Strategic Information System- PDF

Running head: STRATEGIC INFORMATION SYSTEM
STRATEGIC INFORMATION SYSTEM
Name of the University
Name of the student
Author Note

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Organizational structure of Woolworths................................................................................2
Operational problems due to the organisational structure......................................................4
Examples of system acquisition methods and the favourable method...................................5
Sales procedure system flowchart of Woolworths.................................................................6
Problems and frauds with the ERP system............................................................................7
Accounting software package adoption and development.....................................................8
Current market size................................................................................................................9
Leaders in the market and reason for their competitive advantage........................................9
Challenges of accounting software implementation............................................................10
Recommendations................................................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................12

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Introduction
In the following report, the accounting system implementation in the business
processes of particular organization has been mentioned. In this report, the organisation that
has been chosen for the accounting software implementation is Woolworths Australia. The
report describes the organizational structure of the chosen company. The discussion part of
the report discusses the operational problems that the organization was facing due to its
organizational structure. The report discusses several system acquisition methods such as
commercial and custom accounting software as well as ERP. A flowchart has been proposed
for the sales procedure of the chosen organization. Moreover, due to the incorporation of the
new technology, the frauds and control problems that are associated with the new system has
been discussed as well.
The development and adoption of the accounting software packages have been
mentioned in the second half of the report. Each software has been evaluated and the present
market size of each of the softwares has been mentioned. The leaders of the accounting
software packages have been mentioned and the reason for their competitive advantage
against the other softwares have been evaluated. The present challenges that the accounting
softwares face has been evaluated and discussed and possible recommendations to address
the issues have been provided.
Discussion
Organizational structure of Woolworths
At the top level of the managerial board, lies the Board of Directors. Their job is to
maintain and enhance the shareholder value and also check whether the business activities in
the proposed organization are carried out effectively or not. They are also responsible for

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maintain the interests of the prospective stakeholders and also to appraise the performance,
strategies and policies of the organizational group (A brief history of Woolworths 2018). The
board charter mentions all the responsibilities of the directors. The process of representing the
interests of the shareholders, their power and responsibilities are all mentioned in the Board
charter. Since 2013, the chairman of Woolworths organization has been Gordon Cains.
The managing director and chief executive officer is Brad Banducci. The other
members of the Board of Directors are Scott Perkins, Siobhan Mckenna, Jillian Broadbent,
Michael Ulmer and Holly Karmer.
The Group Executive committee comes just under the hierarchy of Board of
Directors. They are responsible for propagating the business towards its organizational goals.
The executive committee’s members are in charge of providing quality services to the
employees of Woolworths as well as to the prospective customers that the company serves.
By reviewing and analysing the management decisions and operations, the members of the
executive committee are responsible for reporting the progress back to the members of the
Board of Directors (Woolworths Group: Quality Brands and Trusted Retailing 2018).
Figure 1: Details of the committee membership
(Source: Woolworths.co.za 2018)

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Four permanent committees are set up by the Board of Directors to help them with
certain responsibilities such as Nomination Committee, Sustainability committee, People
performance committee and Audit, risk management and compliance committee
(Woolworths.co.za 2018).
To help the members of the Board of directors in certain activities and
responsibilities, four permanent committees have been set up. The committees are listed
as follows:-
 Nomination committee
 Sustainability committee
 People performance committee
 Audit, risk management and compliance committee
Operational problems due to the organisational structure
Woolworths is facing some serious problems due to the mentioned organizational
structure. The reporting process of the four independent committees to the Board of directors
becomes cumbersome and difficult because several bosses need to be reported at a single
time. Moreover, the resolving queries and the messages vary from one board member to
another making the process even more difficult (Woolworths checkout shutdown 2018). Due
to the conflicting instructions, the workers of the independent organisations can get easily
distracted and confused. The independent nature of the organisations is very common in large
organisations like Woolworths. Nonetheless, this organizational structure has its own share of
disadvantages such as poor customer service (Hyvönen 2013). A proper collaboration and
cooperation between the members of several departments are necessary for providing good
customer support. The prospective customer who is need of service can be transferred to
different departments as no department is sure whose responsibility the problem lies in which

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directly affects the customer (Харакоз and Kharakoz 2015). Unless told by a supervisor, the
workers of the different departments sometimes refuse to work with the other departments
which affects the team performance and coordination of the organizational management.
The next operational problem is the lack of proper communication that arises due to
separate departments in Woolworths. Here, the problem arises not from the Executive
committee or the Board of Directors, but from the supervisors and managers of the various
departmental teams. Sometimes, an authoritative role is taken up by the managers and
supervisors of the departmental team which confuses the members of the respective teams.
This leads to loss of money and time and leads to ineffective decisions (Woolworths: the rise
and fall of the department store 2018).
Examples of system acquisition methods and the favourable method
Commercial accounting software- These commercial softwares can be handled by
medium sizes as well as small sized business organizations. It is used in particular operations
by the respective businesses for creating customized business functions. Several features can
be found in these softwares such as summarization of data by displaying specialized graphs
and special statistics to show the business heath. These accounting softwares have their own
share of pros and cons. Some examples of commercial accounting softwares are Turbocash,
Quickbooks and Freshooks which are used to configure the business processes moderately
(ENTERPRISE RESOURCE PLANNING 2016). These softwares have the capability to
prevent wrong entry of data with the help of multiple error detection layers. The only
downside of using this softwesre is that the software takes a lot of time to install and requires
a maintenance crew (on-site).
Custom accounting software- Sometimes, the business needs a custom functional
software which are made for the business in particular. These softwares are normally created

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when the employees are told to create particular softwares for handling some specific
accounting functions of the business. The custom software slowly grows in capability over
time and are marketed as a separate product by the business. In other scenarios, the custom
accounting softwares are taken up by the business when no other softwares (COTS or ERP)
can perform the specific accounting tasks that are specific to the business (Kohler 2013).The
downside of using these software is that the software occasionally tends to be buggy and
needs maintenance from time to time.
Enterprise Resource Planning or ERP software- Enterprise resource planning
integrates all the information into a database from several business areas The ERP software
has the capability to reduce all the problems that arise due to the separate departmental areas
of Woolworths. The separate departments have to run their own specific software with
respect to their department. Although the software is expensive and takes time to install, it
can be afforded by large scale organizations such as Woolworths. Several modules need to be
purchased differently which can be applied to several departments of an organization such as
Accounting finance, distribution, inventory control and HR (ENTERPRISE RESOURCE
PLANNING 2016). Adopting the software provides a lot of advantages to the organisation
such as critical business process standardization, enhancement in the operations of
distribution, supply chain and financial data management.
Thus for the mentioned scenario, adopting the ERP software package will be
beneficial for Woolworths organization as the likely method for system acquisition. It will
allow the Board of Directors to proficiently manage the four separate departments that are
present in Woolworths (Arli et al. 2013). Also, the company has the capability to acquire the
high cost of the ERP which will be beneficial for them in the long run.
Sales procedure system flowchart of Woolworths

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The sales procedure of Woolworths has been mentioned in the next diagram in the form
of a flowchart:-
Figure 2: Sales procedure of Woolworths
(Source: Created by the author)
Problems and frauds with the ERP system
The control problems of the proposed ERP system has been mentioned as follows:-
 The decision making process needs to incorporate industry specific solutions
 If the system has too many features, it can distract the organization from its objectives
 Fast implementation of the ERP system (Харакоз and Kharakoz 2015)

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 Disregarding the change at the managerial level
 Investing little on the team who is implementing the software
 Departmental communication process irregularity
 Lack of a maintenance plan
The possible frauds that are present in the system are mentioned as follows:-
 Unapproved access to the finance processes
 Document misplacement
 For understanding the core business procedures, unscrupulous employees trying to
take advantage of the ERP system (King and Thobela 2014)
 Accounting system abuse
Accounting software package adoption and development
The adoption of several accounting softwares are generally slow in process due to the
business risks that are involved as well as the high adoption costs. Significant resources and
time of the organization are also used in the conversion process. The organizations face
difficulty in choosing between their traditional accounting system and adopting a new better
option with the rise of digital innovation (ENTERPRISE RESOURCE PLANNING 2016).
Just like other businesses, they are tempted to develop and adopt a better software package.
The adoption process is however, very time consuming and cumbersome. Moreover, the
organization needs to facilitate the conversion process while continuing with their regular
organizational activities. Both the old as well as new system needs to be run at the same time
for the best results.
During the adoption procedure, the risk factor that the company may be facing needs
to be taken into account as well. The organization faces pressure from the prospective
stakeholders for assuring the accuracy of the system. Moreover, during the development of

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the modules, human errors can get in to the system while maintain the database. Also, the
inconsistencies can arise due to different data structures which is a common issue during the
adoption and developmental phase (Харакоз and Kharakoz 2015).
Current market size
The present market size of the prospective accounting softwares depends from
country to country and time to time. In Australia alone, 64% of the market share has been
taken up by the accounting software known as Xero. Intuit has a market share of around 20%
and Sage has a market share of 50%. Similarly in USA, 55% market share has been taken up
by Inuit and Sage has taken up a market size of 33%. The rest of the market size are taken up
by other accounting software vendors (Knox 2015).
Recently, a study was conducted by SOHO which showed that globally Sage has
taken up a market share of 25% and Inuit has taken up a market size of 32%. 42% market
share is taken up by Sage and 22% market share is taken up by Inuit in mid-range institutions
(Monk and Wagner 2013).
Leaders in the market and reason for their competitive advantage
Presently, Freshhooks is the leader of the accounting software market. This software
is very popular with organizations lately and provides multiple features for gaining
competitiveness in the present market scenario.
First of all, the software supports recurring as well as subscription services. The
software has collaborated with several vendors to provide online payment services such as
Paypal. Moreover, the software integrated with other accounting softwares smoothly
(Hyvönen 2013). Most of all, the software comes bundled with a couple of other softwares
which reduces the need for other accounting softwares providing the user with total control of
the accounting operations through a single dashboard. The software also makes secure

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backups timely maintain data security and has maintained a flexible pricing for the software
depending upon its usability. Moreover, the software can be used through mobile apps
providing versatility.
Challenges of accounting software implementation
The common challenges faced due to the implementation of accounting softwares are
mentioned as follows:-
 Choosing the correct accounting software that is needed in the organization
 Full commitment from the management team
 Appropriate training for the users who will be using the accounting software
packages (Patel and Vij 2013)
 No proper budgeting
 No proper testing
Recommendations
The recommendations for the mentioned challenges are proposed as follows:-
 For choosing the proper software, the organization needs to evaluate its needs and
challenges properly.
 The key personnel needs to be taken in the decision making process during the
deployment of the new system which will enhance their commitment levels.
 People who will be using the ERP system needs to be adequately trained
(ENTERPRISE RESOURCE PLANNING 2016).
 The implementation phase needs to involve testing procedures to highlight the
problems in the system preliminarily.
 To prevent the business from suffering due to the accounting software, the budget
testing needs to be properly analysed before the implantation phase.

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Conclusion
To conclude the report, it can be stated that Woolworths need to implement the
Enterprise Resource Planning system in its business processes to mitigate the operational
problems that have cropped up due to the organisational structure. The management of
different departments by the higher level hierarchy will get much easier with the
incorporation of the system acquisition method. In the report, the organisational structure of
Woolworths have been mentioned in detail. The inconsistencies that rise due to the faulty
organisational structure has been evaluated and explained. Several system acquisition
methods have been discussed from which the ERP system was chosen as the most
advantageous of the lot. A flowchart has been provided which mentions the sales procedure
of the respective company. In the report, the adoption and development of the new systems
have been assessed and the market leader has been identified. The reason for the competitive
advantage of the market share has been identified and discussed in the report. The market
share of several softwares has been identified and the challenges and frauds that are linked
with the adoption process has been identified. The recommendations for countering the
significant challenges has been mentioned as well in the report.

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References
A brief history of Woolworths, 2018. [online] Available at:
http://www.woolworthsmuseum.co.uk/aboutwoolies.html [Accessed 2018].
Woolworths checkout shutdown, 2018: Supermarket apologises for .... [online] Available at:
http://www.news.com.au/finance/business/retail/woolworths-explains-technical-glitch-and-
apologises/news-story/f5476d22eea131858908768c181d5230 [Accessed 2018].
Woolworths Group: Quality Brands and Trusted Retailing, 2018. [online] Available at:
https://www.woolworthsgroup.com.au/ [Accessed 2018].
Woolworths hit by nationwide technical outage | SBS News, 2018. [online] Available at:
https://www.sbs.com.au/news/woolworths-hit-by-nationwide-technical-outage [Accessed
2018].
Woolworths Supermarket, 2018 - Buy Groceries Online. [online] Available at:
https://www.woolworths.com.au/ [Accessed 2018].
Woolworths.co.za, 2018 | Food, Home, Clothing & General .... [online] Available at:
http://www.woolworths.co.za/ [Accessed 2018].
Woolworths: the rise and fall of the department store, 2018.[online] Available at:
https://www.theguardian.com/business/2008/nov/19/woolworths-retail-department-stores
[Accessed 2018].
Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and
Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business &
Accountancy Ventura, 16(1).
ENTERPRISE RESOURCE PLANNING., 2016. [Place of publication not identified]:
SPRINGER.

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Hyvönen, T. (2013). MANAGEMENT ACCOUNTING AND INFORMATION SYSTEMS:
ERP VERSUS BOB. European Accounting Review, 12(1), pp.155-173.
King, L. and Thobela, S., 2014. Woolworths farming for the future. International Food and
Agribusiness Management Review, 17(B).
Knox, M., 2015. Supermarket monsters: The price of Coles and Woolworths'
dominance (Vol. 6). Black Inc..
Kohler, A., 2013. Woolworths invests $20 m in data analytics. Retrieved 17/7/2013, from
http://www. businessspectator. com.
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Monk, E. and Wagner, B., 2013. Concepts in enterprise resource planning. Australia: Course
Technology Cengage Learning.
Patel, K. and Vij, S., 2013. Enterprise resource planning models for the education sector.
Hershey, Pa.: Information Science Reference.
Харакоз and Kharakoz, Y., 2015. Features of application of erp-systems in management
accounting. Auditor, 1(3), pp.71-76.