Question

Morgan Manufacturing operates in an industry in which frequent changes in market conditions results in a hectic and volatile IT environment within the company. To keep abreast, Morgan’s system development team are engaged in a considerable level of new program development and application change activities. To efficiently manage the workload, the director of IT has combined the functions of systems development and program change into a single department. This allows programmers of new applications to also maintain those applications. To achieve cross training, programmers also maintain applications originally programmed by other IT personnel. This has resulted in an “open” library policy that allows programmers to access all programs stored in the SPL and download them to personal computers for maintenance. The immediate effect of this policy has been an increase in the work flow by reducing the startup time needed by programmers to become familiar with the systems being modified. It also reduces the time spent on system documentation. Since the designer and the maintenance programmer is the same person, highly detailed and standardized documentation is not needed.

Required

1. Discuss the risk potential related to Morgan Manufacturing’s program change procedures.
2. Discuss the controls that would reduce the risks described above.

Answer 1

The risk potential related to Morgan manufacturing program change procedures can be:

1. The new system development may not be as effective with the changing environment for a longer period of time and it might have to rechange it in the near future.

2. Since one person if becoming the designer and the maintenance programmer, it is highly risky for the company that the employee may leave the company after learning all the new techniques, in the combined way, and join the new company, or start a competitive company in same the industry.

3. The combining of the functions of system development and program change into single department may create job losses and discourage people to join the company.

Some of the controls that would reduce the risk described above are:

1. In the development process right amount of money is invested in the right places and Technology so that the technology can last for a good period of time and give better results to the company.

2. Contracts must be created and signed with the employees of the company for the minimum period of time of working so that they may not leave the company after learning all the new skills immediately and become a loss of the company.

3. Thus merger process may result in the less decentralized and more functional approach hence more job profiles in this department and also the department must be created to compensate the job loss of two separate departments.