HI5019 T1 2019: Strategic Information System Rainbow Illusion Report

This report examines the strategic information system employed by Rainbow Illusion, a retail business with over 30 stores in New Zealand. The report begins with an executive summary, followed by an introduction to Rainbow Illusion's use of a centralized information system for managing sales, cash, and revenue. It details six strengths of their sales transaction system, including enhanced productivity, efficiency, accuracy, and reporting capabilities, along with easy accounting. The report highlights problems avoided through the centralized system, such as errors in transaction cycles and revenue management. It then identifies situational pressures that could increase fraud risks, like manual interference and the system's reliance on human input. The report concludes by discussing the advantages of distributed systems over centralized systems in managing organizational functions, followed by recommendations and a brief conclusion. The report is based on the case study assignment brief provided by Holmes Institute for the HI5019 unit.

Running Head: Strategic Information System in Rainbow Illusion
Strategic Information System in Rainbow Illusion
Report
System04104
8/28/2019

Strategic Information System in Rainbow Illusion
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Executive Summary
Rainbow illusion is known for its fashionable and ready to wear cloths in New
Zealand. The company is known for its best organisational system and information
system that helps the company to establish itself as one of the best organisations in
the New Zealand. The company has more than 30 stores in the country. There are
many employees and managers are working in the organisation to manager various
organisational functions such as sales and distribution, cash collection, and
managing the work the of various retail channels. However, people who are working
in the organisation are responsible for various functions and give the data and
information to the centralised system for inventory management and other decisions
regarding the business operation. This report shows the advantage of using
centralised information system in the organisation and about its strength for the
organisation. This report also includes two situational pressures that force the
organisation towards the frauds or increase the chances of frauds. In the end of this
report, it has been discussed that why distribution system is used in the
organisations for managing various functions rather than centralised system.

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Table of Contents
Executive Summary......................................................................................................1
Introduction...................................................................................................................3
Six strength of Rainbow Illusion’s Sales Transaction System.....................................3
Problems which are avoided by the Rainbow Illusion With the help of Sales
Transaction System......................................................................................................5
Situational Pressure that would increase the chances of Frauds................................6
Reasons to use Distributed system than Centralised system in the organisations.....6
Recommendations........................................................................................................9
Conclusion....................................................................................................................9
References.................................................................................................................11

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Introduction
Rainbow Illusion is a retail business organisation having more than 30 retail stores in
the New Zealand. The company is well aware about the effectiveness of its
organisational functions so it uses centralised information system in the organisation
to manager various functions and work relayed to sales, cash, or managing revenue
etc. The company uses both type of information processing work; online processing
through centralised system and offline procession through the employees. The
company uses the centralised system for getting advantages and increasing the
effectiveness of its sales system. The sales department of the company is directly
related with the customers’ benefits (Kim and Dale, 2015). The centralised system
can help the organisation in many functions like fast and easy payment method, and
easy return of products etc. This report will help to understand various advantages of
using centralised sales system in the organisation and focus on those strengths that
company has gain with the centralises system in the organisation. Apart from this,
this report also includes two situational pressures that force the organisation towards
the frauds. In the end of this report, it has been discussed that why distribution
system is used in the organisations for managing various functions rather than
centralised system followed by some key recommendations and a short conclusion
about the report.
Six strength of Rainbow Illusion’s Sales Transaction System
Rainbow Illusion is known for its proper sales management and well-coordinated
centralised system with the manmade organisational functions. There are many
employees and managers are working in the organisation to manager various
organisational functions such as sales and distribution, cash collection, and
managing the work the of various retail channels. The organisation assigns the
responsibilities to each person and provides their role such as sales person, cashier,
and manager (Tondon, 2016). They all are responsible for performing their own
assigned work and further report to the centralised system for managing sales
related data and information. However, using centralised system in the organisation
improved the work effectiveness of people and distributed the work in sales
department (Beijsterveld and Van Groenendaal, 2016). However, people who are

Strategic Information System in Rainbow Illusion
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working in the organisation are responsible for various functions and give the data
and information to the centralised system for inventory management and other
decisions regarding the business operation. Using centralised system in organisation
has lots of benefits because the centralised system provide automation in generating
information and gather large amount of data related to sales and inventory
management. The major strengths of the organisation after using the centralised
system in the organisation are as follow:
1. Enhance the productivity of the company: Using organisational functions
with young and experienced people improve the productivity level and reduce
the chances of error in the functions. The people can enhance the productivity
of the company by doing overtime work and enhancing the sale of the
company. Although using ERP in the organisation enhance the productivity of
the company by generating reports on the demand and helps the
management with accurate information in decision-makings that further
increase the productivity of the company (Almahamid and Awsi, 2015).
2. Enhance the Efficiency: Using centralised information system and
coordination of people with the system helps the organisation to remove the
chances of error from the organisational functions like sales report and
revenue management. The people are usually accelerating their speed to
match up their work with the centralised system and that will further help the
organisation in enhancing the efficiency of the organisation (Denecken, 2017).
3. Enhance the Accuracy: The human operation on the floor working in
coordination with the centralised system that will help the organisation to
enhance the accuracy of work. The sales person keeping the book transaction
about the sales records, quantity of product sales, description, generating
sales invoice, and these reports are then again makes proper entries in sales
invoice. However, managing this information on centralised based system is
reducing the time that consumed in processing such type of data manually
(Tondon, 2016). Although, the double-check and double entry system reduces
the chances of error and enhance the accuracy of various organisational
functions in the organisation.
4. Easy and quick reporting: The cashier can generate the invoice in quick
time immediately after the sales process. Apart from this, the sales manager

Strategic Information System in Rainbow Illusion
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or cashier can also identify the changes where necessary in the invoice. The
cash register can maintain the records of sales record and receiving money
from the customers (Florentine, 2017). The manual interference in the work
reduces the chances of error and can review the transaction every time with
new approach. This review of sales invoice, credit approval, return slip, and
other functions related to sales can increase the effectiveness of the
organisation. although combination of people with the centralised system
further help the organisation to reduce the time of review and generating quick
report on sales or revenue of the company (O'Shaughnessy, 2019).
5. Detailed Receipts: The transaction or centralised system can divide the
nature of payment and enables the organisation to review of data related to
payment modes. The manger can also make the entry in their book about the
various mode of transaction such as cash transaction, credit card transaction,
debit card transaction, or cheque transaction etc. The centralised system
helps the manager to match their entries with the system as well.
6. Easy and Simplified Accounting: Easy and simplified accounting of the
organisation makes it easy for the organisation to manage their inventory
records. It is really beneficial for the company to review the data when they
needed related to sales or inventory of the organisation. However, the
centralised data system or ERP can help the company to keep records with
great efficiency and accuracy and get the information when the organisation
needed (Shen, e. al., 2016).
Problems which are avoided by the Rainbow Illusion With the help of Sales
Transaction System
With the help of centralised sales processing system and involving people in the
organisational function, the company avoided many issues related to record keeping
and information gathering. It is a universal though that sales department is the key
and main functioning department of any organisation and other functions of the
department are based on the sales function of the organisation. Therefore, managing
sales with great accuracy is the fundamental and key priority of any organisation
(Badewi, Shehab, Zeng, and Mohamad, 2018). Sales department helps the
organisation to generate profit and revenues that further leads to the growth and

Strategic Information System in Rainbow Illusion
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development of the organisation. There were various problems that were avoided by
the company by introducing centralised system in the organisation. Transaction cycle
that is involved many functions such as transaction sales record and cash
management. The transaction cycle involves various key problems in the
organisation, which are removed by the organisation through using centralised
system:
1. The direct involvement of customers and organisation may avoid the chances
of human error in the transaction. It also reduces the financial cycle because
the organisation receives cash from the customers and then paid it to the
suppliers for starting new cycle.
2. Revenue cycle issue are also eliminated from the organisation because
organisation directly receives cash from the customers and give them product
directly (Davies, 2016).
3. The company also avoided the error in the human resource cycle where
organisation removed the bottlenecks of paying money to employees. The
organisation also generates this money from other sources.
4. The company reduce the error in production cycle by paying directly to the
labours and get products in return for the customer and for the sales.
5. The last issue is related with expenditure cycle where company provides cash
to the suppliers and purchase raw materials from the suppliers.
Situational Pressure that would increase the chances of Frauds
There are many weakness of the organisation that enhances the chances of frauds
in the organisation. Two key situational processes that enhance the likel9hood of
frauds in the organisation are as follow:
1. The involvement of manual interference in the sales process or in any other
organisational process may leads to the wrong entry or error in recoding the
transaction. As people can easily manipulate the transaction records for their
own benefit and deliver the manipulated or wrong information to centralised
database, it will increase the chances of frauds in the organisation (Ceri,
2017). People can deliberately make the mistakes in recoding the transaction
for their personal benefit or providing benefit to other party and this will lead to

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a serious scam in the organisation where human can easily make fool of
machines such as centralised system of the organisation (Sussy, Saul, and
Vicente, 2016).
2. The centralised database system is depends on the command or information
which is provided by the people in the organisation. The centralised database
system does not have its own senses or IQ to identify the errors by itself. This
will lead to wrong transaction entry or false information output for managerial
decision making related to sales management or revenue management. This
is a serious concern associated with such type of organisational system
(Cukur and Svensson, 2016).
Reasons to use Distributed system than Centralised system in the
organisations
Using distribution system and centralised system in the organisation is so common in
the large organisation. In the distributed system there are two or more than two
peripherals are connected together to operate organisational functions (Elmonem,
Nasr, and Geith, 2016). The distributed system is capable in managing large amount
of data and it can easily perform heavy task in Nano seconds. The distributed
system do not have shared memory or shared variables. The data can be put in the
distributed system from different location at the same time of clock it means it can
provide multiple of access to the people from different location to a common
database. However, the distributed system is based on multiple of processors, which
are connected with each other with the help of a computer network (Ahmad, Ibrahim,
and Garba, 2015).

Strategic Information System in Rainbow Illusion
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(Source: Melendez, 2018)
The second type of computer network is centralised computer system in which all
calculations and records are generally done by a particular computer system. One
system can do several jobs and that have no autonomous components (Rouhani and
Mehri, 2018). The centralised database system is usually a type of homogeneous
technology where multiple of users can use the same data and resources from
different location at all time. However, centralised system is known for its single point
of control and it has single point of failure so it is easy to find the error but failure of
centralised system can lead to failure of whole organisational process or stop the
complete organisational process (Ge, Yang, and Han, 2017).

Strategic Information System in Rainbow Illusion
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(Source: Melendez, 2018)
Advantages of using distributed systems over centralised systems are as follow:
1. Speed: The distributed system has very fast processing speed as compared
to centralised system because it combines multiple of processor together. The
speed in accessing the information from multiple of nodes also makes it
different from the centralised system (Kocaoglu and Acar, 2015).
2. Inherent Distribution: Some applications on distributed system are
inherently distributed with other systems, which are connected together. The
examples of such systems are banking, railways, or airline ticketing systems
(Melendez, 2018). The inherent connection of distribution system make it
more efficient in handling large amount of data and enables the organisation
to perform the task more accurately and efficiently than centralised system
(Kocaoglu and Acar, 2015).
3. Reliability: The distributed system is more reliable than centralised system.
The workload of an organisation can easily be divided over many peripherals
and it makes the work easier for the organisation. However, a single failure in
the nodes of distributed system not affected the other system in the network
(LaBarre , 2019). This is a great example of benefit that is associated with the
distributed system. For example, if in an organisation a system related to

Strategic Information System in Rainbow Illusion
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managing cash transaction will be failed, then it will not affect the other
systems, which are working on sales or purchasing (Kocaoglu and Acar,
2015).
4. Easy in distribution of work: Through the help of distributed system,
workload can easily be divided in many parts or sections through the small
systems. This will make the distribution system more effective than the
centralised system (Beijsterveld and Van Groenendaal, 2016).
In centralise system, there are many issues, which are related to failure and
synchronisation of work. Protection and privacy are two major concerns with the
distributed system and with the centralised system both. The distributed system
reduces the time of effort and work in the organisation but it is noticeable that it
overkills some of the important tasks in the organisation (Saha, 2010). However,
distributed system needs some extra physical resources and engineering work
because it connects many system and processor together for the work.
Recommendations
Based on above study and analysis these are few recommendations which can be
given to the Company:
1. Company can use advanced distributed system like ERP, HANA, SAP for
managing different organisational functions including sales function. These
software will help the company to easily maintain the record of transactions
and business processes and help the management to make crucial decision
regarding business growth and development.
2. The company needs to focus on is data privacy and for this purpose can take
the help of cyber security experts or can also hire the group of experts who
can manage the whole business operation and avoid any kind of cyber frauds.
3. Train the employees about the new implemented distributed system and tell
them about its benefits. The Rainbow illusion should also understand the
importance of training as company should provide training to its employees to
adopt the changes in the organisation. This will increase the productivity of
the organisation and also help the organisation to ensure a systematic way of
business process including sales transaction and keeping record of inventory.

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4. The company needs to focus on assigning proper responsibilities to every
employee of the organisation and train them about their ethical duties to avoid
any concerns related to transactional or deliberate frauds in the organisation.
Conclusion
It can be concluded that Rainbow Illusion should focus on replacing its old
centralised system with the distributed system. This will help the company to avoid
business frauds and improve the efficiency of people and resources in the
organisation. The existing organisational system has several benefits for the
company but it has some serious issues related with its current organisational
system. Company uses the revere process to analyse and examine the
authentication of various organisational records and transactions. It takes too much
time to check all the transaction. However, if company uses the distributed system
by replacing the centralised system in the organisation, it can reduce the chances of
frauds in the organisation and improve the productivity of people. The use of
distribution system in organisation can enhance the profitability of the organisation
and will ensure future success and growth of the company.

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