HI5019: Strategic Information System Report on Rainbow Illusion

This report analyzes the strategic information system of Rainbow Illusion, a New Zealand retail organization. It examines the company's use of a centralized information system for managing transactions, inventory, and various organizational functions across its stores. The report details the strengths of this system, including its ability to gather large amounts of data, increase productivity and efficiency, ensure accuracy, and aid top management in decision-making through easy access to information and detailed reporting. The report also identifies potential problems avoided by the system related to transaction and sales cycles. Furthermore, it explores situational pressures that could enhance the likelihood of fraud within the organization. The report then argues for the superiority of a distributed system over the centralized one, highlighting advantages like speed, accuracy, and storage capabilities. The report concludes with recommendations for Rainbow Illusion to transition to a distributed system to improve its performance and mitigate risks.

Running Head: Strategic Information System
Rainbow Illusion and Strategic Information System
Report
System04104
9/5/2019

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Executive Summary
Rainbow Illusion is a retail organisation of New Zealand and it operates its business
through more than 30 stores in the country. Rainbow Illusion uses the centralised
information system and organisational system to record transactions and recording
various organisational functions. The employees of the company also perform their
duties and provide all the information to centralised system for storage and future
access of data and information related to various activities. The manager and
employees all have their own work such as recording transactions related to cash
and sales, managing inventory of the organisation, and managing works of other
retail stores of the organisation. The report analyses the roles of centralised system
in the organisation and analyse that how centralised system helps the organisation in
its decision making and improving the performance. The report also discusses the
advantages of using distribution system over the centralised system. However, it has
been found after all the analysis and study that the Rainbow Illusion must use the
distributed system over the centralised system because it has many advantages like
speed, accuracy, detailed report generation, and multiple of storage and processing
speed etc.

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Table of Contents
Executive Summary......................................................................................................1
Introduction...................................................................................................................3
Strengths of Rainbow Illusion’s Sales Transaction System.........................................3
Problems avoided by Rainbow Illusion’s Sales Transaction System...........................5
Situational pressure that would enhances the likelihood of frauds..............................6
Superiority of Decentralised System over Centralised System....................................7
Advantages of Distributed System............................................................................9
Recommendations......................................................................................................10
Conclusion..................................................................................................................11
References.................................................................................................................12

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Introduction
Rainbow Illusion is known for its retail business operations in New Zealand. The
company has currently more than 30 stores and it is one of the popular company
organisations in retail business. The company uses the centralised information
system in the organisation according to the current needs and business function.
The centralised information system in the company is responsible for managing
various organisational functions such as managing sales, recording cash
transactions, keeping records related to buying and selling of products, managing
revenues etc. Apart from this, the centralised system also make easier for
organisation to keep records related to payment methods and ensure easy return of
products. The company uses both centralised information system and offline
information processing system through the organisational employees. However, the
centralised system helps the organisation to increase the organisational
effectiveness in information processing and taking correct and timely decisions
based in information provided by the centralised information system (Beijsterveld
and Van Groenendaal, 2016). This report helps to understand the strengths of
organisation while using both online and offline information system in the
organisation. It also analyses the strengths of the organisation with the centralised
information system. The report also discusses two key situational pressures that
force the organisation towards the frauds. Apart from this, a comparison between
centralised information system and distributed information system has been
discussed in this report to show why distributed information system is better than
centralised information system.
Strengths of Rainbow Illusion’s Sales Transaction System
The Rainbow Illusion uses both centralised information system and manual
information processing function in the organisation. Bot type of information
processing function in the organisation will coordinate each other in making correct
decision, keeping records, and ensure that organisation will not face any type of
frauds. The various levels of employees and managers are working together in the
organisation to manage organisational functions such as cash collection, managing
revenue, and sales and distribution functions (Almahamid and Awsi, 2015).

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However, the information collected by these people is generally forwards to the
centralised system that keeps this record and provides timely information to the top
management of the organisation for decision-makings and monitoring the
performance of the organisation. Each people in the organisation are responsible to
perform his or her roles and responsibilities and provide information for centralised
information system. However, the organisation has following benefits of centralised
information system that helps the organisation to collect large amount of data and
assist the top management in taking crucial decision regarding organisational
performances (Cukur and Svensson, 2016). However, there are many benefits of
using centralised system in the organisation. Some of the key strengths of the
organisation after using centralised system are as follow:
1. Capacity of Gathering Large Amount of Data: The centralised system
enables the Rainbow Illusion to gather huge amount of data and information
from various organisational functions. Employees who are working in various
organisational functions provide daily information to the centralised
processing system that helps the organisation to gather huge amount of data
related to every organisational function (Biggs, Ryan, and Wiseman, 2010).
2. Increase the Productivity: The combination of offline and online information
system helps the organisation to increase its productivity by reducing the
chances of error during various organisational functions. The people enhance
the performance and productivity of Rainbow Illusion when overtime is
needed. It will further increase the sales of the organisation and further
enhance the revenue of the company. However, apart from this the ERP
system of the organisation helps in generating reports related to various
functions in quick time and on demand (Karimikia, Singh, and Olesen, 2016).
3. Enhance Efficiency of the company: Rainbow Illusion uses the centralised
information system in the organisation that helps the organisation to improve
its efficiency. Using combination of human information function and
centralised I formation system reduces the chances of mistakes or error
during performing various organisational functions. Apart from this, it also
helps the employees to matches their performance with the centralised
information system to improve the efficiency of the organisation (Rouhani and
Mehri, 2018).

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4. Accuracy: The coordination between employees and centralised information
system reduces the error in keeping records related to sales, cash, or revenue
etc. The double check of every information related to these functions and
managing this information in centralised system reduces the chances of error
in information gathering (LaBarre, 2019). The combination of manual
recording and processing of information and centralised information system
provides double check every aspect of data and information and enhance the
accuracy of every function in the organisation.
5. Helps top management in decision-makings: The fast processing of data
through centralised information system, error free reports, and accurate and
timely information given by centralised information system assist the top
management to take correct decisions to improve the performance of
employees. The easy access of information and quick reporting of centralised
system enables the manager to identify the changes or error in invoice and
rectify the error in quick time. The manual approach in the information
processing and interference in the work review the whole transaction
procedure with new approach that also helps the top management to take
crucial decisions (LaBarre, 2019).
6. Easy access of information and detailed reporting: The centralised
information system of Rainbow Illusion provides the facility to generate quick
reports. It means organisation can access the information with latest data
available and also provide the facility to access the data and information in
easy way. The centralised information system keeps a large amount of data
with great efficiency and provides facility to the management to get the
information with great accuracy (Elmonem, Nasr, and Geith, 2016).
Problems avoided by Rainbow Illusion’s Sales Transaction System
The Rainbow Illusion uses centralised information system in association with human
interference in the organisational functions. This type of combination in record
keeping helps the organisation to avoid many type of issues related to transaction
and sales distribution. As sales function is the key and fundamental activity in any
organisation, it is crucial for the organisation to manage sales function with great
efficiency and accuracy (Hu, et. al., 2017). It is the sales department that helps the

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organisation to collect revenue for the organisation and generate cash, which is the
crucial factor of earning profit in any organisation. However, the Rainbow Illusion
avoided various problems with the sales transaction system in the organisation. The
Transaction and sales information system is responsible for many functions such as
recording of data and information related to sales and cash management (Beynon,
2016). It also provides time-to-time information to the management about the sales
and inventory records. However, the centralised system of the organisation helps in
removing various issues related to transaction cycle. These are as follow:
1. The centralised system reduces the financial cycle because it receives cash
form the customers and paid it to the suppliers that avoid the chances of
human error in the transaction and financial cycle.
2. Using centralised system also reduces the revenue cycle. The centralised
system helps the organisation to receive cash from the customers and direct
sell the product to the customers.
3. The organisation generates money from various sources and pays the salary
of employees from those sources. This helps the organisation to avoided error
in human resource cycle where organisation paid salary to its human
resources.
4. The centralised system also reduces the production cycle by paying money
directly to the labours or producers and gets the products for sell.
5. The sales transaction system also reduces the expenditure cycle by providing
cash to the suppliers and purchases the raw material in return.
Situational pressure that would enhances the likelihood of frauds
Rainbow Illusion uses the combination of centralised information system and human
interference in various organisational functions. This combination leads to many
issues and problems in the organisation and enhances the chances of frauds
(Laudon and Laudon, 2016). However, the two key situational pressures that
increase the chances of frauds in the organisation are as follow:
1. The human interference in the various organisational functions may lead to
errors in recoding transaction manually. The major drawback of using human
interference in keeping record and transactions is that people can easily

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manipulate the data or information during recording of data. People can
manipulate the records for their personal benefits and provide wrong
information to the centralised database. This leads to many frauds in the
organisation. It has been also seen in such type of system that people
deliberately make the mistakes for providing benefits to the third party. The
manipulation of data, wrong information as an input for centralised system,
and intention of frauds leads to some serious problems for the organisation
(Denecken , 2017).
2. The functioning of centralised information system in the organisation totally
depends on the input provided by the people or employees of the
organisation. The centralised database system cannot detect the frauds,
which is deliberately done by people for fraud. The failure of detecting such
type of frauds and unable to detect errors is the major drawbacks of such type
of centralised database system. It means every people have influencing
power to manipulate the data and information provided to centralised system.
This is a serious concern for Rainbow Illusion because in the organisation
both humans and centralised system are equally responsible for generating
information and reports.
Superiority of Decentralised System over Centralised System
The modern organisations are totally depends on information technology and
database management system. However, using centralised and distributed system in
the organisation is an essential need of every organisation and it is so common. The
centralised information system depends on a single computer system that helps the
organisation to perform all the activities through a single centralised system (Ge,
Yang, and Han, 2017).
The distributed system consist two or more than two systems that are connected
with each other and assist the organisation to perform all the function with the help of
these systems. The distributed system is more capable in handling tough jobs in
compare to centralised system. Apart from this, the distributed system can also store
huge amount of data and perform the given command with quick speed. The
distributed system provides the facility to the users to put the information from
different location in Centralise database system (Ge, Yang, and Han, 2017).

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However, the distributed system has shared memory or variable that enables the
organisation to collect the information from various sources in the same time. The
distributed system helps the employees or people to access a common database
from different location and access the information from the common database as
well. The multiple processor used in distributed system make it more effective and
fast in processing information and it also enables that multiple of people can access
the data or upload the data with same processing speed from different locations. The
major advantage of distributed system is that failure in one peripheral or system
cannot affect the functioning of other system of function of the organisation (Valtari,
Verho, Hakala-Ranta, and Saarinen, 2010).
(Source: Ge, Yang, and Han, 2017)
The centralised database system is a single network computer system where all the
functions of an organisation performed by a single network or computer system in
the organisation. The centralised system can perform multiple of jobs and it have no
autonomous components (Kim and Dale, 2015). The centralised database system
provides the access to a common resource and common database all the time from
different location. However, it allows a type of homogenous technology to a single
point system through a single point control. However, the major advantage of such

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system is that it is very easy to find out failure spot in the system but the major
demerit of this system is that a little failure in the system leads to failure of the whole
organisation and its functions. The failure in centralised system stops the entire
activities in the organisation and this is a major drawback with centralised system
(Kim and Dale, 2015).
(Source: Kim and Dale, 2015)
Advantages of Distributed System
The major advantages of using distributed system are as follow that makes it
different and beneficial from the centralised system:
1. Speed: Distribution system has capability to process the information very fast
as compared to centralised system. This is because the distributed system
combines the multiple of processors and allows access from different location
to different storage (Rämä and Mohammadi, 2017).
2. Reliability: The distributed system is more reliable than centralised system
because the data or information is not gathered at one place in such type of
information system. Apart from this, people cannot manipulate the data or
system for frauds. The division of work over many peripherals helps the
organisation to make the work easier for every people. Apart from this, failure

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in one node of distributed system not affects the functioning of whole system
or other functioning of the organisation (Kim and Dale, 2015).
3. Quick Access of information: The distributed information system provides
quick and easy access of information from any location. This helps the people
to get the information anytime from anywhere. People can access the
information around the clock.
4. Easy Distribution of work: Distributed system allows the organisation to
divide the workload in many parts through the various systems. This facility of
distributed system gives an edge over the centralised system in the
organisation.
However, it can be said that distributed system is more superior than centralise
system and there are many issues associated with centralised system such as
failure issue, synchronisation problems, and common memory and storage
capabilities. However, the privacy issue and manipulation of information is the major
concern for centralised system (Keshet and Ketterle, 2013). However, the
distribution system overcome all these issues of centralised system but there are few
disadvantages are also associated with distribution system such as extra need of
physical resources and privacy concerns etc.
Recommendations
These are the following recommendation that can be given to Rainbow Illusion to
improve its productivity and performance.
1. The company should implement the distributed system over the centralised
system that will help the company to maintain the records related to its
business operations. The company can use the SAP or ERP system to
manage the data of the organisation. Apart from this, the implementation of
these systems can help the top management to make accurate and quick
decision regarding organisational performance.
2. Rainbow Illusion should focus on data privacy and for this purpose, company
can take the help of third party of cyber experts.

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3. The company needs to educate and train the current employees about the
new installed systems and motivate the people to adopt the changes in the
organisation.
4. Assign proper responsibilities to every employee in the organisation and ask
them to perform their duties in ethical manner. This will prevent the unethical
and deliberate manipulation of data in the organisation and prevent the
frauds.
Conclusion
In conclusion, Rainbow Illusion is a large organisation that manages more than 30
stores in the country in different location. To manage all the functions and operations
of the organisation, Rainbow Illusion must replace the old information system
(centralised system) with distributed system that will help the organisation in
accessing quick and accurate information and avoid the chances of frauds. The
distributed system also reduces the chances of human manipulation of data and
information. The easy access of data and reliable information helps the top
management to make right decisions that will further help the company to improve its
performance and increase the revenue of the company. The distribution system also
allows the organisation to use the reverse process to check and analyse the
authentication of data and detect the sources of frauds.