Round Soft produces and markets an accounting system for small retail business. The system contains all the usual modules, such as those for accounts receivables, payables, inventory, payroll, general ledger, and so on. In addition, the RoundSoft system includes special modules for sales analysis and prediction.
The core logic for the sales analysis and prediction modules is based on a patented artificial intelligence technique that is so effective that the system can predict actual sales, by product, up to 6 months in advance with an accuracy rate exceeding 98%. There exists no other product this effective in the industry. As a result, RoundSoft enjoys robust sales and has grown 10,000% in the previous 2 years.
The main problem facing RoundSoft is its accounting system. The volume of sales orders from authorized resellers has grown so large that the accounting system can no longer handle all the transactions in a timely manner. Software deliveries and installations are backed up by a full 3 weeks, and many angry customers are seeking other software solutions to their accounting problems. If something is not done soon, RoundSoft’s reputation will likely be damaged seriously and a permanent loss of market share may follow. Barbara Conta is RoundSoft’s controller, and she is presently considering various options. Her assistant, Bob
Blake, argues that RoundSoft needs to develop a completely new accounting system from the ground up. Blake’s arguments in favor of his position include the following:
a. The present accounting system was designed for a company one-tenth the company’s present size. It is nearly impossible to adapt such a system to the present environment.
b. The original accounting system did not include modules to record contracts for installations of the software. Over time, RoundSoft has found it very profitable to install and service installations for large regional companies. To accommodate this growing line of business, RoundSoft developed a separate software system for processing these transactions. Keeping a separate system has caused many problems, however, and has complicated the end of quarter process of producing financial statements.
Barbara Conta, however, has a great deal of experience in systems development and knows how painful it can be to develop an entirely new system. Recognizing Blake’s arguments, she is seriously considering the option of developing the new system based on a blueprint from SysQuick, a national systems consultant that specializes in business systems blueprinting.
The salesperson from SysQuick claims that by using their blueprint method an entire new system can be implemented for RoundSoft in only 4 weeks for only a quarter of the cost required to develop a new system from the ground up. However, Bob Blake is skeptical about using a stock blueprint. “No two systems are alike,” he said. “How can you just take a stock system and force it on our company? Something is bound to go wrong.”
Barbara Conta is very worried about the decision. She knows that a bad decision could seriously damage her entire career. After all, who wants to hire a controller who managed the development of a failed system? On the other hand, a good decision would put her in a position to become the controller for one of the many large, sought-after high-tech companies in her area, with a salary twice as large as her present salary.
a. Describe arguments both for and against the blueprint option.