Strategic Information Systems: Analysis of Business Processes

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Strategic Information Systems for Business and Enterprise
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Executive Summary:
In this report Process and systems of the company like cash disbursement, purchase
process and Payroll system are analysis to identify the weakness of the process which
helps management to take corrective action. Further in this assignment graphical
representation is conducted to identify the threats and weakness of the process so that
company can developed a strategic planning to strengthen the system process.
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Table of Contents
Executive Summary:........................................................................................................1
Introduction:..................................................................................................................... 3
Purchase System.............................................................................................................4
Cash disbursement system:-............................................................................................8
Payroll system................................................................................................................12
The weakness of the payroll system:-............................................................................14
Conclusion:.................................................................................................................... 16
References:....................................................................................................................17
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Introduction:
The study conducted to analyse the function process of various process system in the
organization and also find the errors and issue for business entity during the process
implementation. Here the entire report focused and analysis the various process like
purchase, cash disbursement and payroll within the organization to identify the
effectiveness of the process for the organization. In this study, the data flow diagram
and flow charts are used to measure the process of Cash disbursement and payroll
system of the business entity so that management can identify the effective process for
business and entity.
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Purchase System
Purchase is the essential process of each manufacturing mechanism. Purchase system
handles all the activities which are related to purchase of inventory and also inventory
management in the business unit for the company. As the purchase is the primary
process of the entity from which the company can identify their supplier and received
raw material for manufacturing activities in the business (Raduan, & Jegak, 2013).
Availability of raw material strengthens production efficiency of the company and also
provides effective management of cost in production or operational activities. The initial
stage of each organization is starting from purchase department which inbuilt the
process of supply of raw material to the production entity so that they can deliver the
goods or products in the market.
Purchase system can also be identified as the system which controls and monitor the
inventory stock of the company and maintain their records in manually or automatic
software system so can cost reduction can be minimized by production units for
business. IT takes a vital role in management activities in the company so the
collaboration of IT in inventory management provides better control on inventory and
easy maintenance of goods so that management can archive vital information from the
system for the concerns of inventory in the business unit for production.
Purchase system follows a process which is interlinked with each other so that the
company can manage their investor y. In software, a particular process takes place on
the time after that other process starts running which is depends on prior process which
is finished in the system so the output of a process is the input of another process
(Boston, 2017). This kind of activities defines a chain in the purchase system which
drafted a framework so that the company can manage inventory ineffective moaner and
also acquire important information which is needed by the company. Some of the steps
need to be followed by management to overcome the risk in inventory and also
increased the value of financial information of the company.
 Generation of the Purchase order through an electronic medium which provides
authentications.
 Identification of better way of control and maintain inventory for business production.
 Maintain and balanced the adequate list of Dealer or supplier for the company.
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 Use of electronic way of payment to their supplier so that tracking of expenses can be
easy for management.
 A Proper tool for identification of expenses in the near future for business activities to
maintain an inventory of business entity.
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Purchase System Flow Chart
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Purchase System Weaknesses:
Each system had several issues which management need to evaluate for better
performance of the system. Here some of the issues and weakness are discussed for
purchase system so that effective control of system implemented.
 Improper planning of Purchase
In the current scenario, purchase needs to be conducted on proper planning and
requirement of material in production for the company but sometimes management
placed the order of purchase before pre-analysis of the requirement of material for
production high cause addition material and increase carrying the cost of the
product. As before order, management needs to analyze the requirement of
inventory so that the company reduce the additional cost on inventory and maintain
the adequate control on inventory management.
 Purchase authentication:
Purchase authentication is the major issue which arises with the use of the
electronic medium of the inventory control system. Proper accountability of system
rises on the profile of the person, not on the person who orders the quantity. In
some of the time employee take the illegal entrance of manager profile which harms
worthless purchase of inventory for business activities. Proper cross-checking can
be helpful for the company to avoid unnecessary purchase of raw material and also
void additional cost of purchase that kind of material.
 Price Concentration of Management:
Price is the major issue for management as many of the time purchasing officer
attracts toward the price of material instead of quality and value of inventory which
overcome the quality of finished goods which impact on the performance of the
business in the market (Davis et. Al 2017). Management needs to consider the
value instead of price so that they can consume adequate material for their
production unit in the market. Further if the company concern on price and value
then they can overcome their additional cost of material wastage and control
production activities for a business entity.
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Management needs to implement some of the policies to overcome the weakness and
threat for production and purchase system of business entity.
 Management needs to maintain and control the supplier list according to the right
mix of price value and quality of material which enable them to achieve cost-effective
products from their operational activities.
 A periodically check can ensure management about the performance of the
purchase system and also help to identify any issues during the purchase process
for the company so that management can take corrective action to overcome those
issues.
Data Flow diagram of Purchases:
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Cash disbursement system:-
Cash disbursement is the major part which deals with a cash payment for the business
activities so that management need to concern for the improvement in cash
disbursement of company (Taylor, & Bonsall,. 2017). Many of the time cash fraud is the
major problem for each organization so management needs to implement effective
control using technology advancement so that they can detect and overcome that kind
of issue for management. With the use of Information technology management can
define the framework which effective controlling framework on cash payment of
company. Following is the process of the cash disbursement system:
 Identification of Payment
 Filling necessary information for cash disbursement
 Preparing cash or payment instrument like cheque or online transaction
 Authentication of the transaction from the proper and responsible authority
 Transfer of payment details to the vendor and reconcile account of the vendor
 Documentation of the transaction for a business entity
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The weakness of the cash disbursement system:-
Cash always concern for the fraud activities which are entitled by an employee of the
business so the company needs to overcome their weakness related to cash
disbursement systems so that they can achieve an effective framework for Cash
payment.
 Internal control plays a major role in cash disbursement, many of the times
employees of the company are engaged in cash fraud for their personal benefits
(Lohrey., 2019). Management internal control can be a major weakness for a
business entity which they need to improve for effective management control on
cash and cash equivalent.
 Many of the time in business accountability is not exist for cash payment transaction
which enables the employee to theft cash from petty cash of the company and also
enables major cash issues for business in their operational activities.
 Irregular check and non-rotation of the responsibility of employee for cash and petty
cash book can invite major frauds in cash for the company. Further management
loss the control on cash and cash equivalent assets which provide major drawback
in business activities.
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