analyst,
specializing in developing IT solutions for small business
needs. You have been contracted by the CIO to prepare the
documentation required for the ITSC as they consider replacing
the information systems associated with operations, business
administration, and finance. Due to the backlog in the billing
and payment processes, the ITSC wants to start by replacing the
current customer billing and payment system and processes.
13. However, the ITSC requires assurance that a new billing and
payment system and processes can be interfaced with other new
IT systems and updated business processes as needed. While
there is currently no money in the budget allocated to replacing
or upgrading these systems, the executives are committed to
moving the company forward and improving PEP’s ability to
manage its growing business efficiently and effectively.
Your Activities
After interviewing each member of the ITSC, you have
collected the following information regarding the invoice,
billing and payment processes and needs:
• Customer billing is handled by the Invoicing Department,
which reports to the VP, Business
Administration.
• Customer payments are handled by the Accounts Receivable
Department, which reports to the
CFO.
• Customer billing and payments are managed and recorded in
an in-house developed Microsoft
Access based solution. The solution was developed by the IT
Department and is housed on a server controlled and managed
by the IT Department. The solution is updated on request from
the Invoicing and Accounts Receivable Departments.
• The Sales Department works with Invoicing to establish new
customer accounts and update and close existing accounts as
needed.
• The Ordering & Shipping Department sends a monthly report
to Invoicing where the products ordered and shipped and their
codes are entered into the invoicing module. Pricing is
computed based on the product codes and quantities entered.
• Invoicing is responsible for adding, updating, and maintaining
the product codes and pricing used by the invoicing database on
the 15th of each calendar month. The monthly report containing
the updates is provided by the Marketing Department.
• Invoicing generates and mails customer bills on the last
14. business day of each calendar month.
• Customer payments (lump sum) are due by the 10th of each
calendar. Customers send the payments to Accounts Receivable.
Accounts Receivable is responsible for updating customer
account records when the payments are received.
• Invoicing is responsible for identifying accounts that are 30
days, 60 days or more overdue. These reports are sent to
Accounts Receivable and Sales. Accounts Receivable handles
all collections.
• There is a 2% fee added to all invoices that are 30 days or
more overdue.
• Accounts Receivable notifies the Sales Department to assist
with customers who are 60 days or more delinquent. Ordering &
Shipping is also notified so that no further shipments are made
until the outstanding invoice is paid in full. These situations are
rare.
• Installation services are offered as a fixed price fee for small
businesses (doctor’s offices, individually owned pharmacies,
etc.). Larger installations (hospitals, chain pharmacies,
pharmaceutical manufacturers, etc.) are billed on a pre-defined
hourly rate.
• Volume discounts are not currently offered, but Marketing is
planning to offer this discount within the next six (6) months
because the low voltage motors are increasingly being ordered
in quantities of five (5) or more. The following volume
discounts will be offered:
o 5 or more: 2%
o 10 or more: 5%
o 25 or more: 10%
• Electronic invoicing via email is not currently offered, but
Marketing and Invoicing plan to offer this feature within the
next six (6) months.
• Electronic payment to a lockbox account is not currently
offered, but Marketing and Accounts Receiving plan to offer
this feature within the next six (6) months.
• The customer account data elements currently include:
15. o Customer Organization Name
o Customer Street Address
o Customer City
o Customer State
o Customer Zip Code + 4
o Primary Contact First Name
o Primary Contact Last Name
o Primary Contact Phone Number
o Primary Contact Email Address
o Secondary Contact First Name
o Secondary Contact Last Name
o Secondary Contact Phone Number
o Secondary Contact Email Address
o Products Ordered
o Product Ordered Date
o Products Shipped
o Product Ship Date
o Quantity
o Product Pricing
o Calculated Price (Calculated Field)
o Amount Due (Calculated Field)
o Amount Paid
o Date Paid
o Amount 30 Days Overdue (Calculated Field)
o Amount 60 Days Overdue (Calculated Field)
o Amount Greater Than 60 Days Overdue (Calculated Field)
o 2% Overdue Amount (Calculated Field)
• The customer account data elements required for near-term
plans include:
o Quantity Discount (Calculated Field)
o Electronic Invoicing (Check Box)
o Electronic Payment (Check Box)
• Paper invoices currently contain the following data elements:
o Unique Serialized Invoice Number (System Generated?)
16. o Customer Organization Name
o Customer Street Address
o Customer City
o Customer State
o Customer Zip Code + 4
o Products Ordered
o Product Ordered Date
o Products Shipped
o Product Ship Date
o Quantity
o Product Pricing
o Calculated Price (Calculated Field)
o Amount Due (Calculated Field)
o Amount 30 Days Overdue (Calculated Field)
o Amount 60 Days Overdue (Calculated Field)
o Amount Greater Than 60 Days Overdue (Calculated Field)
o 2% Overdue Amount (Calculated Field)
• Paper invoice data points required for near-term plans include:
o Volume Discount (Calculated Field)
o Electronic Invoicing (Yes or No)
o Electronic Payment (Yes or No)
• When electronic invoices are offered, the same current and
near-term data elements as shown above will be included.
You have also documented the following additional
considerations:
• All customer, invoicing, and payment data must be secured,
but accessible to those departments and personnel who have a
need to know.
• PEP requires the ability to generate a receipt automatically at
the time payments are recorded. The receipt will be sent
electronically to the organization’s primary contact email
address. The receipt must contain:
o Unique Serialized Invoice Number
17. o Customer Organization Name
o Customer Street Address
o Customer City
o Customer State
o Customer Zip Code + 4
o Amount Paid
o Date Paid
o Amount Outstanding
• The following company entities need to be able to generate
their own reports as needed:
o COO
o CFO
o Director, Accounts Receivable
o Accounts Receivable Managers & Staff
o Director, Accounts Payable
o SVP, Engineering & Manufacturing Operations
o VP, Business Administration
o Invoicing Managers & Staff
o Sales Managers & Staff
o Marketing Managers & Staff
o Ordering & Shipping Managers & Staff
Your Deliverables
Your first task is to develop the Preliminary Investigation
Report (PIR), which will examine the problems/opportunities,
identify benefits of a new system, and report on various aspects
of feasibility of such a project. You will draw upon the
background and other information provided above to develop
the PIR. If that Report is accepted by the ITSC, you will
analyze and organize the requirements you have collected into a
Requirements Specification. After receiving approval of the
Requirements Specification, you will develop the Systems
Design Specification, which will translate the requirements into
a logical design of the proposed system. With a further
decision to proceed, you will then develop the Final System
18. Report, which will combine your previously developed
documents and lay out the way ahead if the project is approved
and funded.
PEP Case Study 1
IFSM 461: Systems Analysis and Design
Precision Electronic Parts, Inc.
Case Study
Introduction
This case study will be used for a series of staged assignments.
It should be thoroughly read and understood prior to working on
any of the assignments.
Setting
Precision Electronic Parts (PEP), Inc., is a small private
business that has retained you to assist in the development of a
new billing and payment system and associated processes.
Background
PEP is a small, private specialized electronics company in
Kansas. For the past 20 years, it has manufactured a wide range
of precision electronic components and replacement parts for
medical equipment used in hospitals, doctor’s offices, and
pharmacies. Last year, the company began building and
delivering custom low voltage motors that reduced electricity
costs and made older medical equipment more environmentally
friendly. More recently, PEP has added a new line of more
efficient low voltage motors that can be used in precision
equipment outside the healthcare industry.
As a result, PEP is experiencing significant increases in orders
19. for the motors. The manufacturing facility has been expanded,
and the sales and marketing teams have been enlarged. All of
this is straining the Ordering & Shipping Department and the
Inventory Management Department, which have received no
increase in personnel. They are meeting the challenge, but the
Executive Leadership Team (the CEO, COO, CFO, and CIO)
know that they are only treading water. The Finance
Department, however, is getting further and further behind in
their invoice, billing and payment processes. The Business
Administration Department has stepped up to the task, but is at
the breaking point.
IT Steering Committee
The IT Steering Committee (ITSC) at PEP is comprised of the
Executive Leadership Team, the Senior Vice President and Vice
President.
• Carolyn West is the Chief Executive Officer (CEO). She has
been at the company for 11 years. Carolyn has a background
working for and managing electronics companies. Like most
CEOs, Carolyn is focused on the strategic and long-term
business health of PEP. She chairs the IT Steering Committee.
Carolyn and the committee members jointly make decisions
about IT systems and major organizational business process
changes.
• Tim Uduak, Jr. is the Chief Operating Officer (COO) and the
son of founding partner Tim Uduak, Sr. Tim has been around
the company since its inception in one capacity or another,
except for four years of college and a 3-year break to startup his
own company. When his startup failed, Tim came back to PEP
as the SVP, Engineering & Manufacturing Operations. Last
year, he was promoted to COO. While Tim has a strategic focus
and is not technology averse, he prefers to solve business
challenges with processes rather than information technology.
20. • Karl Manley is the Chief Financial Officer (CFO). He has
been with the company for 9 years. Karl has a background in
accounting and finance, and is a certified public accountant
(CPA). He tends to focus on the company’s financial health to
the exclusion of all other business concerns. While Karl is
technology fluent, he resists new IT purchases unless there is a
clear and direct connection made between the technology
investment and improving the company’s financial profile. The
Director, Accounts Receivable (Mary Winston) and the
Director, Accounts Payable (Amy Dole) report to the CFO, and
together are responsible for the financial operations of the
business.
• Mark Temple is the Chief Information Officer (CIO) and head
of the IT Department. He provides all IT services to PEP. Prior
to being hired as the CIO, Mark was an IT manager at a large
multi-national corporation responsible for providing IT services
to their offices from the headquarters in Lincoln, Nebraska.
While in that position, Mark participated in very structured IT
processes, and developed an appreciation for working with the
operational and management divisions to ensure success of IT
projects. When he arrived at PEP, he advised the CEO, COO
and CFO that an IT Steering Committee could help ensure they
pursued the most beneficial IT projects. He is your primary
point of contact for dealing with PEP in analyzing their
processes and systems.
• Susan Black is the Senior Vice President (SVP), Engineering
& Manufacturing Operations and is Tim’s replacement. Susan
has worked for the company for 13 years. She started as a
Senior Engineer, and after six years was promoted to Director,
Engineering, where she spearheaded the successful research and
development of the low voltage motors. Susan is a champion of
information technology as long as it is clearly focused on the
core business.
21. • Jason Udo is the Vice President (VP), Business
Administration. He oversees all departments, except
Engineering & Manufacturing, Finance, and IT. His
responsibilities include key support functions such as Sales,
Marketing, Ordering & Shipping, Inventory, and Human
Resources.
The ITSC has adopted the IT governance processes
recommended by the CIO. They review proposals for IT
investments and determine where to invest their limited funds.
Each of the members has particular areas of interest, but all of
them are focused on reducing the overall cost of running the
business, increasing sales, and managing the cost of IT for the
company. The ITSC has established a series of checkpoints at
which they make go/no-go decisions on IT projects. At these
decision points the following documents are reviewed by the
ITSC:
· Preliminary Investigation Report – describes the
problem/opportunity, identifies benefits of a new system, and
reports on various aspects of feasibility of the proposed project.
· Requirements Specification – documents the requirements to
be fulfilled by the proposed system.
· Systems Design Specification – translates the requirements
into a logical design for the proposed system.
· Final System Report – compiles previous documents and lays
out the way ahead if the project is approved and funded.
As each report is approved, work on the following step begins.
This controls the amount of time and effort put into a request
for a system. For example, if the Preliminary Investigation
Report is not accepted by the ITSC, no further work is
performed on the system proposal.
Your Task
You are an independent Business and IT Systems Analyst,
specializing in developing IT solutions for small business
needs. You have been contracted by the CIO to prepare the
22. documentation required for the ITSC as they consider replacing
the information systems associated with operations, business
administration, and finance. Due to the backlog in the billing
and payment processes, the ITSC wants to start by replacing the
current customer billing and payment system and processes.
However, the ITSC requires assurance that a new billing and
payment system and processes can be interfaced with other new
IT systems and updated business processes as needed. While
there is currently no money in the budget allocated to replacing
or upgrading these systems, the executives are committed to
moving the company forward and improving PEP’s ability to
manage its growing business efficiently and effectively.
Your Activities
After interviewing each member of the ITSC, you have
collected the following information regarding the invoice,
billing and payment processes and needs:
• Customer billing is handled by the Invoicing Department,
which reports to the VP, Business
Administration.
• Customer payments are handled by the Accounts Receivable
Department, which reports to the
CFO.
• Customer billing and payments are managed and recorded in
an in-house developed Microsoft
Access based solution. The solution was developed by the IT
Department and is housed on a server controlled and managed
by the IT Department. The solution is updated on request from
the Invoicing and Accounts Receivable Departments.
• The Sales Department works with Invoicing to establish new
customer accounts and update and close existing accounts as
needed.
• The Ordering & Shipping Department sends a monthly report
to Invoicing where the products ordered and shipped and their
codes are entered into the invoicing module. Pricing is
computed based on the product codes and quantities entered.
23. • Invoicing is responsible for adding, updating, and maintaining
the product codes and pricing used by the invoicing database on
the 15th of each calendar month. The monthly report containing
the updates is provided by the Marketing Department.
• Invoicing generates and mails customer bills on the last
business day of each calendar month.
• Customer payments (lump sum) are due by the 10th of each
calendar. Customers send the payments to Accounts Receivable.
Accounts Receivable is responsible for updating customer
account records when the payments are received.
• Invoicing is responsible for identifying accounts that are 30
days, 60 days or more overdue. These reports are sent to
Accounts Receivable and Sales. Accounts Receivable handles
all collections.
• There is a 2% fee added to all invoices that are 30 days or
more overdue.
• Accounts Receivable notifies the Sales Department to assist
with customers who are 60 days or more delinquent. Ordering &
Shipping is also notified so that no further shipments are made
until the outstanding invoice is paid in full. These situations are
rare.
• Installation services are offered as a fixed price fee for small
businesses (doctor’s offices, individually owned pharmacies,
etc.). Larger installations (hospitals, chain pharmacies,
pharmaceutical manufacturers, etc.) are billed on a pre-defined
hourly rate.
• Volume discounts are not currently offered, but Marketing is
planning to offer this discount within the next six (6) months
because the low voltage motors are increasingly being ordered
in quantities of five (5) or more. The following volume
discounts will be offered:
o 5 or more: 2%
o 10 or more: 5%
o 25 or more: 10%
• Electronic invoicing via email is not currently offered, but
Marketing and Invoicing plan to offer this feature within the
24. next six (6) months.
• Electronic payment to a lockbox account is not currently
offered, but Marketing and Accounts Receiving plan to offer
this feature within the next six (6) months.
• The customer account data elements currently include:
o Customer Organization Name
o Customer Street Address
o Customer City
o Customer State
o Customer Zip Code + 4
o Primary Contact First Name
o Primary Contact Last Name
o Primary Contact Phone Number
o Primary Contact Email Address
o Secondary Contact First Name
o Secondary Contact Last Name
o Secondary Contact Phone Number
o Secondary Contact Email Address
o Products Ordered
o Product Ordered Date
o Products Shipped
o Product Ship Date
o Quantity
o Product Pricing
o Calculated Price (Calculated Field)
o Amount Due (Calculated Field)
o Amount Paid
o Date Paid
o Amount 30 Days Overdue (Calculated Field)
o Amount 60 Days Overdue (Calculated Field)
o Amount Greater Than 60 Days Overdue (Calculated Field)
o 2% Overdue Amount (Calculated Field)
• The customer account data elements required for near-term
plans include:
o Quantity Discount (Calculated Field)
25. o Electronic Invoicing (Check Box)
o Electronic Payment (Check Box)
• Paper invoices currently contain the following data elements:
o Unique Serialized Invoice Number (System Generated?)
o Customer Organization Name
o Customer Street Address
o Customer City
o Customer State
o Customer Zip Code + 4
o Products Ordered
o Product Ordered Date
o Products Shipped
o Product Ship Date
o Quantity
o Product Pricing
o Calculated Price (Calculated Field)
o Amount Due (Calculated Field)
o Amount 30 Days Overdue (Calculated Field)
o Amount 60 Days Overdue (Calculated Field)
o Amount Greater Than 60 Days Overdue (Calculated Field)
o 2% Overdue Amount (Calculated Field)
• Paper invoice data points required for near-term plans include:
o Volume Discount (Calculated Field)
o Electronic Invoicing (Yes or No)
o Electronic Payment (Yes or No)
• When electronic invoices are offered, the same current and
near-term data elements as shown above will be included.
You have also documented the following additional
considerations:
• All customer, invoicing, and payment data must be secured,
but accessible to those departments and personnel who have a
need to know.
26. • PEP requires the ability to generate a receipt automatically at
the time payments are recorded. The receipt will be sent
electronically to the organization’s primary contact email
address. The receipt must contain:
o Unique Serialized Invoice Number
o Customer Organization Name
o Customer Street Address
o Customer City
o Customer State
o Customer Zip Code + 4
o Amount Paid
o Date Paid
o Amount Outstanding
• The following company entities need to be able to generate
their own reports as needed:
o COO
o CFO
o Director, Accounts Receivable
o Accounts Receivable Managers & Staff
o Director, Accounts Payable
o SVP, Engineering & Manufacturing Operations
o VP, Business Administration
o Invoicing Managers & Staff
o Sales Managers & Staff
o Marketing Managers & Staff
o Ordering & Shipping Managers & Staff
Your Deliverables
Your first task is to develop the Preliminary Investigation
Report (PIR), which will examine the problems/opportunities,
identify benefits of a new system, and report on various aspects
of feasibility of such a project. You will draw upon the
background and other information provided above to develop
the PIR. If that Report is accepted by the ITSC, you will
analyze and organize the requirements you have collected into a
27. Requirements Specification. After receiving approval of the
Requirements Specification, you will develop the Systems
Design Specification, which will translate the requirements into
a logical design of the proposed system. With a further
decision to proceed, you will then develop the Final System
Report, which will combine your previously developed
documents and lay out the way ahead if the project is approved
and funded.
PEP Case Study 1