Strategic Information System for Xero: Organizational Structure, Operational Problems, and Accounting Software Packages

This paper discusses the strategic information system adopted by Xero, a New Zealand-based software company that provides accounting services to small and medium-sized businesses worldwide. It covers the company's organizational structure, operational problems, system acquisition methods, and system flowchart and control problems. It also explores the challenges and issues faced by the company and how accounting software helps it gain a competitive advantage in the global market. The paper provides insights into the market size, leaders in the global market, and what gives them a rivalry advantage.

Running head: Strategic information system
Strategic information system

Strategic information system
Table of Contents
Introduction.................................................................................................................................................3
Part 1...........................................................................................................................................................3
The current Organizational structure...........................................................................................................3
Operational problem....................................................................................................................................4
System acquisition method..........................................................................................................................5
Custom software......................................................................................................................................5
ERP (Enterprise resource planning).........................................................................................................5
Commercial software...............................................................................................................................6
System flow chart of the sales procedures..................................................................................................6
Controls problems in the system..................................................................................................................7
System and application issue...................................................................................................................8
Consumer experience and possible fraud.................................................................................................8
Part 2...........................................................................................................................................................9
Adoption and development of the accounting software packages................................................................9
The current market size...............................................................................................................................9
Leaders in the global market and what gives them the rivalry advantage..................................................10
Challenges.................................................................................................................................................10
Solutions or recommendations..................................................................................................................11
Conclusion.................................................................................................................................................11
References.................................................................................................................................................13
Bibliography...............................................................................................................................................15
2

Strategic information system
Introduction
Strategic information system provides a path to carry out the business activities and
operations successfully. The main aim of this paper is to provide a brief outline about the
strategic information system that is adopted by Xero. Xero company has been chosen in the
paper as it is a software company that provides accounting services to its clients. In the first
phase, the paper explains the organizational structure, operational problem, system acquisition
method, and system flowchart and control problems and in the second phase, it depicts the
challenges and issues that are faced by the company and it also explains that how accounting
system helps the firm to gain rivalry benefits across the world. More detail of the task has been
discussed below.
Part 1
The current Organizational structure
Xero is a New Zealand based software organization that develops and builds cloud based
accounting for small and medium sized businesses in the world. The offices of the company are
situated in Australia, New Zealand, the United States, Singapore and the United Kingdom (Xero,
2017). It is listed on both the New Zealand exchange and Australian exchange. The company’s
product based on the different software and sold by subscription in the market. The products of
the firm are used in more than 180 countries. There are approx 1853 employees employed in the
firm. Along with this, effective and dynamic strategies are used by the firm to provide various
types of software to the customers across the world (Xero, 2017). The firm entered the United
Kingdom and Australian market in 2008. The organizational structure of the company has been
stated below.
Organizational structure of Xero
3

Strategic information system
Operational problem
Xero operates and manages its business activities and operations worldwide so as there
are enormous problems faced by the company while conducting business activities and
operations effectively and successfully. Furthermore, business support service issue is ongoing in
the company therefore; the firm is struggling in today’s era from many ways. The operational
issues include the following:
Inefficiency issue: One of the significant issues in operation management is inefficiency that
affects the growth and success of the firm. Due to poor labor force, efficiency issues occur within
the organization. This affects the profitability and progress of the firm adversely.
Teamwork issues: Teamwork plays a vital role in each and every company for attaining the
goals and objectives. Teamwork issues and problems affect the sustainability of the company
negatively. To attain long term goals and objectives, Xero needs to focus on the teamwork by
maintaining coordination and cooperation in the organization. In this way, the company has been
able to minimize the operational issues within the organization. Furthermore, it also helps in
making a good and dynamic position in the global market.
Conflicts and errors in business operations: Xero makes mistakes in calculation, tools and
techniques that could affect the progress of the firm. It leads to loss and damage within the
organization. Along with this, the outmoded software creates various mistakes and errors in the
workplace. In addition, it also affects long term mission and vision of the firm. It shall be noted
4

Strategic information system
that the company should use a system which helps to handle the large amount of information and
facts within the organization.
Technology issues: The Company uses traditional technology and system to provide products
and services in the marketplace. The company is unable to update the system and software within
the organization. In this way, various technology issues are faced by the firm. It shall be stated
that Xero needs to focus on the latest technology and software to beat the competitors in the
marketplace.
System acquisition method
There are enormous methods that can be used and initiated by Xero to conduct business
activities and operations successfully. Furthermore, it is essential to use an effective software and
system to analyze and evaluate the current business status. Along with this, dynamic software
system is used to make effective decisions within the organization for bettering the growth and
success. There are three software systems that initiated by the Xero and business organization
that have been stated below.
Custom software
Custom software is software that is specially developed and built for some specific
organization and other users. It is developed and initiated by the company for specific aim and
prupose. Xero uses this system to fulfill the demands and requirements of the customers. Xero
maintains a custom software application that is designed according to the needs and requirements
of users. The organization needs to develop a custom software system to manage and handle the
accounts of other organizations (Ross, 2012).
ERP (Enterprise resource planning)
Enterprise resource planning may be defined as a process by which a firm manages and
integrates the important part of its business and organization. An ERP system integrates and
includes the various areas such as planning, purchasing, sales and inventory. ERP system
provides several benefits to Xero Company. ERP is easily scalable that means easy management
of new processes, departments and others. Furthermore, ERP system improves and enhances the
data quality by improving and developing the underlying process and procedures. Xero uses ERP
5

Strategic information system
system for performing automated business operations and activities. They are accountable to
provide and use better business features to the users. It also ensures clients to access and use
different types of software application that are essential for their business activities. By using
ERP system, wide range of information can be transferred within the organization. It provides
unique and dynamic structure to handle the backend and front end process for the success and
profitability of the firm. In this way, the company uses dynamic and effective enterprise resource
planning for successful integration of business processes and business (Lenart, 2011).
Commercial software
Commercial software may be defined a computer software that is produced for sale or
that serves commercial purposes. Along with this, commercial software is any program or
software that is created and developed for licensing and sale to end users (Kruger and Xie, 2012).
Microsoft windows, MS office and Adobe Flex are considered the main commercial software
that can be bought from any retail shop and buyers. Commercial software is used to maintain
records of the employees. It is reliable, cheaper and easy to implement within the organization.
Furthermore, automatic updating can be done by commercial software in Xero. The firm uses
Microsoft operating system to install dynamic and effective applications programs in order to
better integration in the business. In addition, the software can be updated for specific needs and
requirements. Bespoke software is open source because it provides competitive advantages to the
company in the global market (Muenchen, 2012).
System flow chart of the sales procedures
This type of flow chart is very similar to data flow charts. Data flow charts do not include
decisions; they just show only path that data takes, where it is held, processed than output. The
system flowchart is a better way of communicating and coordinating the logic of a system to all
concerned in the organization (Scheer, 2012). With the help of system flow chart, problems and
issues can be analyzed in a hassle free manner hence it reduces and eliminates the costs and
wastage of time. Along with this, this flow chart also helps in debugging process and procedure.
It is a part of sales process which is initiated by the company at the workplace. By using
effective system flowchart, the firm has been able to deal with users and consumers to provide
better accounting services. The flow chart of Xero has been drawn below.
Xero system flow chart
6

Strategic information system
The above mentioned system flow chart indicates that how system flow chart provides
support to the clients in Xero company. It is seen effective and dynamic to attract more clients.
The diagram explains that in first stage customers submit PO for purchasing a product and
service. In second stage, PO enters in order and contracts with agent. The order is given to agent
for approval and after the approval; order is shipped in an effective way.
Controls problems in the system
There are various risks involved while initiating the ERP system within the organization.
The company needs to indentify and analyze these risks and challenges to make a strong image
in the markets. If talk’s about the technology, various risks are involved in the system and
software application while providing satisfaction to the consumers. Furthermore, software is
accessed and used by ineffective and unskilled workers who are unable to know and understand
that how to use the system and software. Due to lack of quality, various issues and problems are
occurred in the organization (Baleanu, Machado and Luo, 2011).
7

Strategic information system
System and application issue
It is one of the significant complexities in control problem which need to improved and
encouraged. This issue is combined with accessing and evaluating the application program with
help of clients. A consumer should have knowledge and experience about the system and
software. A client shall be expertise in ERP system and commercial system to identify and
evaluate the software in order to perform effectively and efficiently. Along with this, ERP
encompasses various application and software issues which can lead to loss and damage within
the organization (Garg, Hager and Rao, 2011). Apart from this, decentralization is also occurred
in the organization when it accesses and evaluates the software system. It shall be noted that
training and development plays a crucial role to reduce this issues and beat the competitors in the
market. Therefore, the company provides training to the workers to detect application issues. The
other option is that Xero has to hire skilled, potential and experienced applicants who can handle
the issues and problems of application programs (Von Krogh, 2012).
Consumer experience and possible fraud
The consumers need to that how to use application programs in order to avert and reduce
the application complexities. They need to have clarity of the software and application programs.
They should use software and system openly and friendly. Furthermore, the clients should have
enough capable and potential to install the software and system whenever it is required. The user
experience issue can be resolved by implementing an operation plan and system.
On the other hand, fraud and racket are reduced in order to provide effectiveness and
efficiency to the end users in the global market. ERP system is implemented by the Xero
employees to perform daily activities and operations successfully. Hence, it is important to
analyze and evaluate the rackets and frauds that may occur in the application system and
software. There are enormous framework and models available and used for ERP system by the
company to determine and analyze the fraud activities (Ptak and Schragenheim, 2016).
8

Strategic information system
Part 2
Adoption and development of the accounting software packages
The main aim of Xero is to provide best and dynamic accounting services to the users and
other business organizations. To provide information to other organizations, the company offers
accounting services and software. This software and system helps in managing the costs and
expenses within the organization. The firm requires a software and ERP system to handle their
business operations and build an effective and unique business strategy. The accounting
software, commercial software and ERP system are used by the organization earn and maximize
the profitability in the marketplace (Stallings et al, 2012). Along with this, these systems also
provide several other benefits such as cost reduction etc in the field of business. There are approx
2 lakh users who used accounting software to overcome the competitors and maximize the
growth and success of the firm (Kwak et al, 2012). The firm has become popular and well
positioned in the global market by using accounting software. Along with this, Xero has been
able to overcome the competitors by using this software. By initiating the accounting software,
the company has also been able to identify the strengths of the market and competitors such as
MYOB. The company services are used by customers across the world. In addition, the firm
holds 15% of market share in Australia to deal with clients effectively and hassle free manner.
Moreover, innovative and latest technology and system are used by the organization to analyze
and evaluate the plans and strategies of the rivalries all over the world. In today’s era, the
company is increasing its revenue and profitability by using accounting software (Gelinas, Dull
and Wheeler, 2011). The earned revenue of the company is approx 71%.
The current market size
The market size is large for conducting business activities successfully. Therefore, the company
can take various advantages in the market by providing innovative software and accounting
services to the customers.
9

Strategic information system
Leaders in the global market and what gives them the rivalry advantage
Xero has strong and effective including chief executive officer, board of directors, and
other team members who look after the profitability and success of the firm in the international
market. The company appoints financial officer and data officer to manage and handle the tasks
and duties in a hassle free manner (Obolensky, 2017). They are responsible for increasing the
revenue and profitability of Xero. Along with this, chief partner officer is accountable for the
development, design and marketing of software and application system. These leaders play a
vital role in the company to attain maximum level of outputs and results. These leaders also help
in developing and improving the business strategies for the organization. In addition, day to day
business activities and operations are performed by the managers. It shall be noted that
managers, top management and employees focus on the needs, requirements and wants of the
clients to assess the business process and operation effectively (Selznick, 2011). There are
various competitors existed in the market such as Quick books, Freshbooks, CCH ProSyetm Fx
Suite and Sage intact that affect the sustainability of the company. To overcome the competitors,
Xero needs to focus on the opportunities and threats of the market and rivalries.
Challenges
Accounting software, ERP system and commercial software are used by the company
because it makes easy tasks and duties (Moe, Aurum and Dybå, 2012). However, there are
various challenges and issues faced by Xero while implementing the accounting software and
ERP system. Some of the challenges and issues have been stated below.
10

Strategic information system
 Lack of security is one of the significant issues that dealt by Xero when they initiate the
accounting software within the organization. The software is unable to provide right and
accurate information due to lack of security.
 The workers are unable to perform business operations well and effective way due to lack
of efficiency. Therefore, efficiency and effectiveness is the biggest issue in Xero. Due to
lack of efficiency, the clients are unable to use and access software (Torchiano et al,
2013).
 Along with this, technical and file storage issues are dealt and faced by the workers
within the organization. If a consumer faces problems and issues, then consultants and
technical team is not available 24 hours in the workplace. This creates issues and
problems in the minds of customers. Apart from this, it is complex to find and identify a
specific accounting file from the records. Therefore, various challenges are being faced
by the management of Xero (Gallouj and Djellal, 2011).
 Most of the accounting software and commercial software have become older due to lack
of accuracy. It creates enormous hurdles in the marketplace. It is assumed that all these
challenges are faced by Xero when implement business operations in the global market.
Solutions or recommendations
To resolve these issues and challenges, Xero can use a cloud based accounting software
system within the organization (Krutz and Vines, 2010). Multiple function of ERP shall be
initiated by the firm to make better business operations. Apart from this, training and
development coaching sessions and programs shall be held by the organization to increase and
boost efficiency of the workers. It shall be stated that the company should modify in the ERP
system to gain competitive benefits. Apart from this, effective and dynamic accounting system
must be used by Xero to make a strong financial position globally. In this way, Xero is able to
accomplish its goals and objectives with staying in the competitive market.
Conclusion
On the above mentioned study, it can be concluded that strategic information system
plays a significant role in each and every company. No company can grow and explore its
business without using strategic information system within the organization. Here is the
11

Strategic information system
discussion about the strategic information system that is used by Xero Company for providing
accounting services to the customers. On the other hand, various challenges and hurdles are
faced by the company when implements an accounting system. Now it recommended that the
firm should use effective and dynamic accounting system to gain long term benefits and returns.
12

Strategic information system
References
Baleanu, D., Machado, J.A.T. and Luo, A.C. eds., 2011. Fractional dynamics and control.
Springer Science & Business Media.
Gallouj, F. and Djellal, F. eds., 2011. The handbook of innovation and services: a multi-
disciplinary perspective. Edward Elgar Publishing.
Garg, D., Hager, W.W. and Rao, A.V., 2011. Pseudospectral methods for solving infinite-
horizon optimal control problems. Automatica, 47(4), pp.829-837.
Gelinas, U.J., Dull, R.B. and Wheeler, P., 2011. Accounting information systems. Cengage
learning.
Kruger, U. and Xie, L., 2012. Advances in statistical monitoring of complex multivariate
processes: with applications in industrial process control. John Wiley & Sons.
Krutz, R.L. and Vines, R.D., 2010. Cloud security: A comprehensive guide to secure cloud
computing. Wiley Publishing.
Kwak, Y.H., Park, J., Chung, B.Y. and Ghosh, S., 2012. Understanding end-users’ acceptance of
enterprise resource planning (ERP) system in project-based sectors. IEEE Transactions on
Engineering Management, 59(2), pp.266-277.
Lenart, A., 2011, September. ERP in the Cloud–Benefits and Challenges. In EuroSymposium on
Systems Analysis and Design (pp. 39-50). Springer, Berlin, Heidelberg.
Moe, N.B., Aurum, A. and Dybå, T., 2012. Challenges of shared decision-making: A multiple
case study of agile software development. Information and Software Technology, 54(8), pp.853-
865.
13

Strategic information system
Muenchen, R.A., 2012. The popularity of data analysis software. UR L http://r4stats.
com/popularity.
Obolensky, N., 2017. Complex adaptive leadership: Embracing paradox and uncertainty.
Routledge.
Ptak, C.A. and Schragenheim, E., 2016. ERP: tools, techniques, and applications for integrating
the supply chain. Crc Press.
Ross, L.M., 2012. Method for turning printed books into interactive printed books by using
custom software to create and insert barcode-indicia that link readers to remote websites. U.S.
Patent Application 13/134,988.
Scheer, A.W., 2012. Business process engineering: reference models for industrial enterprises.
Springer Science & Business Media.
Selznick, P., 2011. Leadership in administration: A sociological interpretation. Quid Pro Books.
Stallings, W., Brown, L., Bauer, M.D. and Bhattacharjee, A.K., 2012. Computer security:
principles and practice (pp. 978-0). Pearson Education.
Torchiano, M., Tomassetti, F., Ricca, F., Tiso, A. and Reggio, G., 2013. Relevance, benefits, and
problems of software modelling and model driven techniques—A survey in the Italian industry.
Journal of Systems and Software, 86(8), pp.2110-2126.
Von Krogh, G., 2012. How does social software change knowledge management? Toward a
strategic research agenda. The Journal of Strategic Information Systems, 21(2), pp.154-164.
Xero, (2017) About Xero. [Online] Available at: https://www.xero.com/au/about/team/
[Accessed: 16 April 2018]
Xero, (2017) When small business is beautiful business. [Online] Xero. Available at:
https://www.xero.com/au/ [Accessed:16 April 2018]
14

Strategic information system
Bibliography
Antonakis, J. and Day, D.V. eds., 2017. The nature of leadership. Sage publications.
Baleanu, D., Machado, J.A.T. and Luo, A.C. eds., 2011. Fractional dynamics and control.
Springer Science & Business Media.
Chen, H.J., Yan Huang, S., Chiu, A.A. and Pai, F.C., 2012. The ERP system impact on the role
of accountants. Industrial Management & Data Systems, 112(1), pp.83-101.
Gallouj, F. and Djellal, F. eds., 2011. The handbook of innovation and services: a multi-
disciplinary perspective. Edward Elgar Publishing.
Garg, D., Hager, W.W. and Rao, A.V., 2011. Pseudospectral methods for solving infinite-
horizon optimal control problems. Automatica, 47(4), pp.829-837.
Gelinas, U.J., Dull, R.B. and Wheeler, P., 2011. Accounting information systems. Cengage
learning.
Klenke, K., 2016. Qualitative research in the study of leadership. Emerald Group Publishing
Limited.
Kruger, U. and Xie, L., 2012. Advances in statistical monitoring of complex multivariate
processes: with applications in industrial process control. John Wiley & Sons.
Krutz, R.L. and Vines, R.D., 2010. Cloud security: A comprehensive guide to secure cloud
computing. Wiley Publishing.
Kwak, Y.H., Park, J., Chung, B.Y. and Ghosh, S., 2012. Understanding end-users’ acceptance of
enterprise resource planning (ERP) system in project-based sectors. IEEE Transactions on
Engineering Management, 59(2), pp.266-277.
15

Strategic information system
Lenart, A., 2011, September. ERP in the Cloud–Benefits and Challenges. In EuroSymposium on
Systems Analysis and Design (pp. 39-50). Springer, Berlin, Heidelberg.
Maditinos, D., Chatzoudes, D. and Tsairidis, C., 2011. Factors affecting ERP system
implementation effectiveness. Journal of Enterprise information management, 25(1), pp.60-78.
Magal, S.R. and Word, J., 2011. Integrated business processes with ERP systems. Wiley
Publishing.
Moe, N.B., Aurum, A. and Dybå, T., 2012. Challenges of shared decision-making: A multiple
case study of agile software development. Information and Software Technology, 54(8), pp.853-
865.
Muenchen, R.A., 2012. The popularity of data analysis software. UR L http://r4stats.
com/popularity.
Nwankpa, J.K., 2015. ERP system usage and benefit: A model of antecedents and outcomes.
Computers in Human Behavior, 45, pp.335-344.
Obolensky, N., 2017. Complex adaptive leadership: Embracing paradox and uncertainty.
Routledge.
Ptak, C.A. and Schragenheim, E., 2016. ERP: tools, techniques, and applications for integrating
the supply chain. Crc Press.
Ross, L.M., 2012. Method for turning printed books into interactive printed books by using
custom software to create and insert barcode-indicia that link readers to remote websites. U.S.
Patent Application 13/134,988.
Scheer, A.W., 2012. Business process engineering: reference models for industrial enterprises.
Springer Science & Business Media.
Selznick, P., 2011. Leadership in administration: A sociological interpretation. Quid Pro Books.
16

Strategic information system
Stallings, W., Brown, L., Bauer, M.D. and Bhattacharjee, A.K., 2012. Computer security:
principles and practice (pp. 978-0). Pearson Education.
Torchiano, M., Tomassetti, F., Ricca, F., Tiso, A. and Reggio, G., 2013. Relevance, benefits, and
problems of software modelling and model driven techniques—A survey in the Italian industry.
Journal of Systems and Software, 86(8), pp.2110-2126.
Von Krogh, G., 2012. How does social software change knowledge management? Toward a
strategic research agenda. The Journal of Strategic Information Systems, 21(2), pp.154-164.
Xero, (2017) About Xero. [Online] Available at: https://www.xero.com/au/about/team/
[Accessed: 16 April 2018]
Xero, (2017) When small business is beautiful business. [Online] Xero. Available at:
https://www.xero.com/au/ [Accessed:16 April 2018]
17