The literature review would be on an organization (company) that is using accounting software packages in Australia.
- The current organizational structure
- What operational problems (e.g., inefficiency, errors) do you think the organisation could experience because of this structure?
- What is the most likely system acquisition method— commercial software, custom software, or ERP?
- Describes and prepare a system flowchart of the sales procedures for the chosen organisation (company),
- Identify any control problems in the system and what sorts of fraud are possible in this system?
Development and adoption of the accounting software packages,
Identify the leaders in the market and what gives them the competitive advantage
Identify the current gaps or challenges encountered by users or customers of accounting software/packages and make relevant suggestions or recommendations.
Answer:
Introduction
The report is created with the motive of introducing the importance of accounting software in businesses of any competency and dimension. Accounting software is a tool that is either developed on premises by an organisation or most commonly subscribed from other third-party vendors and implemented within the organisation (Warren, Reeve and Duchac 2013). An organisation has to face numerous issues related to financial matters as it gradually grows in size. It becomes difficult and expensive for the organisation to maintain all the financial aspects such as payroll, monetary transactions with clients or suppliers and such. Maintaining a proper record of all the financial transactions that goes on inside the company is also a pain for the same, as it requires maintenance of excess personnel and resources for the purpose. However, the conventional method of keeping records of the transactions in pen and paper is quite inconvenient as well as unreliable, as they tend to get missing or damaged, which creates many issues later. That is why, nowadays most business houses are implementing accounting software packages for the betterment of the same (Warren, Reeve and Duchac 2013).
Accounting software helps to collect and maintain electronic records of all financial transactions that are carried out within an organisation and it can suggest ideas regarding optimised method of business transactions that may provide enhanced financial benefit to the organisation (Simkin, Norman and Rose 2014). The report emphasises its objective by providing details of Wesfarmers, an Australian organisation that has adopted accounting software package for the maintenance of its financial transactions.
Overview of Wesfarmers and its Corporate Framework
Wesfarmers is a large organisation based in Australia that finds its establishment in the year of 1914. Initially the organisation was known as Western Australian farmers’ cooperative and was a small business. However, the organisation soon evolved into a business giant and made a place as one of the top companies of Australia. Wesfarmers has its headquarters stationed at Western Australia (Wesfarmers.com.au 2017). Its business operations include hotels, supermarkets, convenience stores, department stores, household improvement materials, office supplies and liquor. The organisation also has business in industrial division such as fertilisers, chemicals, energy harvesting, coal and industrial safety products. The organisation is considered as one of the largest private sector employer in Australia and it presently houses around 220,000 employees. The shareholder strength of the company is approximately 530,000 (Wesfarmers.com.au 2017).
The organisation maintains a generalised corporate framework as well as various sub-frameworks due to the diversity in the business of the organisation. The generalised corporate structure of Wesfarmers is as shown below:
Figure 1: Corporate Structure of Wesfarmers
(Source: Wesfarmers.com.au 2017)
The organisational structure of Wesfarmers provided above shows the various business operations that are performed by the company. It can be seen that the organisation has to manage a complex framework whose various operations are performed and managed by other organisation such as Coles, Kmart, Target and such (Wesfarmers.com.au 2017).
Operational Issues of the Company due to its Structure
The major operational issue of the organisation is the structure of the organisation itself. The company has engaged itself in various different sectors of business, some of which are of completely different competencies. This can create great problem in monitoring and controlling every section of the organisational operation. Failure of proper supervision in any one of the sectors will result in a flood of issues (challenge 2017). The company has to provide emphasis in supervising all the business sectors equally. Apart from the problem related to management of organisational operation, the company has to face a load of issues related to financial matters. The finance department of Wesfarmers has to deal with a large amount of monetary transactions daily. The challenging part in this aspect is the various sources of business with whom the company carries out monetary transactions. It is hard for the personnel of the finance department of Wesfarmers to maintain proper manual records of all the transactions that is happening with all the different business sectors of the organisation. The diverse business framework of the organisation is the reason behind this problem as well (Switzer.com.au 2017).
System Acquisition Method of Wesfarmers
Wesfarmers is a very large organisation that has a network of businesses involved. To organise and manage an organisation of such proportion, it is not sufficient to implement just one software or technology. The company has implemented many software that is tasked with the maintenance and management of the various modules of the organisation.
Three main commercial software is engaged in maintaining the integrity of the company as a whole. These are as follows:
Wesfarmers has engaged the services of A10 Networks, which is a trusted provider of various high-performance application networking solutions that aids the organisation to ensure that the network and data centre applications of the same is secured, highly available and accelerated (A10 Networks 2017).
The main objective of Wesfarmers is to provide a satisfactory return to the shareholders, as they are the vital elements of the organisation. To maintain the objective the organisation has to rely heavily on the feedback of the customers. Due to this reason, the organisation has subscribed the services of Customer Monitor that serves the purpose of managing customer voice, word of mouth marketing, customer retention, loyalty and social promotion (Customermonitor.eu 2017).
The third software that is used by Wesfarmers limited is Jedox. The software is capable of analysing, reporting and unified planning of various financial aspects of the organisation that supports in decision-making of the authority of the organisation in respect to finance, purchasing and marketing, and sales (Tröndle 2017). Jedox is an efficient Business Intelligence and Corporate Performance Management solutions provider that provides the organisation the opportunity to perform real-time planning on the internet, cloud and on any computing device. The users of the service of Jedox are able to perform work in smarter ways, achieve streamlined business collaboration and are able to make proper decisions with confidence (Tröndle 2017).
Apart from the software or services mentioned above, the organisation has implemented various other software or services for the different modules of the organisation as necessary for the operation of the modules. For example, WesCEF, the division of the organisation responsible for the management of the chemical, energy and fertiliser providing business uses JD Edwards Enterprise One ERP software package as an on-premises ERP platform (Oracle.com 2017). WesCEF has also launched custom online customer portals that include myCSBP, FERTview and Sampling Pro. The division of Wesfarmers that is responsible for the management of the Supermarkets undertaken by the organisation as Coles, KMart and such uses SAP as the basis of their Enterprise Resource Planning (ERP) software system.
System Flowchart for the Sales Procedure of Wesfarmers
The organisation has different sales process flowchart depending on the business process the flow chart is indicating. However, all the flow charts follow the structure of a general sales process flowchart that is as provided below:
Figure 2: System Flowchart for Sales Procedure of Wesfarmers
(Source: Wang 2017)
The operation shown in the sales process flowchart starts with the placing of an order from a customer of the organisation, which follows the process of authentication of the order from the sales department of the organisation. Once the purchase order is authenticated, it is forwarded to the supply and management department who ensures the delivery of the product or service to the destination address provided by the customer (Wang 2017).
Control Problems and Possible Frauds in the System
The diverse business modules of Wesfarmers lead to obvious control problems within the organisation. It is difficult for the general management of the organisation to supervise all the business parts in the organisation effectively and receive accurate reports on the functionality of the same. That is why the company has arranged separate management departments for each business competency who are tasked to provide with complete report of their respective business to the general management of the organisation (Kent and Zunker 2013). However, this system may lead to departmental competition to prove superiority of management service over other departmental management groups and lead to falsified reports of better performance sent to the general management to stay ahead of the other management groups. Frauds can be possible at the marketing level as well due to the lack of proper supervision at the supply depots of the organisation. Other frauds may include intervention of hackers who may pose as a legitimate agent of the organisation and receive the credentials of an online purchaser while the customer fills the required details to make a purchase order (Grayson-Morison and Ramsay 2014).
Development and Adoption of the Accounting Software Packages
Wesfarmers Limited has separate divisions that maintain the business operations of the different business competencies that are undertaken by the organisation. The different divisions implement different accounting software depending on the requirement of the respective sector of the business. The WesCEF division of Wesfarmers that is entitled with the supply of chemical, energy and fertilisers has implemented JD Edwards Enterprise One as ERP system or Accounting Software for performing the necessary tasks in the organisation. JD Edwards Enterprise One is an application suite that has enterprise resource planning as well as accounting software integrated in it (Samuel and Kumar 2013). The application suite is not the standard version that is developed by Oracle, rather it is developed and implemented on-premises of WesCEF in collaboration with Oracle. The suite provides help with accounting system apart from other aspects of enterprise resource planning. The accounting software integrated within the application suite helps in keeping electronic records of all financial transactions that is going within the organisation and generate reports related to the same to keep the finance department of the organisation updated at all times. The implementation of the accounting software has reduced the necessity to recruit and maintain excess personnel for maintaining the financial records. The organisation has achieved better performance at an optimised expenditure due to the implementation of JD Edwards Enterprise One ERP system (Piairo et al. 2013).
Apart from the ERP system discussed above the division of Wesfarmers that is responsible for looking after the businesses related to supermarkets, retail stores and such use SAP as an ERP platform that provides similar service as that of JD Edwards.
Present Market Size of Wesfarmers
Wesfarmers is a large business group that is listed among the top ten organisations of Australia. However, it is ranked 8th among the 10 companies and failed to topple the dominant big players in the market such as the Commonwealth Bank of Australia or the Westpac Banking Corporation (Biddle 2016). Provided below is the list of the top ten companies in Australia. The ranking of the companies are based on the market cap that the respective organisations have achieved starting from March 1, 2016 to March 1, 2017.
Figure 3: Market Size of Wesfarmers in Relation to other Australian Companies
(Source: Kilroy and Schneider 2017)
The graph provided below shows the comparison of the Wesfarmers with Commonwealth Bank of Australia (CBA), Westpac Banking Corporation (WBC), Woolworths Private Ltd (WOW) and Macquarie Group (MCG) in relation to their current stock market size. The graph shows that Wesfarmers is maintaining an intermediary stage in between the four other organisations, where CBA and WBC is above Wesfarmers while WOW and MCG are at the bottom of the same. The report is generated based on yearly information.
Figure 4: Current Market Size comparison of Wesfarmers with CBA, WBC, WOW and MCG
(Source: Kilroy and Schneider 2017)
The Leaders in the Market and their Competitive Advantage
The figure 3 provided above shows the top ten companies of Australia as per current records. The leaders in the market such as the Commonwealth Bank of Australia or the Westpac Banking Corporation undertake different strategies to achieve competitive advantage over other competitors in the market (Cusumano, Kahl and Suarez 2015). For example, CBA emphasises on diverse options that is provided to their clients whereas WBC provides stress on giving a better customer experience. Wesfarmers has adopted the strategy to engage its resources in diverse business competencies to attain competitive advantage (Cusumano, Kahl and Suarez 2015). However, it seemed to have little effect in providing it the required competitive advantage.
Issues faced by Accounting Software Users
Accounting software users face frequent problems in relation to outdated software or less user-friendly ones. Lack of security is another vital issue related to the same. Some accounting software lack proper reporting service that causes a great deal of problem for the users (Seo 2013).
It is recommended to use trusted service providers for availing the service of accounting software who can provide user-friendly software. To resolve the security issue, sophisticated firewall and network security tool can be implemented as well.
Conclusion
The report concludes with the fact that Accounting Software is a necessity for the improvement for every organisation at present, irrespective of the various issues related to the implementation and use of the same.
References
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