In order to remain cost effective in the competitive business environment, businesses must adopt working systems that are not only lean but also efficient. The ever-growing information technology industry presents numerous ways where companies can identify opportunities for savings in their daily operations. One such opportunity is in the management of information within the company and especially about accounting information.
Traditionally, firms relied on the laborious manual accounting systems. These systems require a lot of labor and a large physical filing space whereas suffering from a large number of drawbacks. For instance, it takes a lot of time to trace and retrieve a file in the traditional accounting system. On the contrary, it only requires a click of the mouse to retrieve a file in the computerized system. For that reason, firms must embrace technology if they are to succeed in today’s business environment (Bagranoff, Simkin & Norman 2010).
Such is the case for Willoy Engineering, an electrical contracting company based in Illinois. The company offers electrical maintenance and installations services to the state of Illinois. In order to identify the requirements for the new accounting system, one must understand the current system, identify its weaknesses, and think up ways in which to solve them. This involves studying the current physical system, documenting it, defining the future logic system, and designing the future physical system.
To start with, one must study and analyze the system in use by utilizing the existing documentation such as data flow diagrams and flow charts. At this stage, the objective is to build on the available information to understand the operations of the current system. To document the existing logical system, one should remove the physical elements from the current system and produce a logical flow data diagram. One then proceeds to the next stage of defining the user requirements for the new system.
This involves ranking the requirements according to their importance in order to establish the most crucial ones in case the available resources cannot satisfy all the user requirements. To achieve this, it is imperative to categorize the user requirements into three groups. There are those requirements that are critical to the system and without which the system would not be usable, those that make the system easier to use and those that make the system “nice enough” but are not critical to the operation of the system (Ulric & Dull 2010).
Any systems development cycle starts with an initiative. There must be a will to solve a particular problem. In this case, the need to improve the current accounting system is the identified initiative. It then goes to systems concept development where one identifies the scope of project and where an analysis is done on the costs versus benefits, risk management and as well as a determination of how feasible, the project is.
A project management plan then follows which provides the guidelines and timelines for acquiring the required resources for the successful completion of the project. After which, one needs to do a requirements analysis in order to create a detailed functional requirements. Designing and developing the concept then follows. The other phase is integration, and testing. During this phase, one must ensure that the new system meets the functional requirements of the envisaged system. After this, one implements the system into a real physical environment. Operation and maintenance then follows (Bagranoff, Simkin & Norman 2010).
During the implementation of this system, the company may face a number of challenges. One of these challenges is resistance from the workers who might fear that a new accounting information system will render them redundant and therefore jobless. To this effect, the management must educate the employees on the weaknesses of the old accounting system and elaborately explain the need for a new system by actively involving all the employees.
The best way to achieve this is to let the employees own the initiative. Secondly, it is most likely that without involving the right stakeholders, it will be difficult to define the requirements of the new system. Employees should also be encouraged to adopt the new system as a personal empowerment tool. The company may also face financial challenges in implementing the new financial system. For instance, one must improve the existing computer network, which will affect the profitability of the company in the short run (Ulric & Dull 2010).
From the onset, one needs to change the supply and procurement system and the materials delivery system. The current system does not integrate the labor and material requirements of a particular work site in order to determine whether each job makes a profit or a loss. As well, the system does not capture variations in material quantities from the initial materials quoted in the tender documents. The systems developer must incorporate this as a functional requirement in the new system. As well, the new system should be able to classify required materials and classify in order of priority. Finally, the new system should be able to give preliminary information concerning the financial position of the company (Ulric & Dull 2010).
References
Bagranoff, N. A., Simkin, M. G., & Norman, C. S. (2010). Core Concepts of Accounting Information Systems (11th ed.). New York, NY: John Wiley & Sons.
Ulric, J. G., & Dull, R. B. (2010). Accounting Information Systems. Boston, MA: Cengage Learning.