Strategic Information System: Telstra's Accounting Software Analysis

This report provides a review of strategic information systems and the use of accounting software packages in Australia, with a focus on Telstra Corporation. It evaluates several accounting software options, considering both benefits and costs. The report discusses Telstra's organizational structure, operational problems, and accounting system issues, including fraud control. It also explores the adoption and development of accounting software packages in the Australian market, identifying key players like MYOB and XERO, and their competitive advantages. Challenges and gaps encountered by users are highlighted, and the potential benefits of implementing an ERP system to address Telstra's accounting and customer service issues are considered. The report includes a flowchart of Telstra's sales procedures and identifies control problems within the system, concluding with recommendations for improving accounting practices and technological infrastructure.

Running head: STRATEGIC INFORMATION SYSTEM
Strategic Information System
Name of the Student:
Name of the University:
Author Note:

2STRATEGIC INFORMATION SYSTEM
Table of Contents
Introduction......................................................................................................................................2
Part 1:...............................................................................................................................................3
Current structure of organization:....................................................................................................3
Operational problems experienced by organization due to structure:.............................................3
Most likely acquisition method:......................................................................................................3
Preparation of flow chart of sales procedures:................................................................................3
Identification of control problems and fraud in the system:............................................................3
Part 2:...............................................................................................................................................3
Adoption and development of accounting software packages:.......................................................3
Current market size:.........................................................................................................................3
Identification of leaders and their competitive advantage:..............................................................3
Identification of challenges and current gaps encountered by accounting software packages
users:................................................................................................................................................3
Conclusion and Recommendations..................................................................................................3
Reference List..................................................................................................................................4

3STRATEGIC INFORMATION SYSTEM
Introduction:
The report is prepared for reviewing literature on organization using accounting software
packages in Australia. In this particular study, evaluation of several accounting software has
been done in the context of benefits provided and costs incurred. Many organizations in
Australia use accounting software ranging from small scale enterprises to organizations
operating on large scale (Pearlson et al. 2016). Evaluation of accounting software is done by
selection organization such as Telstra Corporation and explanation of organizational structure
and problems faced due to employing of some system software. Telstra is a media and
telecommunication company that is based in Australia. Company is involves in operation and
building of market voice, telecommunications, internet access, mobile and other entertainment
products and services (Telstra.com.au 2018). The current paper discusses about the operational
problems faced by Telstra due to their organizational structure and identification of problems and
fraud in their accounting system.

4STRATEGIC INFORMATION SYSTEM
Part 1:
Current structure of organization:
Organizational structure of Telstra:
(Source: telstra.com.au 2018)
The new product division and swathe of staff’s appointment has been restructured by
Telstra and a new specialist group has been created that divided mobile and fixed business. IT
functions; technology and network have been consolidated into single operations (Alamin et al.
2015). Four functional groups will be maintained after restructuring will come into effect and
this comprises of a consolidated operations, product based business, customer facing and
corporate support.

5STRATEGIC INFORMATION SYSTEM
With the introduction of mobile technologies, wireless broadband, cable technologies,
digital television services and satellite technologies, the telecom industry is undergoing rapid
technological change. A new business unit is introduced by Telstra that is Technology innovation
and strategy that reflects greater focus on building world class Technology Company and
innovating. The new business unit is built with strong focus on fulfilling the objectives of
delivering gains in productivity and commercializing and stimulating innovation so that a stream
of appealing new product and services is provided by the organization (Cassidy 2016). This will
help in contributing to the revenue growth and optimizing research of Telstra with its partnering
models and technology developers.
Operational problems experienced by organization due to structure:
Telstra has been facing issue of network mishaps and this includes dealing with complex
and large communication network. Such network mishaps are creating hindrance in the
operations of bank, airline and large departmental stores. The scores of customer services are
negatively impacted by the poor performance of network of Telstra. Some other problems faced
by Telstra in their operations are products offerings and service quality that is below the
international standards and expectations of customers. The core of problem lies in addressing the
main issue and in this regard facilities should be based on competition (Boulianne 2014).
Most likely acquisition method:
Telstra in the current scenario make use of XERO online accounting service that is
designed for gaining flexible access to reports, invoices, sales taxes and other financial services.
Telstra has a web based portal that is Telstra T suite that enables them to manage and purchase

6STRATEGIC INFORMATION SYSTEM
several software applications that is available from time to time. They have the option of
choosing from three available XERO services that is small, medium and large. XERO small
provides user with the facility of providing twenty reconciled bank statements lines, five
accounts payable and five accounts receivables per month for approved credit notes and invoices.
Users using XERO medium are provided with the facility of unlimited bank reconciliation and
unlimited invoicing (Tsang 2014).
XERO on other hand are provided with the several advantages such as allowing multi
currency transactions such as reconciliation of foreign currency bank accounts and managing
invoices of foreign currency along with the unlimited bank reconciliation and unlimited
invoicing. Telstra is able to manage their services online using their T suite application online.
Using such cloud computing software helps in optimizing cloud journey and it has enabled
organization in deploying, creating and optimizing sustainable cloud solutions by the accredited
cloud services (Galliers and Leidner 2014). The accounting professionals help in generating
desired output by making use of primary entry in the accounting books.
Although, XERO is a well set up accounting software package in Australia, but the
question which arises is what it lacks and what gain it provides. There are several accounting
requirement and features that are used by business ranging from small scale to large scale such as
book keeping, live reporting, customer relationship management, tax compliance, job
management and report filing. Telstra being an organization operating on large scale faces with
several disruptions requires accounting software that provides the facility of seamlessly
managing all the accounting tasks as well as easing customers with different online services
(Dwived et al. 2015). Moreover, in the current situation, the company is facing issue with their

7STRATEGIC INFORMATION SYSTEM
billing system and the link is always unavailable for making payments. In the physical network,
there are various interdependencies that make it difficult for allocation of services potential to
individual projects and assets. There are considerable differences in determination of services
potential in assets as there is a no direct connection between asset capacity and service
requirement. Internet provider and budget mobile of Telstra have debited bank accounts of
customer multiple times and have overcharged customers. There was disruption in online
chatting system and many other technological adversities that made the customer service worst
(Lim and Perrin 2014).
It can be seen that in light of Telstra facing such accounting issues relating to
technological system, implementation of ERP system will help organization in solving several
accounting issues and grievances of customers (Arvidsson et al. 2014). Furthermore, it will also
assist management of organization in preparing effective plan in terms of hiring of right
professionals, budget preparation and solving accounting information system issues.
Preparation of flow chart of sales procedures:

8
Sales Department
Customer’s orders are
received by sales
department clerk from
customers
Three parts sales order are
prepared by the clerk
Credit department receives three
copies for approval, where customer
credit records are reviewed by clerk
Copy of sales order is returned to sales
department by credit department
clerk
Reviewing and filing of sales
order
Warehouse department
Two copies of sales order are
received by warehouse
department
Sending copies of sales
order to Shipping
department
Filling of third copy of sales
order by warehouse department
Shipping Department
Preparation of shipping notes
upon arrival of goods
Sending copy of one sales order
to customer
Shipping notes is sent to billing
department
Customer receivable
account is updated by
billing clerk upon
receiving shipping notice
and filing shipping notice
to this department
STRATEGIC INFORMATION SYSTEM
Flow chart of sales procedure of Telstra:
(Source: created by author)

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The flow chart depicts the sales procedure of Telstra and this shows that sales procedure
is completed when the customer accounts receivable is updated by billing clerk upon receipt of
shopping notice and then the notice is filed into the department.
Identification of control problems and fraud in the system:
The issue in the accounting system procedure is related to authorization that is the person
who is authorized to make entry in respective departments. It is certainly possible that the person
finalizing the entire process and maintaining books of account might get involve in conducting
some fraud act that would lead to manipulation of data. In the situation of absence of monitoring
the expenses and costs related to sales procedures, there can be understatement or overstatement
of such figures by accounting departments and the person responsible for handling such
department might not check the voucher validity (Mageto 2017). Therefore, after viewing the
current accounting system used by Telstra, it can be inferred that the accounting package used by
company that is XERO only deals with passing primary entries and generation of accounting
entries using such input (Spraakman et al. 2015). However, the current accounting package does
not provide with the option of generation of MIS report and other working at project site.
Part 2:
Adoption and development of accounting software packages:
In the present situation, accounting information system is being used by more than 70%
of businesses enterprises in Australia and they have software that is on premise running on their
computers. Some other businesses make use of cloud computing software such as Reckon,

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MYOB and XERO. Employment of accounting software is somewhat difficult decision for
business as they need to evaluate the cost incurred along with the efficiency provided. The
adoption of accounting software by enterprises in Australia is occurring at faster pace and the
adoption of such software is mainly attributable to reasons such as reducing tedious paperwork
that is characterized by commission and errors of omission, costly and time wasting
(Yigitbasioglu 2015). Moreover, efficacy and effectiveness of accounting system are some other
factors leading to their ever increasing adoption.
Current market size:
The accounting software market of Australia is facing increasing competition with small
and medium enterprises being the largest customers of accounting software. MYOB, XERO and
Intuit are some of the biggest player in the market of accounting software and they have taken
the accounting software to cloud computation. XERO enjoys a market share of 65% with Intuit
taking 55% of market share. MYOB on other hand is the largest provider of business
management and accounting software with less than 60% of market share at present (Watty et al.
2016). A dominant market share is enjoyed by MYOB in desktop accounting solutions and the
small enterprise desktop license sales is no longer pursued by them.
Identification of leaders and their competitive advantage:
Accounting software such as MYOB and XERO are facing increasing competition from
new entrants. Other software such as Intuit and Sage are actively involved in promotion of online
solutions in the market of Australia. It is required by MYOB to grow its share of small enterprise

11STRATEGIC INFORMATION SYSTEM
cloud computing in light of strong brand recognition and market position of XERO and other
threats from new pocketed entrants (Whittington 2014).
In response to increasing preference of customers towards online solutions, the
development of cloud based product is accelerated by MYOB. This particular software is taking
the effort of competing with other providers by providing business with features of payroll needs
and cloud based software for accounting along with attempting to convert desktop users to online
suite of products (Maharaj and Brown 2015).
Saasu is another cloud accounting software and it is regarded as the only profitable online
software company operating in Australia. It has an estimated base of customer of about 20000
businesses. Despite such features, Saasu was unsuccessful in selling and it failed to attract same
number of bookkeepers and accountants as XERO software. The priorities of Saasu are different
from its rival and high capable inventory module is retailer friendly feature of this software
(Arvidsson et al. 2014). Compared to this, until 2014, XERO was not able to realize its inventory
module.
XERO on other hand is the most popular accounting software operating in Australia
claiming 540000 businesses. A number of innovation has been brought by this software and its
reflect twin trends of compliance automation and advisory. Price of XERO is one of the biggest
complain as it requires organization to incur huge costs for the implementation (Spraakman et al.
2015). Intuit on other hand is seeking competition from XERO and MYOB as it is considering
launching of Qucikbooks financing small business loan service to small enterprise in Australia
(Hossack 2015). For Quickbooks, Australia is the fastest growing region. Therefore, there is

12STRATEGIC INFORMATION SYSTEM
significant competition among the accounting software packages in Australia as each comes with
varied features that help them in gaining competitive edge over their competitors.
Hence, it can be inferred from the analysis that market of software accounting package in
Australia is dominated by Intuit, XERO, MYOB and Saasu. Due to several features provided by
all such software, there exists an inflexible competition in accounting software market.
Identification of challenges and current gaps encountered by accounting software packages
users:
Users of accounting software encounter some accounting problems that are listed below:
Lack of security- Users of software has the main concern of their data security as foreign
parties are able to access it. One of the major issues associated with the cloud based accounting
software is that it is based on internet and makes use of internet for performing its several
functions. Owner of such software can access their bank accounts from any place as such
software is linked to bank account of businesses. All this is responsible for increasing the
cybercrime acts such as phishing and malware (Gitman et al. 2015). Using such software can
pose risk to business information confidentiality.
Costing issue- It is not easy for business to implement such accounting software as it is
required by organization to have minimum standard system, hard drive memory and random
access memory. Additional costs are consumed by the implementation of software in terms of
creation of technical support and back up data (Yau, 2017). In addition to this, subscription costs
of using software are based on number of users that is allowed by software and ad on features.