Tonyís Pet Supplies is a small to medium sized business (SME). The business has a good reputation for high quality pet food and enjoys long-standing arrangements with many pet shops for the provision of food, toys and accessories. Tonyís Pet Supplies has traditionally used a small accounting package to manage its operations, with Make Your Business Profitable ëMYBPí being the package currently in use. Recently, however, a few of the staff in the administration team have complained that MYBP has become slow in processing transactions. The computer that runs the program is also fast approaching its capacity, having not been updated for several years and now also handling the businessís inventory management system. As a result of the strained system, Tonyís Pet Supplies is considering the possibility of an upgrade. However, it is concerned that, should it go ahead with an upgrade, it would have to employ a programmer to develop its new system, as well as a full-time IT specialist to keep the system running. It is also unsure of what needs to be done in managing the systems development process.
One of the things particularly troubling Peter Jacob, the part owner of Tonyís Pet Supplies, is the possibility of investing capital now and having to do so again in a couple of yearsí time as technology changes. However, Peter does not mind spending a large sum now if the system is a long-term answer, since, as Peter said, ëOnce the system is acquired then the business can get back to normal and do what it does best ó make great pet products ó without having to spend money on IT.í
Required
You work for a professional accounting firm as Peterís accountant, and Peter has asked for your advice on a new system. Peter would like your recommendation to be in writing so that it can be shared with their business partner (essay format - max. 1500 words including references) and it should therefore be written using appropriate professional language and include answers to the following:
(a) Discuss the advantages and disadvantages of making or buying a new system
(b) Discuss the security risks associated with both making or buying a new system, and ways of mitigating those risks
(c) Provide a recommendation to Tonyís Pet Supplies as to whether making or buying a new system is most appropriate for their business, with a justification
(d) Evaluate Peterís claim that: ëOnce the system is acquired then the business can get back to normal and do what it does best ó make great pet products ó without having to spend money on ITí? Explain your reasoning, using examples.
Sample Solution