Wesfarmers Information System for Business and Enterprise Report

This report provides a detailed analysis of Wesfarmers, a major Australian conglomerate. It begins with an overview of Wesfarmers' organizational structure, including its leadership team, and identifies key operational problems, such as the need for root cause analysis and improved departmental co...Read More

Running head: INFORMATION SYSTEM FOR BUSINESS AND ENTERPRISE
Information System for Business Decision
Name of the Student
Name of the University
Author Note

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INFORMATION SYSTEM FOR BUSINESS AND ENTERPRISE
Table of Contents
Introduction................................................................................................................................2
PART 1.......................................................................................................................................2
1. The current organizational structure..................................................................................2
2. Operational problems of the organization..........................................................................3
3. Most likely system acquisition method..............................................................................4
4. System flowchart of the sales procedures..........................................................................5
5. Control problems in the system and frauds in the organization.........................................7
PART 2.......................................................................................................................................7
1. Development and adoption of the accounting software packages.....................................7
2. The current market size......................................................................................................8
3. The leaders in the market.................................................................................................11
4. Relevant problems and suggestions.................................................................................12
Conclusion................................................................................................................................12
References................................................................................................................................14

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INFORMATION SYSTEM FOR BUSINESS AND ENTERPRISE
Introduction
The report is aimed to provide a detailed analysis of a business or enterprise. The
organization selected for the report is Wesfarmers. The organization mainly has interest in
chemical, retail, coal mining, fertilizers and safety and industrial products. The Wesfarmers is
the largest employer in Australia with an approximate employee number of 205,000
(Klettner, Clarke & Boersma, 2014). The organization was founded in 1914 to provide
services and merchandise to the western Australian farmers. Later in 1984, it grew into a
retail conglomerate.
PART 1
1. The current organizational structure
The Wesfarmers being one of the largest organizations in Australia has the following
organizational structure ("Leadership team", 2017):
Leadership team
Richard Goyder AO Managing Director, Wesfarmers Limited
Rob Scott Deputy Chief Executive Officer, Wesfarmers Limited
Terry Bowen Finance Director, Wesfarmers Limited
Anthony Gianotti Deputy Chief Financial Officer, Wesfarmers Limited
Maya vanden Driesen Group General Counsel, Wesfarmers Limited
John Durkan Managing Director, Coles
Michael Schneider Managing Director, Bunnings Group and Managing
Director, Bunnings Australia & New Zealand
Peter (PJ) Davis Managing Director, Bunnings UK & Ireland
Guy Russo Chief Executive Officer, Department Stores

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INFORMATION SYSTEM FOR BUSINESS AND ENTERPRISE
Ian Bailey Managing Director, Kmart
Mark Ward Managing Director, Officeworks
David Baxby Managing Director, Wesfarmers Industrials
Ian Hansen Chief Operating Officer, WesCEF
Linda Kenyon Company Secretary, Wesfarmers Limited
Jenny Bryant Chief Human Resources Officer, Wesfarmers Limited
Alan Carpenter Executive General Manager, Corporate Affairs,
Wesfarmers Limited
Tim Bult Director, Associate Businesses and International
Development
Olivier Chretien Managing Director, Business Development and
Corporate Planning
2. Operational problems of the organization
Organizations as large as Wesfarmers face many problems in terms of management
and organizational structure:
1. Any kind of problems arising in the organization should be analyzed with focus on
the root cause of the problem and not the probable symptoms for the problems arising in the
workplace. It can be easy for the organization to focus primarily on the symptoms of the
organization, which are visible in the workplace (Pettigrew, 2014).
2. If identifying one root cause with multiple problems then all the problems should
be eliminated or else the problems might resurface and create a problem again. While

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INFORMATION SYSTEM FOR BUSINESS AND ENTERPRISE
searching for the root problems all the root problems should be analyzed and a plan should be
developed to mitigate the problems with the organization.
3. Every one of the organization should know how the organization works.
Departmental working should be shared with the other departments so that everyone knows
the working procedure that is happening around the organization (Pettigrew, 2014).
4. When the improvement procedure is taking place in the organization, they should
be able to answer the questions being asked to them. Knowing the working procedure of the
organization is vital for the employees (Scott & Davis, 2015).
5. Not involving enough people in the management procedure can make lagging in the
working of the organization. To keep up with the smooth flow of work they should involve
more employees in the departments (Pettigrew, 2014).
3. Most likely system acquisition method
System acquisition method is important for an organization to keep up with the
market competition. An organization can be select from three of the best software type, which
are available:
Commercial software: software, which is developed to be used by any organization or
individual, is known as commercial software. They are generally sold in the market for a
price declared by the developers of the software. They are mainly open source or licensed
software’s. They include games, OS and other software, which are used in day-to-day life
(Morgan et al., 2015).
ERP: ERP or enterprise resource planning is a separate type of software targeted to be
used by core business operating department of the organization. It helps the organizations to

5
YES
NO
NO
YES
QUOTATION
CUSTOMER
AGREES TO
PURCHASE.
SIGN THE CONTRACT
END
STOCK?
DELIVER AFTER
RECEIVING
PAYMENT
INFORMATION SYSTEM FOR BUSINESS AND ENTERPRISE
procure order details, manufacturing materials, manage sales, and invoice orders (Shaul &
Tauber, 2013).
Custom software: software’s created specifically for the use of an organization are
termed as custom software’s. They are developed keeping in mind the specifications of the
organization who has requested the software to be developed. This type of software’s can be
a combination of the different types of smaller software’s in the market. Make this to
implement complex working of different types of work into a single software (Völter et al.,
2013).
For the selected organization, Wesfarmers the working environment would force them
to use an ERP for the invoices and logistics of the warehouse management. However, the best
option for the organization is to create a custom software, which will target the important
software’s being used in the organization to be implemented into a single one (Völter et al.,
2013). The software can be made to do all types of working of the organization.
4. System flowchart of the sales procedures
The following diagram illustrates the sales procedure that is being followed by the
Wesfarmers (Brown, 2016). The flowchart shows the important procedures and steps being
implemented to keep up with the sales procedure of the organization.

6
YES
NO
NO
YES
QUOTATION
CUSTOMER
AGREES TO
PURCHASE.
SIGN THE CONTRACT
END
STOCK?
DELIVER AFTER
RECEIVING
PAYMENT
DELIVER THE
GOODS
RECIEPT OF GOODS
AFTER SALES
SERVICE
ARRANGE THE
DEPOSIT
PREPARE THE
PRODUCTION
INFORMATION SYSTEM FOR BUSINESS AND ENTERPRISE
Figure 1: Sales procedure flowchart being followed by the Wesfarmers
(Source: Made by author)

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INFORMATION SYSTEM FOR BUSINESS AND ENTERPRISE
5. Control problems in the system and frauds in the organization
Controlling of problems in the workplace should be done effectively by the use of
effective management planning. Areas of fraud occurring are placing of purchase orders,
payroll transfer to fraud employee accounts, company credit card misusage, and vendors
asking for larger shipment delivery (Barak, 2016). The frauds of data theft from the
organization can cause privacy hampering of the employees of the company. These type of
frauds can be controlled by the usage proper security measures inside the organizations
network so that no outside intruder can come into the system and steal the data. Dividing the
information accessibility to different hierarchical sections would provide better security of
data inside the organization.
PART 2
1. Development and adoption of the accounting software packages
Demand for the use of cloud based accounting software’s was not high in the last
decade. Recently upon learning about the benefits of the cloud based, software’s all types of
organizations are trying to adopt to the use of such software’s (Mahzan & Lymer, 2014).
Having the ability of the cloud implemented into a software would help the storage of the
information of the cloud. The employees of the organization to use to their benefit can access
the information then. The sharing of the information allows the work done on the software to
be fast paced. Introduction of Xero, MYOB and Quick Book has brought around revolution
in the grounds of accounting software’s. The software’s allows cloud based accounting
benefits and help in becoming the best available software for business management (Mahzan
& Lymer, 2014). The problem, which was previously there was that, the employees had to
work on different software’s to complete their work. Now they are able to work on a single
integrated software, which allows the use of cloud based integration. The recent scenario of

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INFORMATION SYSTEM FOR BUSINESS AND ENTERPRISE
the organizational structure has changed and the companies have started adopting the new
software’s for the benefit of their organization. Automating the use of the different
accounting packages of the software’s help them to provide the report for the business easily
and fast. The features like fast banking activity, smart reports and easy invoicing of the orders
of the organization (Sampaio & Bernardino, 2016). Availability of the use of the mobile
version of the software also helps the employees to perform their work easily.
2. The current market size
The current market size of the Wesfarmers has been collected from the official
website of the organization ("Share price", 2017):
ALL FIGURES IN
$M UNLESS
SHOWN
OTHERWISE
2016 2015 2014
RESTATED
2013
RESTATED
2012
SUMMARISED INCOME STATEMENT
Sales revenue 65,643 62,129 59,903 57,466 57,685
Other operating
revenue
338 318 278 283 395
Operating revenue 65,981 62,447 60,181 57,749 58,080
Operating profit
before depreciation
and amortization,
finance costs and
income tax
2,642 4,978 3,877 4,486 4,544
Depreciation and (1,296) (1,219) (1,082) (1,033) (995)

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INFORMATION SYSTEM FOR BUSINESS AND ENTERPRISE
amortization
EBIT 1,346 3,759 2,795 3,453 3,549
Finance costs (308) (315) (346) (417) (505)
Income tax expense (631) (1,004) (939) (908) (918)
Profit after tax from
discontinued
operations
- - 1,179 133 n/a
Operating profit after
income tax
attributable to
members of
Wesfarmers Limited
407 2,440 2,689 2,261 2,126
CAPITAL AND DIVIDENDS
Ordinary shares on
issue (number) 000's
as at 30 June
1,126,131 1,123,753 1,143,275 1,157,194 1,157,072
Paid up ordinary
capital as at 30 June
21,937 21,844 22,708 23,290 23,286
Fully-franked
dividend per ordinary
share declared (cents)
186 200 200 180 165
Capital management:
capital return and
fully franked
- 100 50 - -

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INFORMATION SYSTEM FOR BUSINESS AND ENTERPRISE
dividend components
FINANCIAL PERFORMANCE
Earnings per share
(weighted average)
(cents)
36.2 216.1 234.6 195.9 184.2
Earnings per share
growth
(83.2%) (7.9%) 19.8% 6.4% 10.5%
Return on average
ordinary
shareholders' equity
(R12)(excluding
significant items)
9.6% 9.8% 10.5% 8.9% 8.4%
Fixed charges cover
(R12, times)
(excluding significant
items)
2.7 3.0 3.2 3.0 2.9
Interest cover (cash
basis) (R12, times)
(excluding significant
items)
16.8 20.5 15.9 12.2 10.8
FINANCIAL POSITION AS AT 30 JUNE
Total assets 40,783 40,402 39,727 43,155 42,312
Total liabilities 17,834 15,621 13,740 17,133 16,685

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Net assets 22,949 24,781 25,987 26,022 25,627
Net tangible asset
backing per ordinary
share
$3.45 $4.85 $6.14 $4.69 $4.45
Net debt to equity 31.0% 25.1% 13.1% 20.2% 19.1%
Total liabilities/total
assets
43.7% 38.7% 34.6% 39.7% 39.4%
STOCK MARKET
CAPITALISATION
AS AT 30 JUNE
45,158 43,860 47,835 45,936 34,846
3. The leaders in the market
Wesfarmers started its organization from being a farmers’ cooperative in the
Australian province. After the acquisition of the Coles group, they have diversified their retail
business. Apart from all the different types of business, they are running they have still the
best interest in providing the farmers of Australia with agricultural merchandise and services
(Annarelli & Nonino, 2016). Their biggest competitors in terms of their business profile are
Woolworths ltd., Metcash Limited and Caltex Australia Limited. Being the largest
organization in terms of employment as well as in terms of revenue which was worth
AU$65.98 in the year 2016 ("Five-year financial history", 2017).
4. Relevant problems and suggestions
Organization can have many problems, which would require the best use of the
management to eradicate the problems and provide solutions to the employees of the
organization. The major problems related to an organization are:

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INFORMATION SYSTEM FOR BUSINESS AND ENTERPRISE
1. Inability to predict the future of the organization can lead to problems in the
organization. The management should hire a consultant who has the power to read the trends
in the market and analyses the future of the organization based on the analysis of the report.
This could be helpful for the organization as they will be able to understand the ways in
which they would need to change their marketing strategy (Larsen, Manning & Pedersen,
2013).
2. Software’s lack in the security protocol, which is essential to keep the informations
safe from the outsider, attacks. Use of firewall is not enough for the software has to keep up
with the increasing cyber-attacks and risks (Svobodova, 2016).
3. Use of old outdated software’s faces an issue for the employees. The old software’s
are incapable of doing newer calculations, which are essential for the easy working of the
organization (Larsen, Manning & Pedersen, 2013).
4. The software’s are not user friendly in nature and make the employees using the
software have to work hard to produce a better document to be used by the organization.
Conclusion
To conclude this report it can be said that Wesfarmers has come a long way to
become one of the largest organization in Australia. Changing their acquisition methods and
their organizational structure to the benefit of the organization will help them to stay on top
of the chat as the largest organization in the Australian industry. As they provide the largest
employment power to the people around the world, they should try to focus on the problems
in the organizations and mitigate them at the earliest.