Rainbow Illusion Case Study: Strategic Information Systems Assignment

This case study analyzes the strategic information system of Rainbow Illusion, a retail company, examining its sales transaction process, strengths, and limitations. The report details the roles of various personnel, including salespersons and cashiers, and explores the manual record-keeping syste...Read More

Running head: STRATEGIC INFORMATION SYSTEM
Strategic Information System
Name of the Student
Name of the University
Author’s note

Executive Summary
The report presented in the paper is based on a sales transaction process that is followed in
Rainbow Illusion Company. The different segments of the transaction process are highlighted
keeping in focus about the important personnel involved in the entire procedure. The
functions of the personnel are stressed upon which are jotted down separately in the section
of key strengths. The functions of the various departments are also stated. The limitations that
the company has overcome in the past days are also elaborated and the reasons for
developing such a typical manually operated system are also briefed. This system also has
certain risks and limitations which are also pointed out in the paper. At the last section, a
general discussion is provided regarding the advantages of a distributed computer system
over a centralised computer system.

Table of Contents
Introduction................................................................................................................................3
Discussions.................................................................................................................................3
Six strengths in Rainbow Illusion’s system for controlling sales transactions..........................3
Problems avoided by Rainbow Illusion by incorporating the strength in the system of
controlling sales.........................................................................................................................5
Two situational pressures in the company that might increase the likelihood of fraud.............7
Reasons for the preferences shown by companies for a distributed computer system..............8
Conclusion..................................................................................................................................9
References................................................................................................................................10

Introduction
The report aims to present a brief description regarding the prevailing transaction
process of Rainbow Illusion Company. This will be followed by the strengths that are shown
by the company in controlling its transactions of sales. In carrying out such a process, the
company might be faced with many kinds of risks. A thorough analysis of such risks is
proposed in the paper. The response of the company in mitigating these risks are recorded. In
this respect, the historical problems faced by the company in implementing such a process are
also elaborated. Each strength is given a key priority and emphasised in a proper sense. The
company might be facing many tough situations that could make it prone to several kinds of
risks. These situational pressures are pointed out. At the end section, a general discussion is
provided about the benefits of a distributed computer system over a centralised one and the
reason behind the preferences of the managers in choosing a distributed computer system.
Discussions
Six strengths in Rainbow Illusion’s system for controlling sales transactions
From the case study, it can be suggested that Rainbow Illusion company has a widely
spread retail business. However, the system of sales transaction as reflected by the company
is still very manual and goes back to the past days (Ingram et al. 2015). The company
believes in following a unique procedure for conducting its sales transaction system (Ingram
et al. 2015). The company has hired comparatively younger sales personnel and has allotted
part-time work for them. The wages that have been fixed for the sales personnel are based on
the number of hours they work. These personnel have their respective sales targets above
which they get commission (Sukhia, Khan and Bano 2014). Such a system can be thought as
a key strength for the company as the company is able to generate more profit with less
incurred costs.

The company shows many other strengths in its sales transaction system. The cash registers
that are used by the company are unsophisticated and they are required a four-part sales
invoice (Basker 2016). The different methods of payments do not influence the sales invoices
and they are used irrespective of cash, bankcard or a cheque. This helps in easing the
operations of the company.
Another strength is vividly highlighted in the sales floor which consists of manual
recording process. The salesperson of the Company does the job of recording. He manually
records all the transactions that have taken place in the sales and also keeps a unique
identification number for a single employee (Kobelsky 2014). The salesperson also does the
job that is required in the entire sales procedure. This includes calculation of the total
invoices of sales and the also the calculation of the discount that is applied to the products.
Other elements related to the products in sale are also taken care of by the salesperson
(Kobelsky 2014). This includes clothes, description of the products as well as class of the
products. Another very significant function of the salesperson is to keep record of the amount
of tax that is getting imposed on the revenue generated from sales. All these duties and
responsibilities of the salesperson are very unique to the company.
Next in the line is the role of the cashier who is also exclusively related to the process
of sales. The salesperson shows the invoices to the cashier and the cashier reviews all those
invoices. He gives a perfect input to the sales procedure (Willeam and Widyaningdyah 2016).
The cash register which is used by the company purely functions under the cashier (Kobelsky
2014). The cashier validates all the invoices mechanically and denotes them with a specific
transaction number. The cashier also performs the role of approving the charged credits and
also the sales that are generated through the payment of cheque (Willeam and
Widyaningdyah 2016). The job of the cashier almost ends at this stage and ultimately keeps
two copies of invoices with himself. He hands over one copy of the invoice to the customers.

Out of these two retained copies, one is needed in store while other would be needed as a
bankcard.
The last important strength as shown by the company is the process of handling the
returns. The process of handling returns is similar to that of the invoice (Rao, Rabinovich and
Raju 2014). In case of return procedure, a return slip is issued by the cashier. This is an
additional activity shown in the process of handling the return.
Problems avoided by Rainbow Illusion by incorporating the strength in the system of
controlling sales
Rainbow Illusion company undertakes a manual recordkeeping process which is a
unique identification of the company (Scott 2014). In contrary to this, the companies who
undertake this process through the use of an accounting software has to consult an accountant
or a financial adviser in order to purchase the software convenient for keeping records (Scott
2014). In this respect, such a challenge is avoided by Rainbow Illusion company through the
process of keeping records through a manual procedure.
The company also has been able to hire part-time employees and are paid based on
the hours they work (Valletta and List 2015). The other companies with full-time employees
are required to give more wages to them. In this way, this company has been able to cut-off
its costs and has mitigated such a limitation.
The job of the salesperson is also manual in the company. The salesperson calculate
the amount of tax that is imposed on the figure of sales (Skedinger 2015). The other
companies use different accounting software that follow the regulations of the Australian
taxation. Such software could be installed by getting a license (Skedinger 2015). This is a
very hectic and a lengthy process. Therefore, such a complicated process is mitigated by
Rainbow Illusion company at the maximum possible extent.

The job roles of both the salesperson and the cashier are mechanical and manual.
Therefore, the employees are not required to be given additional training as the process is
very convenient. Neither will it require the involvement of a middleman (Dorle 2016). This
will automatically enhance the security of the procedure. Without the improvisation of this
process, the sales staff had to wait for the accounting office to give the bills to the customers
at a far away date (Dorle 2016). Another disadvantage that is restricted by the company is the
risk of hacking and stealing of data which is very common in the electronic process of
operation.
The company has a centralised data processing system that controls all the operations.
There is an integration between all the departments of the company which is an added
advantage of the company (Anderson and Bolton 2015). The centralised processing system
reviews all the errors in the numerical figures which might occur due to the inefficiency of
the staff of various departments. Through this way, improvements can be brought about in the
process and it can be developed in the future through minimisation of errors (Anderson and
Bolton 2015). Other companies have faced various regulatory costs while following a
separate processing system. This negative effect is minimised by the company Rainbow
Illusion up to a greater extent.
Through the implementation of all these manual systems, the company has been able
to reduce all the risks that are faced by other companies due to implementation of an
electronic processing system. All these risks include cyber security risks that arise due to
cyber criminals and many other risks (Cherdantseva et al. 2016). In this context, the
advantages shown by a manual process of sales transaction over an electronic process of sales
transaction and identified and highlighted as necessary.

Two situational pressures in the company that might increase the likelihood of fraud
Rainbow Illusion Company follows a manual system of sales transaction in its
business. There is involvement of people in various stages and departments. (Arcega et al.
2015). Though a manual process has many benefits over an electronic process, still a manual
process also has its own limitations. One of such limitations can be occurrence of fraudulent
activities in each and every stage of the sales transaction process. Such fraudulent activities
are common between the employees having key functions in the process.
The managers of the company are required to reconcile the data that is generated
through the transactions. As the entire process is conducted manually, there might be errors.
The managers are required to handle a large number of data but in a very limited time
(Arcega et al. 2015). As a result the process is always associated with human errors. The
detection and identification of such errors is a very cumbersome process and most of the time
the errors could not be minimised up to a greater extent due to lack of time in the hands of the
companies.
There can be manipulation of data by the salesperson or the cashier that would
significantly hamper the entire procedure (Paquet-Clouston, Bilodeau and Décary-Hétu
2017). The salesperson might manipulate quantitative information of the invoices when he is
totalling all the figures(Paquet-Clouston, Bilodeau and Décary-Hétu 2017). He might also
manipulate figures of the discount applied to the products while he is tracking them down.
This might lead to a fraud in the entire process of sales transaction.
Likewise, fraud might take place on the part of the cashier. He might falsify certain
quantitative data or information while he is matching the data of the invoices. A manual
matching process carried out by the staff also invites anomalies (Downing et al. 2016). The

linking of data is done following the relationship between the departments. Generally a single
data is compiled from multiple departments which increases the errors of the activity.
Another important risk is the risk coming from the central processing system that is
present at the last stage of the hierarchy. The review system of the central processing unit
takes up a remote control of making all the important decisions (Sullivan 2014). As a result,
there is always a risk of delay in the activity and lack of participation from the employees in
the decision making process. Due to all these reasons, the manual system of sales transaction
followed in Rainbow Illusion Company cannot be regarded as a complete functional system.
Reasons for the preferences shown by companies for a distributed computer system
The companies always prefer to install a distributed computer system over a centralised
computer system due to the following reasons.
1) The speed of a distributed computer system is much greater than that of a
centralised computer system (Agrawal et al. 2015). The primary goal of the
managers of the companies is to achieve maximum speed on a single problem so
that it can be solved in a limited time. Therefore, they prefer distributed system for
achieving this target,
2) The distributed computer system is always distributed inherently where there is a
connection between all the departments of the company (Agrawal et al. 2015).
This is another reason for the preference of distributed system by the managers.
3) The third benefit of the distributed system is its reliability. The distributed system
is highly reliable as compared to the centralised system. The distributed system
distributes the entire work over many machines or departments at the same point
of time (Ghosh 2014). This reduces the workload and also reduces the number of

machine failures. This is because failure of one machine would not disrupt the
entire process of the activity.
4) The final and the most important value provided by the distributed system is its
incremental growth in the process of business operations. Due to a failure in the
primary machine, it is required to be replaced by a larger one or a second
machine. This might lead to the creation of difficulties in the operations of the
company. Such a problem is solved properly by the distributed system (Ghosh
2014). This is because, in a distributed system there is no need of a second or a
larger machine. In such a case, simply adding more processors to the system
would solve the issue. Even for similar issues occurring in the future days, the
machine can be expanded gradually through adding of processors. This would
lead to incurring of less cost and consumption of less time by the companies.
Conclusion
From the above report it can be concluded that Rainbow Illusion Company has been
able to successfully carry out its manual process of sales transaction. From the first section, it
is evident that the company finds many strengths in this process that is operated manually. In
this respect, the different job roles of the key personnel of the company are highlighted. It is
found out that the key personnel involved in this process are the salesperson and the cashier.
Their specific job roles are discussed that brings about a simplicity and a convenience in the
process. The limitations of the past which led to the introduction of this system by the
company are also figured out. However, the manual system has also come up with several
disadvantages which are stated in the report. These disadvantages include different fraudulent
activities that can occur at each department while the sales transaction procedure of the
company is in progress. At the last section, a general discussion is provided regarding the
importance of a distributed computer system over a centralised computer system and the

reasons due to which the managers prefer to install a distributed computer system over a
centralised system.

References
Agrawal, H., Mathialagan, C.S., Goyal, Y., Chavali, N., Banik, P., Mohapatra, A., Osman, A.
and Batra, D., 2015. Cloudcv: Large-scale distributed computer vision as a cloud service.
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Anderson, M. and Bolton, J., 2015, October. Integration of Sensors to Improve Customer
Experience: Implementing Device Integration for the Retail Sector. In 2015 IEEE 12th
International Conference on e-Business Engineering (pp. 382-386). IEEE.
Arcega, C.K., Datinguinoo, E., Guerra, J., Guno, C., Mayuga, H.J., Villamena, E. and
Manongsong, J.L., 2015. Computerized vs. non-computerized accounting system of small
and medium enterprises in Lipa City, Philippines: A comparative analysis. Asia Pacific
Journal of Academic Research in Business Administration, 1(1).
Basker, E., 2016. The evolution of technology in the retail sector. In Handbook on the
Economics of Retailing and Distribution (pp. 38-53). Cheltenham: Edward Elgar Publishing.
Cherdantseva, Y., Burnap, P., Blyth, A., Eden, P., Jones, K., Soulsby, H. and Stoddart, K.,
2016. A review of cyber security risk assessment methods for SCADA systems. Computers
& security, 56, pp.1-27.
Dorle, N., 2016. ROLE OF THE SALESPERSON IN" TOTAL DESIGN". Challenges of the
Knowledge Society, p.728.
Downing Jr, C., Howard, E.H., Goodwin, C. and Geller, E.S., 2016. Preventing the threat of
credit-card fraud: Factors influencing cashiers’ identification-checking behavior. Journal of
prevention & intervention in the community, 44(3), pp.177-185.
Ghosh, S., 2014. Distributed systems: an algorithmic approach. Chapman and Hall/CRC.