MA - Design, Acquisition and Development of Information Technology System (Overview & In-depth)

Question 1

What is an information technology infrastructure

Answer 1

• Is a component required to develop, test, execute, monitor, and support IT services components

Question 2

Provide the components of IT infrastucture

Answer 2

1. Hardware
2. Softwate
3. Storage
4. Network - how computers communicate with each other
5. Security - Refers to the protection of IT system and networks from theft, disruption, damages, data leaks
6. Facilities - a physical location where the IT system is kept ex. offices, network facilities

• If implementation is successful, can help with strategic and operational objectives and a competitive edge

Question 3

Provide 5 sufficient controls that can be placed to safeguard technology

Answer 3

1. Proper authority for access
2. Adequate backup process for data being loss or damaged
3. Privacy protection for employees/ customers
4. Data information must be reliable
5. Responsive to customer needs, relationship with key stakeholders

Governance structure - Management job to develop & implement information system
- Can support management controls to address weaknesses and IT infrastructure

Question 4

What is the system develop life cycle and the 5 phases?

Answer 4

SDLC - structure process that helps organizations acquire, design, develop, and implement software.
- Can be costly, Internal auditor review document

Phases
1. Initial Feasibility Study - Determine the strategic benefit of developing or acquiring a system
Ex. An Organization that has been using paper purchase orders may decide order system

2. Requirement analysis and definition - *Stakeholders and project team determine specific resources and technical requirement
   Ex. Function, capacity, information needs
3. Application design/ selection - Includes determining how information will flow through the system, documenting the process; database design
   Ex. System is tested to ensure it can be integrated with organizations other system
4. Implementation: Four types
   - Parallel conversion, direct cutover, Pilot study changeover, phase changeover
   Ex. PO system is implemented but the paper system previously used is also continued
5. Maintenance and system tools: Post-implementation evaluation is often performed to identify both what was done well and areas for improvement
   Ex. Organization complete post-implementation evaluation to consider and document success

Question 5

What analysis is used to determine if the company should insource or buy

Answer 5

• A cost/ benefit analysis is used to compare whether the company should insource or outsource the IT system needed
• Need to determine cost and future cash flow are estimated, financial tools like NPV can be used
• Tangible benefit as a substitute for intangible benefit.

Question 6

How is the internal and external auditors play a role in the SDLC

Answer 6

Internal auditors - they determine the effectiveness of each phase and ensure that objectives are met.
External auditors - ensure completeness and accuracy of F/S

Question 7

When is the cost/ benefit analysis used for which phase of the SDLC

Answer 7

Cost/benefit analysis is used for phase 2 - requirement analysis

• If an external purchase is determined, request proposal documentation, allows the potential vendor to have clear scope and expectation

Question 8

Provide the two specifications of the design phase and the main types of testing that are to be performed

Answer 8

Specification:
1. Functional - presented to the stand-alone user how the system works and involves the application
2. Design - more instruction that is more technical. The document provided to programmers

Main types of testing
1. Unit testing - each module is tested to make sure that the design is under design document
2. System testing - The system as a whole is tested to ensure the program, database, and other components work properly
3. Interface testing - Any hardware or other application that interacts with the new system is tested to make communication a function

Question 9

What are the advantages and disadvantages of the four-system implementation?

Answer 9

1. Parallel conversion
   Advan: Lowest risk of conversion error
   Disadvan: It is expensive and can be both time-consuming and inefficient
   - It can be confusing for staff as they must deal with two different control system
2. Direct cutover -
   Advan: Cost-effective with no redundancies
   Disadvan: Highest risk of conversion error because there is no backup or fallback if the error and major issue
3. Modular/ Pilot study changeover - A new system is used for a limited manner to start, such as a single department. The new system is then implemented for the rest of the organization
   Advan: Limit the exposure risk from errors and issues. Usually used for large systems affecting different operating segment
   Disadvan: With both the old and new system and their related control system in use at the same time
4. Phased changeover
   Advan: Allows staff time to become accustomed to the new system. Any errors are more quickly and easily discovered and resolved without excessive re-input
   Disadvan: Costly to maintain both systems. Maybe a resource challenge, as there may not be enough staff to maintain both systems

Question 10

Provide the 7 types of insourcing and outsourcing factors for the cost/ benefit analysis

Answer 10

1. Functionality
2. Integration
3. Cost
4. Speed
5. Risk
6. Control
7. Knowledge transfer