ABC Company, a PC software house, has used manual procedures to account for its receivables, payables and inventory. The company receives most orders telephone, billing customer’s bank charge card accounts. Some customers order mail, enclosing cheques or money orders in payment. ABC Company ships immediately on receiving certified cheques or money orders but waits for personal cheques to clear the bank before shipping software.
Five sales representatives prepare order forms for telephone and walk-in customers, open mail orders and complete those order forms as time permits. The owner suspects that ABC Company has outgrown its accounting and inventory procedures and also believes that using manual accounting and inventory procedures is poor advertisement for a software house. Therefore, the owner has decided to install computer-based accounting and inventory systems.
a) The owner intends to convert from a manual to a computer-based system. Identify and briefly explain, in your own words, the sequence of activities that should begin before conversion.
b) What do you understand conversion or changeover from manual to computerized system? What are the different approaches? Explain in brief.
c) Recommend an appropriate conversion approach to the company owner and state two advantages and two disadvantages.
A. The owner intends to convert from a manual to a computer-based system should follow the sequence of activities as described below before conversion
• Describe the current system in writing.
• Define the required inputs, processes, and outputs for the new system.
• Research the available hardware and software to meet the requirements.
• Visit or contact other firms using candidate systems
• Prepare a request for proposal to obtain bids for the candidate system.
• Evaluate the bids and select the most cost effective system that meets the requirement.
• Prepare a conversion plan to install and implement the chosen system.
• Involve the system users in the planning, educate them as to the benefits to be obtained from the system, and train them in the use of the system.
B. Conversion or changeover is the process of changing from the old manual system to the new computerized system. It requires planning to establish the basic approach to be used in actual changeover. There are five different approaches for converting from the old manual system to the new computerized system.
i. Direct Changeover
On the specified date the old manual system is dropped and the new computerized system is put into use.
ii. Parallel Conversion
This refers to running the old manual system and the new computerized system at the same time in parallel.
iii. Gradual Conversion
Gradual Conversion attempts to combine the best features of the Direct Changeover and the Parallel Conversion, without incurring the risk.
iv. Modular Prototype Conversion
This approach uses the building of modular, operational prototypes to change from old system to new system in a gradual manner.
v. Distributed Conversion
This refers to a situation in which many installations of the same system are contemplated, such as in banking or franchises like restaurants or clothing stores.
C. Recommend parallel operation
i. Provide a backup copy in case new system corrupted.
ii. User satisfaction not affected – no sudden changeover to new system.
i. It requires all operations are performed twice, thus it doubles the employee workloads
ii. It is difficult to make comparisons between output of the new system and the old system.