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HI5019 Strategic Information System for Business Assignment Help
Use of internet and information technology is becoming a necessary tool for organisational success. Information system increase level of convenient and effectiveness in the organisation. According to Aboud (2011), improving the effectiveness of business activities is always top management’s concerns. The system developed with the use of information technology help organisations in achieving their goals and objectives with the maximum and efficient use of resources.
Companies like Disk 4U & Sun gate Foods using multiple human resources for accounting and business activities. To enhance productivity and improve Performance Company identifies the requirement of strategic information system in order to reduce the risk of manual errors. Companies want to use information technology and using information system in response to the corporate business initiative. For this activity Top management of company allocate budget for development of information system as per the requirement of the company.
2.0 Case study analysis:
2.1 Case study AIS for Disk4U:
Disk 4 U sales its product physically and maintains books of accounts manually without using any technology or software, as the business expanded its business and company starts selling its product through the online channel. The company requires involving accounting information system to keep the books of accounts online and up to date.
2.1.1 about the business:
Disk4U is a company which sales CDs and Vinyl records through its physical shop. It is a family owned business driven by family members. The company is selling products through the physical shop and via mail or telephone orders. The company also introduce a new online channel through E-bay for selling its products.
2.1.2 Business Process:
Currently, Disk 4 U maintains its accounts and keeps records of business activity manually without using any technology because there is no such need but due to the expansion of business criteria arise need of information systems identified to meet the specified goals of the company and improvisation of business processes. Currently, organisation follows a manual system of recording business and accounting transactions.
2.1.3 Statement of User requirement (SOUR):
Disk 4U needs to expand their business. During expansion of the business, they face some issues or problems which are recovered by accounting and business system consultants. The problems or issues discovered by the consultant are as follows in reference to Disk 4 U Company:
Business reporting is public reporting of 's operations and financial performance maintained by the . These reports always maintained by for providing regular information to decision makers or management team in order to support in the policy framing (Graham, et.al., 2011). Disk 4 U is a small company its working criteria is limited so it maintains limited reports now company opens its online channel for distribution of its product to final consumers. It is a part of business expansion. Expansion of business will increase more responsibility and perform those responsibilities and legal compliances company has to maintain more books or reports. Due to unavailability of technology or resources company is facing to business reporting which may arise problem or barrier in business decision making (Lloyd, 2011).
Accounting reporting includes financial statement and books of accounts which every maintains in order to know the amount of expenditure and income. As the size increases sources of income and expenditure related to business increases, for an effective control of Expenses Company arises the of technology which saves time and efficient use available human resources (Graham, et.al. 2011). Disk 4 U facing problem in maintaining proper books of accounts for the new online selling channel introduce by the .
Management of Disk 4 U Company requires maintaining accounting and financial records in electronic form. For solving the issues faces by the organisation can be resolved by adopting accounting information system.
2.1.4 System Requirements:
Accounting information system is mostly used by the organisation for collection, storage, manage, retrieval and reporting of financial data. It is used by accountants, consultants, financial officers, auditors and many financial and taxation agencies. According to Grande, Estébanez & Colomina (2011), Accounting information tools are produced for management and control of organisation’s financial and economic areas.
Advantages of Accounting Information System:
Figure: Benefits of Accounting Information System
1. Accounting Information system helps in increasing speed and accuracy in collection and calculation of financial data in the organisation.
2. Accounting information system reduces the chances of error in calculation and recording of financial data.
3. AIS are user-friendly software any specified knowledge or professional skills are not required for working on this software.
4. AIS provide the facility of instant access of financial data with the help of it, one can easily analyse the financial performance of the company.
5. AIS software generates report instantly without taking extra time for preparing and generating financial reports.
According to Pretorius, Ajala & Agunbiade (2014), Accounting Information System plays a significant role in the economic and financial management of the organisation. Implementation or adoption of AIS is significant for the organisations due to:
1. AIS provide information on an actual budget to the management which will help company’s management in planning and control of business operations.
2. AIS help in preparing budget forecasting of future sales or profit.
3. AIS provide quantitative information to the management personnel of the organisation.
4. AIS helps in increasing the quality of maintaining financial records in the organisation and also increase storage capacity for storing financial statements of different financial years.
Account Edge Pro AIS:
Account edge Pro is an accounting information system innovated to fulfil the objectives or purposes of the small business organisation. It helps in managing the bank accounts, balances, inventory level and keeps a track record of the annual budget. It helps in maintaining books of accounts maintain by the organisations and informs the management about the assets available in the business and liabilities of the business organisation. It provides actual income or expenses level of the organisation.
Advantages of Account Edge Pro AIS:
1. It is easy to use accounting information software for the small size business organisation.
2. It records accounting transaction not only in home currency but in the terms of other currency.
3. It has a flexible feature of sales tax.
4. Easy calculation of tax liability.
5. Keeps the account in electronic format.
6. It provides up to date information to the organisation.
7. It prepares accounts in double entry system format.
8. The company can record all the transactions related to sale, purchase, orders, inventory, time billing etc.
9. It is affordable by small organisations.
2.1.5 Software and Vendor Selection
Disk 4 U basically faces the problem of recording accounting and business transactions which can be solved if company purchase account edge pro accounting information system. For selecting this accounting Software Company considers the following criteria:
1. Prices offered by the vendor for the software.
2. Easily implementation of software in the organisation accounting system.
3. Such accounting information system is easy to use.
4.The ability of software to suit the nature of business.
5. No more complexity in the functionality of the business.
The vendor provides support and assistance for the implementation of system software.
Good track record of performance in other small scale organisation.
Disk 4U considers the following criteria for selecting a in order to purchase accounting information software. must consider that:
1. A number of years from when the vendor is in the business of selling software.
2. The ability of vendor supply product or services constantly in a regular manner.
3. The vendor is able to supply all the requirements related to such software implementation.
4. The vendor provides internal experts for implementation of system software.
5. Terms of payment followed by vendors.
6. Sustainability and financial stability of vendor in the current industry.
7. Delivery times take by the vendor to deliver such accounting information system software.
8. Services after sales provided by the vendor to its customers.
2.2 Case Study ERP system for Sun gate Foods
Case study ERP
Sun gate Foods is a rice producer and seller. It requires doing multiple double entries of accounts while selling the product nationally and internationally. It wastes 10 times more time in recording financial transactions. Currently firm employed extra human resources for recording the level of inventory. After recruiting more individuals company takes weeks to record the financial transactions. This delay of time and cost of human resources arise the need of enterprise resource planning software.
2.2.1 about the business:
Sun gate Foods is a wild rice producer and distributors carried its business activity in the different locations of victoria. Marketing activities are conducting through the different branch. Company Buys rice from farms then process it and distribute and sells it international and national market. Its patchwork of ISs and data soils require more time in accounting data entry.
2.2.2 Business process
Business operations of Sun Gate Foods are conducting at a broader level. For recording and compiling the transactions related to business and accounting Activities Company hires newly qualified staff they keep record through manual systems. To remove the complexity in business and accounting reports and saves time. The company is required to adopt enterprise resource planning software in order to meet is objectives.
2.2.3 Statement of user requirements (SOUR)
In the of Sun gate Foods, it is identified by the consultants that Sun gate Food is a working in production sector it operates its business from three warehouses and one marketing office. So covers a wide area for its business activity. While conducting business operations company faces accounting problems or issues which are as follows:
Manual accounting: Sun gate Food operating its business activity from different branches allocated at different situations. For human resources or accountant appointed by the , it is very difficult maintains up to date accounts or financial reports. Management faces problem in maintaining financial reporting due to manual accounting procedure. It requires technology or software to maintain financial accounts (Sedatole, 2016).
Multiple or dual entries of information: Currently, the is not working with software so it faces problem in entry system of orders placed by customers. Due to manual accounting company require making manual re-entries of each order and financial transactions. This made errors in financial accounts on the cost of wastage of time (Sedatole, 2016).
Issues related to inventory: Due to manual accounting system followed by the , management faces problem-related to inventory issues. Management of company are not ensured about the correct level of inventory in order to meet the inventory requirement company have to maintain inventory level high so it cannot face a of inventory in the case of market demand. Keep high inventory level block the liquid assets of the company and company cannot the other operational requirements. To sort out the problem related to the of the company have maintained proper inventory level and for this, they require the software which provides information about inventory level (Wanke, 2014).
The company is facing problems related to business reporting. Company employee huge staff for preparing reports related to inventory and other reports which help management in policy decision making. The company prepares reports manually on the basis of information provided in the financial statement. Due to lack of technology company fails to prepare business reports which provide exact information about company's business. It arises problems in management decision making.
Accounting and business transaction reporting takes more time and waste the efforts of human resources. To take effective use of human resources and consume time effectively Sun gate foods require adopting enterprise resources planning software.
2.2.4 System requirements:
As per the problems faced by Sun gate foods, it is suggested to me that they should require implementing Enterprise resource planning software. Those organisations adopted enterprise Resource planning in their organisational structure then it gains control and easy tracking of workflows across the different department of the organisation. Enterprise Resource Planning (ERP) is a significant application software-mediated by information technology and internet which helps in integrating functions of all departments of the company with the application of single software.
The advantage of Enterprise Resource Planning:
With the help of implementing Enterprise resource planning software within the organisation, multiple business tasks can be conducted easily. These business activities may be:
1. Product or service planning related to purchase.
2. Manufacturing of product and its service delivery.
3. Sales and marketing of product or services
4. Stock management
a. ERP brings visibility or transparency among working or operations carried out within various departments of an organisation.
b. ERP ensures that workflows of the activities in the organisations are running in a smooth way and none of them is missed out by management.
c. ERP remove complexity and because perform multiple business activities with the single reporting system.
d. ERP is cost effective because one organisation can require only single ERP software for overall working activities.
e. ERP brings easiness and effectiveness in e- commerce transactions.
f. ERP is a multi-modular software organisation may use it as per their requirements (Eden, Sedera & Tan, 2012).
According to Elraga & Serafi (2011), there are many reasons for the organisation for which they can invest in the enterprise resource planning software. These reasons are as follows:
a. ERP is an alternative for the organisations which uses different software for different departmental functioning.
b. ERP is tested a security system, it provides data security and maintains security standards within the organisations.
c. ERP helps in automation and re-engineering of currently running business process.
d. ERP enhance the cooperation and teamwork among the employees of the organisation.
Net Suite Enterprise Resource Planning:
The company should adopt net suit enterprise resource planning software to solve the issues faced by the company. According to Elraga & Serafi (2011), there are many reasons for the organisation for which they can invest in the NetSuite Enterprise Resource Planning software. These reasons are as follows:
a. NetSuite ERP is an alternative for the organisations which uses different software for different departmental functioning.
b. NetSuite ERP is tested a security system, it provides data security and maintains security standards within the organisations.
c. NetSuite ERP helps in automation and re-engineering of currently running business process.
d. NetSuite ERP enhances the cooperation and teamwork among the employees of the organisation.
e. It helps in increasing speed and accuracy in collection and calculation of financial data in the organisation.
f. It reduces the chances of error in calculation and recording of financial data.
g. NetSuite ERP is a user-friendly system that any specified knowledge or professional skills are not required for working on this software.
h. NetSuite ERP provides the facility of instant access of financial data with the help of it, they can easily analyse the financial performance of the company.
The positive impacts of NetSuite ERP system on the performance of the organisation are as follows: -
With the help of implementing NetSuite Enterprise resource planning software within the Sungate foods, multiple business tasks can be conducted easily. These business activities may be:
a. They easily make plans for the Product or service in order to purchase.
b. Activities such as manufacturing, sales, marketing, stock marketing, etc. get performed easily.
c. Finance get managed effectively with the system implemented
d. It provides transparency among operations carried out within various departments.
e. It helps in ensuring that operational activites run smmoothly.
f. It reduces complexity as it helps in performing multiple tasks over single platform.
g. It is cost effective that favours the organisational decision making.
h. It introduces easiness and effectiveness in e- commerce transactions (Eden, Sedera & Tan, 2012).
2.2.5ERP Software and Vender Selection:
While selecting software related with Enterprise resource planning only vendor selection criteria cannot be considered but it also covers prices of the software and their customer ratings.
?Above figure shows the level of preference given by customers to ERP software. In the above-cited figure shows that SAP is mostly preferable ERP software by the business organisation (Elhuni, 2015). But it is very expensive, organisation Disk 4U and Sun gate Foods cannot afford it as per the available financial resources.
Criteria for software selection includes following key points (Hidalgo, Albors & Gomez, 2011):
1. Software must fulfil the criteria of functional requirement
2. Software must be easily integrated with the existing technical system
3. Company is capable of bearing cost for maintenance and further extension of software
4. Number and quality of services provided or offered by vendors
5. Software must meet the vision criteria of the organisation.
Vendors are those persons who offer enterprise resource planning software to the organisation which contributes in creating value and competitive advantage of the company. Vendors of ERP software include Microsoft, Oracle, SAP, and Sage. These all vendors offer ERP software at different prices and with different features.
This assignment explains the problems faced by organisations in case of the manual system of keeping financial and business reporting. The manual system causes an error, time-wasting, costly and excessive use of human resources. This assignment explains the importance and role of a strategic information system for the purpose of management decision making and operational activities. Companies are not using technology in their business and financial reporting and perform all the operations manually which cause issues related to solving the issues faced by the companies Disk 4U and Sun gate foods as an accounting and business system consultants I recommend Disk 4 U Accounts Edge Pro software to cater the need of accounting transactions and NetSuite Enterprise Resource Planning Software to Sun gate Foods to cater the need of business and financial reporting. These systems are cost effective tools. This assignment also put light on the criteria used while selecting vendors for purchasing ERP and AIS software. While selecting and implementing the software, the organisation must consider that software fulfils their requirement. The level of popularity or preference must be considered by the organisation before purchasing the ERP software. With the purchase and implementation of ERP, software organisation conducts its business and financial reporting easily and accurately. There will be less chance of human error which enhances the performance level of the company which ultimately contributes to gain a competitive advantage to the companies.
Disk 4 U and Sun gate Foods are expanded their business activities. Expansion of business requires more efforts in business and operational activities of the company. ERP software makes easy to perform the operational task with a high rate of visibility, transparency, accessibility which contributes to organisational success and growth.
Disk4 U is a small company so it could not purchase expensive ERP software like SAP for recording its accounting transaction. It allocates $ 150,000 for software purchasing. The company can make a purchase of Account Edge Pro AIS (Adams, Piazzoni & Suh, 2014). Such AIS is affordable by the company because it is meant for fulfilling the purpose of small enterprises.
Sun gate Foods is a big company in comparison to Disk 4 U. To reduce the cost of salary offered to accounts Department Company must adopt ERP software so that it effectively integrates the business activity related to warehouses and marketing activities. The company must choose from Net Suite ERP software tool. NetSuite ERP software tool is only cost effective but also suitable for middle and small size organisations (Comer, & Castolo, 2011).
NetSuite ERP software and Accounts Edge pro-AIS integrates the functions of all the departments of the company in a single computer system and serves the need of collecting and maintaining business reports of all the departments in the organisation. Net suit ERP software automatically places the business process into a useful format at one place which places standardised information to cater the need of all the departments. Such ERP system not only caters the need of financial or accounting reporting but it also fulfils the need of business reporting. ERP and AIS software are commonly used by manufacturing and production organisations.
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