ACC2002: Analyzing AIS for IS/IT-Enabled Innovation in Orgs

This report critically discusses the strategic application of Accounting Information Systems (AIS) to achieve IT-enabled innovation within organizations. It provides two examples illustrating the use of AIS for innovation, highlighting success factors and lessons learned. The report examines the impacts of internal factors (organizational, individual, and management) and external factors (market, industry, social, economic, technological, and political/policy) on the success or failure of AIS-enabled innovation, focusing on decision support systems and transaction processing systems. It concludes with recommendations and guidelines for organizations to succeed in using AIS for innovation, emphasizing the importance of planned implementation, software testing, data migration, and regular maintenance.

Running head: ACCOUNTING INFORMATION SYSTEM
Accounting Information System
Name of the Student
Name of the University
Author Note

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Table of Contents
1. Introduction......................................................................................................................2
2. Use of Accounting Information System: Overview with two examples.........................2
3. Description of AIS used: Challenges and Benefits..........................................................3
3.1. Decision Support System..........................................................................................3
3.2. Transaction procession system.................................................................................4
4. Recommendation.............................................................................................................6
5. Conclusion.......................................................................................................................7
References............................................................................................................................8

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1. Introduction
Accounting information system is a software system that is used by business
organizations for collecting, managing, storing and data processing. This data is mainly used by
the consultants, business analyst, accountants and business managers for efficient decision
making. The aim of the report is to analyze the use of accounting information system (AIS) in
business (Lim 2013). AIS can be put to use for innovation in business. The report will be
evaluating the use of AIS with two examples and will further discuss the impacts of certain
internal and external factors of AIS enabled innovation.
2. Use of Accounting Information System: Overview with two examples
Accounting information system can rightly be used for business innovation. Innovation is
seen to positively affect the capability of the firm in competing successfully in a global market.
Innovation increases the productivity and efficiency of the company. Innovation is the success
actor of increase in use of accounting information system in business.
One example associated with the use of AIS in innovation includes changes in business
reality. Accounting information systems have allowed the businesses to have an integrated
system that enabled the managers in easier decision making. The use of AIS has driven a change
in collection, measurement, analysis and communication of the information associated with the
organization thus driving the business innovation (Laudon and Laudon 2015). This type of
accounting information system is known as decision support system. Accurate business
decisions can be taken with the implementation of AIS which is a significant advantage as well.
Thus the use of accounting information system helps in business innovation and therefore the use
of accounting information system has been increasing ever since.
Another example of use of AIS in business innovation includes performance management
in organization. With the help of AIS, performance measurement of various business operations
associated with the business organization is possible (Simkin, Norman and Rose 2014). One of
the most common uses of AIS is generation of financial statements that helps in easier business
review. The reports generated by the accounting information systems along with the financial
statements that are generated by the accounting information system act as leading indicators for
comparison with the other companies. This helps the organization in keeping up with the

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competitive advantage of the company. This type of accounting information system is called
transaction processing system.
3. Description of AIS used: Challenges and Benefits
In the previous section, two types of accounting information system have been identified.
These two information system includes the decision support system and transaction processing
system (Collier 2015). Leading business organization makes use of this type of accounting
information system for business innovation. For example, the Lion Company of Australia, or
Curtis Australia make use of these accounting information system in their daily business
processes. The detailed description of these two accounting information system is discussed in
the following sections.
3.1. Decision Support System
The decision support system that is a part of accounting information system mainly helps
on cost accounting. One of the most critical factors associated with the performance
measurement of any organization is having the financial analytics right so that effective decision
can be taken (Demski 2013). This type of accounting information system helps in streamlining
the costing and accounting process. This data helps in identifying the opportunities of improving
costs and quality outcomes associated with the business needs.
One advantage of this type of accounting information system is that it presents the
organization with the necessary information that is needed for effective management of the
different business processes associated with and organization (Mancini, Vaassen and Dameri
2013). These are the significant business advantages associated with thmaking use of accounting
information system. However, there are certain challenges associated with the use of this type of
AIS which are discussed as follows-
1. The initial cost of implementation of the system is quite high.
2. Training the employees is another significant challenge associated with the
implementation of this type of accounting system.

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Apart from the benefits and the challenges related to the use of accounting information
system. There are certain impacts of the internal and external factors on the successful use of
accounting information systems (Accorsi, Manzini and Maranesi 2014). One of the basic criteria
for ensuring successful implementation of the information system is providing training to the
employees of the organization. This is an internal factor that has a huge impact on the successful
implementation of decision support system within the organization (Hla and Teru 2015). The
external factors having a huge impact on the successful implementation of the decision support
system in the organization include the economic factors. The decision support system helps in
easier management easier management of the accounting decision which gives the organization
an economic benefit (Bonczek, Holsapple and Whinston 2014). Thus this external factor has a
positively impacted the organization on the use an implementation of decision support system.
Another accounting information system that is most commonly used for innovation is the
transaction processing system (Demirkan and Delen 2013). The transaction processing system is
an accounting system that is used for managing the different transactions associated with the
organization (Sauter 2014). The transaction processing system helps in real time processing of
the data which is a significant advantage. The benefits and the issues associated with the
transaction processing system are discussed in the following section.
3.2. Transaction procession system
The transaction processing system is an information processing system that is used by the
business organizations for managing the transactions associated with the system. The use of
transaction processing system includes performance, reliability and information retrieval in real
time (Lee et al. 2013). This system mainly consists of a hardware and software in a transaction
oriented application. The transaction processing system is one of the most widely used
transaction processing system as it helps in managing the sales, order entry, reservations and
payroll along with the employee records. Thus it helps in easier management of the financial
transactions in an organization. The transactional processing system mainly serves the
operational level of the organization (Dulebohn, James and Richard 2013). This type of
information system is mainly used for supporting and recording a certain number of transactions.
Thus the transaction process system is a type of accounting information system that act as a

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backbone for majority of the organizations. There are certain significant benefits of making use
of transaction processing system, which are as follows-
1. One of the major benefits of making use of the transaction processing system is that it
is able to handle a large number of transactions simultaneously. It is observed that a good
transaction processing system is able to manage and coordinate thousands of purchases, sales at
once (Belfo and Trigo 2013). With the benefit of easier operations handling, it is possible to
manage the business transaction in an effective manner.
2. The use of transaction processing system in an organization facilitates online
transactions (Petter, DeLone and McLean 2013). This type of system is efficient and has an
excellent response time. The online processing system helps in easier management of the
transaction related issues which is one of the significant advantages for the business
organizations.
3. The transaction processing system provides real time data to the business managers
thus increasing the business benefits. With real time data availability, the business managers are
able to effectively manage the different processes in the business.
The above discussed point gives an idea of the benefits that implementation of the said
accounting information system can bring to the organization. However, there are certain issues
and challenges associated with the use of transaction processing system in the business
organization. The challenges associated with the implementation of this type of accounting
information system are as follows.
1. The implementation and the processing cost of this system are significantly high
(Shibl, Lawley and Debuse 2013).
2. The implementation of this system in business is time consuming as well.
3. Problems can be faced while moving the existing data to a new system. ‘
4. The handling of the system is complex and for that proper users’ training is required.
This is one of the significant issues associated with the transaction processing system.

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Apart from that, certain internal and external factors have a large efffects on the
implementation of the transaction processing system (Al-Mamary, Shamsuddin and Abdul
Hamid 2014). The smooth operation of the transaction processing system largely depends on the
management factors and process in the organization (Lipaj and Davidaviciene 2013). For
successful implementation of the transaction processing system, the organization should ensure
appropriate business management.
The external factor that has a huge impact on the smooth business operation includes the
social and economic environment of the organization (Gottschlich and Hinz 2014). The social
and the economic environment of the organization need to be strong in order to ensure successful
implementation of the transaction processing system.
4. Recommendation
In order to ensure successful implementation of accounting information system for
business innovation, the organization should follow a planned approach. Proper planning of the
implementation is needed for ensuring that the accounting information system software is
implemented without any issue (Qrunfleh and Tarafdar 2014). The recommendations that will
help the organization in become successful in making use of accounting information system in
business innovation are as follows-
1. The accounting information system that is to be implemented in the organization
should be designed according to the requirements of the organization. The development of a plan
for successful implementation of the project will ensure that the organization is making use of a
structured approach in successful implementation of the project.
2. It is recommended that before the go live of the designed software, accurate testing of
the software is needed to be ensures. This will help in identifying the bugs in the system.
Furthermore, before the go live of the accounting information system, it is recommended that the
legacy data is migrated to the new system.
3. The accounting information system implemented within an organization should be
subjected to regular maintenance that will help in easier identification and management of the
different issues linked with making use of accounting information systems.

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5. Conclusion
The report gives an overview the use of accounting information system in business
innovation. The use of accounting information system has increased over the years mainly
because of the business advantages and benefits it provides. Two most commonly used
accounting information system, which are transaction processing system and decision support
system is discussed in the report. The report discusses the business benefits and the issues linked
with the use and implementation of transaction processing and decision support system in
business organizations. One issue linked with the implementation of accounting information
system is its cost of implementation. The report concludes with certain recommendations for
easier implementation of accounting information system in business organization.

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