HI5019 Strategic Information Systems Case Study: Bell Studio

This case study analyzes Bell Studio, exploring various transaction cycles including payroll, purchasing, sales, and financing. It delves into financial and management reporting systems, outlining their functions and importance. The study also examines e-commerce, detailing its types, benefits, and associated risks such as cyber security threats and consumer distrust. Security protocols like firewalls, access controls, and data encryption are discussed as crucial measures. Furthermore, the assignment addresses the risks inherent in computer-based systems, particularly ERP, and emphasizes the role of ethics and internal control processes. UML diagrams are used to represent the business processes of Bell Studios. The report covers the challenges of e-commerce and computer systems, providing a comprehensive overview of strategic information systems in a business context.

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Executive summary
Over the years the numbers of businesses competing in the market have grown. This has made it
challenging for any organization to survive and have a competitive edge compared to other
companies. For better production rates, many businesses have indulged themselves in adopting
new techniques and technology to perform their transactions.
Before jumping into new methodologies, it is necessary for the involved parties to have a better
comprehension of what they are all about. One of these technologies includes computer-based
systems such as the Enterprise Resource Planning System. The report is aimed at ensuring that it
will portray the detail concerned in this system. Other technologies that have been discussed
include E-commerce; the report will guide the ready to understand how E-commerce works.
It is also necessary that the challenges associated with these methodologies be addressed. Form
the report the challenges have been addressed and the protocols to mitigate the consequences
associated with them. After going through this report, the reader will also have an understanding
of the transaction cycles in Business Accounting.

Contents
Introduction.................................................................................................................................................3
Transaction cycles.......................................................................................................................................3
Financial reporting system...........................................................................................................................6
Management reporting system.....................................................................................................................6
E-commerce................................................................................................................................................7
Risk of e-commerce.....................................................................................................................................8
Security protocols in e-commerce...............................................................................................................9
Risks associated with computer based/ erp systems....................................................................................9
Role of ethics and other internal control processes....................................................................................10
Bell studio uml diagrams...........................................................................................................................11
Weakness From The system......................................................................................................................14
Conclusion.................................................................................................................................................15
Reference...................................................................................................................................................16

Introduction
The report is aimed at giving a better comprehension of the business factor. This report points
out the meaning of E-commerce, discussing the processes and also the types of E-commerce that
are exercised. In addition, it also discusses the shortcomings that are brought about by practising
E-commerce. The security protocols also implemented to reduce the incidence of cyber-attacks
have also been outlined.
The report also discusses the various types of transaction processes. The business processes in
each transaction cycle have also been stated thus providing a better comprehension. The report
also outlines the introduction of the computer-based system in business environments. The
challenges that come with these systems have also been stated with great reference to the
Enterprise Resource Planning (ERP) System (Lytras and Pablos, 2009).The diagrams in this
report shows the UML diagram for Bell Studios the organization for specific business processes
to be completed.
Transaction cycles
In business accounting, transaction cycles are a group of business processes that work together to
achieve a specific task. Majority of the business processes can be aggregated to function such as
payment of the organisation staff, sale of products, payment of lenders and payment of the
supplier of the raw materials (Maas, van Fenema, and Soeters, 2014). The type of transaction
cycles include
1. The Payroll Cycle
The payroll cycle is a collection of all the processes involved in managing the wages and salaries
of the staff within an organization. The typical processes that are involved include:
 Gathering the information of the time spent by each staff
 Performing benefits and deduction based on the employee time
 And lastly performing a fair distribution of the salaries and wages
While some companies may rely on outsourcing the payroll processing system, others have
already installed systems that perform the above-stated processes (Payroll Software Systems).
The processes involved in this transaction cycle may seem easy to perform but require a

particular type of skill involved. The levels of appraisal also require the input of several
individual or bodies. Accounting cycle
2. Purchasing Cycle
This transaction cycle involves a number of business processes that are involved in service or
product transactions between an organization and its vendors, where receipt processes are
performed later during the purchasing cycle. One of the business processes involved in the
Purchase order that is handled by the procurement department.
The purchase order (also referred to as the PO) is prepared form the request served form eh
purchasing department through the use of Material Request Forms (Pohl and Förstl, 2011). The
form is arranged and contains information on the type of goods with their respective quantities.
The manager of the organization has to validate the information in the Material Request Form
and sign in order to facilitate the execution of succeeding processes.
Once the purchasing order has been processed by the vendor, the services or goods ordered are
received. This process has to be recorded, and an invoice served; this is performed by the
purchasing department. The invoice served by the vendor is used in generating the bill of unpaid
purchasing. The customer uses the invoice to guide them on the payment to the vendor.
In the case of damaged goods or unsatisfactory good, the customer can then return the goods to
the vendor. Below are the general business processes involved in this transaction cycle:
 Requesting of materials or services
 Performing quotation on the requested items
 Purchase order
 Receiving the products
 Payment (return of purchases in case of dissatisfaction)
3. Sales Cycle
The sale cycle involves a couple of business processes that an individual or a department take in
order to close a new client. These processes include:

 Understanding the product/ service- at this stage, the salesperson has to have a clear
understanding of how the product or service will affect its end client.
 Searching- the sale person has to identify the suitable market from which the customer
will be highly interested in the product
 Analyzing customer needs- this involves understanding the requirement the user may
want to be satisfied by the product.
 Confrontation- the sales persons have to prepare a presentation of the product.
 Countering customer rejections- the sale's person must have a reason that will counter
any repellency from the customer concerning the purchase of the product
 Closing the deal
 Conducting follow-ups of the customer
The diagram below shows the order of the above processes
4. Financing Cycle

It also termed as a business cycle, and it involves mapping the economic activities on a graph to
depict the rise and fall in economic activities. Analyzing the information derived from the charts
help the organization in understanding its economic shifts.
Financial reporting system
A financial reporting system is a functional unit that is responsible for delivering financial
information to the concerned parties in an organization. The information that is provided is used
to perform various processes in the firm including making decisions. The information provided
by the system mostly includes a summary of all the financial transaction that has been performed
over a certain time frame; usually per annum.
For the system to be effective, the system has to be able to record all the financial transactions
data that have been performed with reference with their corresponding tasks. From the data, the
system should be able to summarize the data to generate information that is later represented to
the user; this can be in form if charts and graphs (Bédard and Gendron, 2010).
This system is used to monitor the effectiveness and the efficiency of the company generally,
thus helping in performing certain processes and with what magnitude. Below is the flow of data
within the financial reporting system:
 Data from the transaction is received
 The data is stored in the prime book entry
 Summary form the prime book are transferred and posted on the ledger accounts
 Balancing of the ledger books is done, and the trial balance is derived
 The information from the trial balance are posted on the financial statements
Management reporting system
A management system is a formalized system that helps in procedure or processes involved in
the documentation for the purpose of formulating reasonable policies, goals and objective in an
organization. The core factor of having a quality management reporting system to help the
individuals or company to meet the requirements of its clients or of the staff thus improving the

effectiveness and efficiency (Adelberg, Smith, Hatton, Viswanathan and Lusardi, NewZoom ,
2010).
Below are some of the functions performed by a Management Reporting System
 Reducing the cost of production
 Improving the business processes
 Economizing on resources
 Improve teamwork among staff
The benefits of a quality management reporting system to the company are numerous; this
includes the fact that the user’s and staff requirement will be met. In addition, it will facilitate the
company working within its legal constraints and also help the organization to grow.
E-commerce
It is also referred to as electronic commerce or internet commerce which involves the buying and
selling of goods and services over the internet. It also stretches to the performing of commercial
transaction over an electronic system. It is different from e-business since e-commerce is only
restricted to the transaction of goods and services.
The birth of e-commerce is dated back to August 1st but over the years it has grown dramatically.
This has enabled buyers and seller to perform their transactions through the internet. This
technique has been adopted by both freelancers and also larger organization to sell their goods
and services to the public (Turban, Lee, King, Liang and Turban, 2009). E-commerce is made up
of various types based on the transaction between the seller and the buyer of the product, the
major four distinctions include :
1. (B2C) Business to Consumer- a business selling its goods or services to a consumer
2. (B2B) Business to Business- business selling or providing its services to another business
3. (C2C) Consumer to Consumer- one consumer selling or rendering service to another
consumer
4. (C2B) Consumer to Business- consumer rendering services or selling products to a
business

The following are the transactions that are involved in e-commerce:
 Retailing- selling of the goods directly to the customer without involving intermediary
bodies/ individuals
 Wholesale- selling good bulk quantities
 Drop shipping- products are sold to the consumer and shipped to them
 Crowdfunding – this is when a group of consumer raise funds in order to buy a good
from the market
 Subscription- recursive buying of a good or service until a point where the consumer is
not in need of the product
 Digital products- this is purchasing digital goods such as temples, books and even
software license
 Service- this is the purchasing of service online, where a person offers his/ her skill in
exchange for compensation or appraisal
Risk of e-commerce
The following are the shortcomings that are associated with e-commerce (Chiu, Wang, Fang. and
Huang, 2014):
1. Performing a business online, or through an electronic system open up the risk of being a
victim to cyber security
2. E-commerce processes have a big reliance on the internet. In cases where there is a
problem from the Internet Service Provider, the business processes come to a halt. This
will lead to loss of income and even customers.
3. Digital materials sold over the electronic system can be copied and get redistributes by
other users. This brings about property issues that are difficult to resolve and prevent
4. In some case, the business processes involved in E-commerce incur high taxations. This
discourages consumer since it leads to overpricing of the goods or services.
5. E-commerce also faces resistance from the consumer. For businesses that lack a physical
building associated with the company face distrust from the consumer.

Security protocols in e-commerce
The impact caused by cyber-attack on e-commerce does cost not only the organization and the
user but also destroys the reputation of the firm. The security protocols that can be implemented
include:
Setting up firewalls- by installing a firewall on your website or business application, you will
prevent the cyber attacker from exploiting the vulnerabilities in the system( Ghosh and
Swaminatha, 2011).
Implementing access controls- by implementing authentication and authorization protocols will
ensure that legitimate user access the system’s network (Jutla, Bodorik. and Wang, 2009). The
use of the two-factor authentication has proven to increase the levels of security on a system
Data encryption- this is the process of converting plain text to cypher text. This process inhibits
attackers from understanding the information flowing through a system. The legitimate user of
the system can only access and understand the message through the use of secret decryption key
and algorithms.
Risks associated with computer based/ erp systems
Over the year business processes have evolved to implementing computer systems, the most
common being the implementation of the ERP system (Hänsel , Fure and Bratthall, 2013). The
introduction of this system has changed the business processes to be more effective and efficient.
Due to the fact that this system has numerous advantages, the shortcoming or risk associated
with this system has been overlooked (v). Below are a few of the risk that is associated with the
implementation of such systems:
1. Failure to redesign the business processes
Most of the organization decides to redesign the computer-based systems to meet their
organizational goals; this is contrary and wrong. For the system to be more effective, it is
necessary for the business processes to be re-engineered in order to suit the system (Arel,
Beaudoin and Cianci, 2012). This process is difficult to implement since it's hard for the entire
organization to redesign its normal business processes.

2. Lack of adequate support from top management
It is nearly impossible to perform business processes without the support of top management. In
order for the objectives of the firm to be realized the top management has to play its role as the
sponsors.
The system is bound to fail if the members of the top management also want to be the ones
running the system. To ensure maximum use of the system, the role of operation should be left
for the operational staff.
3. Lack of training and hiring of skilled personnel
The processes of implementing a computer-based system into a firm also involve the training of
staff and user. Some of the companies may fail to fund this process thus leading to the under
usage of these systems.
The organization should be ready to educate its staff and user about the system, in some other
cases, it is important for a system admin to be employed in order to monitor the system. This
will, in turn, lead to optimum usage of the system
4. Lack of proper infrastructure
In order for a system to function, it has to be placed in a suitable environment. This involves
items such as effective networks and hardware equipment.
The risks associated with these computer-based systems are numerous, and in order to counter
them, there is a need to set up protocols that will ensure these challenges are reduced or avoided.
By doing this, the system will bring improvement is an organization.
Role of ethics and other internal control processes
It is crucial that each organization have an ethic and control system that will ensure
accountability, this system will prevent frauds. In addition, it will act as a system for detecting
and resolving problems that compromise the overall performance of the organization (Goetsch
and Davis, 2014). Below is the fundamental importance of this system:
 Functions are performed effectively and efficiently

 Reports such as financial and management reports are reliable
 Business processes are conducted in compliance with the las of the state
Internal control is also necessary for the proper functioning of an organization; they include:
The control environment which dictates the mode of the organization, this includes factors such
as ethical values, management philosophy and competence of the organization (Morsing, 2016).
Risk assessment- this involves identifying and preventing the possible risk that an organization
may encounter
Control activities such as developing rules, regulations and policies that govern business
processes.
Monitoring processes that ensure actions undertaken by the organization are within the outlined
policies and goals (Bommer, Gratto, Gravander and Tuttle, 2009).
Gathering and proper dissemination of information, this is to facilitate understanding of business
processes among the staff.
Bell studio uml diagrams
Data flow diagram of purchases and cash disbursements systems
Fig 1(Dennis, Wixomand Tegarden, 2009)