Strategic Information Systems for Business | Study

Running head: STRATEGIC INFORMATION SYSTEM
Strategic Information Systems for Business and
Enterprise
Name of the Student
Name of the University
Author’s note:

1STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND ENTERPRISE
Table of Contents
Introduction:....................................................................................................................................2
Analysis of Physical Internal Control Weaknesses:........................................................................2
Description of IT Controls That Should Be In Place:......................................................................5
Data Flow Diagram:........................................................................................................................8
Conclusion:......................................................................................................................................9
References:....................................................................................................................................10

2STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND ENTERPRISE
Introduction:
An information system developed to monitor and control corporate business initiative is
generally called strategic information system. Strategic information system provides great
benefits to organization in terms of competition. Currently, many organizations are
implementing strategic information system for delivering services and products at lower cost.
Main purpose of strategic information system is focusing on demanding market segments. The
higher level processes of strategic information system is allocating, storing, processing and
moving data. Strategic information system bridges gap of business requirements and IT
requirements.
The report is done based on the case study of Giant Eggplant. It is a fruit and vegetable
market in Rowville, Victoria. This market offers various diary, agriculture and bakery products
from local bakeries and farms. Currently, it is facing issues regarding sales and profit. This report
consist of evaluation of Giant Eggplant’s revenue and expenditure cycles. Data flow diagrams
will be provided to show input and output of each process within.
Analysis of Physical Internal Control Weaknesses:
There are total six control weaknesses present in both revenue and expenditure cycles of
Giant Eggplant. These control weaknesses have been described in detail at below section.
i. Improper Documentation: Documentation is a crucial factor in any business. It
records evidence of transactions done in a business. Warehouse staff of Giant
Eggplant does not have any documentation for products and shelves. Warehouse
staff only maintains one day inventory. Without any documentation, management
of Giant Eggplant does not have any historical record of product import and

3STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND ENTERPRISE
export from warehouse. The quality of documentation at finance department is
also very poor. Without any proper documentation, management cannot acquire
enough data to analyze business processes and identify the gaps. The effect of
lack of proper documentation can be seen in sales process also. Often, customers
complain about incorrect product purchase or superficial amendments in invoice.
The organization is having rough time to properly evaluate the product quality
delivered from suppliers.
ii. Improper Definition of Key Business Cycles: Complication in the business
processes creates the inefficiency of business cycles. In order to operate the sales
process smoothly, Giant Eggplant need dedicated sales person. As the internal
sales cycle is not defined properly, the sales person have to complete a lot of work
other than selling products. This is creating delays in the business process. The
sales process is not transparent. This restricts the organization to put every
process like importing, sales, warehouse management in synchronization. Both
the revenue and expenditure cycles have many loop holes and improper
definition.
iii. Lack of Transaction and Authorization Control: Before commitment of
resources authorization of purchases is essential for Giant Eggplant to implement
better control in sales. Preventing inadequate spending can be achieved through
implementation of level of authorities. Giant Eggplant do not register the
customer before sales. It creates a huge gap in customer relationship management
process. Understanding customer psychology and sales patterns is very crucial for
the organization. In order to achieve better results in sales, Giant Eggplant must

4STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND ENTERPRISE
recognize the needs of customer. Sales controls should be strong enough to guide
the organization as well customer to get best results in every situation. Internal
authorization is also very important for maintaining business process.
Management should have power over all the business processes and authorization
to modify operations as per business objectives.
iv. No Review: Management of Giant Eggplant put great efforts in completing day to
day operations but do not indulge themselves in performing reviews. Reviews
regarding sales, financial transactions, customer demand, warehouse management
and other important factors provide essential information to maintain business.
Reviews dig out useful information that can give hint about what is going right
and what is going wrong in business. Often, many frauds happen in business that
cannot be seen in daily operations. Review process helps the managers to identify
these frauds and prevent the organization to lose more profit.
v. Ineffective System: Currently, Giant Eggplant is operating its business through
several computers installed in different departments. These computers are not
connected to each other. People from other departments have to visit other
departments if they want to get some non-departmental data. Managers rely on
paper based reports sent from different departments. The biggest weakness in this
control issues is communication gap.
vi. Lack of Security: The organization is currently lacking in both logical and
physical securities. Warehouse staff often face issues with matching the imported
staff with ordered goods. Often customers make less payment for what they have

5STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND ENTERPRISE
purchased. Inaccurate invoice is making the organization lose a lot of money each
month.
Description of IT Controls That Should Be In Place:
IT controls can be defined as the procedure by which the organizational assets of a
business can be secured in the first place. The diverse categories of IT systems which are used in
commercial organizations can be secured with the help of IT controls. The net profitability of the
business as well as the security concerns of the IT systems can be addressed in the first place
with the help of IT controls (Ahmi et al. 2016). Data is considered as an asset in each
organization and the role IT controls is very much significant for organizational growth. On the
other hand, it can also be said that there are few limitations related with IT controls as well such
as collusion, human errors, management override and segregation of duties. Each of these
limitations has to be addressed before considering the IT controls.
There are numerous challenges which are faced by Giant Eggplant’s systems such as
their shopping carts for the online consumers, online cash registers, data warehouse, electric
check register, and numerous computer systems on the finance department. It must be said that
the entire business procedure depends upon the data collected from each of these computer
systems.
The accuracy as well as the validation of the financial statements of this organization can
be enhanced in the first place with the help of the accounting control. The accounting controls
can be very much useful for this organization to deal with the regulations and laws (Mohamad
and Toomey 2016). The accounting controls which must be deployed in this business includes
trial balances, data backups and reconciliations.

6STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND ENTERPRISE
There are introduction of the procedural controls can be very much useful to deal with the
flow of money which comes in and outside this organization. The sales concessions which
empowers this business can also be enhanced in the first place with the help of the procedural
control.
The deployment of the embedded control can be very much useful in this business as it
would help them to maintain a long term relationship with each of the stakeholders. The
automatic data backup can be processed if embedded control is considered for every IT systems
(Sheldon 2019). The financial control of each of the transactions can be maintained with the help
of the embedded control as well. Decision making ability of the strategic planners of the IT
systems in this organization can also be benefited from the use of the embedded control.
The incorporation of the IT controls can be very much useful to maintain the integrity,
availability and confidentiality of the data which are accessed by the IT systems. The over
functionality and the computerized business procedures can also be enhanced using the IT
controls.
It can also be said that the IT general controls (ITGC) can also be beneficial in this
organization to deal with the complications of the components and processes of the IT
technologies which are used in this business (Turner and Weickgenannt 2020). The most
significant ITGCs which can be used across the systems of Giant Eggplant are logical access
control, program change management control and computer operations.
The selection of the risk mitigation strategies can be selected in the first place with the
help of IT controls as well. These controls are also very much useful as it can help to secure the
employee data as well as their business data. The complications of the cash registers can also be

7STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND ENTERPRISE
addressed in the first place with the help of IT controls as well (Gelinas, Sutton Jr and
Federowicz 2019). These controls can be very much useful for the clerks of this business who
maintains the purchase orders from their computers. The performance of the electronic cash
register can also be enhanced with the help of the IT control system.
The weakness of the internal control systems of this organization in terms of the lack of
segregation of duties and the reporting issues. The complications of the accounting policies can
be maintained in if IT controls is introduced in this business (Gelinas, Sutton Jr and Federowicz
2019). The other internal control systems which can be introduced in Giant Eggplant are the trail
balance systems and approval authority stamps, these controls are very much useful to deal with
the complications of the IT systems such as their data security risks.
The complication of the ineffective transaction procedure can be resolved in the first
place with the help of the IT controls as well (Marchewka 2016). The issues relayed with the
hard copy journal vouchers of this organization can also be resolved with the help of the IT
controls.
Cash disbursements can also be addressed with the help coming from the IT controls,
these controls can be very much beneficial for the finance clerk to deal with the general ledger.
Purchasing the summary information can be enhanced if IT controls are added across each of the
computer systems in Giant Eggplant (Mazza and Azzali 2018). The use of the IT control systems
such as the software controls, computer operation controls, data security controls and
administrative controls can be very much useful to address the challenges which are faced in
Giant Eggplant.

8STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND ENTERPRISE
Data Flow Diagram:
Figure 1: Expenditure Cycle DFD
(Source: Created by Author)
Figure 2: Revenue Cycle DFD
(Source: Created by Author)

9STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND ENTERPRISE
Conclusion:
From the above study it can be concluded that a lot of issues is present in current physical
controls of Giant Eggplant. Sales related control in Giant Eggplant is one of the weakest
controls. The organization is having a lot of delays in sales process as no dedicated sales person
is not present. Another department, warehouse, is having issues in maintaining the goods.
Warehouse staff has to complete many of the processes manually. From checking the selves to
loading the imported products into the computer all is done manually. Communication gap
between the departments of Giant Eggplant is one of the main factors of business process delay.
The organization does not have clear physical control in any part of business. The proposed IT
controls are described perfectly. From description of IT controls provided in the report it can be
stated that these controls can be the solution for implementing better and controlled processes
with Giant Eggplant.

10STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND ENTERPRISE
References:
Ahmi, A., Saidin, S.Z., Abdullah, A., Ahmad, A.C. and Ismail, N.A., 2016. State of Information
Technology Adoption by Internal Audit Department in Malaysian Public Sector. International
Journal of Economics and Financial Issues, 6(7S), pp.103-108.
Akbar, M.S. and Suraida, I., 2017. Competence and Professional Care of External Auditor on
Information Technology Audit. TRIKONOMIKA, 16(1), pp.21-27.
Gelinas, U.J., Sutton Jr, S.G. and Federowicz, J., 2019. Business processes and information
technology.
Marchewka, J.T., 2016. Information technology project management: Providing measurable
organizational value. John Wiley & Sons.
Mazza, T. and Azzali, S., 2018. Information technology controls quality and audit fees: Evidence
from Italy. Journal of Accounting, Auditing & Finance, 33(1), pp.123-146.
Mohamad, S. and Toomey, M., 2016. A survey of information technology governance capability
in five jurisdictions using the ISO 38500: 2008 framework. International Journal of Disclosure
and Governance, 13(1), pp.53-74.
Sheldon, M.D., 2019. A Primer for Information Technology General Control Considerations on a
Private and Permissioned Blockchain Audit. Current Issues in Auditing.
Turner, L. and Weickgenannt, A., 2020. Accounting information systems: controls and
processes. Wiley.