HI5019 Strategic Information System - Assignment 1: Literature Review on Woolworths

HI5019 Strategic Information System
Assignment 1 (Literature Review)
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Table of Contents
Introduction:....................................................................................................................................3
PART 1............................................................................................................................................4
1. The current organizational structure.....................................................................................4
2. What operational problems (e.g., inefficiency, errors) do you think the organisation could
experience because of this structure?..............................................................................................5
3. What is the most likely system acquisition method— commercial software, custom
software, or ERP?............................................................................................................................6
4. Describes and prepare a system flowchart of the sales procedures for the chosen organisation
(company)........................................................................................................................................8
5. Identify any control problems in the system and what sorts of fraud are possible in this
system?..........................................................................................................................................10
PART 2..........................................................................................................................................12
1. Development and adoption of the accounting software packages.............................................12
2. The current market size.............................................................................................................13
3. Market leaders and competitive advantage................................................................................15
4. Identify the current gaps or challenges encountered by users or customers of accounting
software/packages and make relevant suggestions or recommendations......................................16
Conclusion:....................................................................................................................................17
Refrence list...................................................................................................................................18
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Introduction:
This report introduces to the theme of the strategic information system. The entire report is
focusing on the functioning of Woolworths. Woolworth is the prime retail company of Australia.
The report will provide an insight into the organizational structure and sales procedure of the
Woolworths. In addition to this, the report examines the issues which are identified in the sales
procedure. Woolworths implemented ERP system to manage its business operations effectively
and efficiently. Further, this report highlighted the market size and main competitors of the
Woolworths. The entire report is presented in a systematic manner to highlight the use of
information system in Woolworths.
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PART 1
1. The current organizational structure
The organization structure denotes the pattern of main functional units of the organization. The
organizational structure consists of numerous activities like planning, directing, staffing and
controlling. The organization which is studied in this report is Woolworths. Woolworths is the
leading retail chain. The structure of an organization must be well defined so that the goals and
objectives of the company can be accomplished effectively and efficiently (Woolworths Group,
2018). The organization structure of the Woolworths is specified underneath:
Figure: The organization structure of the Woolworths
Source: (Woolworths Group, 2018)
Woolworths is a multi-functional organization which is having a complex organizational
structure. The organization structure is divided on the basis of functions. The functional
organizational structure is paying attention in the direction of task allocation on the basis of
responsibility and ability. The top level of the structure is giving directions to the lower
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management so that there is a good coordination between the top and bottom level of
management.
2. What operational problems (e.g., inefficiency, errors) do you think the organization could
experience because of this structure?
The organizational structure of Woolworths is not following the down to up approach. The issues
of the lower level of management are not communicated rightly to the upper management. So,
the organizational structure of the Woolworths suffers from various issues or problem. The most
common issue is that the lack of good interaction among the superior and subordinates.
Operational communication is necessary to keep up an organizational structure running in an
effective and efficient manner. Without good communication, new procedure and ideas can get
chaotic. Directors may begin to renew the efforts in an effort to assess assured parts of a
procedure as their own. This is why the communication regarding the decision-making is
important to rest of the business is precarious to the accomplishment of the organizational
structure of Woolworths. If the departments are not perfect on exactly what their duties and roles
are the management will suffer from errors and inefficiencies.
The organizational structure of the company is currently flowing horizontally. The upper
management of the company is making decisions without considering the opinions of the lower
management; the goals of the company are not communicated properly to all the organizational
bodies. When the upper management is not taking the views of lope management the company
suffers from the lack of appropriate goals and objectives. The organizational structure of the
company is considered to be perfect when there is a continuous flow of communication and all
the work is managed in the right order. Woolworths has a complex organization structure so it
should assign the role and duties of the personnel in the correct order so that appropriate
decisions can be taken (Frias, 2014).
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3. What is the most likely system acquisition method— commercial software, custom
software, or ERP?
In the context of Woolworths, the most likely system acquisition method is ERP (Enterprise
Resource Planning). ERP is a comprehensive effort to integrate financial, marketing, human
resources and manufacturing in a single information system. The standardized record keeping
allows information sharing throughout the company. In the recent years, Woolworths has
implemented a cloud-based SAP for Enterprise Resource Planning and payroll. The software is
launched by keeping in mind the issues which are faced by the company in dealing with the
inventory information. The traditional system used by the Woolworths was managed manually
so there is a need to acquire a fully automated system in an order to manage the business
operations of the company in an organized manner. The Project Galaxy Transformation is the
project processed at Woolworths to replace the 30-year-old ERP system named CASS. The main
purpose of launching ERP is to reduce the issue of data redundancy and duplication (Monk and
Wagner, 2012.
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Figure: Workings of ERP model
Source: (Lasisi, et. al., 2017)
Before launching the ERP model, Woolworths is required to investigate its market so that proper
investments in funds can be made. The latest studies revealed that Woolworths made an
investment of amount $200 million in applying the reformative software in the Information
Technology division for the supermarket industry of Australia.
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4. Describes and prepare a system flowchart of the sales procedures for the chosen
organization (company).
(Source: By author)
The systems flowchart of sales of the Woolworths group is considered an invaluable tool for the
organization. It gives a visualized opportunity for understanding the sale process. The flowchart
reveals issues by highlighting and predicting sale numbers. It is the best and effective method of
representation. In this flowchart, steps are clearly mentioned in the boxes with green color
which are linked to each other through the arrows. The arrows clearly indicate the workflow
direction. The results are shown by yellow color rectangular shapes. It includes all the steps that
involve knowledge of the product, sale planning done by management, approaches, required
assessment of the sales, simple presentation, commitments, and finally a follow-up. Different
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colors are used in this flowchart to represent different steps that are involved in a systems
process. The flowchart which is a diagrammatic representation and can be called by alternative
names like process map, functional process chart of a company, workflow diagram and also
business flow chart or diagram. In this flowchart, everything is represented graphically starting
from the customers submitting the request till the shipment of the order including the request
approvals, rejections, notifications, shipped and not shipped, etc. along with the standard terms
and the acceptable changes. It is very important to make the flowchart simple and
understandable with complete information.
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5. Identify any control problems in the system and what sorts of fraud are possible in this
system?
The Woolworths is the country’s biggest supermarket chain and is facing major control problems
which are outlined by the investment bank:
 There is slowing in the consumer cycle process for this group.
 The higher lease costs and taxation to the hotels.
 The major issue is product quality which is considered as the main issue for the Woolworths
Group.
These above-mentioned issues have led to making the management of the company work on
their strategies and developing more tactical strategies to achieve success and overcome all these
issues. The management should work on improving the performance of the company by
evaluating and measuring mainly based on the income before paying the taxes, interests, etc.
The action control elements of any system include administration that is the sole decision maker
of any organization and duty separation with the acceptable definition of actions.
The management control system is a very important factor for the organization. Where the
worker's strength is more, the management control needs to be more active and carry out all the
steps to enhance the performance to achieve the organization goals.
The sorts of fraud that can be possible in the system of the Woolworths are as follows:
 Sources of Supply chain such as counterfeiting. The brand should be protected from the
unauthorized online sale that includes the third party. Counterfeiting of products should be
avoided as it is a risk for the organization and it can lose the profit share in the market.
 Supplier and Procurement risk. It can involve the bribery, price manipulations, etc.
 Grey Market frauds. Anti-counterfeiting, whistleblowing programs, etc. should be
implemented to avoid grey market frauds.
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 Shrinkage frauds. The remediation programs and actions should be reviewed at regular
intervals.
 Product quality and safety threats. Brand protection should be implemented with forensic
audits, mystery shopping, etc.
 Advertisement, marketing misuse. Misuse of marketing, advertisements.
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PART 2
1. Development and adoption of the accounting software packages.
Accounting software denotes the software application and system which are utilized by the
company to facilitate efficient and effective controlling and monitoring activities of accounting
system and functions in the company. Woolworths is using accounting software packages to
organize and monitors the accounting records of the company, the accounting software packages
help in managing the accounts payable, ledgers, receivables and journal entries. The company is
considering integrating the business operations into one system. The managers of the company
are opting numerous options in the fields of accounting software. The company conducts Market
analysis to install the accounting software packages in an effective and efficient manner.
Woolworths adopted accounting software packages to identify the issues that are faced by the
company. The development of accounting software packages is developed by keeping in mind
the specifications and the structure of the organization (Starinsky, 2016).
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2. The current market size.
The company has practiced grim price cutting to guarantee increased customer market and
beating the opposition in the vibrant business atmosphere. The current market size of
Woolworths is large. The two prime performers in the year 2017 for gaining the market share in
the entire grocery marketplace were Aldi, up to 0.8% points to 12.1% and Woolworths up to
0.8% points to 32.2%. This now creates the mutual market share of Coles and Woolworths and
Aldi 73.1%, up to 1.7% points over the last few years. IGA still seems to be struggling in the 4th
place on 7.4%, down 1.1% points for the same year. Woolworth is expanding its market base in
both local and global market. Hence, the market size of the Woolworths is large.
Figure: Main competitors of Woolworths with their market share
Source: (The Balance, 2017).
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From the above figure, it can be analyzed that the Woolworths is the main leader of the market
with 43% market share. After Woolworths, Coles is the second leader in the market with 37%
market share. After Coles, the main player in the food and retail market is IGA with 15% market
share. At the fourth and fifth position is Aldi with 3% market share and others (The Balance,
2017).
.
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3. Market leaders and competitive advantage
The main competitors of the Woolworths are Coles, Aldi, Farmer Jack’s and IGA. The company
is facing cut-throat competitors in the global and local market. The main market leader in the
retail and food industry is the Coles. Coles and Woolworths are the main competitors of each
other. The products supplied by Coles and Woolworths are almost same, but the goods which
are supplied by the Woolworths are more economic. The market leader is focusing on providing
a satisfactory return to the stakeholders and frames the main strategies.
Figure: The main competitors of Woolworths
Source: (Keith, 2012).
The growth of supermarket significantly showdown among Coles and Woolworths as here is a
fight for the cost. The cost required to be revealed by both the businesses in the forthcoming
reporting period. Coles is continually improving its products and strategies so that the company
can win the consumer of Woolworths... with each passing year Coles is achieved growth and
profits.
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4. Identify the current gaps or challenges encountered by users or customers of accounting
software/packages and make relevant suggestions or recommendations.
In the context of Woolworths, the existing challenges or gaps which are faced by the consumers
or users of accounting software is the lack of consumer relationship management, not user-
friendly, inconsistent, time-consuming and lack of security. The main issues which are faced by
the user in the accounting packages are the security issues. Software’s are prone to software
attacks. These attacks must be minimized by installing firewalls and using passwords to protect
the files and data. The challenge which is faced by the user is these software’s are not
custro9mized and turn out to be non- friendly. Almost all the accounting systems are reasonably
difficult to understand by the users.
Further, the software’s are inconsistent with the current operations of the Woolworths.
Reconciling the accounts and other books is time consuming due to the inconsistency in the
accounting software’s or packages the procedure of installing these software’s turns out to be
time-consuming. In addition to this, the issue which is faced by Woolworths in the accounting
software package is the weak reporting system. The most recent issue which is encountered by
Woolworth is the lack of software compatibility (Starinsky, 2016).
Recommendations
The above-stated issues the company should maintain good communication at each level. The
data and information of the consumers must be maintained safe and secure from the third party
access. The existing software’s liker-SAP must be continually updated by the company.
Further, Woolworths should hire the appropriate team of experts who can manage and implement
this accounting software’s in a right manner. The software must be customized on the basis of
Neds and requirements of the consumers.
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Conclusion:
From this report, it is clearly concluded that Woolworths is a major market player in the austral
in the market. The organizational structure of the company is multi-functional and is on the basis
of duties and responsibility. The company is installing ERP model for managing its business
operations in a well-organized manner. The sales procedure of the Woolworths is a systematic
flow of product and services which are followed by the Woolworths. Further, the report
suggested that the market size of the Woolworths is wide and is expanding its reaches in the
global market. The main leader in the food sector is the Coles with a good share of the market...
Woolworths, Coles, ALDI, IGA, and Metcash Ltd are the main competitors of each other.
Woolworths is framing strategies to acquire accounting software’s to regulate the payrolls,
inventories and other business operations. Hence, it can be concluded from the report that
accounting software plays a significant role in the monitoring and performance of in the
Woolworths.
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Reference list
 Chang, J.F., 2016. Business process management systems: strategy and implementation. CRC
Press.
 De Carvalho, J. and Campomar, M.C., 2014. Multichannel at retail and omni-channel:
Challenges for Marketing and Logistics. Business & Management Review, 4(3), pp.103-113.
 Frias, J.L., 2014. Educational entrepreneurship: The relationship between organizational
structure and innovation. California State University, Fresno.
 Keith, S., 2012. Coles, Woolworths and the local. Locale: The Australasian-Pacific Journal of
Regional Food Studies, 2, pp.47-81.
 Lasisi, M.O., Owens, J.D. and Udagedara, S., 2017. Key benefits of enterprise resource planning
adoption within small family businesses: a conceptual framework. J Bus Econ Res, 14, pp.77-86.
 Monk, E. and Wagner, B., 2012. Concepts in enterprise resource planning. Cengage Learning.
 Raju, P.S., Bai, D.V.R. and Chaitanya, G.K., 2014. Data mining: Techniques for enhancing
customer relationship management in banking and retail industries. International Journal of
Innovative Research in Computer and Communication Engineering, 2(1), pp.2650-2657.
 Starinsky, R.W., 2016. Maximizing business performance through software packages: Best
practices for justification, selection, and implementation. CRC Press.
 The Balance, 2017. The Largest Australian Retailers. [Online]. The Balance. Available at:
https://www.thebalance.com/largest-australian-retailers-2892105. [Accessed on: 10.05.2018].
 Woolworths Group, 2018. About Us. [Online]. Woolworths Group, Available at:
https://www.woolworthsgroup.com.au/page/about-us/ [Accessed on: 10/05/2018].
 World Health Organization, 2018. How Pharmaceutical Systems are organized in Asia and the
Pacific. OECD Publishing.
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