Managers at some companies face an ongoing systems development crisis: IS departments develop systems that businesses cannot or will not use. At the heart of the problem is a "great divide" that separates the world of business and the world of IS. Few departments seem able or ready to cross this gap.

One reason for the crisis is that many companies are looking for ways to improve existing, out-of-date systems or to build new ones. Another is the widespread use of PC-based systems that have spawned high user expectations that IS departments are not meeting. Users seek more powerful applications than are available on many older systems.

The costs of the great divide can be devastating. An East Coast chemical company spent over $1 million on a budgeting and control system that was never used. The systems department's expertise was technical excellence, not budgets. As a result, the new system completely missed the mark when it came to meeting business needs. A Midwestern bank used an expensive computer-aided software engineering (CASE) tool to develop a system that users ignored because there had been no design planning. A senior analyst for the bank said, "They built the system right; but unfortunately they didn't build the right system."

d. Who plays the most vital role in the effective development of the system?

Remnants, Inc., with headquarters in St. Louis, manufactures designer clothing. The company markets and services its products by region, with each functioning as a profit center. Each region has a manager, an accounting department, a human resources department, and several area offices to market and service the products. Each area office has sales, service, and administrative departments whose managers report to an area manager.

The New York area office departed from the standard organizational structure by establishing a branch office to market and service the firm’s products in Boston. A branch manager who reports directly to the New York area manager heads the local office.

The Boston branch manager is encouraging the New York area manager to consider a new information system to handle the local branch’s growing information needs. The New York area manager and the eastern region manager want to establish a project team with employees from the region, area, and branch office. The team will assess the information needs at the Boston branch office and develop system recommendations. The following employees have been appointed to the project team, with Keith Nash as chairperson:

Eastern Region Office
Kurt Johnson, Budget Supervisor
Sally Brown, Training Director
New York Area Office
Keith Nash, Administrative Director
Boston Branch
Heidi Meyer, Branch and Sales Manager
Bobby Roos, Assistant Branch and Service Manager
Joe Gonzalez, Salesperson
Juana Martinez, Serviceperson

c. What contribution would a budget supervisor make in a project team?

Remnants, Inc., with headquarters in St. Louis, manufactures designer clothing. The company markets and services its products by region, with each functioning as a profit center. Each region has a manager, an accounting department, a human resources department, and several area offices to market and service the products. Each area office has sales, service, and administrative departments whose managers report to an area manager.

The New York area office departed from the standard organizational structure by establishing a branch office to market and service the firm’s products in Boston. A branch manager who reports directly to the New York area manager heads the local office.

The Boston branch manager is encouraging the New York area manager to consider a new information system to handle the local branch’s growing information needs. The New York area manager and the eastern region manager want to establish a project team with employees from the region, area, and branch office. The team will assess the information needs at the Boston branch office and develop system recommendations. The following employees have been appointed to the project team, with Keith Nash as chairperson:

Eastern Region Office
Kurt Johnson, Budget Supervisor
Sally Brown, Training Director
New York Area Office
Keith Nash, Administrative Director
Boston Branch
Heidi Meyer, Branch and Sales Manager
Bobby Roos, Assistant Branch and Service Manager
Joe Gonzalez, Salesperson
Juana Martinez, Serviceperson

b. Given the team’s composition, what sources of conflict can you see arising among its members? Do you think the group will succeed in its objective to develop an IS for the Boston branch office? Why, or why not?

Remnants, Inc., with headquarters in St. Louis, manufactures designer clothing. The company markets and services its products by region, with each functioning as a profit center. Each region has a manager, an accounting department, a human resources department, and several area offices to market and service the products. Each area office has sales, service, and administrative departments whose managers report to an area manager.

The New York area office departed from the standard organizational structure by establishing a branch office to market and service the firm’s products in Boston. A branch manager who reports directly to the New York area manager heads the local office.

The Boston branch manager is encouraging the New York area manager to consider a new information system to handle the local branch’s growing information needs. The New York area manager and the eastern region manager want to establish a project team with employees from the region, area, and branch office. The team will assess the information needs at the Boston branch office and develop system recommendations. The following employees have been appointed to the project team, with Keith Nash as chairperson:

Eastern Region Office
Kurt Johnson, Budget Supervisor
Sally Brown, Training Director
New York Area Office
Keith Nash, Administrative Director
Boston Branch
Heidi Meyer, Branch and Sales Manager
Bobby Roos, Assistant Branch and Service Manager
Joe Gonzalez, Salesperson
Juana Martinez, Serviceperson

a. Project team members contribute their skills to help accomplish a given objective. Characteristics of group members can influence the functioning and effectiveness of a project team. Identify some of these characteristics.

Don Richardson, JEM Corporation’s vice president of marketing, is part of a management team that for several months has been discussing plans to develop a new line of business. Rumors about the major organizational changes that may be required to implement the strategic plan have been circulating for months. Several employees who are anxious about the expected changes confronted Don. The sales manager said, “It is imperative that we speak to you right away. The employees are very apprehensive about the proposed changes, and their job performance has slacked off.” The accounting manager added, “That’s right. My staff are asking me all sorts of questions about this new line of business, and I don’t have any answers for them. They’re not buying the ‘We will make an official announcement soon’ line any longer. I suspect that some of them are already looking for jobs in case the department changes phase out their positions.” Implementing organizational change is one of the most demanding assignments an executive faces. It has been suggested that every change requires three steps: unfreezing the current situation, implementing the change, and refreezing the effected change. This view, however, lacks the specific details needed by an operating manager who must initiate the change.

b. Discuss ways JEM Corporation can alleviate employee resistance to change.

Don Richardson, JEM Corporation’s vice president of marketing, is part of a management team that for several months has been discussing plans to develop a new line of business. Rumors about the major organizational changes that may be required to implement the strategic plan have been circulating for months.

Several employees who are anxious about the expected changes confronted Don. The sales manager said, “It is imperative that we speak to you right away. The employees are very apprehensive about the proposed changes, and their job performance has slacked off.” The accounting manager added, “That’s right. My staff are asking me all sorts of questions about this new line of business, and I don’t have any answers for them. They’re not buying the ‘We will make an official announcement soon’ line any longer. I suspect that some of them are already looking for jobs in case the department changes phase out their positions.”

Implementing organizational change is one of the most demanding assignments an executive faces. It has been suggested that every change requires three steps: unfreezing the current situation, implementing the change, and refreezing the effected change. This view, however, lacks the specific details needed by an operating manager who must initiate the change.

a. Explain why employees resist organizational change.

Businesses often modify or replace their financial information system to keep pace with their growth and take advantage of improved IT. This requires a substantial time and resource commitment. When an organization changes its AIS, a systems analysis takes place.

c. Systems analysis is often performed by a project team composed of a systems analyst, a management accountant, and other knowledgeable and helpful people. What is the management accountant’s role in systems analysis?

Businesses often modify or replace their financial information system to keep pace with their growth and take advantage of improved IT. This requires a substantial time and resource commitment. When an organization changes its AIS, a systems analysis takes place.

b. Explain the activities commonly performed during systems analysis.

Businesses often modify or replace their financial information system to keep pace with their growth and take advantage of improved IT. This requires a substantial time and resource commitment. When an organization changes its AIS, a systems analysis takes place.

a. Explain the purpose and reasons for surveying an organization’s existing system.

The approach to long-range AIS planning described in this chapter is important for large organizations with extensive investments in computer facilities. Should small organizations with far fewer information systems employees attempt to implement planning programs? Why, or why not? Be prepared to defend your position to the class

Audio Visual Corporation (AVC) manufactures and sells visual display equipment. Headquartered in Boston, it has seven sales offices with nearby warehouses that carry its inventory of new equipment and replacement parts. AVC has a departmentalized manufacturing plant with assembly, maintenance, engineering, scheduling, and cost accounting departments as well as several component parts departments. When management decided to upgrade its AIS, they installed a mainframe at headquarters and local area networks at each sales office. The IS manager and four systems analysts were hired shortly before they integrated the new computer and the existing AIS. The other IS employees have been with the company for years. During its early years, AVC had a centralized decision-making organization. Top management formulated all plans and directed all operations. As the company expanded, decision making was decentralized, although data processing was highly centralized. Departments coordinated their plans with the corporate office but had the freedom to develop their own sales programs. However, information problems developed, and the IS department was asked to improve the company’s information processing system once the new equipment was installed. Before acquiring the new computer, the systems analysts studied the existing AIS, identified its weaknesses, and designed applications to solve them. In the 18 months since the new equipment was acquired, the following applications were redesigned or developed: payroll, production scheduling, financial statement preparation, customer billing, raw materials usage, and finished goods inventory. The departments affected by the changes were rarely consulted until the system was operational. Recently the president stated, “The systems people are doing a good job, and I have complete confidence in their work. I talk to them frequently, and they have encountered no difficulties in doing their work. We paid a lot of money for the new equipment, and the systems people certainly cost enough, but the new equipment and new IS staff should solve all our problems.” Two additional conversations regarding the new AIS took place.

BILL TAYLOR, IS MANAGER, AND JERRY ADAMS, PLANT MANAGER

Jerry: Bill, you’re trying to run my plant for me. I’m the manager, and you keep interfering. I wish you would mind your own business. Bill: You’ve got a job to do, and so do I. As we analyzed the information needed for production scheduling and by top management, we saw where we could improve the workflow. Now that the system is operational, you can’t reroute work and change procedures, because that would destroy the value of the information we’re processing. And while I’m on that subject, we can’t trust the information we’re getting from production. The documents we receive from production contain a lot of errors. Jerry: I’m responsible for the efficient operation of production. I’m the best judge of production efficiency. The system you installed reduced my workforce and increased the workload of the remaining employees, but it hasn’t improved anything. In fact, it might explain the high error rate in the documents. Bill: This new computer cost a lot of money, and I’m trying to make sure the company gets its money’s worth.

JERRY ADAMS, PLANT MANAGER AND TERRY WILLIAMS, HUMAN RESOURCES MANAGER

Jerry: My best production assistant, the one I’m grooming to be a supervisor, told me he was thinking of quitting. When I asked why, he said he didn’t enjoy the work anymore. He’s not the only one who is unhappy. The supervisors and department heads no longer have a voice in establishing production schedules. This new computer system took away the contribution we made to company planning and direction. we’re going back to when top management made all the decisions. I have more production problems now than I ever had. It boils down to my management team’s lack of interest. I know the problem is in my area, but I thought you could help me. Terry: I have no recommendations, but I’ve had similar complaints from purchasing and shipping. We should explore your concerns during tomorrow’s plant management meeting.

ANSWER THE FOLLOWING QUESTIONS:

1. Identify the problems the new computer system created, and discuss what caused them.

Audio Visual Corporation (AVC) manufactures and sells visual display equipment. Headquartered in Boston, it has seven sales offices with nearby warehouses that carry its inventory of new equipment and replacement parts. AVC has a departmentalized manufacturing plant with assembly, maintenance, engineering, scheduling, and cost accounting departments as well as several component parts departments.

When management decided to upgrade its AIS, they installed a mainframe at headquarters and local area networks at each sales office. The IS manager and four systems analysts were hired shortly before they integrated the new computer and the existing AIS. The other IS employees have been with the company for years.

During its early years, AVC had a centralized decision-making organization. Top management formulated all plans and directed all operations. As the company expanded, decision making was decentralized, although data processing was highly centralized. Departments coordinated their plans with the corporate office but had the freedom to develop their own sales programs. However, information problems developed, and the IS department was asked to improve the company’s information processing system once the new equipment was installed.

Before acquiring the new computer, the systems analysts studied the existing AIS, identified its weaknesses, and designed applications to solve them. In the 18 months since the new equipment was acquired, the following applications were redesigned or developed: payroll, production scheduling, financial statement preparation, customer billing, raw materials usage, and finished goods inventory. The departments affected by the changes were rarely consulted until the system was operational.

Recently the president stated, “The systems people are doing a good job, and I have complete confidence in their work. I talk to them frequently, and they have encountered no difficulties in doing their work. We paid a lot of money for the new equipment, and the systems people certainly cost enough, but the new equipment and new IS staff should solve all our problems.”

Two additional conversations regarding the new AIS took place.

BILL TAYLOR, IS MANAGER, AND JERRY ADAMS, PLANT MANAGER

Jerry: Bill, you’re trying to run my plant for me. I’m the manager, and you keep interfering. I wish you would mind your own business.

Bill: You’ve got a job to do, and so do I. As we analyzed the information needed for production scheduling and by top management, we saw where we could improve the workflow. Now that the system is operational, you can’t reroute work and change procedures, because that would destroy the value of the information we’re processing. And while I’m on that subject, we can’t trust the information we’re getting from production. The documents we receive from production contain a lot of errors.

Jerry: I’m responsible for the efficient operation of production. I’m the best judge of production efficiency. The system you installed reduced my workforce and increased the workload of the remaining employees, but it hasn’t improved anything. In fact, it might explain the high error rate in the documents. Bill: This new computer cost a lot of money, and I’m trying to make sure the company gets its money’s worth.

JERRY ADAMS, PLANT MANAGER AND TERRY WILLIAMS, HUMAN RESOURCES MANAGER

Jerry: My best production assistant, the one I’m grooming to be a supervisor, told me he was thinking of quitting. When I asked why, he said he didn’t enjoy the work anymore. He’s not the only one who is unhappy. The supervisors and department heads no longer have a voice in establishing production schedules. This new computer system took away the contribution we made to company planning and direction. we’re going back to when top management made all the decisions. I have more production problems now than I ever had. It boils down to my management team’s lack of interest. I know the problem is in my area, but I thought you could help me.

Terry: I have no recommendations, but I’ve had similar complaints from purchasing and shipping. We should explore your concerns during tomorrow’s plant management meeting.

ANSWER THE FOLLOWING QUESTIONS:

1. Identify the problems the new computer system created, and discuss what caused them.

Solve systems of equations using substitution.

$$x+10=-8y$$

$$-8y+x=6$$

Solve systems of equations using substitution.

$$x+7=8y$$

$$8y+x=9$$