What is the five step systems development life cycle (SDLC) process? What does this process do?
- System analysis (incl feasibility)
- Conceptual design
- Physical design
- Implementation and conversion
- Operations and maintenance
SDLC is the process used to obtain and implement a new AIS.
What are the two PLANS that are required before the SDLC process is begun?
Project development plan - including cost/benefit analysis, development requirements, schedules etc.
Master Plan - What, How, Who (a more long range plan)
What two methods are used to ensure a plans objectives are being met in the time forecasted?
Program Evaluation and review technique (PERT) chart - shows a network of arrows and nodes (including a critical path which shows the path requiring the most amount of time)
GANTT Chart - a bar chart with activities on the left hand side and time across the top. like Microsoft project.
Why is feasibility analysis important? What are the different types of feasibility that should be considered?
Proper feasibility analysis ensures that projects are less likely to be cancelled or fail.
Different types of feasibility analysis include economic, technical, legal, scheduling and operational.
People can sometimes be very resistant to change. What are the three types of resistance that such people may use?
- Aggression - deliberate behaviours e.g. sabotage, increased error rates etc.
- Projection - Blaming a new system for everything that goes wrong
- Avoidance - ignoring the system in the hope that it will go away
What are some solutions to issues to resolve resistance to change in the context of developing or acquiring a new AIS?
- obtain org. wide support through involvement
- stress new opportunities
- provide training
- keep communication lines open
What are the five different activities that are usually undertaken in the systems analysis step (i.e. step one of SDLC)?
- initial investigation
- Systems Survey (questionnaires etc)
- Feasibility study
- Information needs and system requirements (by considering AIS objectives)
- Systems analysis report
What can be some of the problems that can occur if an AIS used to support REVENUE cycle activities is deficient?
- customer service problems
- ill marketing efforts
- failure to identify profitable customers & markets
- monitoring of credit accounts and cash collection procedures
What is a simple explanation of the revenue cycle? What is its primary objective?
Revenue cycle = a set of exchange transactions between the firm and its customers associated with providing goods and services to customers (GIVE) and collecting payment from them (GET).
Primary objective: to provide the right product in the right place at the right time for the right price.
What are the four basic activities that are performed in the revenue cycle?
- Sales order entry
- Shipping
- Billing and accounts receivable
- Cash collection
What are some of the main decisions that managers need to make in respect of the revenue cycle?
- how much inventory to carry and where
- should we deliver our products
- how should we price our products
- should we offer customers credit?
- how can we process payments to maximize cash flow
What are the four tasks involved in the “sales order entry” activity in the revenue cycle?
- take the order
- approve credit
- check inventory availability
- respond to customer enquiries (to encourage loyalty through CRM)
What are the two tasks involved in the “Shipping” activity in the revenue cycle?
- pick and pack (assisted with RFID)
- ship the goods
What are the two tasks involved in the “billing” activity in the revenue cycle?
- invoicing
- update accounts receivable
What are the two commonly used methods of accounts receivable for billing?
Open invoice method - customers pay using a second copy of the invoice (remittance advice)
Balance forward method - customers pay based on amounts on monthly statements.
What are the three different methods of the “cash collections” activity in the revenue cycle?
- Electronic lockbox i.e. a postal address where remittances are picked up. Electronic lock boxes are where data is sent from the bank directly to the company
- Electronic Funds transfer
- financial electronic data interchange (FEDI) - where remittance data and funds are exchanged simultaneously. e.g. countdown
Why is it important that the revenue cycle in an AIS provides both operational data and financial data?
so that information is useful for both managers and accountants.
What is the expenditure cycle? Why is it important?
Expenditure cycle - transactions between the firm and its suppliers associated with:
- ordering goods (COMMITMENT)
- receiving and storing good (GET)
- paying suppliers (GIVE)
The exp cycle is important to ensure inventory, supplies and services are acquired and maintained at the lowest price.
What are some of the main decisions that managers need to make in respect of the EXPENDITURE cycle?
- inventory management (how much, where)
- where to source raw materials
- payment terms to debtors (cash flow)
What are the four activities in the expenditure cycle?
- ORDERING materials, supplies and services
- RECEIVING materials, supplies and services
- Approving customer invoices
- Payment
What are three commonly used inventory management techniques?
Economic order quantity - inventory is based on an optimal order size (based on carrying costs, ordering costs etc). Often involves significant inventory levels.
JIT - inventory is only purchased in response to actual sales
Materials requirements planning (MRP) - less inventory is carried through accurate forecasting techniques
What is a purchase requisition form?
A form used before an actual purchase order is created indicating a need for goods or services.
What are the activities in the general ledger and reporting cycle? (GLARC)
- Update general ledger (using data from all other cycles)
- Post adjusting entries (accruals, deferrals, estimates, revaluations and corrections)
- prepare financial statements
- produce managerial reports
What is XBRL?
Extensible business reporting language
A variant of XML designed specifically to communicate the contents of financial data.
