HI5019 Case Study: Strategic Information Systems for Bell Studio

This assignment analyzes the strategic information systems (SIS) implemented at Bell Studio, examining various aspects such as transaction cycles (sales, purchasing, financing, expenditure, and payroll), financial reporting, management reporting systems, and e-commerce. The analysis identifies weaknesses in the current systems, particularly within the purchase system and cash disbursement processes, highlighting the reliance on manual processes and potential for human error. The study then explores the risks associated with these weaknesses, including computer viruses, hardware and software failures, human errors, and hacking, and provides a comprehensive overview of other SIS components such as financial and management reporting and e-commerce. Furthermore, it addresses opportunities for computer fraud, erroneous perceptions of information system risks, technical perceptions of information systems security, financing for security, and the implementation of inappropriate security controls, concluding with recommendations for improvement and enhanced security measures.

Running head: INFORMATION SYSTEMS 1
STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND ENTERPRISE
STUDENT NAME
INSTITUTION
COURSE
DATE

INFORMATION SYSTEMS 2
EXECUTIVE SUMMARY
A Strategic Information System (SIS) is a system which helps to determine how
to deal and work alongside changes in business strategies and structure (Alamri et al.,
2016). The main purpose of this system is to enhance time taken to react to
environmental changes and helps leverage a competitive advantage for businesses and
enterprises. The introduction of strategic systems into businesses and Enterprises is a
major step in acknowledging the impact of technology in business environment. Using
these systems, it is possible to deliver innovative services which are cheaper than the
existing ones. As technology undergoes rapid changes, businesses have to have a well
laid plan on how to go about issues that may arise. They also have to find ways of
incorporating the emerging technology into their business operations.
The main functions in a business firm are marketing and sales, production,
accounting and finance and human resource. Information systems are created in order
to enhance operations and management in a business firm. Among the sources of
business decisions are transaction processing systems which can be used by other
systems to derive relevant information. There also exist other information systems that
are relevant in decision making in their respective levels of application.
The key features of a strategic Information system are decision support systems,
primary enterprise resource planning systems, database systems and real-time
information systems which play important roles in provision of information. Even as this
system is being used by business firms, there exists challenges posed by these
systems on the operations of the business in terms of data security. Since these

INFORMATION SYSTEMS 3
systems are computer based, the risks that affect computing environments will also be
present in such a system (Cassidy, 2016).

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Table of Contents
INTRODUCTION......................................................................................................................................5
Transactional cycles..............................................................................................................................6
Sales cycle...........................................................................................................................................6
Purchasing cycle................................................................................................................................8
Financing cycle.................................................................................................................................10
Expenditure cycle.............................................................................................................................10
Payroll cycle.......................................................................................................................................11
Weaknesses in the Bell Studio system...........................................................................................13
Purchase system..............................................................................................................................13
Cash Disbursement system...........................................................................................................14
Risks associated with the weaknesses in the Bell Studio system...........................................15
Computer Viruses and Malwares..................................................................................................15
Hardware and software failure......................................................................................................16
Human error.......................................................................................................................................17
Hacking, fraud, denial-of-service..................................................................................................17
Other strategic information systems...............................................................................................18
Financial reporting systems..........................................................................................................18
Management Reporting system....................................................................................................19
E-commerce.......................................................................................................................................20
Opportunities for computer fraud.....................................................................................................21
Erroneous perception of Information Systems risk.................................................................21
Technical perception of Information systems security...........................................................21
Financing for security......................................................................................................................22
Implementation of inappropriate security controls..................................................................23
CONCLUSION........................................................................................................................................23
References.............................................................................................................................................25

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INTRODUCTION
Strategic Information System is defined as the process of identifying applications
that can be used to provide a channel for alignment with business strategies.
Organizations all over the world have found it very essential to be at par with the trends
in technological advancements. As technology advances, there is a universal
expectation for the business environments to adapt to the new way of life, in order to
reach their customers. There needs to exist a general plan on how to include these
trends into business processes. The incorporated parts of technology should be
interoperable with the existing systems, and should not affect the flow of operations. All
these integrations make it compulsory for a business company to come up with a plan
on how to include these things.
Information is an integral part of any organization, since most operations rely on
the existence of information. With this in mind, business organizations need to come up
with ways on how to make use of this information for their advantage. Different systems
have to be harnessed in order to harvest enough and relevant information that will
enhance decision making. The existence of information in the past has not been keenly
interpreted to produce maximum profit into a business. Currently, there are approaches
that are being used to mine this information has been stored in bulk, and therefore,
appropriate systems are needed in order to make use of the information that has
remained useless for long.

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Strategic systems is important for any company that aims at achieving
competitive advantage, as it involves use of technology to develop a company’s
services and products and also to aid in advertising the organization’s products. It also
provides the procedural information involved in the process of purchasing a product for
an organization. It mainly features the database system which aims at making use of
the company information in marketing and advertising of products. The Strategic
Information System also ensures that the business dealings align with the organization’s
strategies, and provides the measures that are to be used in carrying out a business in
an organization. This includes drafting, planning, advertising and the actual selling or
purchasing of goods.
In Bell’s studio, the Strategic Information System information is obtained by
analyzing the organization’s transactional cycle. This cycle is described below, and the
ways in which it affects processes in the organization.
Transactional cycles
A transactional cycle is an interlocking cycle that explains the procedures
involved in a business, including all the financial transactions of a company. These
cycles are related to the sale of goods and the payment to employees and suppliers.
These transactional cycles are carried out as: -
Sales cycle
Involves sequential procedure from the time a customer orders goods from a
company to the time they receive the goods after payment. The company will receive

INFORMATION SYSTEMS 7
the order, examine its credibility, send the goods or services required and obtain
payment for the goods. It is a recurring process that enhances exchange of goods and
services to customers for their finances. The essence of sales cycle is to ensure correct
selling price of the correct product at an appropriate time. While building the strategic
information system, management should ensure efficiency and effectiveness of the
sales cycle in the system. Most sales cycles have a definite process, which begins with
making an order, delivering the order and receipting it.
Sales order department is the one that performs sales order entry. There are
definite processes that are followed in entering an order. Customer orders are first
taken, then checked in the credits file. Availability of the inventory is then determined
and a feedback given to the customer through customer service. While integrating this
process into an online platform, customers need to be the ones to enter their details into
the system. This helps reduce human error. Orders need to be directly reflected in the
packing store for sealing and shipping. Efficiency can also be increased by using history
of previous sales to determine the types of products to stock more. To enhance this
approach, choice boards can be used. Checking of credit should be automated.
Figure: Dataflow Diagram for Sales cycle

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Purchasing cycle
The purchasing system involves the process of identifying the inventory need,
placing the order, acquiring the inventory and looking for and identifying the liability, or
the products which don’t meet the organization’s demands. The inventory control
function gives the authorization for purchase of a product. In this process for example,
should the product obtained not meet the required standards, the product will be
restored to the suppliers before the actual purchase takes place. This occurs in cases
when the product quality is not up to standard. But if the product is okay, the purchasing

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order is prepared digitally. These will be forwarded from one department to another up
to the last part of the process.
A purchasing order is issued by a company to a supplier for goods. After
receiving the goods, the company records an inventory of the goods needed to be paid
for and then actually pays for the goods. For most companies, the payment occurs after
the goods bought have been verified and ensured to be up to standard.
Figure: Dataflow diagram of purchases and cash flow systems (no copyright
infringement is intended)

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Financing cycle
It records the transactions concerned with getting funds from the owners and
creditors. It involves the issuing out of loans to customers and the flow of payment of
interest and the repayment of the debt given. It also involves the giving out of company
shares and stock to investors in exchange for payment of dividends over a given time.
Furthermore, it entails using the available capital within a company to acquire assets. It
can be explained by the source of capital, property system and the financial reporting
system.
As demand increases forcing business owners to enter in to loans, financial
analysts have the task to know the purpose for taking the loan and the source of the
loan, the creditor. Having such metrics puts them at a better position to create a rough
positional placement of a business in terms of finances and policies. Moreover, it gives
a clear picture of the amount of working capital in a business. As the working capital is
very important to business operations, having knowledge of financing cycle enables
better decision making. The finance cycle is important since most business operations
rely on finances.
Expenditure cycle
The expenditure cycle provides a review of the procedures taken to ensure a
product reaches its required destination on time. It involves keeping a record of all the
financial transactions of an organization. It incorporates all journal entries and
inventories that a company records in the process of acquiring raw materials or

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products from the suppliers.in order for a company to ensure credibility, most
organizations withhold the payment process until after the product is acquired.
It is therefore necessary to record each process involved in the acquisition of the
product. The processes include the request for product, obtaining the product and
paying up for the product bought. These processes can be done manually or digitally
using a computer software and their objective is to minimize the cost of obtaining and
maintaining inventories and other services necessary for the full functioning and running
of an organization.
Payroll cycle
Occurs within a company and involves its employees. The company examines
the time that an employee works per day. This includes the time and overtime worked.
The employees are then paid based on the total time they have worked within the
company. The payment is made after deducting the necessary taxes and advances.
Figure: Dataflow Diagram for payroll system

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Figure: System Flowchart for Payroll system (no copyright infringement is
intended)
Figure: System flowchart of cash disbursement system

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Weaknesses in the Bell Studio system
Purchase system
The purchase system in the Bell studio’s scenario begins when the purchasing
clerk sends a purchase order to the vendor. After the goods are submitted as
requested, manual processes are used to determine the consistency of data. Where
there is a mix up in the traditional and digital storage of data, the process seems to be
slow and tiresome, since these processes are done repeatedly. Even though
consistency is maintained, the use of manual data storage offers a tough time to the
clerks in the event that the filed data is needed at a certain given time, for a given
purpose. A major setback of this manual process is the possible presence of human
error in the filed data. This necessitates a need for implementation of an automated
system that will ensure that information is available, reliable, consistent and usable.
Also, in the case of Bell Studio, the purchase cycle is initiated by the purchasing
clerk who uses digital technology to determine the need for more stock. While ordering
for the stock, a manual copy of the purchase order is sent to the vendor, who then
sends a manual packing slip, which is manually compare with the purchase order slip
before it is sent to the inventory house and accounts payable departments. The use of
manual processes in Bell Studio necessitates investment in an interoperable and
consolidated information system that links them to the vendor and to other internal
systems. This system will reduce human labor on tasks that can be automated, by
conjoining these systems together.

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Cash Disbursement system
The cash disbursement system is a critical operations system in the Bell Studio
situation. A high level of keenness and strictness should be applied in this system. The
system entails manual labor and paper-based transactions. This poses a risk on the
confidentiality of the system. Human error is also prone to happen in the updates.
The Bell studio system has a manual process for the expenditure cycle. Although
the procedure of ensuring the appropriate flow of expenditure cycle, still, the clerk has to
compare the credibility of receipts and slips in order to determine whether the goods are
the correct ones. A strategic information system can be used to ensure a faster,
automated service (Dwivedi et al., 2015).
Payroll system
Bell Studio’s employees record their hours worked on time cards every day. Their
supervisors review the time cards for correctness and submit them to the payroll
department at the end of each week. While the employees are not trusted in their
transparency, the supervisors are used to confirm attendance of the employees to work.
The computer terminal is directly connected to the central payroll system. This is a
weakness that can be used by fraudulent employees to increase their pay wage and
also, it poses a great threat of information loss in case of a computer virus infection.
Since the process involves a lot of manual labor, it is subjected to the risk of human
error and inconsistent data.

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Risks associated with the weaknesses in the Bell Studio system
Bell studio has an overally weak system that can be victim to attacks and
computer-based threats. The benefits of the systems used in storage of information in
Bell Studio are vast and they are aimed at improving processes, with time-
consciousness. Even as reliance on these system grows, there are certain threats that
are bound to target the systems which can be averted, but after making long
considerations. These risks usually associated with the complexity and prominence of
information that has been exposed, and there needs to be measures to avoid them.
Computer-based threats are threats that come to cause harm to computing
systems. The moment a system is online, it is exposed to dangerous threats that can
totally damage information. These risks can be categorized into general, criminal and
natural risks. All in all, the threats are dangerous to a computer system since they cause
damage. They may also impose great losses to a business organization, and they need
to be mitigated before they do. Since Bell studio is dependent on computers for its
operations, these threats are also inherent in the organization. The threats can cause
adverse effects on the system.
Computer Viruses and Malwares
These are programs that are written to alter the normal functioning of the
computer. They illegally gain administrative privileges and take administrative control of
the computer, and sometimes is unrealized by the user. These programs replicate
themselves and can end up causing damage to the computer.

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It is important for Bell Studio’s management to evaluate free-to-download
software and other alien software before installing them into computer systems. Anti-
viruses from reputable providers should be installed and updated frequently. Advanced
and strict measures should be included in creation of policies in order to combat
computer viruses (DeLone, and McLean, 2016). Viruses can cause unrepairable
damages to computer-based systems and therefore every effort should be made in the
moves aiming at reduction and prevention of this computer threat. Critical systems
should be given maximum prevention against this threat.
Malwares are malicious programs that are created in order to infiltrate and
damage computers without the user’s knowledge. While computer viruses propel
themselves in the computer, malwares are triggered by the users without their
knowledge. Some malwares appear as genuine programs and may confuse users to
think that they are installing genuine software, while in real sense they are injecting
malware into their systems. Other malware can be used to gain sensitive personal
information of users by collecting user data as they type the data into the system. These
malwares are so hidden, and can collect information without any trace. The user may be
tricked to think that their system is working fine, while in real sense, their information is
exposed to unauthorized people.
Hardware and software failure
Power loss is a common issue in organizations that depend on the national
electricity grid. This loss appears when least expected, and the impacts are
unimaginable. Although it is possible to get refund for items that may have been

INFORMATION SYSTEMS 17
damaged by the loss, it is impossible to get data recovery services that will guarantee
100% data recovery. Business organizations should always be prepared for this.
Also, it is possible to have hardware failing without external cause. Not only
hardware, but also, software can fail due to incompatibility issues and upgrade issues.
This can bring devastation and stress to business managers. It is important for business
organizations to consider measures that aim at preventing data loss through ensuring
that there is presence of working alternatives to electricity. Also, software should be
vetted, tested and forecasted for failures, way from design, development and
deployment, before they appear (Davis, and Yen, 2018.).
Human error
To err is human. Human beings are prone to make errors. Even in very keen and
carefully structured environments, there still exists a probability that an error will occur in
every data entry event. Error can occur due to incorrect entry of data, careless handling
of data and its disposal, and also, through accidental opening of infected emails and
software. Unsolicited email can be used to gain access to not only user data, but on a
higher risk level, having administration details fail into unsafe hands will be a big blow to
the whole business organization.
Hacking, fraud, denial-of-service
Hacking is the world’s most known threat to any IT system. Hackers infringe
every possible law to gain access to targeted systems and to remain in the system until
their agenda is finished. Hacking is not only performed by the professional ones, but

INFORMATION SYSTEMS 18
can also be performed by unprofessional first-time hackers, by using the readily
available tools. Hacking can be prevented by seeking loopholes in computer systems
and patching them. Fraud, a type of hacking attack, is the intentional use of trickery to
divert truth in order to gain benefits from the victims of the attack (Liao, Balasinorwala,
and Rao, 2017).
Denial-of-service attack occurs when network traffic is diverted to a certain
website repeatedly, in order to overload the server rendering it slow, useless and may
also be shut down completely. In this attack, the attacker uses various computers to
launch it. Legitimate users are denied access to online services. Denial-of-service
attack take advantage of the limited number of requests a server can handle. Denial-of-
service attacks can be prevented by use of anti-virus software, firewall and strictly
following recommended security practices.
Other strategic information systems
Financial reporting systems
Financial reporting involves the presentation of financial information to various
important stakeholders in a company on how the company is doing financially after a set
period of time for example quarterly or annually. This helps in company auditing and in
reviewing the growth of the company. It includes all the stakeholders and shareholders
involved in the running of the company. It mainly aims at helping in decision making
pertaining to the issuing of resources and help to the said organization. The
stakeholders are shown the possible future net flow for finances and the way the
company has been handling the available cash. This system checks the relevance and

INFORMATION SYSTEMS 19
effectiveness of a business. It also sorts out pending transactions, such as debts and
goods sold on credit.
The financial reporting system starts by forwarding only the previous year’s
balance sheet onto a blank page after which transactions are captured in an appropriate
transaction file. The transactions are then recorded in a special journal and posted to
the subsidiary ledger. Periodically, the transactions from the subsidiary ledger are
entered into a general ledger depending on the frequency of integration of data into the
system. The financial account is placed into worksheets and evaluated for the balance
of each account. Necessary changes are made to the worksheet based on upcoming
details and unentered transactions while working to correct any available errors. The
added entries are filled into appropriate accounts in the general ledger. A balance sheet
is then created from all the entries to be reflected in the statements and the balances
that are to be carried forward.
Management Reporting system
This involves the providence of organized and detailed information to various
management levels within a company or an organization based on their expertise and
fields. The reports serve to provide communication on the company or organizational
status. It is usually provided only to the internal management and it involves both the
financial and the operational data. It serves to help in the making of decisions on the
direction the company takes and the measure needed to reach there. It is done more
often as compared to financial reporting systems. The management reporting systems

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help to capture the information needed by managers to improve their effectiveness in
functionality and to improve the quickness in the managerial response to issues.
Management reports can be grouped into programmed reporting and Ad hoc
reporting. Programmed reporting provides information that is anticipated. It can be
scheduled, where it is provided according to a given time frame or on-demand report
which is caused by in-action events. Ad hoc reporting on the other hand provides
information promptly required, especially when required on short notice. It may not be
sequential, but it is given as a summary of the information required, and is not computer
detailed. Ad Hoc reports can easily be produced by managers without the assistance of
data professionals.
E-commerce
Electronic commerce is the use of the internet to carry out business transactions.
It uses technologies such as mobile, supply chain management, online marketing,
electronic data interchange, inventory management systems, and automatic information
collection systems. Modern e-commerce uses the World Wide Web in its transactions,
although it may also use other technologies such as E-Mail (Mignerat, and Rivard,
2015).
E-Commerce businesses may employ online shopping, participation in online
trainings, online selling of businesses, online advertisement and gathering, using
demographic data through Web contacts and social media and launching of new
products and services.

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Opportunities for computer fraud
While companies focus on collection of information and their efficiency in storage
and use of information, they fail to realize the value of their information assets and
infrastructure. This offers opportunities for fraudsters to attack and cause harm. The
focus of this discussion will be centered on the vulnerabilities that are made available by
business information systems to fraudsters.
Erroneous perception of Information Systems risk
Business organizations may channel their concentration too much on the
availability and forget to lay strategies on handling threats they may come across in the
confidentiality and integrity of the information. The business organizations that
understand these threats will always view the threats as being from external sources
and overlook the fact that these threats can also be from internal sources. The internal
sources can be their staff, either they are the sources (Gotterbarn, 2017), or they
contribute indirectly to the exposition of these vulnerabilities. Policies need to be set that
will ensure that vulnerabilities are handled internally, and a process be put in place that
will ensure that the vulnerability is not exposed (Pearlson, Saunders, and Galletta,
2016).
Technical perception of Information systems security
Inadequate understanding of causative areas by management and lack of
utilization of appropriate preventive measures also increases risk to the system. Many
organizations perceive information security risks as a technical concern and not a

INFORMATION SYSTEMS 22
collective responsibility, that includes the management and personnel. They also think
that security concerns affect only a small part of the system and fail to perceive that
they affect it wholesomely. Some tend to think that information security issues cannot
be a source of major problems when they affect a certain part of the system. This
assumption exposes the system to vulnerability even if the system was built with
security being the main concern. The management should view security as a major
concern and a wide field that should not be compromised at all costs. Every little effort
should be supported to ensure that any loophole to computer fraud is patched before
damage is caused (Smith-Ditizio, and Smith, 2019).
Financing for security
The management has a lot of influence on the decisions concerning any element
of the organization. Most influence is on the distribution of finances for the operability of
the organization. A lot of organizations overlook the need for financing for security with
the ideology that tight security policies are enough to ensure quality security, hence little
funding is set aside for the actualization of the policy, rather than the upgrading and
maintenance of security infrastructure.
Organization managers should understand that information security is as
important as the information being stored. As more funds are spent in storage, access
and distribution of information, the management should also allocate funds for purchase
of improved security infrastructure and should remove the assumption that security is
only centered on policies.

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Implementation of inappropriate security controls
If safeguarding measures being implemented are obsolete, then also, information
security is rendered vulnerable. Assumptions about the insufficiency of approaches to
security also makes the system vulnerable to fraudulent attacks. Safeguarding
measures should be implemented by qualified IT personnel and vulnerabilities checked
often in order to strengthen system security. Security controls should also correspond to
the environment in which they are being applied. There should not be a conflict between
these approaches (Pearlson, Saunders, and Galletta, 2016).
CONCLUSION
Strategic information systems will help a great deal in improving efficiency,
accuracy and performance of business processes. If these systems are included in the
operations of the business organization, there is an assurance savings in expenditure
cost, increased operations speed, reduction in human error, improvement of customer
experience, automation of services and many more advantages.
Although the system has many advantages, it is important to anticipate risks that
may accompany the implementation of such a system to the business. As reliance on
the system increases, there may arise security issues, that need to be prevented. The
prevention of these risks should not only be anticipated but also be launched from the
design phase of the system, with the possible threats offering the security guidelines in
its development. Security policies also need to be enforced while using the system in
order to have a security-centered approach while using the system. There should be

INFORMATION SYSTEMS 24
emphasis on the role of ethics in security enhancement among staff. Strict measures
should be put in place for personnel who break the code of conduct and enhanced
security measures should be put in place (Nasreen, and Purohit, 2018).

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