Strategic Information System for Rainbow Illusion Company

This report discusses the processes, risks, and internal controls of the revenue cycle of Rainbow Illusion Company. It also focuses on the six strengths, problems avoided, likelihood of fraud, and the advantages of distributed systems over centralized systems.

Running head: STRATEGIC INFORMATION SYSTEM
STRATEGIC INFORMATION SYSTEM
Name of the Student
Name of the University
Author Note

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Executive Summary
The report deals with the case study of the Rainbow Illusion Company. The rainbow Illusion
is an organization that deals with the readymade clothes for young females. They have a very
big business but procedures of cash transactions are very old and uses four parts sales
invoice. The report deals with the processes, risks and internal controls of its revenue cycle.
The report focuses on the six strengths of the Rainbow Illusion Company in order to control
the transactions of its sales. The report discusses about the problems that have been avoided
by the company. The report focuses on the two situations of pressure that would increase the
likelihood of fraud. Lastly, the report concludes with the discussion about the distributed
systems.

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Table of Contents
Introduction:...............................................................................................................................3
Discussions.................................................................................................................................3
Business Scenario...................................................................................................................3
Six Strength in Rainbow Illusion System..............................................................................4
Problems of Rainbow Illusion................................................................................................4
Likelihood of fraud................................................................................................................4
Installing a Distributed System rather than a Centralized System.........................................5
Conclusion..................................................................................................................................6
References..................................................................................................................................7

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Introduction:
Rainbow Illusion is a retail chain that has 30 stores in Victoria and New South Wales.
It sells readymade clothes for young females. Each of the stores of the company has a
manager and an assistant manager. The cashier and the sales personnel are young people and
work as per time. They are paid hourly wages and some commissions that are based on the
volume of the sales.
The report is based on the processes, risks and the internal controls for its cycle of
revenue that will be given to the chief executive officer of the Rainbow Illusion Company.
The report focuses on the six strengths that are present in the system of Rainbow Illusion in
order to control the transactions of its sales. The report discusses about the problems that are
avoided by the company. The report also discusses about the two situational pressures that
would increase the likelihood of fraud. Last but not the least, the report discusses about the
reasons about the companies that choose a distributed computer system over a centralized
one.
Discussions
Business Scenario
Rainbow Illusion is a retail chain that has 30 stores in Victoria and New South Wales.
The company sells readymade clothes for the young females. Each of the stores of the
Rainbow Illusion Company has a manager and an assistant manager and both are paid with
salary. The cashier and the sales personnel are young people working part time and are paid
with hourly wage. The Company uses cash registers that are unsophisticated having four sales
invoices in order to record the transactions.

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On the floor where sales are conducted, the salesperson records the number of the
employee manually, the transactions, the sales invoice totals, calculates the discount when it
is apt, calculate the sales tax and prepares the grand total. The salesperson transfers the
invoice to the cashier.
The cashier then reviews the invoice and inputs the sale. At the end of the day, the
cashier orders the sales invoices serially and then does the required job necessary for him to
do. After the assistant manager does the calculation, the invoices are sent to the manager
where he prepares the daily deposit of the bank. The cash registers tapes, invoices of the sales
and the return slips are sent to the department of central data processing. The department then
returns a weekly sales and the activity report of the commission to the manager for review.
Six Strength in Rainbow Illusion System
The Rainbow Illusion Company deals in readymade clothes for young females. As,
the Rainbow Illusion Company has 30 stores, so the business is quite big. There are many
sales transactions in a day for the Rainbow Illusion Company. There are several strengths of
the company for controlling the transactions of the sales. The six strengths in Rainbow
Illusion system for controlling the sales transactions are:
Rainbow Illusion is the name of a retail store that is mainly focused on making female
outfits. Various departments of the organisation maintain the procedure of purchase for the
store. The strength of the store in described below:
1. Distributed system for purpose of computation:
This is the section of the organisation that works on the operation of process for
the organisation. Among the various type of process the items are chosen in a particular
section, in another the invoice are prepared and in the last one the dispatch section of the
item are maintained. There is numerous numbers of representatives in the organisation

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who maintains all this particular tasks for the organisation. All of the workers have their
own tasks and they focus only on their particular department. Thus from this it can be
seen that the organisation have a system which is distributed according to their work with
different representatives.
2. Transaction method in case of diverse system:
This organisation follows various modes of transaction for their business process.
The customers of this organisation can avail any of the payment mode to make their
payment for the organisation. All the various type of payment mode include cheque,
credit cards, debit cards, online banking and hand to hand liquid cash as well. The
organisation also use various e-wallets from where they receive the payments form their
clients as well.
3. Invoice process in all shopping process:
Making the invoice for every purchase of the customers is a vital thing. In case of
the particular organisation a double invoice processing occurs. In this case firstly the
rough invoice is produced for the chosen items of the customer. Where the details
regarding the items along with their price list are included. After this at the time of the
payment form the customer the cash counter makes the final invoice which makes it more
efficient along with double checking. Thus it helps to counter any mistake in the invoice.
4. Transfer of the order in sales department:
After the cash counter release the product to the customer after accepting the
payment form the customer, a copy of the invoice is sent to the department of sales of the
organisation. In the particular department the invoice is rechecked to counter any further
mistakes including any type of minor mistakes which are also considered. After the
invoice is re checked they record the data in the sales department of the organisation. This

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helps the organisation to keep the record for each of the customers along with their needs
and choices that also helps the customer to attar in future with various plans according to
their needs and concerns
5. Maintenance of chain process:
The whole of the purchase method of the organisation follows and maintains a
chain process, along with various sections of the process that are linked to one another
and works accordingly. This process helps the organisation to maintain a particular path
for the process of purchase of any type of product from the organisation. By this chain
process, it also helps the organisation to encounter any type of mistakes that is missed by
any of the section of the process. Thus, it makes the organisation more efficient in their
process of purchase of products.
6. Unity among the transaction record:
This is an important phase for the organisation; in this phase all the transaction
done each day, form the organisation is monitored. Each single transaction is monitored
and the data for all the transaction are monitored. This helps the organisation to maintain
a clear record for all the transaction and the transaction are also checked once again.
Further to this it also helps while assisting in future with any past transactions and the
orders related to the organisation.
Problems avoided by Rainbow Illusion
By following the particular strengths of the organisation, it provides certain
advantages in the organisation. They are as follows:
Due to the distributed system in the organisation, it helps to provide an error free
process that is provided to the customers along with less consumption of time. Due to this
practice, the work pressure of the organisation also diminishes and as for every phase,

7STRATEGIC INFORMATION SYSTEM
different experts are provided the works occurs more efficiently and perfectly as well. Each
of the experts for each of the sections perform their work properly as they are well trained
and in each section of work the process are checked which helps to make the procedures
more efficient and error less.
There are various advantages for facilitating different modes of transaction in the
store. As there are different kind of customers that hit the store, and each of the customers
wishes to follow different payment process. It is a trouble if they do not get the facility for
their wishing facility. The organisation provides almost all type of payment mode for the
customers that are available in the market. Thus it helps the customers to choose among all
this different type of payment modes and they can make the payment in their own wished
mode.
In this part of strategy the representatives make a rough invoice for the purchase of
the customers, where the invoice is checked, again as the final invoice is made in the cash
counter it is revised and modified again, thus it helps to provide an error free invoice for the
customer.
The sales department keep the record of the invoice for each of the transaction where
it is checked and analysed, form where the errors can be encountered and also helps the
organisation to understand the sale of products.
As the organisation follows a chain process, it makes the process more prominent and
safer. Thus, it helps to provide an error free and a fast process, which is also time saving for
the customer as well.
Since the account manager keeps and track all the transaction each day it helps to
keep record of all the transaction in the organisation.

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Likelihood of fraud
The Rainbow Illusion is a company that deals with the business of clothing. There are
various strengths and problems of the company. However, sometimes some pressure comes
to the company that increases the vulnerability of fraud in the organization.
The situations of pressure in the organization are:
 Online security: The likelihood of fraud in the Rainbow Illusion Company can occur due
to the security threats from the malware and the phishing attacks.
 Reliability of the systems: The fraud in the can occur when the internet service providers
crashes, then the system of the company also crashes and the online payment system
shows an error.
 Credit card fraud: The fraud in the company can occur when someone uses stolen credit
card for shopping or a hacker uses stolen credit card from the other customers.
 The returns of warranty and goods: The fraud in the Rainbow Illusion Company can
occur due to the return of the goods and the warranty. It increases the cost of supply chain
of the company and they are not able to resell their goods at the original price.
Installing a Distributed System rather than a Centralized System
The centralized computer systems are the systems that use the architecture of
client/server where more than one nodes of the client are connected directly to a central
server. This system is commonly used in many organizations where client dispatch a request
to the server of the company and then receives the response. Some of the companies do not
use centralized computer system due to their limitations. The disadvantages of the centralized
computer systems are:

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 The centralized systems are dependent on the connectivity of the network. The systems
can fail if somehow the nodes lose connectivity as the central node in only one.
 The entire system can fail abruptly.
 There is a less probability of back up of data. If somehow the server node fails then there
is no backup. The maintenance of the server is difficult. The server node is only one and
due to some reasons, it is unprofessional and inefficient in order to take the server down
for the maintenance.
The Distributed systems are the systems where every node makes a decision of its
own. The behaviour of the system that is final is the collection of decisions of the nodes that
are individual. The distributed systems are very difficult to design and debug the algorithms
for the computer system. Clock that is common causes trouble in the ordering of the
transactions that are temporal. It is difficult for a node in order to get the global view of the
computer system.
The advantages of these distributed computer systems for the companies to use are:
 Content and speed distribution
The distributed systems are faster than the systems of single computer. One of the
benefits of distributed database is that the queries that are present in the server can be routed
with specific information of the user, rather than all the requests having to go to a machine
that is single that can be overloaded. The requests can also be routed to the servers that are
present physically close or on a network connection that is speedy and that is allocated to
dealing with the traffic of the network and the bottlenecks. This occurrence is common in the
networks of content distribution that is used for online media.
 Parallelism and scaling

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When the distributed systems are set up in order to distribute the data among the
servers that are involved, they are easily scalable. If the systems were designed well, it can be
simple as adding some hardware that are new and then telling the network to add it to the
systems that are distributed.
The distributed systems can be designed for parallelism. This is common in the
operations that are related to mathematics for the things such as modelling of weather and the
computing that are scientific, where the powerful processors that are multiple can divide up
the independent parts of simulations that are complex and then get the answer faster than they
would running them sequentially.
Conclusion
It can be concluded from the report that rainbow illusion Company has many
advantages due to its uses of distributed system. The report deals with the processes, risks
and the internal controls for the cycle of its revenue. The report deals with the six strengths of
the Rainbow Illusion Company. The report focuses on the problems that have been avoided
by the Rainbow Illusion Company for controlling its transactions of its sales. The report
focuses on the two situations in the company that would increase the probability of fraud.
Lastly, the report discusses about the why companies install distributed system rather than a
centralized system.

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