Holmes Institute HI5019: Case Study Report on Rainbow Illusion

This report presents a case study analysis of Rainbow Illusion, a retail company operating in New South Wales and Victoria. The study examines the company's sales transaction system, focusing on its strengths, such as the appointment of full-time managers and commission-based salespeople, and how these strengths help avoid weaknesses. The report identifies potential situational pressures that could increase the risk of fraud within the manual sales process. It also discusses the advantages of distributed systems over centralized ones, and why companies might choose the former. The report concludes by summarizing key findings related to the strategic information systems employed by Rainbow Illusion and how the company maintains its market position through the coordination between its various branches, emphasizing the manual sales transaction system.

Running head: CASE STUDY BASED REPORT ON RAINBOW ILLUSION
CASE STUDY BASED REPORT ON RAINBOW ILLUSION
Name of the Student
Name of the university
Author note

1CASE STUDY BASED REPORT ON RAINBOW ILLUSION
Executive Summary
Businesses are complex and dynamic in nature thus strategic information system has a lot of
importance in case of various business strategies. Strategic information systems act as a help
to the organizations developing generic strategies. These strategies help businesses in
attaining competitive advantage. The importance of strategic information system can be well
understood from the advantages that its provides such as cost reduction, switching cost,
creating unique products and services, barrier to entry, product differentiation, market
enhancement and creating alliances. Strategic Information Systems help the organizations in
creating as well as implementing strategies such as Customer Management, Reduction in
Cost, Increasing sales and many more. The companies or the businesses implementing
strategies successfully get a competitive advantage over their market rivals. If any business
can make use of information system in an effective manner then it can maintain its position as
well as strength in the market. The strategies made are responsible for increase in the market
share of the organization. There are many complicated decisions that need to be taken by the
officials in the management and strategic information system help the managers in
channelizing these informations in a specific and organized way. Thus strategic information
system can help the organizations gain competitive advantage as well as organizes the
business structure and position. The report analyzes a case study of a retail store having its
branches in New South Wales and Victoria. In this report strategic information system
implementation in case of the sales transaction of the company will be discussed. The study
will be focusing on finding out the strengths as well as of the weaknesses that have been
successfully avoided by the firm. The paper provides six strengths of the firm in the process
of sales transaction after assessing the case study. It further comments on the reasons how
these strengths have been successful in avoiding certain weaknesses. The paper includes two
of the situational pressures that these kinds of companies can face or those that increase the

2CASE STUDY BASED REPORT ON RAINBOW ILLUSION
possibility of fraud. The advantages of distributed system over centralized ones have also
been included in this report. The reasons why companies choose distributed system is a part
of the paper as well. Lastly, the paper concludes commenting on the facts and issues related
to the strategic information system that could be understood from the particular case study. It
comments on how the company has made use of strategic information systems in the process
of its sales transaction to maintain its position. The coordination in between the various
branches of the company has also been analyzed.

3CASE STUDY BASED REPORT ON RAINBOW ILLUSION
Table of Contents
Introduction................................................................................................................................4
Strengths recognized in sales transaction system of Rainbow Illusion..................................4
Problems avoided by Rainbow Illusion by the incorporated strengths..................................6
Situational Pressures increasing the possibility of fraud........................................................7
Distributed Computer Systems- reasons why companies choose it.......................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10

4CASE STUDY BASED REPORT ON RAINBOW ILLUSION
Introduction
Rainbow Illusion is a company that deals in readymade clothes and it caters to the
needs of young females. The firm has 30 branches all around New South Wales and Victoria.
All the stores have a different manager and assistant manager. The manager and the assistant
manager are paid a salary to work full time. The case study provided includes the sales
structure of the company and every step of the sales structure has been discussed. The process
involved in the sales transaction structure has been given (Shaltayev, Deniz and Hasbrouck
2016). The sales structure provides a clear idea of the individuals involved in the sales
transaction process and this will be assessed and analyzed concerning the strategic
information systems. The paper will be discussing the strengths of the company in the
process of its sales transactions and how has it avoided errors by implementing this process
will also be considered. The daily processes involved in sales transactions have also been
discussed in the paper. The concept of distributed systems and a single computerized system
along with the advantages of the former over the latter have also been included in the report.
The report is a case study specific as the content of the report adheres to the case study
provided. The comments and other facts provide will be related to the case study.
Strengths recognized in sales transaction system of Rainbow Illusion
1) The company has appointed different managers and assistant managers at each of its stores
who work on a full-time basis and are paid accordingly.
2) The company hires young people as cashiers and as a salesperson.
3) The salesperson is the one who is at the starting of the sales transaction and they have the
option to earn commission over the salary they are paid based on the volume of sales done by
them.
4) The invoice handed to the cashier is reviewed by the cashier.
5) Reconciliation report is prepared daily by the assistant manager of the individual branches.

5CASE STUDY BASED REPORT ON RAINBOW ILLUSION
6) The corporate headquarters of the firm is kept updated with the cash register tapes, return
slips and the cash invoices daily.
To recognize the strengths of the company in the sales transactions, the sale cycle needs to be
understood and reviewed. The sale cycle is a vital part of the transaction cycle. The
transaction cycle is an interlock system for the transactions happening in a business. In the
maximum of the cases, the various business transactions are a collection of smaller cycles of
transactions that relate to the sale of goods, employers, suppliers, and payment that is made to
the lenders. In this case study, the sales cycle is given and the strengths found out is that from
the sales cycle. The cycle starts with the salesperson and ends at the level of the manager.
The salesperson is hired on a part-time basis and he is responsible for keeping a record of the
cash invoice manually. He keeps a record of the employee number and other details of the
sales transaction including the class, description, quantity, types of clothes and net price. A
total sales invoice, discount if applicable on certain products and the total are also calculated
by the salesperson on the sales floor. Next in a cycle comes the cashier who is handed the
sales invoice and he is responsible to check the same as well as providing an input of how
many of the products have been sold. The cash register used by the company is simple. It can
validate the sales invoice mechanically by assigning a number to the various transactions.
The cash register gets approval to the credit on sales charge also approving sales paid by
cheque. The cashier keeps with him a copy of the invoice which acts as the store copy, the
second copy of it is given to the customer and the last is for the bank. The return handling
process of the company is just reverse. The assistant manager comes next in the sales cycle
and he is responsible to reconcile the invoices to cash register tapes. The manager is the last
to make a review of the day’s transactions and he deposits the amount earned from the
transactions at the bank. The cash register tapes, sale invoices as well as the return slips are
sent to the corporate headquarters. From the above system of the sales transaction of the

6CASE STUDY BASED REPORT ON RAINBOW ILLUSION
company, it is clear that it follows an organized system which is the strength of the company.
Hiring employees on a part-time basis saves the firm from fraud as people dealing with
systems for long are the ones who get indulged in fraud. The employees are motivated as well
because they can earn commission over their salary according to the volume of sales they do.
Problems avoided by Rainbow Illusion by the incorporated strengths
The 30 stores of Rainbow Illusion have their mangers and assistant managers which is
a positive aspect of the firm. Burdening a single person with the responsibility of two or more
stores will result in low productivity in case of work. Suppose a person handles three stores
then it might happen there could be errors while recording transactions and the daily cycle
will be affected badly. The company hires young people like cashiers and salesperson which
is another positive aspect as the target customers are young as well. The salesperson can
convince the customers as their choices might be similar and being of the same age their
dressing sense may match. The risks arising from the use of machines in the sales cycle are
avoided in the firm as it is a manual process from the last to the last step (Shiau, Chen and
Tsai 2015). It is not that errors might not happen but as at every step, the invoices are
checked and reviewed there are very fewer chances of errors. The company is far from the
disadvantages of the computerized system. The disadvantages are as follows:
Technical issues- Depending on the computer system would make the company vulnerable to
technical issues such as sudden break down of the system that may lead to loss of information
related to transactions. Technical knowledge to handle the systems is required and for this,
the company has to hire employees skilled in this which will add to the cost of the company.
2) Data insecurity- Computerized databases are prone to data breaches and there have been
many instances of data breaches that disrupt the whole system of an organization. Sales
transactions deal with financial information and thus if these data are hacked the
organization's position in the market will be affected (Cassidy 2016).

7CASE STUDY BASED REPORT ON RAINBOW ILLUSION
Thus handling the sales transaction process manually saves the company from many
problems. Rainbow Illusion adheres to a structured way and the records are updated daily to
the corporate head which shows that each of the stores has good connections with the main
branch. Unlike the prevalent online craze, the company has stuck to its manual procedure that
helps in maintaining and retaining the privacy of data of its clients.
Situational Pressures increasing the possibility of fraud
The process involved in the sales transactions is fully manual; this has advantages as
well as disadvantages. Errors that are computer generated can be technological or human-
made. Technological errors have alternatives to be checked but in case of intentional errors
made by humans, there exists no such alternative as it is planned and developed to disrupt the
system. Humans can make errors unintentionally as well but the error, in any case, can be
committed (Weiss and Miller 2015). In the case of financial transactions, even a small
alteration can have a bad impact on the whole system. As discussed above the sales
transaction cycle involves the salesperson, cashier, assistant manager, and manager. Each of
them has a significant responsibility to maintain the daily transactions of the firm. Somebody
wanting to commit fraud can easily do so. Suppose the cashier manipulates the sales invoice
as per his requirement and makes some alterations then the whole cycle will get disrupted
resulting in loss of revenue of the firm. The copy that is retained in the sales book can also be
altered has the cashier in a post higher than the salesperson. The higher-level employees that
are the managers and the assistant manager can make changes to the bills as well to make
some extra income from there thereby affecting the revenue of the company. Unintentional
errors can happen as well, for example, the daily process of sending the cash register receipts,
sale invoices and the return slips can be a burden for the manager and a casual attitude may
lead to errors in the same (Pearlson, Saunders and Galletta 2016).

8CASE STUDY BASED REPORT ON RAINBOW ILLUSION
Distributed Computer Systems- reasons why companies choose it
Distributed systems are laced with many advantages for which they are preferred over
the single computerized system. Some of the reasons are as follows:
1) In distributed systems, more than one computer system is connected and these work as a
single unit effectively. When compared to single computerized systems, distributed systems
are more powerful as well as resilient. The distributed systems have greater speeds as well.
Distributed systems have many advantages if used in a proper and organized manner.
2) Speed of the distributed system is another advantage along with the process involved in
distributing the content. The queries that arise can be easily routed to the servers with various
information from a single user. This saves from overloading a single system with many
requests. Speed is an important parameter in the case of handling financial transactions
(Ingram et al. 2015). Therefore organizations choose distributed systems over a single
computerized system.
3) The distributed system allows the users to route requests to the nearby servers or the
servers having greater speeds. An increase in speeds helps in reducing the time involved in
transferring data and at the same time saves resources that are used to handle the network
traffic and the related bottlenecks.
4) The distributed systems serve the primary purpose of data distribution amidst the servers
linked to the system and these are scalable as well (Hu et al. 2017). It is easy to work with
distributed networks for example if some new hardware is added to the network the
information passes to the distributed system as well.
5) The distributed systems can help in designing parallelism. This is the generalized case and
relates to mathematical operations for example weather modeling as well as scientific
computing. This finds its applications in those multiple processes which are effective to

9CASE STUDY BASED REPORT ON RAINBOW ILLUSION
divide independent parts related to complex simulations. The distributed systems help in
obtaining an appropriate result and at a faster speed.
Conclusion
From the discussions made in the above paper, it can be seen that the company has a
well-defined structure and the process followed in the transaction cycle has a definite process.
The individuals responsible in every step of the sales transaction carry on their task in order
and thus save the company from chaos and disruptions in the transactions. The processing of
the transactions is done every day thus no work is left for the other day. The manual system
of the organization is efficient and keeps the organization away from the machine-oriented
risks. The negative aspect of the organization is that the frauds which may happen can only
be done by the human resources of the organization. The organization keeps its employees
motivated with commissions over their salary. To avoid frauds there could be sessions that
involve motivating employees to carry out their work properly. The sales transaction cycle of
the organization has not been influenced by the online platform prevalent in the businesses of
the rivals thus maintaining their way.

10CASE STUDY BASED REPORT ON RAINBOW ILLUSION
References
Cassidy, A., 2016. A practical guide to information systems strategic planning. Auerbach
Publications.
Hu, Z., Mukhin, V., Kornaga, Y., Lavrenko, Y. and Herasymenko, O., 2017. Distributed
computer system resources control mechanism based on network-centric
approach. International Journal of Intelligent Systems and Applications, 9(7), p.41.
Ingram, T.N., LaForge, R.W., Williams, M.R. and Schwepker Jr, C.H., 2015. Sales
management: Analysis and decision making. Routledge.
Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and using information
systems, binder ready version: a strategic approach. John Wiley & Sons.
Shaltayev, D., Deniz, B. and Hasbrouck, R., 2016. Factors affecting a perishable supply
chain's transaction costs and service. International Journal of Applied Management
Science, 8(2), pp.114-131.
Shiau, W.L., Chen, S.Y. and Tsai, Y.C., 2015. Management information systems issues: co-
citation analysis of journal articles. " International Journal of Electronic Commerce
Studies", 6(1), pp.145-162.
Weiss, N.E. and Miller, R.S., 2015, February. The target and other financial data breaches:
Frequently asked questions. In Congressional Research Service, Prepared for Members and
Committees of Congress February (Vol. 4, p. 2015).