HI5019 Strategic Information Systems for Business: Rainbow Illusion

This report analyzes the strategic information system of Rainbow Illusion, a company with 30 garment stores, focusing on its sales system's strengths and weaknesses. It examines how the company manages its sales transactions, emphasizing the roles of the full-time and assistant managers in overseeing store operations and minimizing fraud risks through a detailed invoice system. The report identifies potential situational pressures, such as manual transaction processing and centralized decision-making, that could increase the risk of fraud. Additionally, it compares Centralized and Distributed Computer Systems, explaining why companies often prefer distributed systems for their operational flexibility and departmental control. The analysis highlights the importance of robust internal controls and risk management procedures to safeguard the company's financial integrity.

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

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STRATEGIC INFORMATION SYSTEM
Executive Summary
The report is based upon strategic information system as it shows how the company
is carrying their business activities with the help of strategic information system. It
deals with a company name Rainbow Illusion which haves several retail stores in the
country. It shows the strength in company sales system and how the company is
reducing the problems which are there in company sales system. The situational
pressure which is faced by the company has also shown in the report. Lastly, the
report shows the Centralized Computer System and Distributed Computer Systems
and why managers choose the Distributed Computer System over Centralized
Computer System.

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Table of Contents
Introduction...................................................................................................................3
Strength in Computer System......................................................................................3
Problems in Company Sale System.............................................................................4
Situational Pressure in Rainbow Illusion......................................................................5
Different Computer System in the Company................................................................5
Conclusion....................................................................................................................6
Reference.....................................................................................................................8

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STRATEGIC INFORMATION SYSTEM
Introduction
Strategic Information System is developed to help the company carry their
business objective. They are made to give competitive advantage to company.
These system helps the company to carry forward all the information in their
accounting system. Strategic Management involves the implementation and
formulation of company goals and the initiative taken by management to complete
the goals and objective in the business. Strategic management provides a direction
to an enterprise to specify the goals of the organization and helps the company to
develop plans and policies to achieve those goals in the business (Ansoff et
al.,2018). These help the organization to allocate resources which allows the
business to implement the plans. The company should have proper marketing
strategies which will let them gain an appropriate amount of revenue in the industry.
Strategic management helps the company to step ahead of its competitors and able
to hold more area in the market. The report shows about Rainbow Illusion which is
having 30 garment stores in the country. It discusses the strength of the company
system as to how the company has a proper sale system in their business (Baker
2014). These also show the problem which could incur in the company business and
how the company is managing with the same. The next part of the report shows the
operational pressure which can arise the situation of fraud in the business and how
the company can deal with the same. It also states about the centralised accounting
and Distributed Computer Systems and gives the reason why companies prefer
distributed system over the computerised system.
Strength in Computer System
Companies should have a proper accounting system that will help them to
record all the company transaction in their financial statement. Sale system helps the
company to make a proper invoice and also help them to know about the details of
each sale transaction in the business (Edvardsson et al.,2014). Sale system helps
the company to carry its business operation smoothly. If the system is beneficial,
then it helps the company to minimise the risk of fraud in their business activities.
Strength in Rainbow Illusion sales system has shown below:
1. The information given about the Rainbow Illusion sales systems states that
the company has appointed two managers for the store. One is a full-time
manager, and another one is the assistant manager. These will help the
managers to divide the responsibility of their job and able to perform their job
effectively in the business. The store has so many activities that are to be
handled by the managers as there are two managers these will help them to
carry business activities properly in the store (Foxall 2014). Both managers
have sufficient amount of knowledge in regards to a business operation which
will let them increase the overall revenue of the shop. These show that the
shop has appropriately managed by both managers and also able to decrease
the risk of fraud in the business.
2. The invoice system, which is introduced by the company, also serves as a
strength in their business activities. These invoice system helps the company
to gain clarity of each event that is happening in their business (Ginter,
Duncan and Swayne 2018). The four invoice helps the company to check
whether all the transaction has appropriately recorded in the system or not. It
also helps the company to verify their stock with the information gathered with
the help of analysis of their invoice.

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3. Individuals are recording all the transaction manually that help them to record
all the information in their accounting statement. These provide an overview of
the performance of the company in the industry. Company will get an idea
about the fast-selling product and it will able to increase the supply of same in
their shop.
4. The cashier has to verify each transaction before proceeding for the payment.
These let them know that all the transaction appropriately sold to the
customers (Goetsch and Davis 2014). The cashier has to give identification
number to each order which helps them to track details of each order easily in
the business as all the transaction is marked by the cashier that will help them
to evaluate the company inventory in future events.
5. The proper reconciliation process has been carried by the company that let
them identify any business error in the company sales system. These help the
company to know the effectiveness of their employee, which are performing
the business transaction in the shop. It will let the company know about each
week performance, and with the help of that company can change its current
market strategies in the business.
6. The central processing unit of the company is checking and recording all the
store data, which will help them to get a back up whenever the company
required for the same. As the company is having so many reconcile process
which helps them to reduce the error in company business operation. These
process helps the company to reduce the risk of fraud in the company
business.
Problems in Company Sale System
1. The company store has so many responsibilities which are very hard for an
individual to perform as a result of which company will have a lack of proper
management in their business. As the company has appointed two managers
and them able to divide the responsibility of store and able to perform each
activity efficiently in the business (Hill, Jones and Schilling 2014). The
company can minimise the lack of management responsibility by appointing
two managers in the business.
2. Company is recording all its business transaction in a proper accounting
system which leads to reduce the risk of materiality and misstatement in the
company business. As if the company had a computer system, then it would
increase the risk of materiality in the business. Four invoices which are
generated by the system gives them proper information about the business.
3. Company is recording their transaction manually, which will reduce the risk of
misstatement in the business (Hill 2017). Company is checking all the
transaction, and then the proper recording is done by a company individual,
which also provides clarity of information recorded in the company business.
4. The cashier is checking all the transaction, so it minimises the risk of
misstatement in the company financial statement (Zeriti et al.,2014). Each
order marked with an identification number that helps them to identify the
details of order quickly in their business operations. Cashier checks all the
details before proceeding the transaction that helps them to earn the proper
amount of revenue in the business.
5. Cashier keeps details of all the payment held in company business. It let them
confirm the sale amount accurately in the business (Hitt and Duane Ireland

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2017). Invoices help them to know how the transaction carried as by cash,
cheque or any other mean of payment in the business.
6. Central processing unit verifies all the company activities on a timely basis
which helps them to minimise the amount of fraud in the company sale
systems (Kotler et al., 2015). It let them reconcile all the company transaction
with the report generated in the central processing unit. These provide clarity
of information among the management of the company and let them carry its
business operations efficiently.
Situational Pressure in Rainbow Illusion
These are the pressure which leads to an increase in the risk of fraud in
company business. Situational pressures arise when there is a high chance of fraud
in company business. The company must have proper accounting information which
will help them to get details of all the business operation carried by the company
(Wikström and Bouhana 2017). The company having weakness in internal control
leads to an increase in the risk of fraud in the business. The situation pressure lies in
company business shown below:
1. All the company transaction transferred manually that increases the risk of
material misstatement in the company business. Company is not having any
proper computer system to record all the transaction as a result of which the
individual employee, carrying the manual accounting process, will able to
manipulate the company transaction easily in the business. These will lead to
an increase in the misstatement effect in the company business and also
affect the company financial position (Lasserre 2017). Employees of the
company will able to eliminate some sale transaction which leads them to
decrease the overall profit of the company in their business activities. It
increases the chance of fraud in the company, which should be minimized by
the company by carrying proper risk management procedures.
2. Company managers have all the power in regards to the decision-making
process in company business activities. Mangers have all the access in
regards to company financial information which give them the flexibility to
manipulate the company accounting transaction easily (Lusch and Vargo
2014). The control lies in the hand of managers, so this increases the risk of
fraud in the business. The company should have a proper record of all the
transaction that takes place in a business which will also help them to reduce
the risk of fraud in the financial report.
Different Computer System in the Company
Each company should have a proper accounting system which will help them
to carry the business activity easily in business. The system helps them to record all
the accounting transaction accurately and able to prepare proper accounting
statement of the company. There are two types of a computer system which are
Centralized Computer and Distributed Computer Systems.
Centralized Computer System
It is the accounting system in which all records kept in one place. This system
controls all company department and branches accounting process (Maglio et al.,
2016). It helps the company to connect one or more organization to the central
server. The system displays all the accounting entries that recorded in different
stores of the company. The company can check details of one branch or all branch

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at one time. This system helps the company to carry all their activities from one
system in the business. It builds a link of communication between all the department
of a company which help them to carry the business activities easily. Company does
not have to spend much amount of time on research of data as all the data of all
branches are available in one place (Moutinho and Vargas-Sanchez 2018). It helps
the company to prepare the accounting statement easily as the data of each branch
is readily available in the centralised accounting system. These also help them to
carry the integration process as there is some merger or acquisition than a company
can easily include that company data in the system and carry its business operation.
The company business based on one software only so this decreases the overall
training cost as a company has to train its employee in regards of the usage of single
software (Neo et al.,2017). It increases the coordination between the department of
the company.
Distributed Computer System
Distributed Computer System is a system in which each department of the
company has their system. Each department has to fulfil its business requirement,
which will help the company to carry its activities properly. It provides the flexibility of
operation as each department can carry their method to record the accounting
transaction (Öztamur and Karakadılar 2014). It helps the company to reconcile the
information by the confirmation of balance from the inter-team department. Each
department carries its accounting system, which helps them to increase the
efficiency of work in the business.
Centralized Computer System vs Distributed Computer System
The research shows that most managers choose Distributed Computer
System over Centralized Computer System as in a Distributed Computer System
each department has their server, which helps them to increase the overall speed of
the work. Centralized Computer System is based on a single server as all the
department is working under one server that let to decrease the overall speed of
company business as it provides massive pressure on a single server. Centralized
Computer System is usually expensive, which cannot be afforded by each class of
company whereas Distributed Computer System is comparably cheap that could be
affordable by all class of companies (Schmidt, Spann and Zeithammer 2014). The
Centralized Computer System is controlled by one single head which increases the
risk of material misstatement in the company business. Many individuals manage
Distributed Computer System as each department carries its accounting transaction,
which decreases the risk of material misstatement in the accounting statement.
Centralized Computer System fails it means that there will be no operation in the
company whereas if Distributed Computer System fails than only one department will
not able to work but to remain others will able to carry their business operating
smoothly (Smallbone and Cale 2016). Back up of company lies in one place in the
Centralized Computer System that shows if there is any problem in the system the
company will lose all the information and they will not be able to restore the
information quickly. The Distributed Computer System has many servers, so even if
one server fails to perform than also, the company will able to restore all the
information quickly from other servers.

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STRATEGIC INFORMATION SYSTEM
Conclusion
The report concludes the strategic information system that carried in the
company. Strategic Information System helps the company to formulate their
business objective and also help them to prepare a plan which will help them to
reach the business objective. Strategic Information System helps the company to
implement its business goals in the vision and mission of the company. Strategic
Information System helps the company to transfer in business information easily in
the business. Marketing strategies made by the company helps them to gain the
proper amount of business in the market and also helps the company to obtain a
proper place in the industry. The report shows about Rainbow Illusion which is a
garment store and has more than 30 stores in the country. The company should
have a proper sales system which can help them to carry its business operation
easily. Rainbow Illusion has proper sales system as the strengths of company sales
system listed in the report. It also states about the problem and how the company
has minimized them in their sale system. Situational Pressure creates more chance
of fraud in company business; it shows how the company employee and
management can manipulate the overall accounting statement of the company.
Lastly, it concludes the Centralized Computer System and Distributed Computer
System as to why the managers implement a Distributed Computer System over the
Centralized Computer System.

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