Strategic Information Systems: A Case Study of Codan Limited

This report examines the organizational structure of Codan Limited and its implications for strategic information systems. It analyzes potential operational problems, explores system acquisition methods, and delves into the sales procedures, identifying control issues and potential fraud risks. The report further investigates the development and adoption of accounting software packages, analyzing the market size, key players, and competitive advantages. It concludes by identifying current gaps and challenges faced by users of accounting software and provides relevant suggestions and recommendations.

HI5019 STRATEGIC INFORMATION
SYSTEMS T1 2018
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Table of Contents
Introduction....................................................................................................................................3
PART 1...........................................................................................................................................4
1...................................................................................................................................................4
2...................................................................................................................................................5
3...................................................................................................................................................6
4...................................................................................................................................................7
5...................................................................................................................................................8
PART 2...........................................................................................................................................9
1...................................................................................................................................................9
2.................................................................................................................................................10
3.................................................................................................................................................11
4.................................................................................................................................................12
Conclusion....................................................................................................................................14
References.....................................................................................................................................15
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Introduction
The report consists of the structure of the organization that is Codan limited for the purpose of
the strategic information system. The problems are also being stated with the particular
organisational structure of the company. The various acquisition methods for the system are also
been included in the report along with the determination of types of frauds that can happen over
the business. The procedures for the sale project are also being provided and effect of the same
over the organization. The factors that affect the development and adoption of the accounting
software packages are included in the report along with the market size of the industry. The
leaders that are being there with respect to the accounting software are also been included and
the reason for getting a competitive edge over others. The challenges have also been identified
for the reporting purpose.
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PART 1
1. The current organizational structure
The organization structure is important for the implementation of the strategic information
system. Organisational structure can be defined as the way defining of activities that are being
carried out between the various levels of the organisation along with the supervision and
coordination. The organization structure can be maintained depending on the goals and
objectives as well as the effect of the decision on the company profitability and growth. The
organizational structure of the company flows from top to bottom (Annual Report, 2018). It is
the directors and committees that have established a control over the internal audit and
formulation of the plans and policies. The Board Audit, a committee on compliance and risk are
useful for the determination of the performance of the auditors. The decision making is based on
the board of directors of the company along with the establishment of the selecting of procedure
and establishment of the same. The directors are a key responsibility for the establishment and
surveillance of risk management that are being established in the organization (Annual Report,
2018). The board is the main authority for the purpose of the strategic direction along with
approving and monitoring of the budget. The statement can be made that the top management
level is being given priority with respect to the strategic decision making as well as setting up of
the risk controls.
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2. What operational problems (e.g., inefficiency, errors) do you think the organization
could experience because of this structure?
There are various operational problems that can be faced by the organization structure that is
being adopted by the company which are as follows:-
Decision making – The effect of this organizational structure is mostly on the decision making of
the company. The decisions are being decided by the top management which some time leads to
delays in it as it has to be circulated to the top management of the company.
Inefficiency and productivity – The other operational problem includes the inefficiency and
productivity due to wastage of time in case of any dispute related to the various activities. The
top management has to decide before the passing the judgment leading to delays. There can be a
loss of production as well as the resources.
Achievement of results – Every organization wants to achieve the goals and objective that are
being formulated by them but making of them on the basis of the analysis and trend may not
correlate with the actual conditions leading to non-achievement of the goals and objectives.
Demotivation among the employees – There can be dissatisfaction among the employees due to
non-achievement of the goals and also decision making at the top management may not be
efficient to solve the dispute if any in quick time. The employees can be dissatisfied due to
ignorance of them with respect to the benefits.
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3. What is the most likely system acquisition method— commercial software, custom
software, or ERP?
It depends upon the nature and size of the business with respect to the system acquisition method
whether being Commercial software, custom software or ERP. It is very difficult to decide the
best option that can be chosen over the others by the organisation. The commercial software is
used for the purpose of the commercial use. The custom software is being prepared by the
organisation itself with their personal judgements and views best suitable for the organisation
(Canes, 2015). The Custom software is easy to adapt and also being flexible it seems the best
option that the company can have but it is not always appropriate that the software that are being
used are most effective and efficient. It can be possible that the ERP which are pre maintained
software. The ERP can be best suited for the company due to the flexibility that is being
provided by the ERP System. The market is complex therefore it is important that the system is
not only as per the requirement but also as per the demand of the market at that time (Canes,
2015). The ERP can be useful for the company supporting the analysis process and facilitating in
reduction of the overall cost that was incurred for the various process.
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4. Describes and prepare a system flowchart of the sales procedures for the chosen
organization (company)
(Figure – Sales process flowchart)
(Source – Edraw, 2018)
The sales procedure consists of various steps. The flowchart of the sales procedure starts with the
registration of the user and generation of order. Once the order is being placed there is a request
for the payment by the company and if it is is not received the customer manager is being
informed regarding the same (EDraw, 2018). If the payment is not arranged there are options of
either cancelling of order and termination of the services or to ask him to arrange payment in
some day. Once the payment is received there is the distribution of the goods to the customer.
The procedure is established by the company for the smooth running of the business and tracking
of the orders received.
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5. Identify any control problems in the system and what sorts of fraud are possible in this
system?
The control problem related to the system is that there is no continuous review of the system that
is being established. The other control problem is there is no compiling of the data and recording
of the same which can be useful for the purpose of future aspect. The information system used by
the company is also used for the monitoring and approving of the financial and other reporting.
The frauds that are possible in the system are the conceiving of the payment received. There is
no separate system for the purpose of the discounts and other rebates that are given to the
customers whom can be misled by the person who is controlling it. There is need to develop the
sales procedure for the purpose of the credit sales which can be reviewed on a timely basis by
reconciling it with the parties. The fraud can be such as theft or misstatement of the accounts of
the clients. There is no check system in the process before the final stage of the payment which
can lead to wrong reporting and accounting of the data by the person. The internal control system
must also be implied for the further strengthening of the data recorded.
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PART 2
1. Development and adoption of the accounting software packages
The accounting software has evolved very much over the time along with being complex in order
to fulfill the requirements. There is various software available in the market such as the Quick
books, Sage Pastel Accounting, etc. which can be adopted for the smooth functioning of the
accounting. It depends on nature and complexity or features that the company wants before
selecting the software packages (Machera, & Machera, 2017). The software packages not only
save the time and money but also improve the efficiency as well as productivity. There can be
proper reconciliation with the reporting of the data for the purpose of accounting. It has not only
improved the working but helps in decision-making process by features such as exporting of the
file in software such as the Xcel for the purpose of presentation. The development is also
possible in-house depending upon the need and requirement of the organization but it sometimes
becomes rigid and may also leave some important aspect which must be considered before the
implementation of the system (Machera, & Machera, 2017). There must be a process of check
and the transactions that are being recorded. The regular updates are also important in the
software developed depending upon the change in the conditions and factors.
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2. Current Market Size
The market size is important for the strategic information system to be developed or adopted. Big
market size leads to increase in the complexities and volatility of the factors that are surrounding
the system that can affect the organizational goals and objective. It is important to have a quick
decision making through the available data and analysis in order to take an advantage over the
competitors. The strategic information system must be adopted considering the market size in
order to understand the complexities that can arrive along with the functions that need to be
carried out through it for better management and control and coordination. The market size of the
industry affects the decision making which must be taken after the analysis of the macro and
micro factors that can be analyzed with the help of strategic information system implemented by
the company. The strategic information system can be helpful in determining the trend based on
the historical data of the market size of the industry is increasing or decreasing. The trend
analysis can be used for the formulation of the plans and policies of the company so that
profitability can be achieved.
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3. Identify the leaders in the market and what gives them the competitive advantage
Accounting software is very much essential for the business purpose irrespective of the size and
nature of the business. The growths of this software are due to the decreased cost, proper
accounting, and faster work. Some of the best software for accounting purpose are as follows:-
Freshbooks – The FreshBooks is in the list of accounting software due to the easiness in using
them. It is used by the organization for the purpose of invoicing of the transactions as well as the
expenses (Finance online, 2018). The ease of use along with the effective management of the
expenses with the ease of use are the critical factors for the purpose of selecting this software.
Xero – The Xero is helpful as it facilitates the working by making it available at the real-time
anytime and on any device. There is also the facility for connecting to the bank and other
financial institutions (Finance online, 2018). The increasing facility with regards to the banking
and other application has helped to attain a spot and competitive edge over other.
Zoho Books – The Zoho books is also very helpful to the organization implementing it in the
system. The Zoho also facilitate the mobile optimization along with the integration of API with
the business for the better and effective management. The unique feature of integration and
mobile system is useful for the organization thus making them opt for this option.
Sage Intact – The Sage Intacct is based on the cloud computing system for the recording and
analyzing of the same. There is need to have knowledge about the accounting for using the
platform (Finance online, 2018). It also includes modules that can be used along with this
software for the purpose of revenue recognition etc. The saga intact is cloud computing which is
important for the company for saving the data along with the facility of attaching the modules.
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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.
Lack of Security – one of the problems that are being faced by the companies is lack of security.
It can be seen that the data which are being stored are sometimes accessible to the foreign clients
even after the implementation of the software such as the firewall but still there are chances of a
leak (Maduqne, 2013).
Weak reporting service – The reporting have become as important as a recording of the
transaction. The only recording of the data is not important as there are various decisions that
need to be taken on the basis of the reporting of data which is missing in some of the accounting
software (Maduqne, 2013).
Lack of efficiency – The increase in demand for the features for the computation has resulted in
the lack of efficiency due to non-responsiveness of the software sometimes. There are complex
steps which are not user-friendly thus increasing the time and decreasing the efficiency of the
persons working in the organization.
Outdating and affects the accuracy – The market have been volatile and with the time it has
become complex too. There is a regular update in the technologies and systems that are being
used as the accounting software. The outdating of the software has also been continuous
decreasing the accuracy of them. It requires regular updates which also increase the cost of the
company (Frazer, ND).
Difficult to customize – The requirement is different as per the needs and objectives of the
organization. It is important that the software is flexible and easy to customize as per the needs
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but in some software, there is no flexibility which can affect the motive of the implementation of
the strategic information system in the organization (Frazer, ND).
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Conclusion
It can be concluded with the help of report that the strategic information systems are important
for the organization. The organizational structure of the company is top to bottom that sometimes
leads to delay in decision making. The ERP is most likely due to the available setup of the
software made considering the factor of the organization. The sales procedure of the company
included the registration of the client and delivery of the service depending upon the payment
made. There is a chance of inefficiency and chances of theft of information system. It can be
concluded that the adoption of the software is based on the objective and need of the
organization as well as the other factors such as the market size. There are various leaders in the
software industry some of the key factors included easiness, different module, cloud computing,
integration with the business etc. providing them a competitive edge over each other. The
challenges include the inefficiency and chance of a breach of security can affect the company,
therefore, it is important to have proper internal control and check system.
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References
 Annual Report, (2018). Annual Report 2017. Codan. [Online]. Also available at
http://codan.com.au/investor-centre/annual-reports/. [Accessed on 18-04-2018]
 Canes, M., (2015). Custom Software vs. Out-of-the-Box ERP Software. Blue Link.
[Online]. Also available at https://www.bluelinkerp.com/blog/2013/03/08/custom-
software-vs-out-of-the-box-erp-software/. [Accessed on 17-4-2018]
 EDraw, (2018). Whole Process of Order and Definition of Sales Order Process
Flowchart. EDraw. [Online]. Also available at https://www.edrawsoft.com/create-order-
process-flowchart.php. [Accessed on 17-4-2018]
 Finance online, (2018). 15 Best Accounting Software Systems for Your Business.
Finance online. [Online]. Also available at https://financesonline.com/15-best-
accounting-software-systems-business/. [Accessed on 17-4-2018]
 Frazer, J. D, (ND). Adoption of new accounting software packages: issues related to the
ease of conversion.
 Machera, R. P., & Machera, P. C. (2017). Computerised Accounting Software; A
Curriculum That Enhances an Accounting Programme. Universal Journal of Educational
Research, 5(3), 372-385.
 Maduqne, (2013). Problems faced by companies that are using accounting software for
their businesses. QnE Accounting Software. [Online]. Also available at
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https://qneaccountingsoftware.wordpress.com/2013/09/13/problems-faced-by-companies-
that-are-using-accounting-software-for-their-businesses/. [Accessed on 17-4-2018]
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