Wesfarmers Case Study: Accounting Software Implementation and Impact

This report provides a comprehensive analysis of the importance of accounting software in modern businesses, using Wesfarmers, an Australian organization, as a case study. It explores Wesfarmers' adoption of various accounting software solutions, including A10 Networks, Customer Monitor, and Jedox, and their impact on managing diverse business operations such as supermarkets, retail stores, and chemical, energy, and fertilizer divisions. The report details the company's system acquisition methods, system flowcharts for sales procedures, and potential control problems and fraud risks. It also examines the development and implementation of accounting software packages like JD Edwards Enterprise One and SAP, the market size of Wesfarmers, and the competitive landscape. The report highlights the operational issues arising from the company's complex structure and concludes with recommendations to address challenges faced by accounting software users, providing a thorough understanding of the benefits and complexities of integrating such systems in a large-scale enterprise.

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Importance of Accounting Software at Wesfarmers
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1IMPORTANCE OF ACCOUNTING SOFTWARE AT WESFARMERS
Executive Summary
The report is made in the light of Wesfarmers, an Australian organisation that uses
accounting software to improve the business operations of the same. The purpose of the
report is to focus on the necessity of implementation of accounting software in organisation
of every dimension and competency for the improvement of the same. The report provides
details of Wesfarmers and the effect of implementation of the accounting software. The
report concludes with possible recommendations to mitigate the issues that are faced by the
users of accounting software.

2IMPORTANCE OF ACCOUNTING SOFTWARE AT WESFARMERS
Table of Contents
1. Introduction............................................................................................................................3
2. Overview of Wesfarmers and its Corporate Framework.......................................................3
3. Operational Issues of the Company due to its Structure........................................................5
4. System Acquisition Method of Wesfarmers..........................................................................5
5. System Flowchart for the Sales Procedure of Wesfarmers....................................................7
6. Control Problems and Possible Frauds in the System............................................................8
7. Development and Adoption of the Accounting Software Packages......................................9
8. Present Market Size of Wesfarmers.....................................................................................10
9. The Leaders in the Market and their Competitive Advantage.............................................11
10. Issues faced by Accounting Software Users......................................................................12
11. Conclusion..........................................................................................................................12
12. References..........................................................................................................................13

3IMPORTANCE OF ACCOUNTING SOFTWARE AT WESFARMERS
1. Introduction
The report is created with the motive of introducing the importance of accounting
software in businesses of any competency and dimension. Accounting software is a tool that
is either developed on premises by an organisation or most commonly subscribed from other
third-party vendors and implemented within the organisation (Warren, Reeve and Duchac
2013). An organisation has to face numerous issues related to financial matters as it gradually
grows in size. It becomes difficult and expensive for the organisation to maintain all the
financial aspects such as payroll, monetary transactions with clients or suppliers and such.
Maintaining a proper record of all the financial transactions that goes on inside the company
is also a pain for the same, as it requires maintenance of excess personnel and resources for
the purpose. However, the conventional method of keeping records of the transactions in pen
and paper is quite inconvenient as well as unreliable, as they tend to get missing or damaged,
which creates many issues later. That is why, nowadays most business houses are
implementing accounting software packages for the betterment of the same (Warren, Reeve
and Duchac 2013).
Accounting software helps to collect and maintain electronic records of all financial
transactions that are carried out within an organisation and it can suggest ideas regarding
optimised method of business transactions that may provide enhanced financial benefit to the
organisation (Simkin, Norman and Rose 2014). The report emphasises its objective by
providing details of Wesfarmers, an Australian organisation that has adopted accounting
software package for the maintenance of its financial transactions.

4IMPORTANCE OF ACCOUNTING SOFTWARE AT WESFARMERS
2. Overview of Wesfarmers and its Corporate Framework
Wesfarmers is a large organisation based in Australia that finds its establishment in
the year of 1914. Initially the organisation was known as Western Australian farmers’
cooperative and was a small business. However, the organisation soon evolved into a
business giant and made a place as one of the top companies of Australia. Wesfarmers has its
headquarters stationed at Western Australia (Wesfarmers.com.au 2017). Its business
operations include hotels, supermarkets, convenience stores, department stores, household
improvement materials, office supplies and liquor. The organisation also has business in
industrial division such as fertilisers, chemicals, energy harvesting, coal and industrial safety
products. The organisation is considered as one of the largest private sector employer in
Australia and it presently houses around 220,000 employees. The shareholder strength of the
company is approximately 530,000 (Wesfarmers.com.au 2017).
The organisation maintains a generalised corporate framework as well as various sub-
frameworks due to the diversity in the business of the organisation. The generalised corporate
structure of Wesfarmers is as shown below:

5IMPORTANCE OF ACCOUNTING SOFTWARE AT WESFARMERS
Figure 1: Corporate Structure of Wesfarmers
(Source: Wesfarmers.com.au 2017)
The organisational structure of Wesfarmers provided above shows the various
business operations that are performed by the company. It can be seen that the organisation
has to manage a complex framework whose various operations are performed and managed
by other organisation such as Coles, Kmart, Target and such (Wesfarmers.com.au 2017).
3. Operational Issues of the Company due to its Structure
The major operational issue of the organisation is the structure of the organisation
itself. The company has engaged itself in various different sectors of business, some of which
are of completely different competencies. This can create great problem in monitoring and
controlling every section of the organisational operation. Failure of proper supervision in any
one of the sectors will result in a flood of issues (challenge 2017). The company has to
provide emphasis in supervising all the business sectors equally. Apart from the problem

6IMPORTANCE OF ACCOUNTING SOFTWARE AT WESFARMERS
related to management of organisational operation, the company has to face a load of issues
related to financial matters. The finance department of Wesfarmers has to deal with a large
amount of monetary transactions daily. The challenging part in this aspect is the various
sources of business with whom the company carries out monetary transactions. It is hard for
the personnel of the finance department of Wesfarmers to maintain proper manual records of
all the transactions that is happening with all the different business sectors of the
organisation. The diverse business framework of the organisation is the reason behind this
problem as well (Switzer.com.au 2017).
4. System Acquisition Method of Wesfarmers
Wesfarmers is a very large organisation that has a network of businesses involved. To
organise and manage an organisation of such proportion, it is not sufficient to implement just
one software or technology. The company has implemented many software that is tasked with
the maintenance and management of the various modules of the organisation.
Three main commercial software is engaged in maintaining the integrity of the
company as a whole. These are as follows:
Wesfarmers has engaged the services of A10 Networks, which is a trusted provider of
various high-performance application networking solutions that aids the organisation to
ensure that the network and data centre applications of the same is secured, highly available
and accelerated (A10 Networks 2017).
The main objective of Wesfarmers is to provide a satisfactory return to the
shareholders, as they are the vital elements of the organisation. To maintain the objective the
organisation has to rely heavily on the feedback of the customers. Due to this reason, the
organisation has subscribed the services of Customer Monitor that serves the purpose of

7IMPORTANCE OF ACCOUNTING SOFTWARE AT WESFARMERS
managing customer voice, word of mouth marketing, customer retention, loyalty and social
promotion (Customermonitor.eu 2017).
The third software that is used by Wesfarmers limited is Jedox. The software is
capable of analysing, reporting and unified planning of various financial aspects of the
organisation that supports in decision-making of the authority of the organisation in respect to
finance, purchasing and marketing, and sales (Tröndle 2017). Jedox is an efficient Business
Intelligence and Corporate Performance Management solutions provider that provides the
organisation the opportunity to perform real-time planning on the internet, cloud and on any
computing device. The users of the service of Jedox are able to perform work in smarter
ways, achieve streamlined business collaboration and are able to make proper decisions with
confidence (Tröndle 2017).
Apart from the software or services mentioned above, the organisation has
implemented various other software or services for the different modules of the organisation
as necessary for the operation of the modules. For example, WesCEF, the division of the
organisation responsible for the management of the chemical, energy and fertiliser providing
business uses JD Edwards Enterprise One ERP software package as an on-premises ERP
platform (Oracle.com 2017). WesCEF has also launched custom online customer portals that
include myCSBP, FERTview and Sampling Pro. The division of Wesfarmers that is
responsible for the management of the Supermarkets undertaken by the organisation as Coles,
KMart and such uses SAP as the basis of their Enterprise Resource Planning (ERP) software
system.

8IMPORTANCE OF ACCOUNTING SOFTWARE AT WESFARMERS
5. System Flowchart for the Sales Procedure of Wesfarmers
The organisation has different sales process flowchart depending on the business
process the flow chart is indicating. However, all the flow charts follow the structure of a
general sales process flowchart that is as provided below:
Figure 2: System Flowchart for Sales Procedure of Wesfarmers
(Source: Wang 2017)
The operation shown in the sales process flowchart starts with the placing of an order
from a customer of the organisation, which follows the process of authentication of the order
from the sales department of the organisation. Once the purchase order is authenticated, it is
forwarded to the supply and management department who ensures the delivery of the product
or service to the destination address provided by the customer (Wang 2017).

9IMPORTANCE OF ACCOUNTING SOFTWARE AT WESFARMERS
6. Control Problems and Possible Frauds in the System
The diverse business modules of Wesfarmers lead to obvious control problems within
the organisation. It is difficult for the general management of the organisation to supervise all
the business parts in the organisation effectively and receive accurate reports on the
functionality of the same. That is why the company has arranged separate management
departments for each business competency who are tasked to provide with complete report of
their respective business to the general management of the organisation (Kent and Zunker
2013). However, this system may lead to departmental competition to prove superiority of
management service over other departmental management groups and lead to falsified reports
of better performance sent to the general management to stay ahead of the other management
groups. Frauds can be possible at the marketing level as well due to the lack of proper
supervision at the supply depots of the organisation. Other frauds may include intervention of
hackers who may pose as a legitimate agent of the organisation and receive the credentials of
an online purchaser while the customer fills the required details to make a purchase order
(Grayson-Morison and Ramsay 2014).
7. Development and Adoption of the Accounting Software Packages
Wesfarmers Limited has separate divisions that maintain the business operations of
the different business competencies that are undertaken by the organisation. The different
divisions implement different accounting software depending on the requirement of the
respective sector of the business. The WesCEF division of Wesfarmers that is entitled with
the supply of chemical, energy and fertilisers has implemented JD Edwards Enterprise One as
ERP system or Accounting Software for performing the necessary tasks in the organisation.
JD Edwards Enterprise One is an application suite that has enterprise resource planning as
well as accounting software integrated in it (Samuel and Kumar 2013). The application suite

10IMPORTANCE OF ACCOUNTING SOFTWARE AT WESFARMERS
is not the standard version that is developed by Oracle, rather it is developed and
implemented on-premises of WesCEF in collaboration with Oracle. The suite provides help
with accounting system apart from other aspects of enterprise resource planning. The
accounting software integrated within the application suite helps in keeping electronic
records of all financial transactions that is going within the organisation and generate reports
related to the same to keep the finance department of the organisation updated at all times.
The implementation of the accounting software has reduced the necessity to recruit and
maintain excess personnel for maintaining the financial records. The organisation has
achieved better performance at an optimised expenditure due to the implementation of JD
Edwards Enterprise One ERP system (Piairo et al. 2013).
Apart from the ERP system discussed above the division of Wesfarmers that is
responsible for looking after the businesses related to supermarkets, retail stores and such use
SAP as an ERP platform that provides similar service as that of JD Edwards.
8. Present Market Size of Wesfarmers
Wesfarmers is a large business group that is listed among the top ten organisations of
Australia. However, it is ranked 8th among the 10 companies and failed to topple the
dominant big players in the market such as the Commonwealth Bank of Australia or the
Westpac Banking Corporation (Biddle 2016). Provided below is the list of the top ten
companies in Australia. The ranking of the companies are based on the market cap that the
respective organisations have achieved starting from March 1, 2016 to March 1, 2017.

11IMPORTANCE OF ACCOUNTING SOFTWARE AT WESFARMERS
Figure 3: Market Size of Wesfarmers in Relation to other Australian Companies
(Source: Kilroy and Schneider 2017)
The graph provided below shows the comparison of the Wesfarmers with
Commonwealth Bank of Australia (CBA), Westpac Banking Corporation (WBC),
Woolworths Private Ltd (WOW) and Macquarie Group (MCG) in relation to their current
stock market size. The graph shows that Wesfarmers is maintaining an intermediary stage in
between the four other organisations, where CBA and WBC is above Wesfarmers while
WOW and MCG are at the bottom of the same. The report is generated based on yearly
information.