HI5019 Strategic Information Systems: CBA's Software & Structure

This literature review provides a comprehensive analysis of the strategic information systems employed by the Commonwealth Bank of Australia (CBA). It begins by outlining CBA's organizational background and structure, highlighting operational problems such as declining market share and challenges in satisfying clients due to market trends and competition from financial technology companies. The review then discusses CBA's key organizational strategies centered around customer focus, technology adoption, productivity enhancement, and leveraging strengths. The system acquisition method, Enterprise Resource Planning (ERP) using the SAP model, is examined along with a system flowchart illustrating CBA's processes. Control problems, including potential fraud through hoax emails and phishing, are identified. The review further explores the adoption of Xero accounting software by CBA, detailing its advantages such as supporting more clients in less time and real-time financial reporting. The review also touches upon the accounting software market size and leaders, identifying gaps and offering recommendations. Finally, the review concludes by summarizing the key findings and their implications for CBA's strategic information systems.

Running head: STRATEGIC INFORMATION SYSTEM
Strategic Information System: Commonwealth Bank of Australia
Name of the Student
Name of the University
Author’s Note:

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................3
Part 1......................................................................................................................................3
Organizational Background of Commonwealth Bank of Australia...................................3
Organizational Structure of Commonwealth Bank of Australia........................................3
Operational Problems of Commonwealth Bank of Australia............................................4
Organizational Strategies...................................................................................................6
System Acquisition Method...............................................................................................7
Control Problems within the System..................................................................................9
Part 2......................................................................................................................................9
Accounting Software Packages..........................................................................................9
Current Market Size.........................................................................................................11
Identification of Market Leaders and Competitors..........................................................11
Relevant Suggestions or Recommendations....................................................................13
Conclusion................................................................................................................................13
References................................................................................................................................15

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Introduction
Information system helping in gaining all types of organizational goals with excellent
strategies is known as strategic information system (Haux et al. 2013). The most significant
advantage of this strategic information system is that it provides competitive advantage to
that typical organization. These information systems often deliver any product or service that
does not incur much cost and is absolutely differentiated for focusing on the segment of
market that is important (Galliers and Leidner 2014). It is considered as one of the most
important characteristic in the field of IT or information technology. Moreover, this type of
information system is responsible for helping all the organizations in storing, categorizing,
transferring and processing of any type of information or data. The operational efficiency of
the organization is solely developed with this strategic information system (Willcocks 2013).
Accounting software can be defined a specific type of application software, which helps in
recording and processing the financial transactions in the functional modules like trial
balance or general ledger. The functionality of this software is just like an accounting
information system (Dandago and Rufai 2014). Accounting software can be accessed from
anywhere with any device that has Internet connectivity and does not incur much cost.
This literature review will be providing a short as well as precise discussion on the
most popular ad significant banking sectors in Australia, Commonwealth Bank of Australia.
This literature review will outline the several organizational problems and the organizational
structure of CBA. The system efficiency method, system flowchart and the various control
problems of the organization will be given here. The relevant accounting software package
for CBA will be highlighted here.

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Discussion
Part A
Organizational Background of CBA
Commonwealth Bank of Australia is the most popular and important multinational
banking sectors having businesses in the various countries across the world including Asia,
Europe and entire Australia (Commbank.com.au. 2018). This particular bank is responsible
for providing several financial services that include funds management, investment, loans,
investment, insurance and many more. In the year of 2015, CBA was listed as the largest
bank in Australia in the Australian Securities Exchange with other brands like Bankwest,
ASB Bank and Commonwealth Securities. Commonwealth Bank of Australia is one of the
four banks with Westpac, ANZ and NAB (Commbank.com.au. 2018). This organization
comprises of an extraordinary organizational structure and various organizational strategies
that has made the organization extremely popular and well accepted by all.
Organizational Structure of Commonwealth Bank of Australia
The organizational structure of the Commonwealth Bank of Australia is explicitly
popular and important for the organization. This organizational structure comprises of all the
managing bodies and important employees of the bank (Palvia and Palvia 2013). The board
of directors or the board of commissioners of this organization includes the owners, directors,
stockholders and many more. The three levels of management, i.e. top management, middle
management and lower management are properly given here.

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Figure 1: Organizational Structure of Commonwealth Bank of Australia
(Source: Commbank.com.au. 2018)
Operational Problems of Commonwealth Bank of Australia
Although, Commonwealth Bank of Australia is one of the best banks in Australia,
there are some of the major operational problems within the organization (Ogiela 2015).
These problems are therefore the most significant as well as dangerous as they are effecting
the market shares of the organization. The shares of this organization are going down
explicitly and thus the popularity of the company is falling (Laudon and Laudon 2016). Over
the last five years, due to the degradation in shares, various operational problems have
occurred. This is mainly due to the wrong strategies that the organization has undertaken.
Commonwealth Bank of Australia has taken various approaches for solving their operation
problems. The main reason that their approaches or strategies did not work was constant
alterations in the market trends (Arvidsson, Holmström and Lyytinen 2014). CBA was

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always involved in the competition of going on top. This type of competition often can be
harmful to the organization and this was exactly what happened with CBA. This bank was
failing to satisfy their clients and was not being able to meet the expectations (Konsynski and
Karimi 2013). The situation even has gone down to such limit that they were unable to give
loans to their clients. Another important problem that occurred within CBA was that they
were not making enough money. A multinational bank, CBA found it really hard to make
money and thus the competition was increased from all types of financial technology
companies (Hill, Jones and Schilling 2014). The popularity of all types of financial
technology organizations worldwide has somewhat affected the banking sectors and CBA is
one of the major victims. This is mainly because CBA is a traditional bank and they are being
able to cope up or adjust with the modern changes or alterations. The operations of the bank
are much traditional in comparison to other financial technology organizations (Bryson
2017). Moreover, the regulatory requirements have continued to increase and the banks
require spending maximum on the discretionary budget and thus escalating the requirements.
Figure 2: Downfall of Share Price in Commonwealth Bank of Australia
(Source: Commbank.com.au. 2018)

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The above figure has properly demonstrated about the downfall of the share price of
the Commonwealth Bank of Australia (Alexander 2013). In the above figure, during the
period of June and July 2013, the share price has gone up to 70%, however, recently, it has
gone down to below 20%.
Organizational Strategies
There are some of the most significant strategies of the Commonwealth Bank of
Australia. There are four major strategies of CBA. They are as follows:
i) Customer: This is the first and the foremost strategy of the Commonwealth Bank of
Australia. They always focus on their customers. According to them, the customers are the
most important part of their organization. The culture of this particular bank is completely
vibrant and customer focused (Amrollahi, Ghapanchi and Talaei-Khoei 2013). The
diversification and safety of the money of their customers are properly maintained by the
bank. The major reason for this type of ideology is that they think that this would help to
maintain their popularity.
ii) Technology: The second important strategy of the Commonwealth Bank of
Australia is their technology. They try to maintain their technology. Although, they are facing
problems in coping up with the financial technology companies, they are still trying to
increase their technological skills (Yoo 2013). The real time capabilities are maintained with
several developed applications.
iii) Productivity: The third strategy of the bank is the productivity. The productivity of
this particular bank is much more than the rest of the banks in Australia. They are
continuously simplifying their method so that they can achieve and obtain for better results or
outcomes for their customers (Gholami et al. 2013). Productivity is something that they
always focus on and according to the Commonwealth Bank of Australia, it is extremely

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critical for their long term success. The process by process look is undertaken by them and
thus the errors are reduced and the unit costs are reduced.
iv) Strengths: The final strategy of the Commonwealth Bank of Australia is their
strength. The financial crisis of the bank is overcome with the extraordinary strategies and
thus they try to focus on their strengths for making the organization strong and popular (Youn
et al. 2013). An extremely popular, strong as well as flexible balance sheet is being
maintained and is very important for ensuring that they can continue in supporting their
clients and thus capitalize on opportunities.
Strategies of CBA
Customer 40%
Technology 15%
Strength 15%
Productivity 30%
Figure 3: CBA Strategies
(Source: Created by the Author in MS Doc)
System Acquisition Method
Enterprise Resource Planning or ERP is undertaken by the Commonwealth Bank of
Australia for the system acquisition (Al-Hiyari, AL-Mashre and Mat 2013). ERP can be
defined as the procedure through which any specific organization controls as well as

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integrates various areas like purchasing, planning, finance, marketing and many others. The
organizational goals as well as objectives are well achieved with this particular technique.
CBA utilizes SAP model for their business (Dandago and Rufai 2014). However, the
involvement of SAP is not easy and it needs proper professional training. Flexibility and
scalability are the two most significant advantages of SAP. This particular ERP model has
provided the Commonwealth Bank of Australia with excess effectiveness and popularity
(Simkin, Norman and Rose 2014). Moreover, SAP also help in gaining utmost proficiency
within the software. Cost effectiveness is another important benefit of the model. The specific
SAP model of the organization is absolutely updated and thus it helps to solve the problems
related to any type of operation. It is even utilized by the bank for making the bank shares
absolutely steady and working (Amrollahi, Ghapanchi and Talaei-Khoei 2013). If the interest
rates of the bank would be reduced, then the customers would again take loans from CBA.

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Figure 4: Systems Flowchart of CBA
(Source: Commbank.com.au. 2018)
Each and every process of the bank is provided with details. Three components are
present within the flowchart: review, respond and evaluation.
Control Problems within the System
Various problems are faced by the Commonwealth Bank of Australia. Several
modifications have occurred in the bank shares and this growth of the organization
completely depends on various stakeholders and marketing team (Bryson 2017). The brand
name of this particular bank is solely affected as well as influenced in the sector. The control
problems of this organization even are responsible for reducing the growth in the entire
market.
There are various types of frauds possible in the system of Commonwealth Bank of
Australia. The first and the foremost fraud of this organization mainly include the hoax
emails or the hoax SMS messages (Arvidsson, Holmström and Lyytinen 2014). The other
fraud of the bank includes phishing and spoofing. Smishing is the most popular form of
phishing and SMS.
Part 2
Accounting Software Packages
Accounting software packages are utilized for recording and processing the
accounting transactions within the functional modules like the payroll, general ledger, trial
balance and many more (Simkin, Norman and Rose 2014). This type of accounting software
packages are purchased from any specific third party or is developed by any organization.
There is a great variety in cost and complexity.

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There are various types of accounting software packages available in the market. The
most popular examples include Myob and Xero. The accounting software package that CBA
has utilized in the accounting software package is Xero (Xero Accounting Software. 2018). It
is a cloud based accounting software for all types of businesses. However, it is popular for the
smaller and the medium sized organizations. Approximately all products of this software are
on the basis of the SaaS model or software as a service.
There are various advantages that the Commonwealth Bank of Australia enjoy from
the accounting software package of Xero. They are as follows:
i) Supporting Maximum Clients in Lesser Time: It helps to support maximum time
in extremely less time and Xero is utilized by the Commonwealth Bank of Australia (Al-
Hiyari, AL-Mashre and Mat 2013).
ii) Reporting of Real Time Finances: This is another important advantage of Xero.
The real time finances are reported with this.
iii) Easy Collaboration: The owners of the business and all the clients could be easy
collaborated with this particular accounting software.
iv) High Improvement: Xero software is always improving and thus allow easy
updates of the software (Yoo 2013).

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Current Market Size
Figure 5: Commonwealth Bank of Australia Share Margin
(Source: Commbank.com.au. 2018)
The above figure has demonstrated degradation in share market of CBA. It has gone
down.
Identification of Market Leaders and Competitors
The Commonwealth Bank of Australia is not only the market leader in banking sector.
There are few more, who is leading the market of Australian banks (Hill, Jones and Schilling
2014). These banks are the core competitors of the CBA. The most popular and significant
competitors of the Commonwealth Bank of Australia are given below:
i) National Australian Bank or NAB
ii) Australia and New Zealand Banking Group or ANZ Bank
iii) Auckland Savings Bank or ASB