HI5019 Strategic Information Systems

Prepare a Business Report for the client detailing the processes of selecting an AIS/ERP to help them to make informed decision for investment in information system to take their business to the next level including:
1. Define business processes,
2. Develop business requirements,
3. Determine the systems requirements,
4. Software and vendor selection
5. Determine at least three (3) ways which companies or organizations utilize such technologies to improve business efficiency
6. Evaluate the level of efficiency of the technology implementation
7. Examine potential security risks, data breaches
8. Provide guidelines on how these risks could be mitigated.

Cadbury Inc. employs the use of Enterprise Resource Planning to support all the operations. The system is configured to run the company in a way that transactions are managed comprehensively. Accounting Information System is a computer-based information system that collects, processes report and stores accounting information in an organization. The system communicates the information to the management, financiers, shareholders, employees, government authorities, tax department and union bodies. These groups of information users in Cadbury have varying interests and hence reported with the information they require. Not every information is relevant to each user. Business in Cadbury Australia run through the processes of manufacturing, marketing, human resource management and financing. ERP is efficient in Cadbury Inc. as a support system that matches business requirements with those of the environment to enhance competitiveness. The accounting system must have compliance to the principles and standards governing the practice of accounting so that the information produced can be relied upon by the user groups (Tan, 2009).

1.    Business Process

The aspects of the business process in Cadbury Inc. are the sales cycle, Human resource cycle, expense cycle, general ledger cycle and the Cash Conversion Cycle (CCC). Supporting activities that take place here are in sets of units and comprise of all activities undertaken by Cadbury Limited from manufacturing, marketing, financing, administration, social responsibility practices, funding and management of the human resources. According to (Hussain, 2008, p. 153), all activities in a business setting take place in a cycle repeatedly at regular intervals to ensure continuity of business.

The sales cycle comprises of activities from the point of packaging to completing a deal. The process comprises of:

•     The launch of Cadbury products for the target market.
•    Growth phase where products are continuously developed to match with customer needs and tastes.
•    At maturity stage, Cadbury products are launched to other markets as consumers are used to the products.
•    The final stage of decline is at the point after closing a sale.

 The sales cycle is compared to the standard duration in the industry. This cycle is always shorter than the average in the industry for the business making Cadbury business to be successful. An efficient information system enables forecasting of sales figures and automatically update the master system in the company and make the information available to the accounting system on a timely basis.

The expense cycle covers activities between:

•    The ordering raw materials,
•    Receiving the ordered content and services,
•    Approval of invoices and
•   Disbursing of cash to make payments.

The information system in place minimizes total costs of acquisition and maintaining of inventory.

The Cash Conversion Cycle¸ CCC shows the number in days of it takes the company to convert inputs into cash and is made up of the time required to sell produced goods, to collect receivables and to pay bills on a timely basis. Sales and accounts receivable in Cadbury Inc. are turned into cash quickly to increase efficiency. The shorter the cash cycle is, the less the time that capital is tied on resources. The information system tracks the movement of cash out of the firm through the acquisition of inventory to the time that specific inventory or service is sold out money is received back.

CCC in calculated as accounts receivable turnover (added to) Inventory turnover (less) Accounts payable turnover

Human Resource Cycle in Cadbury Limited starts from recruitment, acquisition, training and development, remuneration and finally discharging. An efficient information system must be able to analyze present HR conditions on every worker for skills, experience, demographics, qualifications and their remuneration.

The General Ledger Cycle is the track of operations recorded in the general ledger which reflects changes in cash, equity, liabilities, expenses, and revenues. It requires an information system that enhances analysis to prove a transaction on a timely basis to allow for tracking of an event that leads to another.

2.    Development of Business Requirements

Operational requirements of sales, human resource, general ledger, purchase and in production has pushed Cadbury business to put in place the necessary infrastructure to accommodate the function of the new information system. The areas in which change is done are in the human resources, physical facilities, business processes such as automation and security systems. All the people require specialized training because information systems are always complicated. Areas of general knowledge and skills are in the use of computers and its peripheral devices that come with the information system in Cadbury Limited, safety measures in the production department and hardware maintenance (Hussain, 2008).

Sales required that a barcode is put on a product and their readers used at points of sale. Sales people have to be trained to operate the barcode reader machines which have to be brought in by the new system. The system in Cadbury Australia keep all the product codes in a master file and configure the master file with the point of sale machine to automatically report sales made to the master file and deduct a sold product from some available stocks immediately. The system does not allow for the possibility of duplicating a barcode. A barcode is an electronic presentation of a product's details in a machine only readable form.

Purchases people manage procurement. All purchase information of a product is encrypted in barcodes hence there was a need to train the purchases people how to operate a barcode machine. A depleted product must automatically get subtracted from available inventory to give notification that another order has to be placed. It must verify purchase rates with distributor records, and ensure that all purchased goods have been received as reported. Purchase people in Cadbury have to review information obtained through activities such as audits to analyze the information received.

The Human Resource people are the workforce to run the operation of the new strategic information system. The labor force in the organization is updated with the new development. Necessary training has to be done for the human resource on how to run the system. Training in Cadbury Inc. reduce occasions of work stoppages. Select personnel that is highly experienced has been hired to oversee the operation of the system. All workforce costs of Cadbury have updated adequately to a master file at the allowed rates of attendance, work done and hours worked. It can be done by configuration to palm scanners or eye scanners placed at strategic entry points such as gate and office doors (Hussain, 2008). The human resource is trained to identify and fix bugs in the system.

The general ledger people are the people in the accounting department. The have to be trained to use the accounting system module of the information system. They have to conduct audits at several points, and this creates the need to be trained in information system audits. The information system enables adequate segregation of duties at data entry user points.

 Information from other departments of Cadbury is automatically updated to the general ledger and provide audit mechanism for approval by the accountant. Account balances transferred to another account is proved to be the correct amount. Movement of every statement item is traced from the cash receipts, balance sheets, cash-flow statements and the journals. An account figure that is disjointed is easily located, and notification sent automatically to the accountant for analysis and correction.

Productions people manage the conversion of raw materials to final goods. They have to receive training of operating the facilities in the production plant. It is important to train them on safety measures as their department in prone to many accidents (Grant et al. 2010). Locating and fixing breakdowns at the facility is in their knowledge. Movement of cost units is established in succeeding groups. Variations must be pointed up by the system notified immediately, and corrective action is taken. The total value of inputs must be found to be equal to that of output unless there are stocks of work in progress and faulty goods which are subtracted by the system.

3.    System Requirement

The requirement of the system is incorporated as modular. Each component is developed as separate from the other. The modules of finance, sales, marketing, accounting, processing, human resource and for purchases are configured so as to transfer data to another module in which the information such as for totals is required (Pour, 2006). Use of modular system in Cadbury Inc. enable easy location of breakdowns and the corrections thereof. In the case of failures, the whole system cannot be affected, and the repairs are made faster hence reducing business stoppages.

Installation of modular systems was initiated in stages, and therefore there is no need worrying about the stoppage of work during the period of installation.

While installation of a module is taking place in its respective department, activities being done is the other units are not affected. Modular systems necessitated testing and evaluation of the systems’ performance at that particular module before the complete system was set up. It has been easier to locate bugs and their fixing in the modular software.

Multi-currency systems have currency converters to allow for cross-national border trade. Cadbury operates in many nations. There is an automatic update of changes in exchange rates. The websites at different country’s branches employ the use of respective local currencies for their figures. Daily variations in the value of money are of critical consideration. The system is configured to translate its information to the local currencies including the languages in those respective countries of operation.

Multi-tax ability enables the information system to accommodate the different types of taxes to be computed and payments made on one system such as PAYE on employees and the value added tax. All the required tax liabilities are accommodated in the system to eliminate situations of tax duplication. The system identifies overpayments in tax and carrying forward appropriately (Tan, 2009). The system has enabled payments of foreign taxes as per the requirements of the foreign policies.

Accounting-standard supported information systems ensure that accounting operations are done with compliance to the international standards and policies that govern the practice. Compliance with standards enables the firm to have a healthy legal environment.

Non-compliance may lead to a conflict of interests between the various groups using accounting information.

The standards include the double entry principle, timeliness, and understandability. Compliance with the ensures that accounting information is relevant. Laws in other countries of operation are considered so that there is no situations o of not abiding that arise to cause fines and termination of business.

The information system to be adopted has to be adaptable to the continuously changing environment. Technology developments come in day and night at a rapid rate as existing technology becomes outdated. Adaptability ensures the accounting operations in the organization stay relevant and in line with the interests of the users and guarantee continuity of business. Continuous change occurs in infrastructure, the facilities, security concerns, government laws and regulations, inflation and software needs. When there is a change in the environment regarding these areas, and there is no matching of the system to adapt to the environment, the business may inevitably collapse.

4.    Software and Vendor Selection

Deciding whether to make an in-house developed software, custom-made software for the seller, leasing, outsourcing or participating in a consortium, some factors have to be considered Such include finances available, qualified personnel, the type of business, level of technological development, view of shareholders and the trend in the industry (Hussain, 2008). A combination of several factors has to be considered to get to the optimal decision. The feasibility of the software has to be analyzed in areas such as economic viability for the cost and benefit, operational and set up costs. The final decision is a software that shall be funded by the budget of the firm.

Technical feasibility is required to establish whether the company has resources, capacity, and infrastructure to sustain the software.

Operational feasibility test determines how the business transforms to accommodate the software (Galliers et al. 2014). Alignments must me made during the installation such as in the business process and the human resource.

The vendor has a wide reputation for success in the whole process of installing a strategic information system. The system needs to be secured from hackers and other cyber-crimes.

5.    Ways in which The Technology will improve business efficiency

Communication

The role of the management in Cadbury Australia is preparation and dissemination of information. Communication takes place in carrying out business operations and is between the management and the employees, suppliers, customers, financiers, the government agencies, and shareholders. Information systems have made this process more efficient and quick. Employees are enabled to communicate to each other in a systematic manner. Storage of information has also been made easy.

Operations

The information provided by the information system is complete and timely hence useful in the management of the business. The cost of running a business has been drastically reduced by the automation in information systems. Customized services to the customers have been enabled. Operations such as sales are evaluated when making choices.

Decisions

The information system in Cadbury Limited provides information that is useful in making decisions. The accuracy and timeliness of the information create confidence and the decisions made are optimal. There is always reduced possibility that different decisions have to be made (Tan, 2009).

6.    Level of efficiency of the technology implementation

Efficiency in technology in Cadbury Inc. compares inputs to outputs whereby the least amount of input is used to produce an optimal quantity. Technological applications always employ the fewer workers. According to (Pour, 2006), mistakes are eliminated on the use of technology performing repetitive operations unlike when they are done by humans alone and the time to complete operations is significantly reduced for example the company’s use of credit cards in making payments. Information kept is up to date, and their retrieval is made easier. Cadbury Inc. has embraced change, and it has taken a reasonable duration of time to install the technological application.

No person has been left out of the implementation process. There is a higher level of execution efficiency especially for modular software, and this does not create a period of complete non-performance.

The performance level is measured by the time saved to produce a product, maximum amounts of output given minimal inputs, reduction of costs, improvement in the quality of goods, customer satisfaction and efficient processes and their flow in the business. Effectiveness in communication also forms a measure of efficiency level technology.

7.    Examination of potential security risks and data breach

Data breaches occur when people who have access to information deliberately attack the system steal data. It is done by employees who are insiders and by criminals from outside the organization.

The loss occurs as a result of exposure. Misplacement of storage media facilities also causes data to be accessed by unauthorized persons.

Neglect when old data media are dumped or sold while not properly erased may make the data to end up being retrieved by others. Lack of strong encryption and weak passwords makes it vulnerable.

Insecure practices of encrypting, storage, distribution and collection of data have safety implications. There is a need for segregation of duties for people who handle sensitive data. Sharing channels are frequently checked for leakages. Necessary safety precautions are put into consideration in Cadbury limited.

Anything that may lead to loss of data is a security risk. Most of the risks are physical and include fire, humidity, and floods. Unpredictable power supply, lightning, earthquakes, and vandalism of infrastructure are potential security risks.

Potential non-physical threats include Trojans, key loggers, phishing, viruses, service denial attacks and worms that cause loss of data, cyber insecurity, disruption of business and monitoring activities that are illegal and against privacy policies.

8.    Guidelines for mitigation of eminent risks.

 Internal threats like fire are prevented by use of automatic fire detectors and non-water fire extinguishers. Controllers of voltage and uninterrupted power supply systems such as automatic generators are to a large extent required as backup energy sources.

Eminent external threats are controlled in Cadbury Inc. Lightning protection systems are installed to reduce the effect that could have been caused by this weather threat. Humidity controllers and proper housing are necessary according to the risk in the location of use (Iyamu, 2015).

Virus and Trojans are countered by the installation of a reliable anti-virus software. External storage is much more necessary.

Human threats in Cadbury Inc. is controlled by regulating access to the information system locations. Locking room and restriction from unauthorized access are required. User identification, passwords which are strong and biometrics monitors unwanted user access at software user ends. The software denies service to unauthorized users. Dust particles are adequately wiped out of the system surface (Iyamu, 2015).

 A strategic information system for Cadbury Inc. remains to be of much importance to this organization because the industry is competitive. Cadbury is more efficiently above the industry average to continue with business and to be profitable. Survival is for the fittest in the environment which is embracing technological information systems.

Cadbury customers and clients get attracted to the company because they perceive that their interests are served with an efficiency level which they expect. Infrastructural changes initiated accommodate efficient operation of the company’s information system.

 Factors of cost, comprehensiveness, security, the objective of Cadbury Limited when making the switch in the business all have been given equal consideration to ensure that an effective system is put in place.

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