A publicly traded company needs to replace its accounting information system (AIS) within the next 18 months. The company has funding and resources to handle the replacement, so cost is not a concern. The company has several choices:
a. Purchase an off-the shelf accounting system from Oracle (PeopleSoft Enterprise Financial Management). Oracle will assist with the installation, configuration, and testing of the solution. Once the system is operational, the company's information systems group will maintain it.
b. Modify the existing AIS application (which is an in-house system developed and maintained by the company's information system group). It will have the same functions and features as the Oracle solution. The information system group will rely on consultants to assist in the development, configuration, and testing of the system. Once the system is operational, the company's information systems group will maintain it.
c. Hire an outside company (Oracle) to handle the installation, configuration, and maintenance of the AIS application (PeopleSoft Enterprise Financial Management). The solution will be outsourced completely. Users will be able to access the system which will be housed at a secured Oracle location. Little to no work will be required by the company's information systems group.
You have been asked by the company's CEO to make a recommendation as to which approach to take. In considering your recommendation, cost is not a concern. For each option, it is anticipated that it will take no more than 15 months to complete the work.
1. Analyze the need for changing to a new system and the potential benefits and risks associated with this change.
2. Identify three (3) advantages and three (3) disadvantages for each of the following choices:
a) Purchase the AIS from Oracle and have it maintained by the company's information systems group;
b) Modify the company's current AIS application and have it maintained by the company's information systems group; and
c) Outsource the AIS to Oracle and have Oracle maintain the system.