The company will face numerous challenges during the changeover process. The biggest among these challenges is the initial cost of implementation. Depending on the solution selected and its requirements, the company might need to replace some of the hardware in use in addition to the software. The cost of initial investment is usually a deterrent for many companies changing from older systems into new systems. This is because of poor planning in many cases (Hall, 2015). Before a new system can be implemented, it is important to understand the shortcomings of the old system and the expected benefits of the new system. In such a case, only necessary improvements would be made. This should not be a problem in this case because a preliminary study has been carried out and it has been determined that the old system has outlived its usefulness.
The benefits of the new system have already been identified. The company will provide the funding for the purchase of the new system as an investment rather than an expense. Once running, the new system will be able to start recovering its investment immediately by making valuable data and information easily available to the company. The second major problem during such changeovers occurs because of employees being introduced to a new system. Employees will already be used to working with the older system. The new system might work differently from the old system and might be a problem to many employees. This requires that training for employees be provided before the changeover actually happens. This makes it possible for the business to begin reaping the benefits of the new system immediately. A major problem of most information systems available in the market is that they are complicated to use. Most accounting information systems will combine data from various departments in a business. They will also be able to handle complex tasks. This usually means that they are complex in design and require technical knowhow to operate.
Another major problem usually encountered during the changeover process is the actual switching of the systems (Simkin, Rose, & Norman, 2015). There are a number of methods that can be used in this process. The most extreme of these is a direct changeover. This is where the existing system is shut down and the new system is brought online. This however can lead to a number of problems. In case the new system fails, the old system has already been switched off and therefore the company will suffer downtime (Howarth, Stanton, & Sinclair-Hunt, 2015). Another method is to use a parallel switch. This is where both the old system and the new system run in parallel for a while. Because both systems are running, employees can switch back to the old system if the new system faces problems. This can also allow data to be transferred from the old system to the new system before the new system becomes operational (Howarth, Stanton, & Sinclair-Hunt, 2015). The parallel changeover is sometimes difficult because it means that new hardware has to be purchased to support the new system alongside the old one. In a direct changeover, the new system can be installed easily into old hardware as they will not be in use at the same time. For this case, a pilot changeover will be done. The old system will continue to be used while the new system will be introduced in a pilot phase. Once the new system has been installed in a few workstations, it will be tested before being gradually rolled out in the entire company (Howarth, Stanton, & Sinclair-Hunt, 2015).
The company has identified a number of problems that it is facing as a result of using outdated system to handle its accounts. In addition, because of becoming a publicly limited company, the company will have to fulfill SEC requirements. One of these requirements is stricter accounting. Due to the growth of the company, it will require specialist accounting information system in order to handle all the data required by the company. The challenges faced by companies in similar situations have been evaluated and effectively covered in this study. This means that they are less likely to become challenges in this case. Various alternatives have been sampled and the best solution has been identified. Although the initial cost may be considered high, this is an investment for the company, as the new information system will have benefits to the company. Immediately after the system is in place, it will be able to provide information for the company that makes its decision-making and forecasting easier. The current situation of the business has been analyzed as well as future needs which have identified the need for a new accounting information system. The company is therefore advised to move with speed to implement the new system.
Hall, J. A. (2015). Accounting information systems. Australia : South-Western
Howarth, A., Stanton, B., & Sinclair-Hunt, M. (2015). Information systems management (Vol. 21). New York: Select Knowledge Limited.
Kirsch, C. E., (2014). Securities law and practice, 2014: How the SEC works. New York : Practising Law Institute
Liebowitz, J. (Ed.). (2013). Big data and business analytics. New York: CRC Press.
Minelli, M., Chambers, M., & Dhiraj, A. (2013). Big data, big analytics: Emerging business intelligence and analytic trends for today's businesses. Hoboken, New Jersey : John Wiley & Sons
Romney, M. B., & Steinbart, P. J. (2015). Accounting information systems. Boston : Pearson
Siegel, J. G., Shim, J. K., Dauber, N. A., & Qureshi, A. A. (2015). Accounting handbook. New York : Barrons Educational Series
Simkin, M. G., Rose, J. M., & Norman, C. S. (2015). Core concepts of accounting information systems. Hoboken, NJ : Wiley
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