Drawbacks of Accounting Software and Challenges Faced by Users

This assignment discusses the development and adoption of accounting software packages, specifically focusing on Xero as a leader in the Australian market. It highlights the various functional modules of accounting software, including accounts payable, accounts receivable, payroll, and trial balance. The benefits of using accounting software for small to medium-sized businesses (SMBs) are also discussed, with Xero being a cost-effective option that offers real-time financial data, automatic bank feeds, and transparent pricing. However, the assignment also touches on some challenges faced by customers of accounting software, including security issues, complexity, and installation/update difficulties.

Running head: STRATEGIC INFORMATION SYSTEMS FOR BUSINESS
Strategic Information Systems for Business
Name of the Student
Name of the University
Author Note

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STRATEGIC INFORMATION SYSTEMS FOR BUSINESS
Table of Contents
Part 1....................................................................................................................................2
1. Introduction..................................................................................................................2
2. Current Organizational Structure.................................................................................2
3. Operational problems Telstra experienced due to the Organizational Structure.........3
4. Chosen System acquisition method.............................................................................5
5. System flow chart of sales procedures.........................................................................6
6. The control problems in the system.............................................................................7
6.1. Frauds Possible in the System..................................................................................8
7. Conclusion...................................................................................................................9
Part 2....................................................................................................................................9
1. Introduction..................................................................................................................9
2. Development and adoption of accounting software packages.....................................9
3. Current Market Size...................................................................................................10
4. Leaders in the Market and the competitive Advantage.............................................10
5. Challenges encountered by customers of accounting Software................................12
6. Conclusion.................................................................................................................12
References..........................................................................................................................13

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Part 1
1. Introduction
Organizational Structure defines certain institutional rules and policies that outline
different work flow within an organization. It helps in defining the tasks, coordination and
supervision within an organization that are needed to be performed in order to achieve the
organizational aim. Organization structure assigns a hierarchy that defines the roles and
responsibility of the members of the organization (Christensen 2013). There are mainly two
approaches of organizational structure, centralized and decentralized. The report discusses the
organizational structure of Telstra Australia and the problems associated with the current
organizational structure. The report puts light to different operational issues the company is
facing and its possible solution. The report suggests the use of ERP to centralize the process flow
within the organization.
2. Current Organizational Structure
The organizational structure of a particular organization is an important aspect for
understanding and solving the functional and non-functional processes within an organization.
Every organization has a certain structure that defines the work processes within an organization.

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The current organizational structure of Telstra Australia is illustrated below-
Figure 1: Organizational Structure
(Source: Telstra.com.au, 2017)
3. Operational problems Telstra experienced due to the Organizational Structure
Organizational structure is one of the primary aspects of managing and evaluating the
growth of a particular organization. Having a proper organizational structure is essential for
maintaining a smooth operation. Organizational structure is important for every organization as it
provides clarity on the human resources issues persisting in an organization (Domeika 2015). A
formal business structure is important in growth of the business. The operations of Telstra is
illustrated below-

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Figure 2: Representing the operations of Telstra
(Source: Telstra.com.au, 2017)
He operational problems, Telstra is facing due to the complex organizational structure are
listed below-
1) Lack of strategic management: An effective organizational structure is essential for
proper strategic management within an organization (Warren, Reeve and Duchac 2013). Proper
strategic management is necessary for effective decision-making. Moreover, an ineffective
strategic management may hamper the sales procedures within an organization and in managing
the different processes within an organization. Strategic management is necessary in order to
manage the sustainability in managing the target market in relation to the organizational structure
(Telstra.com.au, 2017).

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2) Lack of communication: Poor communication is another operational issue associated
with the organization. Communication is an important tool in ensuring the smooth operational
processes within the organization. The lower level staffs are not given enough priority in the
decision making and moreover, the process of communication flow from lower to upper level is
difficult due to a complex organizational structure (Kiani, Lamego and O'reilly 2014). This leads
to certain operational problems, which includes decisions related to the supply chain
management and sales.
3) Inefficient Supply Chain management: The Company Telstra is based on
telecommunication and therefore, supply chain management is an integral part of their daily
business. Poor supply chain management is a major functional problem associated with the
system. This operational issue must be addressed as soon as possible in order to prevent the
serious loss of the company. An improper organizational structure is responsible for weak
organizational relations leading to the poor supply chain management (Gereffi and Fernandez-
Stark 2016).
4) Inefficient human resource management: Human resource is responsible for managing
the workflow and process flow within an organization and therefore having a well-structured
human resource management is necessary. Poor organizational structure is the root cause of
inefficient human resource management (Hendry 2012).
4. Chosen System acquisition method
The most likely system acquisition method for Telstra would be implementing the
Enterprise Resource Planning. This is an efficient system acquisition method for Telstra.
Enterprise resource planning is a systemic process of managing and integrating all the important

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parts of the business, which includes different phases of planning, inventory, marketing sales and
so on (Wallace and Sheetz 2014). This system provides certain functional benefits for managing
the crucial processes of an organization. Researches prove that many organizations have been
successful in implementing the ERP. Use of ERP would definitely help in streamlining the
process flow within the organization and would help in lessen the operational issues arising due
to an ineffective organizational structure. Moreover, adopting ERP as a system acquisition
method may help in reducing the workload of Telstra to a considerable level.
The software helps in integrating all the essential business operations within the
organization. The different operations within the organization, which includes manufacturing,
sales and marketing are integrated using the software (Leon 2014). However, the ERP should be
implemented carefully in order to eliminate the cost overruns within the company.
5. System flow chart of sales procedures
The system flow chart of the sales procedure of Telstra Australia is illustrated below-

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Figure 3: Representing the sales
(Source: Telstra.com.au, 2017)
6. The control problems in the system
The control problems associated with the operations, sales and security of Telstra are
elaborated below-
1) The poor organizational structure leads to the ineffective control processes within the
system due to which, the company is exposed to a number of frauds (March 2013).
2) Lack of proper compliance and clear objective of the proper compliance activities is
another major control problem associated with the organization (Cummings and Worley 2014).

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3) User access rights for information systems: the employees of the organization are
granted more access to the information systems in comparison to the actual work they need to
perform within the organization. This is again a result of a poor organization structure, as the
person grating the rights to the access of Information system to the employees does not
understand the roles and responsibilities of the member fully. The access to the information
system should be limited only to selected employees in order to eliminate the frauds associated
with the organization.
4) Documentation: Adequate documentation is necessary for developing an effective
internal control framework within an organization. Absence of documentation makes it difficult
for the organization to demonstrate the existence of completed transactions, procedures
performed and sales.
5) Policies and procedures: effective policies and procedures help in aligning the business
objectives and further helps in establishing the operating procedures in a proper way.
6.1. Frauds Possible in the System
The frauds possible in the system due to the control problem discussed above are
elaborated below-
1)False sales and false purchase: This is one of the major control problems associated
with the system. Organizational members or the insiders are responsible for this particular fraud.
2) Security issues: many security issues and system frauds arise due to the absence of the
control rights in the information systems of the organization.

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3) Lack of proper documentation is the source of another fraud in the organization.
Documenting the sales is important in order to prevent the fraud in the organization.
7. Conclusion
Therefore, from the above discussion it can be concluded that, having a proper
organizational structure is essential for an organization in order to eliminate the risks of certain
operational and control problem in an organization. The report discusses the organizational
structure of Telstra Australia and certain operational problem the organization faces due to its
inefficient organizational structure. The report further puts light to the sales procedures of Telstra
and the control issues identified in the organization. ERP as the system acquisition method is
recommended for Telstra and its benefits are discussed in the report.
Part 2
1. Introduction
This part of the assignment elaborates the use of accounting software in different
processes of business and organization. Accounting software can be used in managing and
automating different accounting transactions, which includes managing all the accounts related
tasks including the account receivable, payable and trial balance (Murthy and Abeysekera 2015).
The report elaborates the use of different account software and the software that is leading in the
Australian target market. The report focuses on the accounting software Xero, which provides a
wide advantage to the business. The report further discusses the drawbacks of accounting
software and challenges faced by the users.
2. Development and adoption of accounting software packages

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The different functional modules of accounting software are made keeping in mind the
different functional modules of a company and business, which includes accounts payable,
accounts receivable, payroll and trial balance. Accounting software packages are generally built
in cloud based architecture incorporating the business intelligence applications and report
generation modules. Adoption of different accounting software for automating and managing the
different financial processes of business has been beneficial for the organizations. Out of the
different accounting software present in Australian market, Xero is the leader in the market as it
provides a wide range of benefits and manages the accounting related issues quite effectively
(Von Der Emde et al. 2014).
3. Current Market Size
The data from the competitive market shows that MYOB and Xero accounting software
packages hold a larger market place in the target market. SMB ranked Xero to be number one
accounting software in Australia. Therefore, it can be said that Xero offers one of the best
platform in managing the different accounting functionalities of business. The different
operational benefits include accounting and payroll at one transparent price, real time financial
data, which is accessible everywhere and automatic bank feeds. Xero therefore offers effective
management of the different accounting operations within the organization (Robey, Anderson
and Raymond 2013). The pricing of Xero starts at only $25 per month, which is a very cost
effective solution. Therefore, it can be deduced that Xero hold a larger market size in Australia.
4. Leaders in the Market and the competitive Advantage
The two accounting software that leads the market includes Xero and MYOB. This is
because these software offers a wide range of advantages and is very simple to use. Xero and

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MYOB provide an effective support in managing the financial processes within the organization.
The different manual operations involved with the work processes are effectively automated
using these software. The regular updates of the financial database of the organization help in
reducing the redundancy in data and helps in improving the operational system architecture of
the organization.
The competitive advantages of the software discussed above are elaborated below-
1) Cloud based setup: The cloud set up offered by these accounting software helps in
customization of the software according to the need of the client. The software with a cloud
based setup and easy update provides a competitive advantage in the target market.
2) Speedy Functional Output: fast performing software is necessary in this competitive
and fast-paced world and therefore, speedy performance is a must need. Xero, the leader of the
Australian market provides all the functional operation and the performance level of the software
is high as well.
3) Interface: having a complex interface is a drawback as software with a complex
interface becomes very difficult to manage. Therefore, the software that provides an effective
solution along with a simple and easy to use interface is the prominent choice of the business.
The user interface of Xero is quite simple and the software is easily manageable and therefore it
leads the target market.
Therefore, Xero provides an effective solution for the small and medium sized business.
Since it is cost effective, it becomes the first choice for any business organization. The process
integration in Xero is quite effective and therefore it offers varied functional benefits and thus
leads the market (Xero Accounting Software 2017).

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5. Challenges encountered by customers of accounting Software
With the wide range of benefits, there are certain challenges that are faced by the users of
accounting software, which are listed below-
1) Security issues: Since the accounting software is based on cloud setup, different
security issues creep into the system, which must be eliminated in order to eliminate the risk of
data breach (Mudge 2013).
2) Complexity: With the addition of ne features, the software becomes complex to
manage.
3) Installation/ Update: The process of installation is time consuming and the updates are
lengthy, which may sometime delay the work as well.
6. Conclusion
Therefore from the above discussion, it can be concluded that accounting software offers
wide range of advantage in managing different business processes. Xero is the leader of the
market due to the advantages it offers. However, there are certain issues faced by the users of
accounting software, which must be fixed to retain the market position.

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References
Christensen, C., 2013. The innovator's dilemma: when new technologies cause great firms to fail.
Harvard Business Review Press.
Cummings, T.G. and Worley, C.G., 2014. Organization development and change. Cengage
learning.
Domeika, P., 2015. Creation of the Information system of enterprise fixed asset
accounting. Engineering Economics, 60(5).
Gereffi, G. and Fernandez-Stark, K., 2016. Global value chain analysis: a primer.
Hendry, C., 2012. Human resource management. Routledge.
Kiani, M.J.E., Lamego, M. and O'reilly, M., Masimo Corporation, 2014. Patient monitor capable
of accounting for environmental conditions. U.S. Patent 8,740,792.
Leon, A., 2014. Enterprise resource planning. McGraw-Hill Education.
March, J.G. ed., 2013. Handbook of Organizations (RLE: Organizations) (Vol. 20). Routledge.
Mudge, J.C., 2013. Cloud computing-its development and security. Australian Journal of
Telecommunications and the Digital Economy, 1(1).
Murthy, V. and Abeysekera, I., 2015. Corporate social reporting practices of top Indian software
firms.

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Robey, D., Anderson, C. and Raymond, B., 2013. Information technology, materiality, and
organizational change: A professional odyssey. Journal of the Association for Information
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2017].
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payment software application as enterprise services. U.S. Patent 8,671,032.
Wallace, L.G. and Sheetz, S.D., 2014. The adoption of software measures: A technology
acceptance model (TAM) perspective. Information & Management, 51(2), pp.249-259.
Warren, C.S., Reeve, J.M. and Duchac, J., 2013. Financial & managerial accounting. Cengage
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Xero Accounting Software. (2017). Xero Limited 2016 Annual Report. [online] Available at:
https://www.xero.com/media/9883890/xro_2016_annual_report.pdf [Accessed 13 September
2017]