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Accounting Information System ReplacementA 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.