Role of Accountants in Computer Acquisition Process and Risks of Offshore Outsourcing of Information Systems

This article discusses the role of accountants in the computer acquisition process, their contribution, and the risks associated with offshore outsourcing of information systems. It also identifies the organizational issues that management must address in the future and recommends steps the company could take to guarantee consulting service quality.

Accounting information System

Contents
Introduction................................................................................................................................2
Identify the accountant’s role in the computer acquisition process...........................................2
Describe the useful contribution an accountant might make the computer acquisition
process....................................................................................................................................3
Describe at least TWO possible risks offshore outsourcing of various information systems
functions..................................................................................................................................4
Identify the organisational issues that management must address in the future.....................5
Recommend steps the company could take to guarantee consulting service quality.............7
Conclusion..................................................................................................................................9
References................................................................................................................................10

Introduction
This paper focuses on the important organizational aspects such as the role and contribution
of accountants in the process of acquiring computers. In addition, the paper also focuses on
the risks associated with offshore outsourcing and the best ways that can be used for selecting
the consultant for outsourcing.
Identify the accountant’s role in the computer acquisition process
An accountant is the one who performs the financial functions in the organization such as the
recording, analysing and presenting the analysis of financial operations of the business. The
accountant is also responsible for dealing with the third parties such as financial institutions,
customers and the vendors. (prenhall 2010). As analysts, accountants may perform certain
types of analysis using financial data that is used in making business decisions. An
accountant advises on the type and volume of supplies, revenue and expenditure trends,
future revenue expectations and the financial commitments.
In case of computer acquisition process the accountant will play an important role as he/she
will be one of the major users of the information generated with the help of computer.
(prenhall 2010) The accountant will also estimate the overall cost of acquiring the computers
along with analysing the same. In addition the accountant will also participate with the
experts, team, computer analysts, managers, engineers and other personnel who are directly
or indirectly involved in the process of computer acquisition or information system activities.
In this context the accountant will perform the financial analysis to make the business
decision regarding acquisition of computers. The accountant will calculate the expenditure
associated with the computer acquisition along with forecasting the revenue trends. The
accountant will also contribute in the process of selecting the suppliers and volume of
supplies. (Saeidi, Prasad & Saremi 2015).

Describe the useful contribution an accountant might make the computer acquisition
process
The above discussion focused on the role of accountant in the process of computer
acquisition. The overall discussion indicates that an accountant plays a crucial role in the
process of computer acquisition. A competent accountant in an organization is an invaluable
asset as he/she plays number of roles. The accountants use their knowledge and
understanding for analysing the overall environment of the organization in terms of profits
and loss. (Saeidi, Prasad & Saremi 2015)The accountant helps the organization in making the
business decisions regarding an investment. The accountant will encourage the organization
to invest or divest according to the situations. Apart from assisting the organization during
the process of computer acquisition accountants also help in identifying the risks associated
with computer acquisitions along with the ways that can be used for risk mitigation. Further
the accountants also help in allocating a particular budget to the process of computer
acquisition. The accountant also focuses on reducing the overall cost of acquiring the
computers for the organization. In essence, it can be indicated that the accountant maintains
the financial health of the organization by ensuring that computers are acquired at the
optimal costs, there is no financial risk associated with the process of computer acquisition.
(Wilmshurst & Frost 2001).
Describe at least TWO possible risks offshore outsourcing of various information
systems functions
Offshore outsourcing can be defined as the practice of hiring external organizations so as to
perform the various functions of business in countries other than the product or service is
actually developed. (Mohiuddin 2015).The study conducted by Herath and Kishore (2015)
also indicated in their study that there are number of risk associated with the offshore
outsourcing of information systems. Some of the major risks highlighted by the authors
include the risk of unexpected escalated costs, loss of competencies of organization, disputes
and conflicts. However the risk of confidentiality and privacy remains the major risk
associated with the offshore outsourcing of the information systems. (Herath & Kishore
2015)
The offshore outsourcing of the information systems that have huge amount of important
information is associated with the risk of privacy and confidentiality. This is because the

offshore outsourcing introduces the element of constraint related to distance. The time lags
and the geographical distance increases the risk of exposure of important data of the
company. In addition, the data leakage is one of the biggest threats for the companies that
outsource their information system offshore. The offshore outsourcing also poses a threat for
the privacy of customers of the organization. (Bordoloi & Powell 2013) The trade secret or
any type of important information is at a risk in case of offshore outsourcing. The offshore
outsourcing agreements involve the transfers that are cross borders regarding the proprietary
information of customers along with confidential information assets. (Connor 2016). A
business process that is outsourced offshore involves the privacy violations that result from the
negligence, processing, storage, transmission, encryption and access of the confidential
records and information. (Criscuolo & Leaver 2014) The area of information security is one
of the neglected areas in the offshore outsourcing. An offshore outsourcing involves more
confidentiality and privacy risks in comparison of domestic off shoring. The confidentiality
and privacy risks associated with the offshore outsourcing of information system pose number
of threats for the company that is outsourcing its information system; the major threats include
disclosure of information, loss of information, lack of data integrity, fraud attempts and
terrorist uses etc. (Basu & Nikam 2006).
The study conducted by Herath and Kishore (2015) also focused on the number of risks
associated with the offshore outsourcing. Another risk apart from the confidentiality and
privacy risk is the risk of compliance. The risk of compliance arises when the vendors do not
follow or violates the rules, regulations and the policies of the company. (searchcompliance.
2018). This is one of the major risks as it can affect the operations and efficiency of the
company that has outsourced. (searchcompliance 2017). The compliance risks in the offshore
outsourcing of the information system is the exposure to legal penalties, material loss as the
outsourcing company fails to act accordingly the internal policies ,laws and regulations. The
compliance risk is also known as the integrity risk. The compliance regulations in the
organizations are enacted so as to ensure that the organization operates ethically and fairly.
(Herath & Kishore 2015)

Identify the organisational issues that management must address in the future
The case of Queensland’s Bedrooms Furniture QBF indicates that how a wrong selection of
the consulting forms can result in huge financial losses along with the reputation loss. QFB
was a leading company that experienced a tremendous growth. The growth was however
accompanied by number of issues such as the issue of filling the orders and processing the
invoices. (Simone Seth 2008). The information system department of the company was
understaffed that led to increase in the complexity in the process of order filling and
processing the invoices. The process of invoice processing can be defined as the process that
is used for managing the supplier invoices from the receipt to the posting of the invoice. An
organization like Queensland’s Bedrooms Furniture receives number of invoices in different
formats such as the pdf, e voice, paper. This data has to be entered manually or scanned. This
indicates that filling orders and processing of invoices is a long process. In order to solve the
problem associated with the order filling and invoice process QFB hired a consulting firm so
as to solve the problems related to the revenue tracking problems and receipt of payments. The
project was a big failure with loss of $10 million along with the dismissal of the consultants
who were involved in the unfinished project.
There are number of issues that need to be addressed by QFB in future so as to improve the
revenue tracking system of the organization. QFB in future should focus on simplifying and
making the system design flexible so that the medications in the system can be made easily.
This can be done by reducing the number of applications in the system design.

Further, QFB should also focus on gaining an expertise, knowledge and understanding of the
Advanced information system that has to be implemented in the organization. For example:
the Enterprise resource planning system. In this context, the staff of the organization should
also be involved in all the phases of outsourcing of the information system. The staffs of the
company and the consulting form are the major people who will use the system and help QFB
in tracking their revenues. Therefore it is important for the organization to develop a clear
vision and communicate the same to stakeholders. A lack of clear vision, goals and objectives
will lead to failure of a project. (OSF Global Services 2012). The support from the staff can be
gained with the help of effective communication strategies and face to face interactions. QFB
in future should not use a distributed computing system as it led to an incompatibility in the
tracking system of the company’s computer system. A distributed computer system is the one
in which the components are located in on different networked computer. The communication
and coordination is then done by passing the messages from one computer to another. In
future, QFB should use a centralized computer system. Further, QFB should also focus on a
critical selection and evaluation of the consulting firm that will be hired for the management
of business process of the organization. (Wright 2004) The consulting firm should be
evaluated on the factors of expertise, experience, cost and accessibility of the services. A
consulting firm with little experience will not be able to manage the large projects of QFB.
The expertise and experience of the consulting firms will help in management of the data that
is complex and large. QFB in future should also hire the best program developers who can
help in reducing the number of subprograms along with reducing the interdependency between
the subprograms. Last but not the least QFB should focus on improving the communication in
the organization with the help of different communication mediums. (Al-Muharfi 2014)
Recommend steps the company could take to guarantee consulting service quality
The case of QFB indicates that the company made several mistakes in context of selecting the
consulting firm and communicating the vision to the whole organization.
Some of the major steps that can be taken by QFB in context of guaranteeing a high quality
consulting service are as follows:

Defining the goals and objectives associated with the outsourcing activity clearly. In this
context QFB needs to define the process that has to be outsourced. In this context QFB should
focus on gathering a core team that can evaluate the consulting firms or the vendors
participating in the negotiation process. For this purpose the team should include the members
from different departments and levels. (González, Gascó & Llopis 2010). For example: the
legal staff and the human resource department. Some of the major questions that need to
answer in future in context of selecting the consulting firm for the process outsourcing are as
follows:
Which service or the business process has to be outsourced?
What is the type of outsourcing agreement?
What are the locations of offshore outsourcing?
What type of services is expected from the vendor?
What is the expertise of the vendor?
What is the cost associated with the outsourcing?
What are the major risks involved in the outsourcing agreement?
Another step that should be taken by QFB for ensuring the high quality of consulting company
is to know about the vendor with the help of RFI (Request for information). The RFI is an
important document that helps in the evaluation of the vendors. The RFI is used to validate the
interest of vendors along with evaluating the business climate. (Somjai 2017) The RFI will
help allow the vendors to respond freely as it highlights all the core elements. For example:
the business requirements that are defined by the core team, these requirements and
specifications will help the vendor in responding effectively. In essence, the RIF will help
QFB in acquiring all the available information required for a quality outsourcing.
One of the most important recommendations for QFB for selecting the consulting firm for
future outsourcing is that the company should conduct a test project so as to ensure that there
is a good fit between vendor and organization. A test project will allow a review of the
vendor’s project so as to ensure effectiveness and efficiency. (Tayauova* 2012).
The test projects will help QFB in determining that the project is executed within the
guidelines and are completed in a give time frame. In addition, the compliance of the vendor
with different rules, regulations, quality standards and the policies can also be ensured with the
test project. The test project is one of the effective ways for reviewing and checking the facts
related to the vendors before actually finalizing them for the outsourcing. The test projects can
help QFB in testing and experiencing the outsourcing before actually entering in a long term

relationship with the vendors. A couple of vendors selected for the outsourcing should be
evaluated and compared so that the best vendor can be selected for the organization. The
project tests will help in determining the capabilities, abilities and the communication style of
the vendors in context of delivering the projects within deadlines.
The above discussion has provided a complete view of the organizational issues and the
mistakes committed by QFB while selecting the consulting form for outsourcing. Offshore
outsourcing involves number of risks such as the risk of compliance, confidentiality and
privacy. Therefore, it is important for the organizations to select the vendors carefully by
critically evaluating their capabilities, experience and expertise.
Conclusion
The above report has provided useful insights about the off shore outsourcing and the role of
accountant in the organization. Outsourcing is one of the most important organizational
aspects that can affect the overall profitability and reputation of the organization.
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