Strategic Information System Analysis and Recommendations for CBA

This report provides a comprehensive analysis of the strategic information system of the Commonwealth Bank of Australia (CBA). It begins with an overview of CBA's organizational structure, including its four business divisions: retail banking services, premium financial services, investment and insurance services, and institutional and business services. The report identifies potential operational problems arising from the organizational structure, such as communication gaps and synchronization issues. It then proposes Enterprise Resource Planning (ERP) as a suitable system acquisition method, detailing its benefits in terms of data integration, financial management, and human resource management. Flowcharts illustrating the sales procedure for retail banking and premium financial services are presented. The report also addresses potential control problems and fraud risks, including cybercrime, identity theft, and loan losses. Part 2 focuses on the development and adoption of accounting software, suggesting NetSuite ERP and Xero for improved digitization. The report concludes with an analysis of CBA's market size, competitive landscape, and recommendations for strategic improvements.

Running head: STRATEGIC INFORMTION SYSTEM
STRATEGIC INFORMTION SYSTEM
Name of the Student:
Name of the University:
Author Note:

1STRATEGIC INFORMTION SYSTEM
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................3
Part 1:...........................................................................................................................................3
The current structure of the organization.....................................................................................3
Operational problems organization could experience because of this structure:.........................4
Possible system acquisition method:...........................................................................................5
Flowchart of the sales procedure:................................................................................................6
Identification of control problems and possible fraud in the system:..........................................8
Part 2:.........................................................................................................................................10
Development and adoption of the accounting software package:............................................10
The current market size of the Commonwealth Bank of Australia:..........................................10
Lenders in the market and the competitive advantage:.............................................................11
Competitive advantage of the Commonwealth Bank:...............................................................11
Recommendations:....................................................................................................................12
Conclusion.....................................................................................................................................12
References......................................................................................................................................14

2STRATEGIC INFORMTION SYSTEM
Introduction
Commonwealth Bank of Australia is a Australian multinational bank which has its
business in different countries including Asia, United States and Australia. The bank provides
various services which includes retail banking, corporate banking, management of funds. This
bank has been listed as the largest financial organization listed in the security exchange of
Australia. The bank was founded in 1911 and became a private bank on 1996 (Thaichon et
al.,2017).The commonwealth bank is regarded as one of the ‘big four’ in the Australian Banking
sector. The organization has taken many effective business decisions regarding the foreign
collaboration. In 2005 the bank has done an agreement with the two Chinese banks and set up a
branch at India. The bank has gained some reputations. It was the only financial institution listed
in the ‘Dream Employer’s ‘ top 20 list in 2010 and 2011 respectively (Laing & Dunbar, 2015).
The main objective of this paper is to evaluate the business process of the Commonwealth Bank.
This will include the analysis of the business structure and the business procedures of the
company. In order to modify the process in the business system, further recommendations are
made on the basis of position of organization in the market and the challenges and future
opportunities in front of the organization. The paper tries to give the overall business process
evaluation of Commonwealth Bank of Australia.

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Discussion
Part 1:
The current structure of the organization
The managing director of the Commonwealth Bank declared the organization structure of
the bank. The hierarchy has been designed in such a way that it will help to create the vertically
integrated business.
The structure of the organization is aligned to the delivery of the service, development of
the products. There are four business division in the structure- retail banking service, premium
financial service , investment and insurance service and institutional and business service.
Retail banking services: This will helps the consumers to deal with their financial issues
and small business consumers to take the loan for the business or the personal purpose.
Premium financial service: This section deals with the niche business deals like the
wealth management and providing customized services to the customers.
Investment and insurance services: This sector includes the fund management , handling
mutual fund investment and insurance business (Katsigiannis, Agarwal & Jin,2015). The
services also included in this sector are handling the third party support service for the brokers
and financial advisers under the rules and regulations.
Institutional and business service: This section deals with the financial deals with
financial requirements of the financial institutions and corporate, the risks in the investment
along with the capital management. These services are offered to the consumers through a
relationship management approach.

4STRATEGIC INFORMTION SYSTEM
Figure 1: Organizational Structure of the Commonwealth Bank
(Source: ":: Commonwealth Bank :: | Organization Structure", 2018)
The business structure of this bank encourages the better wealth management with
improvised customer service by providing them better financial advices.
Operational problems organization could experience because of this structure:
Lack of communication: The organizational hierarchy is a tree structure. There are
certain advantages of this kind of structure. However, there can be a gap of communication
between the lower management and higher management of the structure.
Lack in the flow of communication: The flow of information delays as it has to pass
different phases of the hierarchy.

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Mismanagement of the business: There are several sections in commonwealth Bank for
managing the business. The miscommunication can create the mismanagement at inter
departmental level.
Problems of synchronization in the operation of four departments: It has been observed
the process management of the four different sections of the existing business process is different
(Seltzer, 2017). In this case, there may be a synchronization problem of the workings between
the different sections.
Occurrence of errors: The miscommunication between the different departments can lead
to the occurrence of human and technical error in the business process.
Possible system acquisition method:
The possible system acquisition method opted for this organization can be
ERP( Enterprise Resource Planning). The main objective of the ERP software is that to integrate
and manage the back office business process of the organization (Willcocks & Reynolds,2015).
It also facilitate the flow of information and helps in the decision making process which is data
driven. The main target of the Commonwealth Bank is to expand the business. In this situation
the implementation of the ERP is useful. The ERP software helps to collect data from various
levels of the organization and builds connection across different departments. There are
different types of the ERP software such as on premise and cloud and multi tiered ERP system.
The deployment ERP enables the reengineering of the business process and training of
the employees. Most of the companies are started to store data in cloud. The ERP vendors are
started to provide services to the cloud based platform (Avkiran,2015). This helps to enable some
functions of the ERP. The cloud based ERP components are coupled loosely (Moradi-Motlagh &

6STRATEGIC INFORMTION SYSTEM
Babacan, 2015). This reduces the cost and the complexity of the implementation. The
organization can deploy the hybrid cloud model in order to run the business and the organization.
In multi tiered ERP approach enables the use of multiple ERP system under one
environment t. This method is known as two tier ERP (Oates & Dias, 2016). The bank can adopt
this implementation of ERP as there are geographic difference between the branches of the bank
and the different divisions in the bank are running under different systems.
The decision of implementation of the type of ERP depends on the collaborated decision of
the management of the banks and the different stakeholders of the bank. The implementation of
the ERP in the Commonwealth Bank can be beneficial in following ways:
 Finance: The ERP will help to gather , manage and generates the financial reports like
trial balance data and the ledgers.
 Managing the human resource: The deployment of ERP in this system will enable the
gathering of data and generation of reports regarding the recruitment of the employee and
review of their performance. It also helps in the decisions regarding the skill development
of the employees.
 Managing the inventory process: The use of ERP in this section will help to generate the
report regarding the management of assets and stock items.
Flowchart of the sales procedure:
The structure of the four departmental services provided by the bank can be describe
through flowchart:

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Figure 2: Retail Banking
(Source: Kozubíková et al., 2015)
In the above flowchart the process of handling the application regarding account opening
is shown. The opening and handling of the account is under the retail baking section. The
interested consumer has to fill up the application form (Kozubíková et al., 2015). The documents
submitted by the consumers are verified by the authority of the bank. The recommendation from
the existing consumer of the bank is asked for, in case if it is needed (Merrett & Ville, 2016).
The successful verification of the document makes the receiving and accepting of the
application. In case, if the documents are not verified and there is any mistake in the application
form, the request for the opening of the account can be rejected.

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Figure 3: Premium financial services
(Source: Sethi, Martell & Demir, 2017)
In case of providing the premium financial services , trust pays the interest to the lender
and lender funds the premium. The grantor makes the trust to pay the interest. Heirs receives the
trust proceeds from life insurance trust.
Identification of control problems and possible fraud in the system:
There can be certain control system problems and the fraud cases , those can be happened
in the baking sector. However, the discussion is about Commonwealth Bank of Australia, there
are the chances that those fraud in this bank also.

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Cyber crime: The bank can be affected from the activities of cyber crime. Currently this
bank is giving services to the customers through the online banking such as and e-banking. The
consumers of the bank is using the ATM of the bank (Bai, Krishnamurthy & Weymuller, 2018).
The attacks on the server of the bank along with the ATM can cause the hackers to access all the
confidential data of the consumers along with stealing the money from the bank.
Identity theft: With the advancement of the technology and the easy available services
through online has developed a chance to use the identity of the other person to access the
account of the bank.
Loss from loan: The bank can be affected from the due loans. Due to the improper
regulations and monitoring the loan defaults can be increased day by day causing the bank a
huge loss.
There are certain problems can occur related to the control system in the bank. These
problems can be regarded as the internal problem of the banks.
Dealing with the money: There is a chance of mistake while counting the money by any
employee of the bank. However, this can be prevented but implementation of the counting
machine at the counter (Keneley, 2017). Though this implementation does not assure the
correctness of counting the money , however, it will reduce the chances of the risks.
Problems with the rules and regulations: The hierarchy of the organizations leads to the
implementation of many rules regarding deposition of the money and processing the cheques
and the money (Sathye, Nicoll & Chadderton, 2017). Without proper understanding of these
rules can make an employee and the customer to become confused about the process.

10STRATEGIC INFORMTION SYSTEM
Part 2:
Development and adoption of the accounting software package:
Commonwealth Bank of Australia is considered as the most innovative bank in terms of
using technology. The bank is currently approaching to make an mobile app which will enable
the users to do various retail banking functions through internet (Moro, Cortez & Rita,2015).
The bank is currently using 7 vendors named-cloudera for the data management, vizier for the
HR and employee management system, verint system for managing the workforce, for the cloud
security tools Vasco data is used, form managing the customer relationship management
salesforce is used, Oracle Exadata is used for the data warehousing, for managing the branding
and advertisement agencies brand culture communications is used.
All the existing software vendors has its own functionality. The data and the process of
the internal banking system is maintained by the software packages are important. However, for
the accounting purpose the bank can adopt certain advanced software like NetSuit ERP and
Xero. The use of these software will help in the digitization of the bank. Apart from that it will
help to eliminate the problems with the manual banking system. There are various types of
accounting software can be use in this context- accounts payable software , accounts receivable
software, general ledger software.
The current market size of the Commonwealth Bank of Australia:
The commonwealth bank is based on Australia. However, it has its business over the
United States and Asia. It has total employee of 51800 across 11 countries. The Commonwealth
Bank of Australia is the largest financial sector in the stock exchange of the Australia.
Currently it is holding 20.5% of total market share . However, the market share of the

11STRATEGIC INFORMTION SYSTEM
Commonwealth Bank of Australia has been dropped from 25.5% to 15.5%. The experts says this
is the result of changing the strategy of the bank. This bank has removed its focus from the major
investors and the in concentrating on the marketers to meet the lending cap.
Lenders in the market and the competitive advantage:
The lenders of the bank is common people. The people who choose the bank for taking
the loans are the lenders of the bank as they return the money after a certain period of time to the
banks. Investors are also the lenders of the banks (Kumar, Charles & Mishra, 2016). They may
use the bank for their financial business. In that case the organizations can choose the
commonwealth bank for keeping the money (Salim, Arjomandi& Seufert, 2016). The common
people who have chosen the bank for the deposition of their money can be considered as the
lender of the bank. The bank can lend money to the common people and the business
organization by using the deposited money in the bank. The whole process goes in a cycle, where
the investors and the people keeps and invest the money in the bank. Bank uses those money to
give loan to the organization and the people as a loan. The bank repays the depositors by the
money it collects through the repayment of the loans.
Competitive advantage of the Commonwealth Bank:
The banks are advancing their services by increasing the quality of the services and the
products and better consumer services. This is making the business of the banking sector more
competitive. However, the main advantage of the Commonwealth Bank lies in its uniqueness
and the brand value. The Commonwealth Bank can be considered one of the largest bank in the
Australia. The main feature of this bank is that is makes the sustainable changes with the change
of the time( Drehmann & Juselius,2014). This helps the m]bank to stay far ahead from the other
banks in the competitive market (Tsai et al.,2016). The quality off the services and the expansion