Strategic Information Systems for Business and Enterprise

1. There are several risks involved in the conversion cycle of Central Production Limited. The first risk if we talk about which is involved in this company is there is a major possibility of the theft or damage of raw materials of the goods which are to be produced (Healthy Working Lives, 2020). Maybe that is the reason the company fell short of the preset minimum level of the quantity of the inventory which is stored in the warehouse of the company. There are also risks involved in the warehouse getting caught up by the fire or any other accidents for that proper maintenance of the warehouse should be done by incorporating fire alarms and fire extinguishers in case of any mishaps or sudden accidents. There can also be errors in the bill of materials this is issued by the warehouse manager which can also be minimized by carefully reviewing and approval of the bills of materials (BOM) by the people involved in the production process.

Now in addition to this, when the work center supervisor gets the required order with the hard copy he should also forward a soft copy as well to the people in the production process. As soft copy will act as a backup just in case the hard copy gets torn or misplaced in any manner. There can also be errors in the sequence of manufacturing which is also one of the risks as well in the company. This also can be minimized by a careful review and analysis of production sequence by the personnel which is involved in the production. Another risk is the misestimating of the requirements of the materials which can lead to a decrease in the production of the company leading to huge losses and a decrease in the sales revenues (Simplicable, 2017).

2. Based on the question, Olive Limited can face a lot of risks and threats in their business as a result of the poor reporting system in the books of accounts by Richard Palm. The first and foremost in this case is if Richard commits a fault or error in recording the number of journal entries into the ledger accounts or subsidiaries books of accounts which can lead to the company making a bad decision based on the false records of data and information (Kreischer Miller, 2017). This can be prevented by carefully reviewing the balances of the books of accounts and analyzing whether the balances of the total debits equal to the total credit balances of the company. It can also be controlled by reviewing the run to run totals of the journal entries which are recorded by Richard. Another risk involved in Olive Limited in the context of internal control is disclosure or breach of the confidential information and data of the company.

This can also result in a large number of thefts and robbery of the assets of the company due to which the company has to suffer and bear huge losses. This can be prevented by keeping proper back up of the ledgers and journals of the company. Also in addition to this, the employees should keep long passwords so that the data on the company portals remains secured. Another risk involved in this is if the company delays in giving the relevant information on a timely basis then there would be an automatic delay in the formation of reports which automatically reduces the profit margin of the company. This can also be controlled by reviewing and preparing the reports and by even incorporating eXtensible Business Reporting Language into the business (Deloitte, 2020).

3. The REA model's full form is the Resource-Event-Agent model. It is an ISO model that checks quality and reliability. (Sqaure Space, 2016)

  • Resource factor states possession or claim by an economic agent.
  • Event factor states activities that arise from economic operations like consumption, exchange, production, and exchange.
  • Agents are stakeholders which perform daily tasks.

REA for Elegant Limited:

  • Resource: restored classic cars
  • Event: Sale or purchase of cars, accounting transactions
  • Agent: cash sales

The relationship between the two variables of the REA model is known as Cardinality. Sales and customers are strongly related which shows high cardinality is the REA model. Resource is the first factor. Resource factor states possession or claim by an economic agent. The agents have control of the resources. The second factor is an Event. Event factor states activities that arise from economic operations like consumption, exchange, production, and exchange. Agents are the last factor. Agents are stakeholders which perform daily tasks. In the case of a company selling cars, the resource is the car that is on sale. The other resources that the company owns and has control over are property rights, staff, etc (Digital Finance Reporting, 2016). The event in the scenario is the sale and purchase of cars. The company also records its accounting transactions as part of events. The agents are the distributors, wholesalers, etc. The relationship between the two variables of the REA model is known as Cardinality. The number of time one entity linked with others is also shown by cardinality. In the present scenario sales and customers are related to each other. For every sale, the sales head should show the number of customers. This will enhance the effectiveness and efficiency of the enterprise.

4. The management team asked the auditor to perform an audit procedure on a data warehouse rather than an operational database. The areas to be addressed by an auditor are:

a. Data warehouse involves the collection of the corporate data, the operational systems, and other information that is relevant to the organization's functions, helping the organization to make more strategy-based decisions. Dissecting the information is useful and easy to respond to important questions or inquiries concerning the company when using the data warehouse to its full capacity.

b. Since it is helpful for the business to have a data warehouse, it should discuss what to build. Given the different technique to design a warehouse, it must design the central architecture in (Arif & Mujtaba, 2015):

  • Storage algorithm: The basic framework is this part of the system; this is the location where the warehouse resides. There are two primary storage alternatives: in-house or cloud. The internal server is the office's interior equipment and the cloud is a digital, server-dependent storage solution. One choice, in terms of efficiency, is realistic, and everything depends on requirements (Raghunathan et al., 2015).
  • Functional software: this is a useful element in the architecture of the warehouse. It is often isolated in two classes: centralization programming and visualization programming. Centralization programming is necessary to collect and maintain information from all your databases. Visualization programming can communicate knowledge and assist in interpretation in a visual setting.
  • Human resources: This is the management component of the data warehouse, which is essential for a working solution. It is important to use new situations in your business to keep the warehouse working. Because it takes a lot of information to run a data warehouse, well-qualified experts must be enlisted. The cloud is supervised by outside sellers.

5. A. The decision of the Managing Director (MD) of Illustrious Limited is the correct one since he proposes the creation of a list of requirements for his new system and this is a totally correct decision since the design of the system will be based on the needs of the client. This can be explained as information systems are important elements within organizations that are used to develop procedures and control through the information process, which is based on data collection and subsequent use (Pressbooks, 2014). Therefore, the analysis of such a system should be aimed at developing the most suitable procedures for the development of the system, supporting the activities of the company, generating benefits, and saving time.

  • The system must meet the objective of being sufficiently understandable so that the information provided by it is useful for troubleshooting.
  • It is important to define which functions must be performed by the program (Software).
  • The software or program must adjust to the events of the company, that is, it must be in accordance with the needs of the information operators.
  • It must define what are the most important information and functions of the system to rank them.

B. For the analysis of the information system, the TELOS model (Envatotuts, 2014) will be apt. It should be developed through the following objectives:

  • Identification of the needs of the company is important as it is going to implement the system express what its needs are in terms of system design, that is, it is the company that decides what it wants to see in its information system and it is that which provides the system requirements,
  • The system must be viable; this means that the costs incurred for the development of the system must go hand in hand with the economic benefits that can be obtained through the developed system.
  • The system must be assigned the functions of hardware, software, personal, etc of the system.
  • The system must be well defined so that there is a foundation for its design and engineering work.

References for Strategic Information Systems for Business and Enterprise

Arif, M. & Mujtaba, G. (2015). A survey: Data warehouse architecture. International Journal of Hybrid Information Technology, 8(5), 349-356, http://dx.doi.org/10.14257/ijhit.2015.8.5.37

Deloitte. (2020). XBRL- eXtensible Business Reporting Language. Retrieved from https://www.iasplus.com/en/projects/research/short-term/xbrl

Digital Finance Reporting. (2016). Understanding the resource-event-agent (REA) conceptual model. Retrieved from http://xbrl.squarespace.com/journal/2016/9/27/understanding-the-resource-event-agent-rea-conceptual-model.html

Envatotuts. (2014). Can we really do it? How to conduct a TELOS feasibility study. Retrieved from https://business.tutsplus.com/articles/can-we-really-do-it-how-to-conduct-a-telos-feasibility-study--cms-21442

Healthy Working Lives. (2020). Fire. Retrieved from https://www.healthyworkinglives.scot/workplace-guidance/safety/fire/Pages/fire-related-hazards.aspx

Kreischer Miller. (2017). 5 internal control risks every organization should address. Retrieved from https://www.kmco.com/resource-center/article/leading-edge/5-internal-control-risks-every-organization-should-address/

Pressbooks. (2014). What is an information system? Retrieved from https://bus206.pressbooks.com/chapter/chapter-1/

Raghunathan, T., Battula, S.K., Gopisetty, R., Rangaswamy, B & Geetanjali, N. (2018). Novel read algorithms for improving the performance of big data storage systems. Procedia Computer Science, 50, 264-269, https://doi.org/10.1016/j.procs.2015.04.050.

Simplicable. (2017). 7 types of inventory risk. Retrieved from https://simplicable.com/new/inventory-risk

Square Space. (2016). Understanding the resource-event-agent (REA) conceptual model. Retrieved from http://xbrl.squarespace.com/journal/2016/9/27/understanding-the-resource-event-agent-rea-conceptual-model.html

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