Case Study - Plaskor Inc.

AIS Case #2:

Chapter 4: Plaskor Inc. #56

Electronic Data Interchange (EDI) is defined as “the intercompany, computer-to-computer transfer of business documents in a standard business format (Turner & Weickgenannt, 2012, p. 15). It involves the exchange of business documents, such as invoices, purchase orders and shipping notices, in a standard, machine-process format between two businesses, in this case between Plaskor Inc. and automotive manufacturing companies who might be interested in the parts supplied by Plaskor Inc. It is important to note that not only will it allow Plakor Inc. to transact with automotive companies the use of EDI have many additional benefits such as;

• Less paperwork, reduced cost. 

• Fewer errors during the exchange of information.

• Increased speed in information exchange and processing.

• Improved trading partner relationships.

• Improved intercompany flow of information.

But like almost everything else there are risks that need to be consider before evaluating whether to buy or develop an Internet EDI system, as noted in our textbook “EDI systems cause risks that may be different from those found in traditional manual or IT systems” (Turner & Weickgenannt, 2012, p. 317). In this case study I will examine those extra risks associated with the use of EDI system and provide internal controls solutions that should be incorporated into the Internet EDI system in order to eliminate or minimize those risks.

a. Describe the extra IT system risks that Plaskor should consider as it evaluates whether to buy or develop an Internet EDI system.

Although EDI has created a number of changes in the way businesses is conducted and has offered many advantages like those mentioned above, it also has attracted new threats and potential extra IT system risks. As a company looking to expand its business opportunities by becoming a supplier for automotive manufacturers Plaskor Inc. must buy or develop systems that would...