Assignment on ERP System (PDF)

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ERP System

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Introduction:
Australia has number of small and large organizations which use the accounting software. As
stated by Sonar & Jadhav (2011), use of accounting software mainly based on the different
factors such as financial viability, types of transactions, etc. It must be noted that requirements of
the large and mid-size organizations are not same in context of accounting software. Accounting
software is the tool which is used by the organizations for the purpose of collecting information
related to the financial feasibility of the business and report about the same. This tool ensures
proper administration in the organization (Accounting Tools, 2015; Morehouse, 2017). Before
deciding about the required software, it is necessary to get knowledge about different types of
accounting software, and under which situation these software’s can be used.
The main purpose of this paper is to discuss the literature review related to the accounting
software packages that are being used in Australia. For the purpose of this paper, TELSTRA is
used as an organization. Structure of this paper includes 2 parts and each part has its own topics.
Subsequently, paper is concluded with brief conclusion.
Part 1:
Organizational structure of TELSTRA:
Telstra Corporation Ltd. is considered as leading telecommunications and Technology Company
in the Australia, and this company offers complete range of communication services and
competing in all telecommunication markets. In Australia, Telstra provide almost 17.6 million
retail mobile services, 5.1 million retail fixed voice services and 3.5 million retail fixed
broadband services. Telstra is the organization which frames such technology and content
solutions which is simple and easy to use and this also includes largest and fastest national
mobile network of Australia (Telstra, 2018). This company is extended its scope and activities in
more than 20 countries. Structure of the company includes following stages:

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(Source: Bamber & Ross, 2000)
It must be noted that, Governance in the organization ensures effective implementation of the
strategy of the company. Governance framework of this company looks like this:
(Source: Telstra, 2018)
Operational issues:
A company with the strong and effective organizational structure ensures different advantages
such as well-defined hierarchy, improved communication, reliability, etc. however, these

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structures imposed number of issues also and some of these operational issues related to current
structure of Telstra are (Awa, 2016) Reliability- sometimes report framed by humans are not
reliable as there are more chances of errors, but transactions processed from software are
authentic and accurate and there are less chances of errors.; Reduce co-ordination- another issue
in context of this structure is less coordination among the different departments of the
organization which automatically results in chaos and confusion and decrease effectiveness of
the company operations (Awa, 2016); Responsibility- in this structure only top management is
responsible for the profitability of the company and remaining departments are only responsible
to perform their task. This impose burden on the top management; Slow adaption of changes-
this structure decreases the flexibility of the organization in adopting changes; Consumes time
and energy- traditional methods of handling the transaction consume large amount of time and
energy of the organization (Weihrich, & Koontz, 2005).
System Acquisition Method:
It must be noted that, there are different types of system acquisition methods which can be used
by the organization for ensuring effecting accounting of the transactions, and some of these
methods are defined in this section. This section also state which method is most suitable for the
Telstra.
Commercial Software includes any software or program which is mainly designed and developed
for the purpose of sale and licensing to end users. In other words, commercial software is the
software which mainly serves the commercial purpose (WIPO, n.d.). As stated by Atri (2012),
this software is present in the market from last many years, and it provides wide range of
computing functionalities and productivity enhancements on large scale. These types of software
solutions help the organization to meet those operating requirements of the business which are
complex in nature. ; Customer software is considered as that software which is particularly
framed for the purpose of particular business or some other type of users. It must be noted that
this software is usually compared with the use of those software which are designed for the large
market such as commercial software or existing free software ((Meehan et al, 2010).; ERP
system is considered as that process through which company generally manage and integrates
important areas of the business. An ERP management information system includes different
areas as important areas such as planning, purchasing, inventory, sales, marketing, finance and

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human resources. ERP stands for Enterprise Resource planning which mainly provide the facility
of the flow of the information and it also coordinated all the resources and activities of the
business organization (Fitrix, 2011).
After analyzing the pros and cons of above stated methods, it can be said that Telstra must use
ERP system for ensuring effective accounting and also for resolving above stated operating
issues in the organization. As, this method ensure reliable flow of the information in the
company and coordinates all the resources and activities of the business organization. Generally,
functions supported by this system include different areas such as manufacturing, inventory,
shipping, logistics, distribution, invoicing, and accounting. Some solution under this system also
ensures customer relationship management functionality. It must be noted that, large number of
business activities mainly includes sales, marketing, production, inventory management, human
resource management, and quality control depend on these systems. The ERP system manly
helps the organization managing different connections with other peoples such as customers,
external stakeholders, etc. and it also ensures effective management of performance. This system
centralizes the database of the Telstra and depends on the common computing platform, as it
provides the users a united, consistent, and uniform environment. With the help of this system,
Telstra is able to offer different solutions with the help of software applications. Through this
Telstra can reduce its business interruptions and also increase the performance for the end users
by monitoring and controlling their activities (WIRC, n.d.).
System flowchart of the sales procedures:
As stated by the sales process flowchart, the steps and possible actions which mainly
accompanied the sale related to the product or service. This flowchart can be used for the
purpose of providing training to the new employees and also for evaluating the current process of
Telstra. It must be noted that this flowchart can be part of the sales automation software.

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Control issues & types of fraud:
Controlling is considered as important area of the organization as it ensures effective
management of the operations conducted by organization and also ensures removal of errors
(Tannenbaum, n.d.). Following are the control issues in the current system of Telstra, and these
issues are stated below:

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As stated by Ahmad (2012), the biggest control challenge in the context of existing system
framed by Telstra is separation of duties. It must be noted that, performance of the difficult
operations are divided among different employees of the organization, but it becomes difficult
for management to divide these duties because if duties are not distributed in proper manner then
it results in greater risk of errors or fraud. Another issue related to control is policies and
procedures, which means if policies & procedures are framed in effective manner then it
becomes easy for Telstra to fulfill their business goals and also establishing best practices
operating procedures. In case, these policies and procedures are not effective then it can result in
number of issues which are severe in nature and affect the company in adequate manner.
Therefore, it is important for the organization to ensure effective policies and procedure in the
organization. One more control issue is also there which states that Telstra provides more access
to the employees in regards of information system than required by employees to perform their
task. This extra access threatened the confidentiality of the business (Gwin, 2015).
Following are the types of frauds which can be found in the current system of accounting used
by Telstra:
 Financial statement fraud- this fraud considered as the most damaging fraud to the
company, but it occurs very rarely. It mainly includes Overstating revenue, earnings and
assets.
 Asset misappropriation- generally, most common types of frauds are fall under the
category of this fraud, and these frauds are susceptible in nature.
 Cash larceny- in this management withdrawn the cash even before such can entered in the
accounting system of the company, and it is very difficult to identify this fraud
(Beenegarter, 2016).

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Part 2:
Accounting Software packages:
Accounting software is considered as computer application which mainly records and processes
transactions and functions related to the accounting in context of the accounting information
system. Generally, it includes different functional modules such as accounts payable, accounts
receivable, payroll and trial balance. As stated by Ryan (2012), this tool mainly fall under the
category of Accounting Information System (AIS) and it is mainly defined as software of
computer which is mainly used for the purpose of recording and processing transactions of
accounting within the handy modules, accounts receivable module, accounts payable module,
trial balance module, payroll module, and general purpose financial report module. The
accounting software and packages differentiate on the basis of cost and difficulty. In the modern
world of business, packaged accounting software is not used only for the purpose of recording
and processing of the data of financial nature but it also ensures use of functional modules in
context of decision processes of management with the intention to get competitive edge.
The adoption of accounting software is happened at a faster pace. A study was conducted by the
Xero (New Zealand accounting Software Company), in this study they survey almost 1622 small
business organizations and stated that small business organizations of Australia are high in
number in context of accounting software adoption in comparison of other countries across the
globe (Scott, 2015). There are number of business organizations of Australia which are adopting
the accounting software system for the purpose of reducing the immense paperwork which are
mainly hampered with the errors related to the omission and commission, time wasting and
costly. The process of accounting initiated with the different ledgers such as sales ledger,
purchase ledgers, cash book, petty cash ledgers, etc., after that trial balance and entries which are
adjusted and lastly financial reports. On the other hand, manual accounting includes large
amount of paper work and different bookkeepers. His software is very and it can be used quickly
because it only requires inputs to correct accounts and reports are automatically generated on the
basis of that figures.

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Current market size:
As stated above, Telstra is the leading communication company in the Australia in context of
both revenue and profitability. Company also expands its business transaction in more than 20
countries across the globe. Strategy of the company mainly focuses on the customer satisfaction
and this is considered as the competitive advantage of the company. This firm mainly offers high
level of connectivity, content, and media to the consumers. Financial statements of 2016 of the
company reflect its net income A$5.8 billion and profit of A$27.1 billion. Head office of the
company is situated at 242 Exhibition Street, Australia and Melbourne. Telstra make new
investments for the purpose of grabbing the opportunities and dealing with the challenges in the
coming future. They are leveraging simple but superior platforms for the purpose of removing
the obstacles and deliver the brilliant customer services. With the help of their additional
investment of $3 billion over FY17–FY19 will direct more than $1.5 billion to building the
networks for the future, approximately $1 billion for increasing the digitization of our business
and up to $500 million for delivering the brilliant customer experiences. Telstra recognized that
each and every area of the additional investment must drive very significant customer experience
improvements. Telstra expected to deliver the profits of more than $500 million of EBITDA by
the year 2021. In the present world of competition, organization is providing different solutions
related to the technology which also includes data and IP networks, network application services,
cloud and integrated solutions (Telstra, 2017).
Leaders in the market & their competitive advantage:
Each and every organization mainly depends on its employees for the purpose of overcoming the
competitors in the market. In other words, company can achieve leadership in the market place
only with the help of talented and effective employees. This means the more talented workers
owned by company, the more it becomes easy for company to achieve its targets. For the purpose
of achieving its long term goals, Telstra must appoint an effective and capable team for
conducting their operations. Competitive advantage of the company is its human resources which
not only help the company in achieving its targets but also help it in achieving best position in
the market (Supratim, 2014).

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Current challenges in accounting software & Recommendations:
Accounting software is generally used in number of company and following are common
challenges which are faced by Telstra and other companies also:
 Lack of security- those who use this software are usually worried about the data security
because such data are accessible by the parties of foreign. However, some security
software’s have capability to resolve this issue but still sometimes this issue occurs great
loss to the company.
 Weak reporting service- sometimes accounting solutions reflect their weakness while
helping those users who wants to get their business data out. In other words, some
software’s does not facilitate the receiving of data.
 Lack of efficiency- such type of software’s sometimes reducing the efficiency of the
business operations if not handled in proper manner.
Conclusion:
After considering the above facts, it can be said that accounting software’s are the tools of
modern world which help the organization in managing their accounting transactions in better
way and also ensures effective management in the organization. in context of this paper, it is
advisable for Telstra to use ERP system as it handle large number of business activities such as
sales, marketing, production, inventory management, human resource management, and quality
control depend on these systems. The ERP system manly helps the organization managing
different connections with other peoples such as customers, external stakeholders, etc. and it also
ensures effective management of performance. This tool ensures proper administration in the
organization. Before deciding about the required software, it is necessary to get knowledge about
different types of accounting software, and under which situation these software’s can be used.

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References:
Accounting Tools, (2015). Types of Accounting Software. Available at:
https://www.accountingtools.com/articles/types-of-accounting-software.html. Accessed on 7th
May 2018.
Ahmad, M. (2012). Problems and Internal Control Issues in AIS from the View Point of
Jordanian Certified Public Accountants. Journal of Emerging Trends in Computing and
Information Sciences, Volume 3(12).
Atri, Y. (2012). Free/Open versus Commercial Software : A Study of Some Selected. Available
at: http://shodh.inflibnet.ac.in/bitstream/123456789/73/2/02_chapters.pdf. Accessed on 7th May
2018.
Awa, K. (2016). Functional structure and operational issues: An examination of core challenges
and remedies. Journal of Business and Management, Volume 18(1), pp-1-4.
Beenegarter, (2016). Four Types Of Fraud That Can Shake Your Organization To Its Core.
Available at: https://beenegarter.com/articles/four-types-of-fraud-that-can-shake-your-
organization-to-its-core. Accessed on 7th May 2018.
Fitrix, (2011). What Is ERP and Why Do I Need It?. Available at: http://www.fitrix.com/wp-
content/uploads/Whitepaper_What_Is_ERP.pdf. Accessed on 7th May 2018.
Gwin, A. (2015). Internal Controls: 5 Common Challenges for Small Businesses. Available at:
https://kaufmanrossin.com/blog/internal-controls-5-common-challenges-for-small-businesses/.
Accessed on 7th May 2018.
Meehan, S.W., Zimmerman, N. and Herzenberg, L. (2010), Leland Stanford Junior University.
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May 2018.

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