HI5019: Strategic Information Systems Report - Bell Studio

This report provides a comprehensive overview of strategic information systems for businesses and enterprises, focusing on key areas such as e-commerce, financial reporting, transaction cycles, and management reporting systems. It explores the importance of accurate and timely financial information for decision-making, detailing the components and benefits of financial reporting. The report also examines different types of transaction cycles, including payroll, purchasing, sales, and financing cycles. It highlights the features and types of e-commerce, its advantages, and potential risks. Furthermore, the document includes data flow diagrams and flowcharts of various systems like purchases, cash disbursements, and payroll, followed by an analysis of potential weaknesses and risks within these systems. The report concludes with a discussion of internal control practices, their weaknesses, and associated risks, encompassing review and reconciliation, asset security, separation of duties, and authorization processes. This analysis is crucial for understanding and mitigating potential issues within business operations.

STRATEGIC INFORMATION
SYSTEM

Executive Summary
This report explains concepts on strategic information system for business and
enterprise in details such as e-commerce, financial reporting, transaction cycles,
management reporting systems. It also outlines in detail internal controls and highlights
some weaknesses and risks. The Internet has made business or enterprise deliver their
services and goods in speed thus e-commerce. Financial statements and reports must
be accurate and provided on time to enhance the decision-making process which is all
about proper financial reporting. For a business to be efficient and effective in its tasks,
a better analysis of transaction cycles which helps in identifying particular tasks in every
cycle and this analysis helps in coming up with a report that plays a major role in
business performance. Effectiveness of the management information system enables
information movement within an enterprise smooth hence better decision making and
planning. Internal control processes within a business structure should set to ensure
resources are not misused, accuracy in information, regulations are followed to the
letter, and protection of business assets hence preventing errors and irregularities,
identifying problems, etc. These internal controls processes have some weaknesses
while if they are or aren’t implemented and also risks.

Table of Contents
Report................................................................................................................................1
Executive Summary...........................................................................................................2
Introduction........................................................................................................................3
Transaction cycles.............................................................................................................3
Financial Reporting............................................................................................................4
Benefits of Financial Reporting......................................................................................4
Management Reporting System........................................................................................4
Why acquire a management reporting system?............................................................5
Features of an effective management reporting system................................................5
E-commerce.......................................................................................................................5
Types of e-commerce.....................................................................................................6
Features of E-commerce................................................................................................6
E-commerce risks...........................................................................................................6
Data flow diagrams of different systems...........................................................................7
Purchases system Data flow diagram............................................................................7
Cash disbursements system Data flow diagram............................................................8
Payroll system Data flow diagram..................................................................................9
Flowcharts of the systems...............................................................................................10
Purchases system flowchart.........................................................................................10
Cash disbursements system flowchart.........................................................................10
Payroll system flowchart...............................................................................................11
Weaknesses and Risks in the above systems................................................................11
Internal control practices with respective weaknesses and risks....................................12
i) Review and reconciliation......................................................................................12
ii) Assets security.......................................................................................................13
iii) Separation of duties...............................................................................................13
iv) Authorization..........................................................................................................14
Conclusion.......................................................................................................................15
References.......................................................................................................................17

Introduction
Business strategies are the key things to business prosperity and realization of new
opportunities. They vary from different areas or fields in this report a few are looked at
this are e-commerce, financial reporting, transaction cycles, management information
systems where every growth in any enterprise or business is affected by them. Internal
control practices ensure the proper business or enterprise functioning whereby they are
also having some weaknesses and risks. All these scenarios are well discussed in this
report.
Transaction cycles
Generally, any transaction within a business or enterprise is interweaved into
transaction cycles and they are meant to achieve certain tasks. Most of the enterprise or
business processes (payments, purchases, sales) which results in transaction cycles.
The following are types of transaction cycles: Payroll cycle, purchasing cycle, sales
cycle, financing cycle. (Soeters, 2014).
1. Financing cycle. Deals with activities within the business or enterprise that
requires finances and also economic activities mapping using charts.
2. Purchasing cycle. This cycle deals with order purchases from vendors or
suppliers. So, it’s all about products or service transactions between the vendor
and the enterprise.
3. Sales cycle: Deals with the products and customer needs. It also involves the
reviewing and correcting of orders made by customers.
4. Payroll cycle. Deals with management of employees or workers payments within
an enterprise or a business. Functions of payroll cycle: cheques issuing,
deduction of taxes, workers’ time recording. There are systems that are installed
to perform those functions.
Financial Reporting

Financial reporting is a process of delivering financial information which is about
business financial performance and status to the different stakeholders of the business.
This financial reporting is mostly processed either annually or quarterly.
Financial reporting is very critical and very important in any enterprise activities because
every activity requires finances and those finances must be accountable for. So, those
financial reports and records must be delivered to different stakeholders. (Elliott, 2009)
There are different components in financial reporting:
1. Quarterly and annual financial reports
2. Notes of financial statements
3. Cash flow, profit accounts, and balance sheets
4. Analysis of management for public company
One of the main objectives of financial reporting is to provide financial information that
enhances decision making in an enterprise. This information entails enterprise or
business performance, status or position financially. (Gendron, 2010)
Benefits of Financial Reporting
1) Easy business financial auditing
2) Effectiveness in decision making through proper analysis of the financial
information
3) Ensures the policies of the business are maintained.
Management Reporting System
A management reporting system is a system that is used in providing information
throughout the business at different levels of the business or the organization structure
and hierarchy. With the help of these systems, information is more reliable because the
information is correct and on time thus enhancing decision making. (de Almeida,
Longhi, 2014).

Why acquire a management reporting system?
It helps in correcting data that senior managers use to make sound decisions in a
company. It may be corrected from different areas or department e.g. finance, payroll,
purchase, etc.
The management information system has capabilities of eliminating redundancy of data
which may be as a result of the same data entry thus enhancing errors prevention.
These management information systems generate reports that are used in analyzing
the trend of a business or an enterprise. (Hatton, 2016).
Features of an effective management reporting system
 Correct data presentation format
 Reports should be generated on time
 Efficient flow of information within the organization.
 Accuracy when it comes to reporting because every department relies on that
information. So, it should be able to detect data inconsistency.
 The management information system should be flexible in terms of response to
the predefined requirements.
 Automatic reports generation and delivery play a role in the success of the
system performance. Therefore, the mode of delivery also matters in the
effectiveness of the management information system.
 Cost efficiency should be considered before implementing any management
information system to avoid having a system that is more expensive to maintain
more than the way a business expenditure on the system. So, the cost should be
acceptable. (David, Bourgeois, 2014).
E-commerce
Technology advancement has made many business use platforms provided by the
internet to do business thus e-commerce. This is made more possible by the way the
internet is now accessible by most of the people thus enterprises and businesses are

taking that opportunity. So, selling and buying products or services over the internet is
growing at a higher rate because people or customers are not limited by the location
boundaries and also it's very fast. (Turban, Lee, King, Liang and Turban, 2009).
Types of e-commerce
a) Business to Customer (B2C) involves a business selling to a consumer or
consumers and is the type of e-commerce that most consumers are involved in
today.
b) Business to Business (B2B) e-commerce involves businesses selling to other
businesses and is the largest form of e-commerce.
c) Consumer to consumer (C2C) is a means for consumers to sell to each other. In
C2C e-commerce, the consumer prepares the product for the market, places the
product for auction or sale, and relies on the market maker to provide a catalog,
search engine, and transaction clearing capabilities so that products can be
easily displayed, discovered, and paid for.
d) Peer to peer (P2P) technology enables Internet users to share files and
computer resources directly without having to go through a central Web server.
Music and file-sharing services where consumers can transfer files directly to
other consumers without a central server involved.
e) M-commerce (Mobile Commerce) involves the use of wireless digital devices like
smartphones to enable transactions on the Web.
Features of E-commerce
- Its transaction is not limited to boundaries thus efficient global reach
- High interactivity thus better customer experiences. This is ensured by the
live chats on e-commerce sites.
- Easy accessibility- it can be accessed from different devices and at any time.
So, a customer can shop at any time he or she wants to be provided there is
internet connectivity.
- Availability of information that helps the buyer make the right decision.
(Yuthas Dallard, 2013)

E-commerce Drawbacks
- Exposure to cyber crimes like hacking which leads to privacy breach of the
customers. Most of these e-commerce uses different forms of payment (credit
cards) which are vital, if a malicious person gets access to, he or she can find
access to personal information.
- High taxes on e-commerce which forces them to sell some products at a
higher price than expected.
- Some goods are just for local shipping only like furniture which is very
expensive to ship overseas.
- Tough regulations set by governments of different countries.
- Sometimes it takes longer for customers to trust e-commerce due to lack of
physical store.

Data flow diagrams of different systems
Purchases system Data flow diagram

Cash disbursements system Data flow diagram

Payroll system Data flow diagram

Flowcharts of the systems
Purchases system flowchart
Cash disbursements system flowchart