Business Information Systems Design and Implementation

Question: Discuss about the Business Information Systems Design and Implementation. Answer: Introduction: In the provided case scenario, it is observed that the management of August Online Technology has intended to conduct a financial analysis for the next eight years based on its income, expenses and tax among others. There are several indicators to evaluate the future potential of the company among which the outcome of net income after tax can clearly depict the possible profitability in the near future. Analyzing the overall financial performance is the most essential practice that enables the company to not only recognizes its own capability but also helps to compare its financial position with other rival companies as well as the external market requirements (Waghmode Sawant, 2014). Goal Seek Analysis Goal seek analysis is considered to be the most essential practice through which the company can have knowledge regarding the possible practices as per its financial abilities (Waghmode Sawant, 2014). The following pictorial illustration (Figure 1) clearly depicts that the sales of the company is expected to increase within the next eight years with the support of the product X. The annual revenue of the company in the initial year is around $50,373,252, which is expected to increase up to $77,498,088 as shown in the below mentioned diagram. The estimated sales have been calculated based on the total unit sold in the previous years and average sales growth rate comprises of $235,411 and 3.25%. The provided scenario describes that the company has increased the overall sales every year as well as the price of the products are also increased by 3%. Thus, based on these elements, the sales of the next years have been calculated accordingly, which is found to be steadily increasing there by representing higher profitability for the company. Considering the goal-seek analysis, there are certain elements on which the sales growth rate largely depends such as annual price growth, annual sales growth and the previous years sales. Now, in case the average of the annual sales growth rate gets decreased, the revenue or annual sales will also be reduced. For instance, in the Year 6 and Year 7 the company failed to perform due to which the sale growth rate become -2% and -3%. Therefore, the overall sales of the company for Year 7 and Year 8 will be reduced from the estimated figure. The stated fact can be elaborated with the help of the following diagram (Figure 2), wherein it is clearly represented that the sales of Year 7 and Year 8 has been reduced due to the changes made in the average growth rate. Thus, based on the understanding obtained from the goal seek analysis, it can be recommended that the company must require the maintainenance of its estimated growth rate as the minimum point to attain the target sales within the particular period. However, from the diagram (Figure 2), it has also been apparent that after reducing the average growth rate and price increase rate for two years, the company sales still continues to increase in the Year 7, which reduces in the last year. From this instance, it can be assumed that the company has high potential in the near future, as it has the capability to face financial loss without slowing down the sales growth. Evaluation of the Eight-Year Financial Projection Based on the financial performance of the company, it has been apparent that the company can develop its revenue along with higher profitability even in this competitive market (Fridson Alvarez, 2011). The following pictorial illustration (Figure 3) represents the overall financial projection value of the company, which has steadily been increased with time and at the end of eight years the company is expected to earn approximately $23,171,928. Concerning the expenses, advertising the product as shown in the above diagram (Figure 3), cost of web services, maintenance of the production or operation, rent of the corporate space, salaries to the involved workers, cost related to shipping the products to the end users and supply chain expenses are the estimated elements based on which the total expenses has been calculated. All the expenses apart from maintenance are calculated through particular percentages, which have been elaborated below: Advertising expenses calculated as 8% of the annual sales in addition to $1,250 as fixed amount Rent has been provided for the initial year, which is expected to increase every year by 6.5% and add to the amount accordingly The company will pay 12% of the annual sales as salaries for the workers 6% of the annual sales are considered as the shipping cost for carrying the product from the production house to the target market The company will include suppliers to supply the product to the end consumers for which 1.2% of the sales are paid as the supply expenses at the end of the year August Online Technology will also adopt web services to perform several activities such as advertising, research or publishing for which at the initial year the company will include $85,000 and each year 6% of the previous price will be added to the figure Apart from this, the company will pay income tax based on the amount of operating income, wherein in case the figure is less than zero, then no tax will be paid otherwise the company will need to pay 33% of the operating income as income tax The net income of the company has been calculated based on all these expenses and the overall expected sales or the product during this particular period. The following diagram (Figure 4) depicts the projected net income that the company can attain from the product X, which has steadily been increased by the end of the Year 8. Thus, it is apparent that the company can largely concentrate on maintaining the growth rate with the support of developed strategies and well-managed workforce, which will eventually help to provide the estimated outcome at the end of the period. Apart from this, it is also worth mentioning that the company can easily enhance the target arena as it has higher financial capability, and can support to bear the possible loss due to new entrants (Fridson Alvarez, 2011). Improving Marketing Sales The August Online Technology has aimed to enhance the revenue for the product X with the support of new market trends such as internet. Based on the projected financial analysis, it can be stated that the company has high potential in future, as the net income is estimated to increase steadily over the period of time. Therefore, the company can concentrate on enhancing the sales volume of the product by investing in marketing. In this regard, it is worth mentioning that online marketing has become a huge medium for organizations in the present context, wherein through a particular platform the marketers can target the entire global arena (Fang Zhou, 2012). The August Online Technology can also utilize the internet source to market the product X, which will help to make the huge numbers of customers aware of the product, thereby enhancing the overall sales volume. Nowadays, every age group of people prefers to use online sources for obtaining information regarding the products in terms of reviews and customers feedback. Therefore, with the support of the web designer or developer, the company can create an online platform for placing the product in front of the target population. There are several services provided by the companies through online forum in the current market to retain the potential customers (Yannopoulos, 2011). However, parallel to creating a website, the August Online Technology also needs to maintain transparent communication with the customers. The company can develop the website in such a manner through which the customers can provide their feedback or share their experience with the product. This can on one hand help the company to improve the product quality, while on the other hand the customers can also get attracted due to this facility as they are also valued by the management in the decision making. On the other hand, web publishing is also considered to be another suitable activity to attract customers in this world of immense competition. Internet has become a huge part of the daily life schedule of the individuals for which the marketers has also initiated to portray all the required information on the social media website (Fang Zhou, 2012). Taking the reference from the stated fact, August Online Technology can also utilize web publishing as their promotional tool, wherein it will publish all the promotional activities through the company website as well as other social media websites to make the customers aware regarding their new policies or offers. Network Security Risks and Protection Security threat has become the most crucial aspect, which is continuously increasing across the globe and has caused a serious concern for companies to ensure product privacy to the customers (Alabady, 2009). There are numerous threats in security risks or network attacks among which hacking majorly affects the privacy maintenance. Since the company will be maintaining an online platform, it has huge security risks in terms of hacking. Due to the process of hacking, it is possible that the hackers will extract the required information from the company website or the company will not be able to control the website. Apart from this, other security risks include snooping and eavesdropping, which are regarded as the threat to accessing the company secure data by any unauthorized person without the consent of the company management (Padmavathi Shanmugapriya, 2009). While developing online forum or maintaining the platform, August Online Technology needs to concentrate on such aspects to avoid network attacks and ensure security of products to the customers. References Alabady, S 2009, Design and implementation of a network security model for cooperative network, International Arab Journal of e-Technology, vol. 1, no. 2, pp. 26-36. Fang, X. Zhou, Y 2012, Internet-future business development focus, American Journal of Industrial and Business Management, vol. 2, pp. 85-88. Fridson, M. S. Alvarez F 2011, Financial statement analysis: A practitioner's guide, John Wiley Sons, United States. Padmavathi, D.G. Shanmugapriya, M 2009, A survey of attacks, security mechanisms and challenges in wireless sensor networks, International Journal of Computer Science and Information Security, vol. 4, no. 2, pp. 1-9. Waghmode, M. L. Sawant, S. B 2014, International journal of advance research in computer science and management studies, International Journal, vol. 2, no. 3, pp. 419-423. Yannopoulos, P 2011, Impact of the internet on marketing strategy formulation, International Journal of Business and Social Science, vol. 2, no. 18, pp. 1-7.