Strategic Information System for Business Decision: Woolworths Report

This report examines the significance of accounting software in maintaining a competitive edge, focusing on Woolworths, a major Australian retailer, as a case study. It delves into the company's organizational structure, operational challenges stemming from software limitations, and the adoption of SAP, MYOB, and POS systems. The report details Woolworths' sales flowchart and acquisition methods, highlighting the benefits and control issues associated with MYOB. Furthermore, it explores the evolution and market dynamics of accounting software, including cloud-based solutions, market leaders, and challenges faced by users, such as security concerns, reporting limitations, and compatibility issues. The analysis encompasses market size, competitive advantages of key players like Xero and MYOB, and provides recommendations for addressing current gaps in accounting software packages, emphasizing the importance of user-friendliness, security, and reporting efficiency. The report utilizes resources from various academic journals and industry publications to support its analysis and recommendations.

Strategic Information System for Business Decision
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Introduction
The present reports aims to demonstrate the importance of using accounting software
packages by business organizations nowadays for staying competitive in the marketplace. In this
context, the report presents an evaluation of an Australian company that is using accounting
software packages. The company selected for the purpose is Woolworths, one of the largest retail
companies of Australia. The report demonstrates the organizational structure of the company,
operational problems in its present organizational structure, type of accounting software used by
the company and the control problems faced by the system. Moreover, it also develops and
describes the sales flowchart of the company. In addition to this, the report also describes the
development and adoption of accounting software packages, the current market size, the leaders
in the market and the current challenges faced by the users of the accounting software packages.
At last, the report provides the recommendations for improving the current gaps in the current
accounting software packages used in Australia.
Part 1
Current Organizational Structure
Coyne (2016) stated that the Woolworths Limited, a leading supermarket giant having
approximately 3,500 stores across Australia and New Zealand. The company operates its
business areas such as supermarkets, liquor retailing, gaming machines, hospitality services and
department stores. Thus, the company has a large complex structure to manage and therefore has
adopted the use of computing devices for streamlining its business processes. The company has
primarily adopted the use of software tools such as Access and Excel. However, the company
faced lot of issues such as data duplication with the use of these software tools. This resulted in
large wastage of time of the employees in carrying out their daily operational activities. The
company, therefore, opted for the integration of other software packages for synchronizing its
business operations and managing its complex organizational structure efficiently. The company
currently adopts the use of SAP for managing its complex business operations. The adoption of
SAP has helped the company in gaining control over its internal business processes and thus
managing them properly (Coyne, 2016).
Operational Problem
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According to Chanthadavong (2016) the organizational structure of Woolworths was
largely complex primarily as it adopts the software tools such as excel and access that accounts
for various operational errors due to data duplication. These software tools were also unable to
compile all the master data of the company and thus it has no shared database. This eventually
results in spending large amount of time in integrating the vast amount of organizational data
collected from its various business divisions. This impacts the decision-making process of the
company leading to decline its productivity and profitability. The company has then recognized
the importance of developing and implementing an efficient accounting software packages for
streamlining its operational processes. The implementation of the SAP system has enabled the
company to simplify the nature of its operational process and performing all its activities quickly
and easily. The company recently integrates the use of MYOB and POS (Point of Sale)
accounting software package for managing its internal business processes. These accounting
software packages has proved to be largely beneficial for the company for easy management of
data and therefore aiding in quick decision-making. The software was able to integrate the
accounting data from the various operational units of the company and making the organizational
structure efficiently (Chanthadavong, 2016).
System Acquisition Method
Hall (2015) stated that the system acquisition method refers to the type of system
procedure adopted for the development and implementation of a software system by an
organization. The Woolworths Limited as such as adopted the use of an ERP (Enterprise
Resource Planning) software system for implementation of is accounting software package. The
ERP software system is specifically developed to integrate the information of various detriments
units of an organization have large and compiles business structure. The Woolworths Limited is
a supermarket giant of Australia and therefore has various departments units. As such it needs an
accounting software system that is able to integrate the accounting information from its various
departments such as accounting, HR, logistics and manufacturing into a single database. The
database can be shared easily across various departments of the company through the use of ERP
software system. The MYOB accounting software used by the company is an ERP system that
possesses the ability to integrate all the accounting information into one linked platform thus
facilitating in easy handling of the accounts (Hall, 2015).
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Sales Flowchart
Various Symbols used in Process flowchart
Sales Process Flowchart implemented in the Woolworth through using the MYOB
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Description of the sales procedure used by the Woolworth in their organization
The sales procedure described here is the online and most intensive system used by the
Woolworth for making sales through B2C channel. This system is follows series of steps that are
mentioned below:
• A: Sales Department: This department requires looking after the customer order and
forwarding them to the credit department. This step is linked with the shopping cart of the
customer and followed to the online processing of payment through the secure server. The sales
department after verifying the payment from the credit department processes the customer order
and sends them to the respective warehouse where goods are stored. Sales department also
intimate the customer that their order has been processed and will be shipped on the respective
date (E-Commerce: Purchasing and Selling Online, 2017).
• B: Credit Department: The main objective of the credit department to verify the payment
details of the order made by the customer and sends them to the sales department after
verification. Credit department uses the secure server to receive the payments from the customer
so that their bank details will not been hacked by others.
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• C: Warehouse Department: This Department receives order confirmation of the particular
product from the sales department. All the order details have been properly mentioned in the
sales order to make the work easy for the warehouse department. After hatching the demanded
product by the customer, it passes to the shipping department to make it deliver to the customer.
• D: Shipping Department: This department receives the goods from the warehouse
department and ships them to the customer address as mentioned in the sales order. It also
intimates the shipping details to the customer.
Control Problems
As per the views of Liguo (2014) the MYOB accounting software system besides
providing advantage of efficient management of cash flow and payroll of an organization is also
associated with some drawbacks. The major control problem associated with the use of MYOB
software is that it is not such user-friendly. Thus, the employees of the company need to be well-
trained for its use otherwise it may result in poor management decisions and occurrence of
unintentional errors in recording and processing of data. The lack of knowledge on employee’s
part to run the software can also result in destruction of valuable data of the company. In addition
to this, the use of MYOB accounting software is also associated with the drawback of occurrence
of fraudulent activities within the company. The data security is one such issue in this context as
the use of accounting software packages can result in breach of privacy of confidential data by
sharing it online which becomes vulnerable to be attacked by hackers. The sharing of
confidential data on online platform by accounting software can result in the occurrence of loss
of valuable information of the company to the competitors. As such, the company is required to
develop efficient security checks to prevent the loss of valuable data by adopting the use of
accounting software packages (Liguo, 2014).
Part 2
Development and adoption of the accounting software packages
Mageto (2017) stated that the use of accounting software packages is on increase among
Australian organizations as such software helped the businesses to automate their manual
accounting processes and improving the operational efficiency. The introduction of accounting
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software has changed the system of accounting functions in Australian business firms. The
Australian businesses at present largely incorporate the use of cloud based accounting software
such as Xero, Quick books, MYOB and many others. This accounting software’s are based on
internet and are very helpful in integrating the accounting information from various sources into
a single linked platform. The businesses largely face the problem of integrating the accounting
information from its various business units into a single platform before the development and
adoption of cloud based accounting software. There was lack of co-ordination among the various
operational units of an entity such as sales, production, logistics, inventory and distribution. As
such, the businesses face large problems in managing the organizational structure and
streamlining their business processes. This led to the development of accounting software’s that
are able to synchronize the business operations and thus leading to increased flexibility in the
organizational structure of business entities. The increased popularity of cloud based accounting
software for improving the operational efficiency has led to its larger adoption and integration
among Australian business firms (Mageto, 2017).
As per Hall (2015) this was mainly because the traditional accounting system is
associated with the major limitation that it is not internet based and needs to be installed properly
on each computer device. However, the cloud based accounting software is integrated in nature
and internet based and therefore requires less time in implementation and adoption. The major
benefits provided by cloud accounting are automation and integration over the traditional
accounting software. This software proves to be largely useful to the business firms for
developing sales and purchase order, conducting multi-currency transactions, integrating payroll
and doing online bill payment. The Woolworths has also incorporated the use of cloud based
accounting software that is MYOB for managing its internal and external, business structure
efficiently (Hall, 2015).
Current market size
There is increased demand of cloud based accounting software in the Australian market
among both SME’s and large scale companies. There are large number of accounting software
available in the market such as Xero, Zoho books, Quick books and MYOB. The increased
demand of this software is attributed to the automation and integration benefits provided by
them. This has lead to the strong growth of the accounting software industry in the Australia
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driven by increased online connectivity. The industry is expected to record a growth of about 7
per cent in the coming five years with the increase in revenue to about 8.5% (Software
Publishing in Australia, 2017).
Leaders in the market and their Competitive Advantage
The top leaders in the accounting software industry of Australia are Xero, MYOB, Quick
Books and Zoho books. The XERO has largest market share of about 65% followed by MYOB.
There is intense competition among these as they offer almost similar accounting software
package. They compete mainly on the price that is based on the scale of operations business
nature and structure. These software companies attain their competitive advantage by achieving
customer loyalty through providing good customer service (Software Publishing in Australia,
2017).
Current gaps or challenges encountered by users or customers of accounting
software/packages
According to Terkper (2008) the current gaps in the accounting software packages are as
follows:
 Lack of Security: The cloud based accounting software are internet based and therefore
the data shared can be accessed by the hackers resulting in the theft of confidential
information.
 Inadequate Reporting Service: The users face problems in getting their data out from the
accounting software packages as it is easy to input the data but rather difficult to retrieve
it back.
 Lack of Efficiency: This accounting software is not such user-friendly and thus requires
lots of efforts on the part of the users for their easy use and maintenance. The users also
cannot customize these software as per their demand as the features are extremely
complicated to be understood.
 Compatibility Issues: The accounting software is sometimes not compatible with the user
programs and thus the users cannot import some data into their program due to
compatibility issues (Terkper, 2008).
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On the basis of above accounting software challenges, it is recommended to business
companies to adopt the use of traditional accounting procedures for managing confidential
accounting data. This is necessary for prevention of theft of data that can result in sharing of
valuable information to the competitors. Also, the companies integrating the use of accounting
software should develop strong security architecture for data security and provide proper training
to all its employees and leaders for proper use of accounting software (Rangaraju and Kennedy,
2012).
Conclusion
It can be summarized from the overall discussion held in the report that cloud accounting
software is largely useful for businesses to automate their accounting procedures. However, the
business companies need to adopt proper security procedures for avoiding the safety issues such
as theft or illegal activities that can occur through the use of accounting software.
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References
Chanthadavong, A. 2016. Woolworths upgrades HR system to the cloud with SAP. [Online].
Available at: http://www.zdnet.com/article/woolworths-upgrades-hr-system-to-the-cloud-with-
sap/ [Accessed on: 22 August, 2017].
Coyne, A. 2016. Woolworths makes fixing IT a priority. [Online]. Available at:
https://www.itnews.com.au/news/woolworths-makes-fixing-it-a-priority-434957 [Accessed on:
22 August, 2017].
E-Commerce: Purchasing and Selling Online. 2017. [Online]. Available at:
http://www.gov.pe.ca/photos/original/IPEI_ebiz_ecomm.pdf [Accessed on: 22 August, 2017].
Hall, J. 2015. Accounting Information Systems. Cengage Learning.
Liguo, Y. 2014. Overcoming Challenges in Software Engineering Education: Delivering Non-
Technical Knowledge and Skills: Delivering Non-Technical Knowledge and Skills. IGI Global.
Mageto, J. 2017. Accounting Softwares in Australia. An Overview. GRIN Verlag.
Rangaraju, M.S. and Kennedy, H. 2012. Innovation in Management Challenges and
Opportunities in the next decade. Allied Publishers.
Software Publishing in Australia. 2017. [Online]. Available at:
https://www.ibisworld.com.au/industry-trends/market-research-reports/information-media-
telecommunications/except-internet-music-publishing/software-publishing.html [Accessed on:
22 August, 2017].
Terkper, S.E. 2008. Accounting Challenges for Semi-Autonomous Revenue Agencies (SARAs) in
Developing Countries, Issues 2008-2116. International Monetary Fund.
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