Accounting Information Systems: The Processes and Controls, 2nd Edition

INTRODUCTION TO IT GOVERNANCE (STUDY OBJECTIVE 1)

In the business environment of today, IT systems are critical to the success of the organizations that use them. IT systems can improve efficiency and effectiveness, and reduce costs. Companies that fail to take proper advantage of the potential benefits of IT systems can lose market share to competitors or in some cases, become bankrupt. To ensure that a company is using IT to its competitive advantage, it must continually investigate and assess the viability of using newer information technologies. The company must ensure that its long-term strategies, and its ongoing operations, properly utilize appropriate IT systems. But how does a company decide which IT systems are appropriate to its operations? Moreover, how does a company decide, for example,

• which accounting software package to buy?
• when the company has outgrown its accounting software or when to upgrade that accounting software?
• whether to use IT systems to sell products on the Web?
• whether to establish a data warehouse for analyzing data such as sales trends?
• whether to use ERP systems or customer relationship management (CRM) software?

Each of these decisions is likely to have a long-run strategic impact on the company. Decisions the company makes about the IT systems it will use will affect the efficiency and effectiveness of the organization in achieving strategic goals. IT systems must be chosen that support management's strategic goals and the daily operational ...