Case Study: Strategic Information Systems for Rainbow Illusion

This case study analyzes Rainbow Illusion, a ready-to-wear garment company, focusing on its strategic information systems. The report examines the company's strengths in controlling sales transactions, such as employing dedicated managers and using manual record-keeping to avoid technical glitches and ensure accuracy. It identifies situational pressures that could lead to fraud, like financial difficulties and pressure to meet sales targets, potentially causing employees to misrepresent data. The study further explores the advantages of a distributed computer system over a centralized one, emphasizing benefits like inherent distribution, performance, cost-effectiveness, scalability, and reliability. The analysis covers transaction cycles, financial and management reporting, and e-commerce considerations, including risks, internal controls, and fraud prevention. The case study highlights the importance of robust systems and ethical practices for business success.

Running head: STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AMD
ENTERPRISE
Strategic Information Systems for Business and Enterprise
Name of the Student:
Name of the University:
Author Note

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Executive Summary
The preparation of this report has helped us to know about Rainbow Illusion, a company
dealing in the ready to wear garment industry for young females. The rise in the growth of
this sector is helping to boost the economy growth. It is providing job opportunities to many
people as well as fulfilling their requirements. The strengths of the company have been
identified along with the problems that have been eradicated by adopting those strengths
have been mentioned. The reasons for a company to opt for installation of a distributed
computer system over a centralized computer system have also been discussed.

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Table of Contents
Introduction............................................................................................................................3
Strengths for controlling sales transactions...........................................................................3
Problems avoided by incorporating the strengths to control the sales transactions.............4
Identification of situational pressures that would lead to an increase in the likelihood of a
fraud.......................................................................................................................................4
Reasons to choose the installation of distributed computer system over a centralised
computer system....................................................................................................................5
Conclusion.............................................................................................................................5
Reference list.........................................................................................................................7

3STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AMD ENTERPRISE
Introduction
This report has been prepared for Chief Executive Officer of Rainbow Illusions that
is into the business of selling ready to wear clothes for young females. The garment
industry in Australia ranks as the biggest garment importer of the Southern hemisphere. It
is a booming industry in Australia as the demand for pullovers, waist coats, jerseys,
cardigans and so on keep increasing each year. The second most demanded garment are
the cotton t-shirts that are available in woven as well as knitted fabric and are very
comfortable. Garments for women like breeches, shorts, brace overalls and knitted cotton
trousers are largely existing in the country. Further, products like women shirts, dresses
and blouses are also widely available (van Krieken 2014). There has been manufacturing
of certain new garments like synthetic fiber dresses, man-made fiber shirts and blouses,
women’s cotton trousers and so on. India is the largest exporter of garments to Australia.
With the help of this report the processes, risks and internal controls for its revenue cycle
have been analysed. The strengths of the company for its control of sales transaction have
been identified that helps it to be at a higher position as compared to its competitors. The
mechanism of having different heads for each store has been a very good strategy
adopted by the company. The advantage for each of the strength has been determined
that has helped to improve the performance for its management system (Shields et al.
2015). The situational pressures on the management as well as the employees, which
would force the company to increase its chances of fraud have been identified (Manurung,
Suhartadi and Saefudin 2015). The reasons for a company adopting a centralized
computer system over a distributed computer have been emphasized. The advantages of
choosing to install a distributed computer system have been highlighted. The advantages
and disadvantages of both the systems of computing have been stated.
Strengths for controlling sales transactions
 Its allocation of a full time manager as well as an assistant manager in each store
helps to monitor the process more smoothly (Block 2016). Each store has its own
set of people to look after its operations rather than being interfered by other people
of the management from different stores.
 The employment of the cashier and the sales personnel as young people attracts
more youth towards their company as they get remunerated by working part time
based on the sales volume as hourly wage along with commission (Anitha 2014).
 The use of unsophisticated cash registers into four parts for recording each
transaction from the sales invoice. The payment type of cash, bankcard or cheque
do not affect the use of sales invoice. The manual recording of the employee
number with the transaction, calculation of discount when required, preparing grand
totals, totalling of the sales invoice and calculating the sales tax (Cropper et al.
2014.). The sales invoice is then given to the cashier and a copy is retained in the
book of sales.
 The input of the sales by the cashier after reviewing the invoices. The cash register
gets validated and the number to the transaction gets automatically assigned. A
copy of the invoice is given to the respective parties to the transaction.
 The sequential ordering of the sales invoice by the cashier and taking the totals of
cheque sales, cash and credit card returns, bankcard and cash (Chen et al. 2014).
The preparation of a daily reconciliation report by the assistant manager for
reviewing by the store manager.
 The forwarding of the sales invoice, return slips and cash register tapes daily at the
corporate headquarters to the department of central data processing for processing.
The returning of the commission activity and weekly sales report by the department
of data processing for reviewing to the manager.

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Problems avoided by incorporating the strengths to control the sales transactions
The allocation of full time managers as well as an assistant manager for each store
allows them to monitor the transactions of the store they have been assigned. There is no
need to look after any other store. The duties have been delegated to the respective
managers for the individual stores. If there had been only one manager it would have
become very difficult for him. There would not have been any helping hand for him. He
would alone be burdened with all the responsibilities of the stores. It would become very
cumbersome for him to track the operations from a single location. He could be present at
all the stores at the same time. The employment of young people has helped to increase
its employee base as it is a company located in a country that has a lot of youth population
who are eager to work. They do not get the privilege of learning while working in all the
companies. Therefore, many young people prefer joining this company as they can work
according to the time they are comfortable as well as continue learning. The recording of
the transactions manually by the sales person prevents the error of technical glitches that
could have arisen (Hidayat, Mustika and Sulistyo 2014). It also prevents work hamper as
the records are maintained manually so there is no risk of work getting delayed due to
system breakdown or powercut. The work can proceed easily without any hindrances. The
reviewing of the sale inputs and invoice by the cashier helps the cash register to
mechanically validate the invoice and supporting it by assigning the consecutive
transaction numbers. This ensures regular checks on the entries being made. It also
assists in getting approval for credit on sales charge and also on payments by cheque.
The deposits and returns are well handled as a copy of invoice is given to the customer,
store and the bankcard. The recording of the sales invoice in a sequential order helps to
track back the records without any difficulty as they are in sequential order. It helps the
assistant manager to reconcile the totalling of the sales invoices that are consecutively
numbered, the return slips and the tapes of cash registers. A daily report for the respective
stores are prepared that helps the manager to review the performances of the different
stores.The forwarding of the data to the central processing department helps by acting as
a backup in case the data has been lost from the stores due to any reason. The data can
all be collected back from the department at the headquarters.
Identification of situational pressures that would lead to an increase in the
likelihood of a fraud
There can be several situational pressures in a company that would lead to the
increase in its likelihood of frauds. One such situation can be the situation of insufficient
working capital and urgent requirement of showing favourable earnings will result in the
likelihood of fraud by the management (Hess and Cottrell Jr 2016). Since, there are
managers and assistant managers allocated for every store they can easily manipulate the
related party transactions and not give the required data to the auditors (Donelson, Ege
and McInnis 2016). Another situation could be when the employees are being forced to
achieve their targets to get their salary and commission on the basis of the sales volume
(Bonny, Goode and Lacey 2015). As the sales target are not being achieved they are not
being entitles to the salaries. This leads to an adoption of misrepresentation of data by the
employees to earn their salaries. They maintain the books of records very sloppily. A
situation of crisis conditions is being created for the operating of the employees
(Breevaart, Bakker and Espevik 2014). They are not being able to meet the required
targets as a reason of which they are not being able to take their mandatory vacations or
periodic rotational shifts.

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Reasons to choose the installation of distributed computer system over a
centralised computer system
A distributed computer system is a mechanism in which the components are
situated on various networked computers that coordinate and communicate their activities
by sending and receiving messages from one to another (Shah and Graham 2014). The
interaction of the components with one other helps to achieve the common goal that they
all have to achieve. This type of system has three important characteristics that include
shortage of a global clock, individual failing of items and concurrency of items. The
examples range from a system based on SOA to huge multiplayer games being played
online to peer group applications (Wu 2017).
A centralised computer system is a mechanism where the architecture of
computing is such that almost all the computing or processing is done over a centralised
server. This makes the central server responsible for providing the logic of application,
processing and giving basic and complex computing resources to the machines that are
attached to its clients. It provides greater protection as compared to distributed computer
system as the process is controlled at a central location. If there is a breakdown of one
terminal it does not hamper the work of the user instead the user can log in again from
another terminal without causing his loss of work. The files can be easily accessible from
the other terminal. In certain situations based on the system, the user may even be able to
resume their work from the point they had stopped working on it (Milkau and Bott 2015).
Even though this system of computing has advantages, it also has certain disadvantages.
The disadvantages include relying of the system completely on the central computer. In a
situation of break down in the central computer, the entire mechanism will be available.
This is one of the main reasons why companies choose to install a distributed computer
system so that no work can be lost due a fault in the central server (Muttaqi et al. 2015).
The other computers can easily continue with their work. The heavy dependency of the
resources and quality of administration given to the users is another disadvantage faced
by this type of computer system. The inappropriate support by the means leads to a great
suffering.
Advantages of Distributed Computer System-
 Inherent distribution – There is natural distribution of certain applications like the
Web
 Performance – The usage of a combined process and storing capacity of several
nodes, the performance targets can be achieved with the help of centralised
machines
 Cost – Performance or the better price till the regular hardware is being used for the
purpose of computer peripherals that is for the better usage of the present hardware
(Avram 2014)
 Scalability – Storage capacity and processing resources can be raised
incrementally
 Reliability – It includes redundant items that cause an impact of software and
hardware faults on its users that can also be decreased
Conclusion
Rainbow Illusion has a very good management system for managing its operations.
It deals in the garment industry which provides ready to wear clothes for women. It focuses
on the manufacturing of existing as well as new products for them. It is a largely growing
industry in the Australian market that is helping to boost its economy. It provides
opportunities to a large number of people by giving them employment. This industry has
helped to contribute to other economies that are developing. It has a centralised computer

6STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AMD ENTERPRISE
system that helps it to operate smoothly without any hindrances. It has several strengths
that helps the company to perform better and avoid the problems which it had to otherwise
face. The assigning of the assistant managers and managers to every store is of a great
advantage as each one performs its own duties and looks into their own responsibilities.
There is no overlapping of the workload. The company may have to adopt to fraudulent
practices in case a situation like that arises that will force its employees and management
to practise misrepresentation.

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Reference list
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performance. International journal of productivity and performance management, 63(3),
p.308.
Avram, M.G., 2014. Advantages and challenges of adopting cloud computing from an
enterprise perspective. Procedia Technology, 12, pp.529-534.
Block, P., 2016. The empowered manager: Positive political skills at work. John Wiley &
Sons.
Bonny, P., Goode, S. and Lacey, D., 2015. Revisiting employee fraud: gender,
investigation outcomes and offender motivation. Journal of Financial Crime, 22(4), pp.447-
467.
Breevaart, K., Bakker, A. and Espevik, R., 2014. Daily transactional and transformational
leadership and daily employee engagement. Journal of occupational and organizational
psychology, 87(1), pp.138-157.
Chen, J.C., Chen, C.C., Lin, Y.J., Lin, C.J. and Chen, T.Y., 2014, January. Assembly line
balancing problem of sewing lines in garment industry. In Proceedings of the 2014
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Cropper, M.L., Freeman, M.C., Groom, B. and Pizer, W.A., 2014. Declining discount
rates. American Economic Review, 104(5), pp.538-43.
Donelson, D.C., Ege, M.S. and McInnis, J.M., 2016. Internal control weaknesses and
financial reporting fraud. Auditing: A Journal of Practice & Theory, 36(3), pp.45-69.
Hess, M.F. and Cottrell Jr, J.H., 2016. Fraud risk management: A small business
perspective. Business Horizons, 59(1), pp.13-18.
Hidayat, A.M., Mustika, I.W. and Sulistyo, S., 2014, November. Implementation of Wireless
Sensor Network to reduce cashier queue. In 2014 Makassar International Conference on
Electrical Engineering and Informatics (MICEEI) (pp. 78-82). IEEE.
Manurung, D., Suhartadi, A.R. and Saefudin, N., 2015. The influence of organizational
commitment on employee fraud with effectiveness of internal control and organizational
justice as a moderating variable. Procedia-Social and Behavioral Sciences, 211, pp.1064-
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Milkau, U. and Bott, J., 2015. Digitalisation in payments: From interoperability to
centralised models?. Journal of Payments Strategy & Systems, 9(3), pp.321-340.
Muttaqi, K.M., Aghaei, J., Ganapathy, V. and Nezhad, A.E., 2015. Technical challenges for
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Wu, J., 2017. Distributed system design. CRC press.