Assignment Accounting Systems

Due: Wednesday 24 April 2013 in the PBS undergraduate assessment office

Value: 50% of the overall unit mark Groups: You may submit work individually or in groups of up to four. You do not have to use the same groups as for the first assignment. Each group should submit only one copy of the work required. The assignment mark will be given to all group members unless the group members request it to be split differently. Groups of more than 1 MUST submit additional information on how the group worked together. Details of this are given below (page 75). Note: If your group plans to work over the Easter period you should arrange details of the work and communication before Easter. Required: The assignment consists of a report to senior management based on ONE of 4 case studies below. In summary these are: Case Study 1: Lascelles Fine Foods Case Study 2: Andy's Bonsai Company (ABC) case study Case Study 3: Security Services Limited (SSL) Case Study 4: Why do public-sector projects fail? report to an NHS trust management Note: Although the report is to senior management it should also follow the conventions of academic work in the sense that: It should be fully referenced and citations used wherever external sources are used, whether direct quotes or put in your own words. It should deal with theory where appropriate (as well as with practice). Note: Some students include either an abstract or 'executive summary'. Neither of these is necessary for this work. However, be sure to follow the standard practice of an introduction and conclusion. Also, use headings and sub-headings to make the structure of the work clear and tables and/or graphs to illustrate points. Word count: 2,500 words excluding cover page, tables, graphs, bibliography & appendices. Criteria: LO 3 LO 4 LO 5 The assignment assesses the following unit learning outcomes,

Explain the activities involved in system implementation & management. Evaluate information systems in a financial & management context. Appreciate security and governance issues as they relate to information systems. you must also Use at least one academic quality article and/or professional journal article. You should NOT use articles aimed primarily at marketing a product (except possibly for tables, graphs, etc.) Use appropriate referencing and citations in Harvard APA format.

Marking will use a modified version of the UoP general grade criteria for level 2.
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University-wide grading criteria for UG level 5

70+ As below plus: Very good work which is clearly written, well argued and covers the subject matter in a thorough, thoughtful and competent manner. Contains some originality of approach, insight or synthesis. Good evidence of research and good use of source material. Good use & presentation of references Very good presentation, organisation, grammar, spelling, punctuation, diagrams and tables 60-69 As below plus: A very good, well presented piece of work covering much of the subject matter and which is clearly and lucidly written. Good attempt to consider and evaluate the material presented Evidence of research in the topic area and satisfactory use of sources and references Good organisation, structure, use & flow of language, grammar, spelling, format, diagrams, tables etc 50-59 As below plus: Work that demonstrates understanding of the topic area with some attempt to discuss material Evidence of research in the topic area extending beyond the Workbook Satisfactory presentation &/or use of references/bibliography according to convention A satisfactory attempt to follow directions regarding organisation, structure, use & flow of language, grammar, spelling, format, diagrams, tables etc The majority of students would normally be expected to fall within this range 40-49 Adequate work that attempts to address the topic & demonstrates some understanding of the basic aspects of the subject matter Attempts to use &/or present references/bibliography according to convention A basic attempt to follow directions regarding organisation, structure, use & flow of language, grammar, spelling, format, diagrams, tables etc 30-39 FAIL

Work in this range attempts to address the question/problem but is substantially incomplete and deficient. Serious problems with a number of aspects of language use are often found in work in this range and the work may be severely under/over-length and/or fails to grasp the nature of the topic matter. Content, analysis, expression, structure and use of sources will be very weak or missing <29 FAIL No serious attempt to address the question or problem, and/or manifests a serious misunderstanding of the requirements of the assignment. Acutely deficient in all aspects.

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Working in groups

Working in groups
Groups of more than 1 MUST submit additional information on how the group worked together. Individuals not working in a group may also complete this information if they wish to practice the skills involved. This information has been developed along the lines of graduate and employability skills for the University of Portsmouth. Management of tasks and of others Group members should share sufficient contact information to enable them to communicate with each other in the timescales required. They should also ensure that every group member has a copy of, or access to, material produced in relation to the assignment. This can be done by exchanging copies of material at group meetings (see below) or by emailing copies of material to other group members. Groups should arrange to meet on a regular basis. At each meeting, one member of the group should be appointed to record the following group work (a sample form is provided): 1 2 3 4 Date, time and location of meeting. Hemis numbers of those attending and apologies for non-attendance. Brief details of the work done and / or topics discussed. Where appropriate, a review of the work done to date, or since the last meeting, including: Whether or not the work is progressing according to schedule (or plan). How the work relates to other work done. What further work needs to be done, and by whom. Any feedback and / or constructive criticism given. Where appropriate, details of any plans made or decisions taken, including: Plans for future work, especially work to be done before the next meeting. How that work is to be split amongst group members. How that work is to be reviewed and / or evaluated by other members of the group. Any assistance and / or support needed or offered.

A different group member should record the above information at different meetings so that all group members have the opportunity to keep these records for at least one meeting. Meetings may take place formally to cover the requirements above and may be in person or via electronic means such as email, text, chat, etc. Often meetings will be less formal and typically will be used to work on the assignment together. The information listed above should still be recorded. In this case, item 5 should also cover work that was carried out while the group worked together. (It may also be the case that item 5 relating to work to be carried out before the next meeting will not apply. This occurs when group members do not carry out work between meetings but do the work together.) Requirement: You must submit a summary of not more than one page covering: Who was in the group? How did the group maintain contact and arrange meetings? How did the group share out work? What was done by whom? What was done jointly? How did the group review, evaluate and act on the work done? How did the group provide feedback, constructive criticism, assistance and support?

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Record of group work

Date, time, location: Hemis numbers of those attending: Brief details of the work done and / or topics discussed: (for example, the parts of the workbook you worked on during a lab session)

Review of the work done to date, or since the last meeting:

Details of any plans made or decisions taken:

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Case Study 1: Lascelles Fine Foods

Case Study 1: Lascelles Fine Foods

Lascelles Fine Foods (LFFL) is a fictitious example of a long-established company operating in the food industry. The company has its administrative headquarters in Ashville and manufactures on an adjacent site. All customer deliveries are from the Ashville-based warehouse. In addition, LFFL purchases finished and semi-finished food products from other manufacturers which it then finishes before resale. The company has enjoyed steady growth in recent years and is now seeking to capitalise on the current fashion for quality and healthy food products. LFFL's turnover is 16 million with net profitability of 6.3% of turnover. It is hoping to gain a competitive edge by providing quality food products which meet all present and anticipated quality standards and to this end will be applying for B55750 accreditation within the next six months. It is hoping to increase turnover by 10% per year after inflation over the next five years and increase net profitability to 9% of turnover over the same period. LFFL's main operations are divided into four main areas: sales and marketing; warehousing and distribution; manufacturing; finance.

All information recording and internal communication is paper based and relies on a range of pre-printed documents which are then used as appropriate.

The sales department

LFFL has a diverse customer base, ranging from small health food shops to major supermarket chains. Orders can be one of two types: standard orders placed in advance for delivery in a specific week or priority orders placed for immediate delivery. Orders are placed either directly through sales office 'account handlers' or through field sales persons (each customer has one sales person). Each customer is allocated an account handler who acts as the main liaison point within LFFL. Besides receiving orders, the account handler is responsible for cash collection, ensuring satisfactory progress of the order and handling day-today queries. Customers are also placed into sales categories based on geographic location, volume of business and type of customer (e.g. specialist store vs supermarket chain). The sales director is apt to change his mind about which category a customer is in and which category means what.

Order processing
Once an order is taken, it is recorded on a pre-printed order form. One copy is retained by the sales department and two copies are sent to warehousing and distribution. Warehousing and distribution sort all order forms into date order. When an order is due to be delivered, products are picked from the warehouse and loaded into the appropriate vehicle. When an order is delivered, it is accompanied by a consignment note and an invoice. The customer is required to check the delivery against the invoice and note any errors on the consignment note. The delivery driver returns with a signed copy of the consignment note and if any errors are noted a corrected invoice is sent to the customer.

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Warehousing and distribution

LFFL stores finished products, bought-in products and raw materials in the warehouse. The warehouse is divided into three areas: the general zone, comprising a high-rise bulk storage area with a floor-level picking area; the cool zone, comprising low-level storage at 2 to 4C; the frozen zone, with temperatures held to -18C. internal warehouse movements from high-rise locations to ground-level areas and vice versa; receiving products and raw materials from suppliers and returned products from customers; issuing raw materials to manufacturing in response to submitted requisition forms; receiving finished products from manufacturing and any unused raw materials.

In addition to their role in the order processing cycle, other activities are also performed:

Information about quantities of finished goods and raw materials in stock is recorded in a card file, which has to be searched manually for the appropriate entry when updating is required.

Manufacturing
Manufacturing ranges in complexity from simple repackaging of bulk-purchased materials to complex mixing and cooking activities. Recipes are recorded on 7" by 5" cards and include details of the required ingredients as well as the processing which is to take place.

Finance
LFFL's finance department is divided into three areas: accounts payable - when LFFL makes purchases, suppliers will invoice them; LFFL uses a manual purchase ledger to manage these accounts; financial accounting - management of all monies flowing in and out of the company together with compliance with legal accounting requirements; management accounting - internal accounting information necessary to manage the business more effectively.

The accounts receivable area is handled by the account handlers who use a manual sales ledger and make a weekly return to the finance department on the state of their customers' accounts.

Specific business issues

There are a number of specific issues which relate to the activities of each department. These are detailed below. Sales The status of an order cannot easily be determined without pestering the warehouse. Many customer complaints occur due to delivery of wrong products, orders delivered too late, incomplete orders and faulty products. Warehousing does not deliver the most important orders first - small orders are often given priority over larger orders from major retailers.
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Case Study 1: Lascelles Fine Foods

Orders often cannot be delivered on time because manufacturing produces too late and in insufficient quantity. Warehousing and distribution Many items have a limited shelf life - warehousing often fails to rotate the stock properly. Actual stock levels are rarely in step with the recorded stock levels - this may be due to pilfering, poor update of stock records or both. The sales department often accepts priority orders for products which are not in stock. Manufacturing bypasses the normal requisition procedures and simply takes raw materials as required - it also often fails to return unused materials to warehousing. Finance The sales returns from the account handlers are often incomplete. There are several bad debts which cannot be recovered - this is attributed to poor credit control procedures. Management accounting is very difficult due to a general lack of accurate information from other departments. Financial accounts are often published late due to lack of accurate information. Manufacturing Warehousing is slow to respond to requests for raw materials, thus necessitating correct procedures being bypassed (especially when the sales department is applying pressure). Lack of accurate forecasting makes it difficult for production to be planned ahead and adequate supplies of raw materials to be secured. General There is a rapid turnover of staff, especially in the sales area where the pressure from customers can be intense. In addition, field sales personnel are apt to make promises which cannot be kept and new sales personnel are often thrown in at the deep end with little formal training for their jobs. There is a high level of sickness in the warehousing and distribution area, due mainly to inadequate provision of lifting equipment. There is a perceived lack of management and technical support which has resulted in a general lowering of morale. Future plans The managing director, Clive Moor, has indicated that he would like to replace the existing paper-based systems with 'computers of some kind'. With such a move, he is hoping to improve on the communication of information at all levels in the organisation. However, Mr Moor knows little about computer hardware or applications software except that it seems to cost rather a lot. In order to proceed with the computerisation programme, Mr Moor has asked the following senior managers to produce a plan: Paula Barlow - Finance director Terry Watson - Sales and marketing director Peter Jackson - Manufacturing operations director Frances Clarke - Warehousing and distribution director
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However, these directors have varying degrees of enthusiasm for the project, together with a desire to minimise the risk of damage or exposure within their own departments. One of the key decisions which must be made will be how LFFL acquires the necessary applications software. One option will be to hire relevant IT staff and build bespoke applications, while another will be to purchase off-the-shelf packages. Yet another option will be for end-users to develop their own applications. This last option may prove awkward, since there is very little IT expertise among the end-users.

QUESTIONS
1. 2. Which method(s) of business systems software acquisition would you recommend to LFFL? Explain and justify your answer. Assuming that LFFL decides to go down the route of purchasing off-the-shelf packages, what steps do you recommend it takes to ensure that the applications which are selected meet their requirements?

Produce a feasibility analysis of the alternative methods of acquiring application software as they relate to LFFL. You should pay particular attention to the operational, organisational, economic and technical feasibility of each one. You should conclude with a recommendation on how LFFL should best proceed to the next phase of the information systems acquisition process. 3. 4. 5. Identify risks, including their probabilities and impacts. Identify possible solutions to these risks. Implement the solutions, targeting the highest-impact, most-likely risks.

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Case Study 2: Andy's Bonsai Company (ABC) case study

Case Study 2: Andy's Bonsai Company (ABC) case study

Background The following scenario is typical of many companies in the retail/wholesale business. A number of information flows exist both internally within the organisation and also with people outside. This case study is used for exercises on information flow diagrams (IFDs), dataflow diagrams (DFDs) and entity relationship diagrams (ERDs). ABC case study information Andy's Bonsai Company (ABC) specialises in selling bonsai kits by mail order. The kits are made up of a number of elements, including soil, plant pots and seeds. Other products such as mini garden tools are also sold. Customers place orders by telephone or by mailing an order slip which is printed as part of an ABC advert. Customers pay by cheque, credit card or debit card. When an order is received by ABC, it is directed to a sales clerk. Each sales clerk has responsibility for a particular geographic region. The sales clerk will enter the details of the order onto a pre-printed three-part order form. One part is retained by the sales clerk, one copy together with the payment is sent to the accounts department and the other is sent to the warehouse (on confirmation of the customer's creditworthiness). CUSTOMER ORDER FORM CUSTOMER NUMBER C234792 CUSTOMER ADDRESS 26 Vicarage Drive Thorndyke West Yorkshire WF247PL CODE 1983 0184 2984 3775 PAYMENT TYPE DESCRIPTION MINI-OAK MINI-MAPLE MINI GARDEN TOOLS (STAINLESS) MINI WATERING CAN (COPPER) Cheque PRICE QTY VALUE 19.95 24.50 29.95 17.50 2 2 1 1 39.90 49.00 29.95 17.50 136.35 ORDER VALUE TELEPHONE NUMBER 014827374 ORDER NUMBER 4214 DATE ORDERED 29 March 1999

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WAREHOUSE CARD INDEX LOCATION PRODUCT CODE PRODUCT DESCRIPTION START QTY 37 28 25 10 60 J82 4151 MINI-ASH DATE 02/06/99 04/06/99 09/06/99 17/06/99 CARD No. 19

TRANSACTION QTY -5 -3 -15 +50

SIGNATURE RON JEFF LUCY ERIC

MANUFACTURING ORDER FORM MANUFACTURING ORDER NUMBER PRODUCT CODE PRODUCT DESCRIPTION QUANTITY ORDERED DATE ORDERED DATE REQUIRED DATE DELIVERED SIGNATURE 7210 4151 MINI-ASH 50 03/06/99 13/06/99 17/06/99 BERYL

PURCHASE ORDER FORM SUPPLIER NUMBER SUPPLIER ADDRESS 14 Wyke Trading Estate Heckwhistle CODE 23 69 84 75 S165 PURCHASE ORDER NUMBER DATE ORDERED 29 March 1999 West Yorkshire WF95JJ DESCRIPTION OAK CHIPPINGS 2' POTS SILVER SAND MINI WATERING CAN (STAINLESS) TELEPHONE NUMBER 016377346 PRICE 30.00 0.03 1.77 4.56 ORDER VALUE 214

QTY VALUE 25 750.00 1000 300.00 10 17.70 20 91.20 1158.90

On receipt of the customer orders and payment details, the accounts department ensures that the customer's payment is valid. If the payment is satisfactory, the department will inform the sales department and the order may proceed. An unsatisfactory payment situation is also communicated to the sales department, which then informs the customer of the problem. The warehouse keeps a manual card-index system of stock and raw materials held together with copies of the customer orders. When an order is dispatched to the customer, the relevant order form is marked as having been dispatched. The warehouse also needs to keep track of the
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Case Study 2: Andy's Bonsai Company (ABC) case study

amount of product in stock and, when stock levels are low, it sends a manufacturing order to the manufacturing department. The manufacturing department is responsible for ordering materials from various suppliers and then packaging them into products for sale to the customer. A three-part purchase order is made out: one part is sent to the supplier, one part is retained by the manufacturing department and the third part is sent to the accounts department. The accounts department holds copies of purchase orders for future matching with delivery notes and invoices. When the supplier delivers the ordered items, together with a delivery note, a check is made to ensure that the delivery matches the order. The supplier will send an invoice to the accounts department on confirmation that the delivery is correct so that payment can be made.

QUESTIONS
1. Produce an information flow diagram for the company. Does the diagram tell you anything about ABC's operations which may need some attention (such as missing or superfluous information flows)? Using the case study and the information flow diagram that you drew in answer to Question 1, produce a simple Level 1 dataflow diagram for the company. How would this diagram be used? Construct an entity relationship diagram for the company. Make sure that you do a crossreference matrix before attempting to draw the diagram. When you have drawn your firstcut diagram, check for many-to-many relationships and eliminate any that you find by using the appropriate technique.

2.

3.

Database design exercise using the ABC case study. Assume the following entities for the ABC database: 4. customer details; salesperson details; sales order header details; sales order line details; item details. For each table in the database, define details of: table names; primary and foreign key fields for each table; name of each field; data type of each field; size of each field; any validation rules which may apply to each field (e.g. a limit on maximum price or quantity etc.). How would you ensure referential integrity so, for example, when records in one table are deleted, this does not adversely affect other tables? Briefly consider what measures might be put in place in the new system to ensure security over ordering by the manufacturing department and associated payments to suppliers.
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You should summarise these database definition using a table or tables in a word processor. 5. 6.

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Case Study 3: Security Services Limited (SSL)

INTRODUCTION SSL have grown over the last 30 years to be one of the main providers of private security services in the United Kingdom. Turnover for the financial year ended April 2012 was up 17% to 98.4 million from the previous year. Profitability has remained steady at around 9.2% of turnover for three successive financial years. SSL provides a wide range of services to companies, individuals and the public sector. The company has grown owing to a combination of factors including organic growth from the original core business, start-ups in associated areas of security and finally takeover of and merger with companies providing related services. The range of services offered include: armoured transport for conveying substantial amounts of cash and cheques between businesses and banks, cash from banks to businesses for wages and conveyance of highvalue items between various parties; provision of security services for businesses - these will include security guards (day and/or night-time cover), analysis and installation of security devices and regular security sweeps of business premises; provision of domestic security services - this includes the analysis of domestic security needs and the installation of appropriate security devices. The most recent addition to the range of services has been the transfer of prisoners between police cells, the courts and prison. This is a contracted-out service sanctioned by the Home Office and carried out to Home Office standards.

COMPANY ORGANISATION Because of the way in which SSL has evolved, the present company structure does not necessarily represent the most effective or efficient way of doing business. SSL has its corporate headquarters in Milton Keynes, Buckinghamshire. It also has four discrete divisions each of which represents a key area of the business. The divisions are geographically separate from the corporate headquarters and are organised as follows: The Private Transport Division (PTD) - based in Bedford, they also have offices in the county town of every county in England and Wales. The Business Security Division (BSD) - based in Leicester, they too have offices in the county town of every county in England and Wales. The Domestic Security Division (DSD) - based in Newcastle-upon-Tyne, they have similar provision of offices to the above two divisions. The Home Office Services Division (HOSD) - this is based in Central London; the precise organisation of this division will be covered later.

None of the divisions shares its premises with any of the other divisions. This is in part due to the way in which the business has evolved (including takeovers and mergers). However, it is also due the very separate operation of each division. DIVISIONAL RESPONSIBILITIES The autonomous nature of the PTD, BSD and DSD divisions means that in effect it carries out all the activities associated with an individual business. The ways in which each division carries out its business activities varies from division to division.

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Case Study 3: Security Services Limited (SSL)

PRIVATE TRANSPORT DIVISION (PTD) Sales section - these are charged for in two ways: (1) contract sales - these are negotiated for various periods and typically relate to regular transport of specific items between two or more locations; (2) one-off sales - these will be for single transportation tasks arranged by customers on an ad hoc basis. The sales area is headed by a senior sales manager based at the divisional headquarters. Each area office also has a sales coordinator, together with a number of sales executives. Marketing section - this is performed by a small marketing department of two persons based at the divisional headquarters. Annual marketing spend is small - this division carries out core, well-established business operations, with limited scope for growth. Transport section - this is the key area for this division; the business operations depend on scheduling the appropriate vehicle for the appropriate route and with the right security team. In addition, activities such as vehicle maintenance and staff duty rostering have to be managed. Information systems section - this is a subpart of the transport section; the division operates a network of three personal computers (PCs) running the following applications: Financial ledgers (Sage Sovereign) Route planning (Autoroute) Duty rostering (end-user developed spreadsheet)

Payroll processing is contracted out to Midwest Bank Business Services. Job costing for new and renewed contracts is performed manually, as is one-off business. This is an area where a new information system (IS) may be useful. The IS function in this division is managed by an ex-policeman who gained some IT experience while in the force but who is not an IT specialist. However, he has made judicious use of consultant support since his appointment. BUSINESS SECURITY DIVISION (BSD) This part of the business has experienced steady growth over the past 5 years. Recent developments have included a response to increased levels of computer theft in small to medium hi-tech companies. An objective of this division is to continue with this organic growth, while at the same time increase its profile in the hi-tech marketplace. The management structure is well established and comprises the following: Sales - managed by a team of sales consultants based at each office. At office level, they are managed by a senior sales consultant. The senior sales consultants report to the Sales Director in Leicester. Sales data is recorded on a PC-based sales ledger and monthly sales figures are sent to Milton Keynes on floppy disk. This department also runs a separate stand-alone PC-based sales tracking and marketing system. A subsection of this department is an installations section that is responsible for supplying and fitting security equipment as ordered by the customers. Marketing - there is no specific section dealing with this; marketing is perceived as being little more than advertising and leaflet drops in each geographic area and it is left to the sales force to accomplish this. Finance section - this division has a separate finance function that runs a range of stand-alone PC-based financial ledgers. Purchase and general ledger information is communicated to head office on hard copy - this is because the ledgers are incompatible with the systems used at head office. Payroll processing is also carried out in-house using the Pegasus payroll package on a stand-alone PC.

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Purchasing section - this is a subset of the finance section that deals with equipment procurement for the installations section. Manual purchase data is passed to the finance section for processing. The IS function is now managed by a 24-year-old graduate in Business Computing who has just replaced a recently retired senior accountant. DOMESTIC SECURITY DIVISION (DSD) This is the most recently established division, having being created by the acquisition from the receivers of a nationwide chain of domestic security specialists within the last 6 months. They have inherited a sound infrastructure of local offices and a reasonable customer base and have been concentrating on turning round a business operation that failed principally because of inadequate financial controls. The key issues for this division are to expand the customer base by (1) increasing the number of customers, (2) marketing new services (e.g. security audits) and (3) emphasising the need for ongoing maintenance of existing security systems. This division is devolved down to area office level, with each office responsible for the local management of the sales activity, materials procurement and installation. Costs and revenues are, therefore, managed at the local level with little current coordination by the divisional head office in Newcastle-upon-Tyne. Currently, the divisional head office is responsible only for collecting financial data from each of the branches (provided by them manually and in a variety of different formats), which it then collates and then passes to SSL headquarters, again in manual paper form. SSL realises that it has to do something about the whole set-up in order to establish a strategic and operational direction for this division. There is no IS investment and no specialist IS staff in this division. HOME OFFICE SERVICES DIVISION (HOSD) This division was set up three years ago as a result of a successful tender to manage the transportation of prisoners between police cells, the courts and the prison service. In addition to the divisional headquarters in Central London, there are six regional offices throughout England and Wales. From these offices, the transport of prisoners and deployment of staff is coordinated. In addition to staff in the transportation vehicles, a number of staff are stationed permanently at police stations in each county. The divisional headquarters is responsible for the following: The coordination of the regional offices. Ensuring that the contractual arrangements are adhered to. Accurately costing both the standard service provision plus any additional services offered. Processing the accounts payable and receivable, and providing financial and management accounting information to SSL's headquarters (manual hard copy only).

This division is the most well organised in computing terms: the divisional headquarters runs an IBM AS/400 minicomputer on which it has a set of financial ledgers, budgeting and costing software that has been purchased from KCB Ltd (a specialist in AS/400 financial systems); each regional office has a PC running routing and rostering software; each regional PC is linked to the AS/400 over a wide area network (WAN); the divisional headquarters also has a number of PCs running business productivity-type packages (e.g. spreadsheet), which are also linked to the AS/400 (thus allowing the download of data to the PCs for further analysis). The division's computing is managed by a 'hybrid' manager with both financial and IT expertise. There is also one analyst/programmer and one operator/programmer.

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Case Study 3: Security Services Limited (SSL)

SSL HEADQUARTERS The company has yet to rise to the challenge represented by an increasingly diverse yet related range of business operations. Similarly, an historic under-investment in IS has meant that the divisional areas can only send information in manual form only where it is re-keyed into relatively old mainframe-based financial systems. The divisional nature of SSL means that the activities at headquarters are principally general and financial management-orientated. The information services (IS) department is somewhat old-fashioned and certainly less up to date than some of the divisions. In addition to a data processing (DP) manager, there are six data entry clerks who are responsible for re-keying financial data from the divisions, three programmers, a systems analyst and two computer operator/systems programmers. The DP manager is about to retire, and SSL must consider how it wishes to manage IS both at headquarters and divisional level.

Questions
1. 2. Analyse how SSL may identify the value that it obtains from its current portfolio of IS and evaluate the techniques that may be used in assessing future IS investments. In many parts of the company, it is clear that SSL does not have a coherent IS strategy. Analyse how it may construct an IS strategy that is supportive of its business strategy and the benefits it would derive from this. Analyse the strategic potential for greater investment in IS and technology at SSL, both from divisional and company-wide perspectives. Could business process re-engineering (BPR) be a useful tool in maximising the potential of IS and IT within the company? Explain and justify your answers. Describe the current location of IS functions within SSL. Recommend the best location of IS services in the future. What are the security implications of these recommendations?

3.

4. 5.

Note: You should specifically consider outsourcing of some or all of the IS services.

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Case Study 4: Why do public-sector projects fail?

Back in the spring of 2007 a doctor application system which was supposed to match junior doctors to specialist training posts was shelved by ministers. Doctors complained that the system - the medical training application service (MT AS) - was profoundly flawed and that many juniors had been unfairly treated. The reorganisation of training and the application process meant that 30,000 doctors were chasing just 23,000 posts in a system poorly thought through. Astonishingly research suggests that one in five doctors have even considered suicide, such is the depth of the fiasco. And the story didn't end there. The MTAS site has also allegedly been the subject of two security breaches, which caused the opposition to call for the resignation of the then-health secretary, Patricia Hewitt. But in the world of public sector technology initiatives, this story was the most recent in a long line of blunders. One of the most troubled technology outsourcing cases was that of the now defunct Child Support Agency. The outsourced IT system was at the root of the agency's problems. An investigation by the National Audit Office (NAO) found that 'go live' of the system had been authorised, despite the CSA and its supplier being aware that there were 52 defects within the system. The NAO branded the project, 'one of the worst public administration scandals of modern times'. These and other examples of outsourcing have been very damaging to public sector organisations for a range of reasons. There is of course the waste of money and other resources. Public sector organisations are effectively answerable to taxpayers - wanton waste of public funds does not bode well for good relations. These public sector technology catastrophes also attract a good deal of negative publicity - this can do serious amounts of damage to the organisation's reputation and dent stakeholder and taxpayer confidence in the ability of the organisation to do a good job. Just look at the CSA - the situation deteriorated to such an extent that the entire organisation was scrapped. The fact that public sector technology and outsourcing projects go wrong so regularly means we aren't surprised by these failures anymore. Public sector projects are so tainted by their poor track record, expectations are set very low and they now have little to live up to. So why do these failures keep happening? There needs to be an element of realism when looking at major technology projects. The sheer scale of the larger projects means that inevitably there will be problems along the way. The problem with many of these initiatives is that the parameters of the project and contract provisions are tightly defined and the contracts are not managed effectively by the same team through the project lifecycle. When a problem is encountered often the first reaction of the public sector is to seek to avoid any blame. History has taught us that errors and mistakes should be expected and factored in to the way that contracts and projects are managed. A shift away from the blame culture to an environment where successful delivery is valued above all else is required in order to increase the probability of problems being detected at an early enough stage for them to be dealt with appropriately in a way that works for the supplier and the public sector. Problems often arise around the cost issue. Cost is often cited as a major driver in technology and outsourcing projects. Whilst it is undoubtedly important, public sector organisations have to be wary they are not blinded in the quest for squeezing as much value for money as possible out of the supplier. This procurement-led approach to technology and outsourcing can be problematic as it leaves very little scope for innovation in the project and makes it much more difficult to cope with problems when they arise.

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Case Study 4: Why do public-sector projects fail?

What appears to be the cheapest deal is often the worst as frequently the service will be compromised or the final cost will spiral because it was unrealistic in the first place. Of course as a spender of public funds those in the public sector feel an obligation to get the best deal but nailing the supplier to the wall financially can often backfire. End users need to realise that any mentality of 'the cheapest wins' means that the more realistic suppliers will be missing out on contracts. Problems in technology and outsourcing deals can often arise when there are unclear lines of responsibility both within the public sector and between the public sector and the supplier. Drafting a contract with clear responsibilities and then managing it appropriately deals with the responsibility between the public sector and the supplier. However, it does not deal with the constant reorganisation that takes place at central and local government level or the constant churn of ministers and officials on projects. With this sort of fundamental change, is it any wonder that there is not a great track record of successful delivery of major technology projects? Failures are often attributed to the supplier but as in any relationship it takes two to tango. A blame culture often comes to the fore when things go wrong, with the end user blaming the supplier as operations were not executed to their satisfaction and the supplier blaming the end user because they were negotiated right down on costs. Problems worsen as the two parties are more concerned with absolving themselves of wrongdoing than they are with rectifying the issues. Since differences or disputes are inevitable in relation to large-scale technology projects, mediation and adjudication - which exist as legal mechanisms for resolving disputes - should be more widely utilised. Adjudication is a particularly useful dispute-resolution process for obtaining swift results which has yet to find favour on large-scale technology projects. From all the press reports that circulate about these problematic projects, it would seem that they invariably involve the same circle of suppliers. This understandably begs the question, why on earth do public sector organisations keep selecting them? One of the major problems in the public sector today is the lack of competition amongst suppliers. The principle reason behind this is the protracted and complex tendering process that suppliers have to go through. Far from there being an alleged 'inner circle', organisations really are limited when picking a vendor for projects of this size. More choice would be likely to mean better service. But with such hurdles to overcome how can smaller, quality suppliers compete in the public sector market? And how can end users avoid the obvious choice? Public sector organisations need to take a more strategic approach to outsourcing. They need to ensure they have a dedicated team that manages the process full time, constantly reviewing existing contracts and looking for improvements and innovations. Instead of using a 'onestop shop' supplier the public sector should look to use specialist suppliers for different aspects of a project. This gives smaller companies a chance of a contract but also gives the end user access to. Unfortunately the need for an 'intelligent client' is often overlooked - with the very expertise the public sector needs to manage its IT suppliers being outsourced to those suppliers. Public organisations shouldn't be held to ransom by a private organisation. If they spread the work and therefore knowledge between a range of suppliers or keep some knowledge in-house then this won't happen. The public sector boom of technology outsourcing is definitely set to continue but public sector bodies need to learn lessons from their private peers. Successful delivery needs to be valued within the public sector more than simply not being to blame for problems. The key to successful delivery is to have continuity of personnel throughout the project lifecycle; a sensible, balanced contract managed appropriately; effective dispute resolution; and the retention of an 'intelligent client' on the public sector side.
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APALS

Accounting Packages & Systems

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QUESTIONS
1. Public-sector information systems projects have had a chequered history. Is the "national programme for IT" proving to be any different from some of the fiascos that have preceded it? The national programme for IT involves a substantial increase in outsourcing. What are the likely benefits and risks associated with this approach? What are the main reasons for project failure? What steps can be taken to reduce the risk of project failure? How could the COBIT methodology be applied in this context? What other methodologies have been developed that apply to public sector projects? How do they apply to this context?

2. 3. 4. 5. 6.

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