Strategic Information Systems: Commonwealth Bank ERP Analysis

This report analyzes the strategic implementation of an Enterprise Resource Planning (ERP) system within the Commonwealth Bank of Australia. It begins by outlining the bank's core business processes, including account management, lending, and transaction handling, while also identifying specific business requirements, such as regulatory compliance and efficient data processing. The report then details software requirements, focusing on features like cash accounting, payment processing, and transaction detection, particularly concerning the reporting of transactions exceeding $AUD 10,000 to AUSTRAC. The selection of Corniche ERP software is justified, along with an explanation of how it addresses the bank's needs. The report further identifies three key areas where ERP can improve the bank's efficiency: streamlining information entry, automating accounting processes, and enhancing account management. Additionally, the report addresses potential security risks and data breaches associated with ERP implementation, proposing mitigation strategies to ensure data integrity and regulatory compliance. The conclusion summarizes the benefits of ERP implementation for Commonwealth Bank and the importance of addressing security concerns.

STRATEGIC INFORMATION
SYSTEMS

Table of Contents
INTRODUCTION...........................................................................................................................1
Business process of bank........................................................................................................1
Business requirements ...........................................................................................................2
Requirement from the software .............................................................................................3
Selection of software and vendor ..........................................................................................4
Determine 3 ways in which common wealth bank of Australia can utilize ERP to improve
efficiency of their business.....................................................................................................5
Evaluate the level of efficiency of the technology implementation ......................................6
Examine potential security risks, data breaches.....................................................................6
Provide guidelines on how these risks could be mitigated.....................................................8
CONCLUSION................................................................................................................................8
REFERENCES ...............................................................................................................................9

INTRODUCTION
ERP stands for Enterprise Resource Planning, which is the integrated system designed to
manage the transactions related with human resources, technology and service efficiently and
effectively in business organisation. The following assignment will cover the detail process
related with installing ERP system in the organisation. Definition of business process and
requirements regarding business will be developed and evaluated in this report (Tanrikuluand
and Ozcer, 2011). Determining the requirements of system and decision regarding selection of
software will be made in effective way. The ways by which companies can utilise ERP
technology for improving their business efficiency will be determined. The level of efficiency of
the technology implementation will be evaluated effectively in this report. Further, examining of
security risk and data breaches will be made. Specific guidelines will be provided to mitigate
these potential risk associated with implementation of enterprise resource planning.
Business process of bank
Banks’ prime process is to keep track, transfer and relocate money. Banks take and save money
of the ones who desire to do same and give it to the ones those who are in need through loans.
The banks earn money with these processes. The revenue is earned by the bank by giving loans
to the customers and earning interest on those loans.
Different process of bank are:
Account opening and management: The primary process of the bank is to open accounts of the
customers of bank. Accounts are opened to facilitate the customers in respect to saving of money
(Martovoy and Mention, 2016). The customers save money in different kind of accounts in
which different facilities are provided by the bank. Banks are also liable to take care of the
accounts opened by the customers. The accounts opened in the bank are duly managed by the
banks which is part of their process. Banking process includes keeping track of the transactions,
accounting the transactions in the books, providing the customers with transaction records. The
management of the accounts is done by bank employees. Employees of Common wealth bank of
Australia depends upon its employees to manage the accounts of customers and also the
employees depend upon the functioning of the software of the bank.
Giving advances: Another main function of the bank is to provide loans to its customers. The
bank provides loans to its customers with a proper process and conditions involved. Loans are
given on demand up to the extent of the security provided by the customers. Loan management
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process is managed by the employees of the bank. The common wealth bank of Australia
provides loans to its customers on regular interest rates from which its revenue is created. The
banks provide loans taking in account the money available with it, which is identified from the
accounts of the banks, the account management is critical part of bank processes. Also, the loan
accounts are managed by the employees of the common wealth bank of Australia (Babund and
Bezawada, 2012).
Business requirements
Business requirements are the needs of the business to run its processes swiftly. The
banks require system to support its activities and help the processes of the common wealth bank
of Australia to run smoothly. The common wealth bank of Australia faced an issue in august
2017 in respect to reporting of transaction. Common wealth Bank is allegedly ordered by the
Reserve bank of Australia to report all the transactions which are more than $AUD 10000 to
AUSTRAC within 10 working days the bank failed to do so and was charged with a case for not
doing so. It was identified that the 53506 transaction of were not reported by the bank to the
authority. In the defence CBA called this an error of the Smart ATM's which lead to such a
mistake (Leon, 2014). They also reported that the coding of the system had error which resulted
in non-detection of mentioned transactions.
Bank requires an Enterprise resource processing system to support its business needs and
processes. From the mentioned problem, it was identified that the ERP is required by the
common wealth bank of Australia to solve the above problem.
Banking activities are wide and incorporate a number of functions. The bank needs a system
software which allows it to run all the errands of the business in through the use of a single
system. Moreover, the system needs to be highly efficient with the data handling process.
1. Accounting requirements: Banks are needed to maintain the accounts of the customers
individually and separately. Every account in the bank is maintained separately to avoid
any overlay of the separate accounts. With the separate recording of the transaction of the
customers the bank also keep handle of the banks accounts and the inflow and outflow of
cash.
2. Transaction detection Common wealth bank of Australia needs to address the problem
which has been identified by the AUSTRAC. They need to detect every transaction
which is equal to or more than $AUD 10000 and report it to the authority. They are also
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required to report the following transaction within 10 working days to the mentioned
organization.
Requirement from the software
A banking industry ERP is required to have several features to support the working of the
banks. The common wealth bank of Australia needs a system software which is efficient and
helps the organization to run all the day to day functions of the banking.
 Cash accounting: The system needs to account all the cash transactions which take place
in the banking process. The ERP should feature the accounting of all the transaction of
the and maintain records of cash inflow and outflow.
 Payment processing: payment processing means the payment transactions through
various channels of payments such debit or credit cards (Monk, and Wagner, 2012). The
system shall handle such transaction and send payments to the parties as requested by the
customers.
 Account management: The system needs to handle the transactions made by the
customers and manage accounting of the customer accounts. The recording is needed to
be done separately for each customer. Also, the ERP should provide the record of
transaction to the customers i.e. bank statements should be provided to the customers.
The ERP should also set a overview of the global bank accounts.
 Preparation of financial statement: The ERP is expected to manage all the accounting
processes of the banks. It should also feature automated preparation of the financial
statements of CBA. The bank need financial statements and reports for auditing and
decision making purpose (Kallunki, Laitine and Silvola 2011.). Precise financial
statements help the management to take better decisions.
 Electronic bank transfers: most of the transaction done by the customers today are
electronic bank transfer. The ERP must monitor and record all the electronic transactions
done by the people.
 Detection and sending of report: The Common wealth bank of Australia needs the ERP to
feature the recording of deposit and withdrawal done by the Smart ATM's. Also, the ERP
should include an efficient code to detect transaction which are equal to or more than
$AUD 10000 as ordered by the authority. It must also feature a code to send a report
including mentioned transactions to AUSTRAC.
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 Management of assets: Asset management refers to tracking of assets of the organization.
The ERP must feature the asset management system in the software to help the bank to
track its assets in case any misshapen with the help of GPS. The ATM’s and other assets
of the bank and also the property of customers which the bank is holding should be kept
under tracking to avoid any losses that is created from the damage of such assets.
 Analytical accounting: Another feature which is considered as an important part of the
ERP is analytical accounting (Momoh, Roy and Shehab, 2010). This feature is needed by
the bank as it links all the processes which include cost and revenue. This features also
helps in formation budgets with the planning process. A viable link can be formed
between the project management and the departments sections to facilitate the activities
of banking.
 Multiple currency accounting: As the common wealth bank is a located in multiple
locations and deal in many currencies the ERP should also focus on accounting in
multiple currencies to facilitate the working of bank with multiple countries.
Selection of software and vendor
After detailed evaluations of many ERP available in the market, Corniche ERP was
selected to facilitate the working of the bank. Corniche is a specially designed software for
private and offshore banks. Software facilitate the bank with multiple currency accounting,
merchant services for payments, card services and also online banking feature.
Corniche also includes features to facilitate the basic and primary processes of common
wealth bank of Australia. The ERP is selected cause of its features that support the working of
the multinational banks. The software will increase the efficiency of the bank with the fast and
efficient working capabilities (Shauland and Taube, 2013).
Corniche has an efficient functions and flexibility to financial institutions. Megasol
technologies can add additional features to the software to detect the transaction which are more
than $AUD 10000, done from the Smart ATM's. The software will also be programmed to send
report of such transaction to the AUSTRAC in the time of 10 days.
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Determine 3 ways in which common wealth bank of Australia can utilize ERP to improve
efficiency of their business
Bank's efficiency can be improved by the use of ERP by common wealth bank of
Australia. The ERP systems reduce the efforts by recording the transactions easily and
accounting them.
 Entering of information : Traditionally all the information in the bank books are recorded
manually by the employees of the bank, which takes too much time and also makes the
room for mistakes being made due to human errors. The recording of information is also
lengthy task by the employees and reduces efficiency of the process (Sedera and Gable,
2010). The ERP is a automated software which records the by which itself as soon as the
transaction takes place. This reduces the problem of human error and makes the working
of the bank easier. Also through the use of ERP time of the employees is saved which
leaves room for them to perform other activities which increases the efficiency of the
bank.
 Accounting process: Accounting is a critical part of the bank processes. Accounting of
the books of separate accounts and the accounts of the bank is typical task which is
performed by the employees of the bank, this leaves mistakes in the books. The ERP
records the transaction in the books and performs the accounting functions at the same
time which leaves the efficiency of the books of accounts (Motiwalla and Thompson,
2012). The ERP also provides a feature to prepare the financial statements of the bank
which are more precise and correct. This proves the efficiency of the common wealth
bank of Australia.
 Management of the accounts: The management of accounts of the customers is one of the
prime processes of the commercial banks. This is a crucial process of the bank as the
accounts of the customers cannot be manages ineffectively. The bank's values depends on
the management of the accounts as the wrong management may lead to conflicts with the
customers. The ERP is highly efficient in management of the bank accounts of the
customers (Dezdar and Ainin, 2011). The transaction made by the customers are recorded
directly into their accounts. Also the bank statements can be printed by the customer's
which provides satisfaction to them. The management of accounts become automated and
fast through ERP which improves the efficiency of the common wealth bank of Australia.
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Evaluate the level of efficiency of the technology implementation
The level of efficiency was improved after the implementation of the ERP system in the
common wealth bank of Australia. The issues faced by the bank internally and externally were
removed. The internal issues of data collection and the efforts in management of accounts of the
customers were reduced with the use of software.
 Detection of transactions: The issue faced by common wealth bank of Australia of
detection of the transaction which are more than $AUD 10000 will be solved with the
implementation of the system software (Morris and Venkatesh, 2010). Corniche has been
remodelled for the use of the bank. The feature to identify any transaction of mentioned
limit and also to create a report and send to the AUSTRAC will improve the efficiency of
bank. The system will send the report within 10 days which will ensure the sending of
report. And the bank will not face such allegation again.
 Customer satisfaction: With the improvement in the management of the accounts of the
customers, the customer will feel satisfactory from the services of the bank. By the use of
ERP system the bank will be able to manage the accounts of the customer's in an efficient
way which will create a unified relationship between the customer and the bank. This will
also increase the trust of the customers in the bank. With the implementation of the ERP
system the common wealth bank of Australia will be able to gain more customers.
 Online banking services : The ERP system software provide the customers with more
services and features. The online banking is a comprehensive feature which highly
improve the efficiency of the bank (HassabElnaby, Hwang and Vonderembse, 2012). The
online feature allows the customer and bank to operate swift and with more efficiency.
The transactions made online are automatically recorded by the ERP system into the
accounts of the customers and the bank. Also, this improves the payment system of the
bank providing the bank with quicker operations. On the implementation of the ERP the
online transaction will be improved and the efforts of the employees will decrease which
will improve the overall efficiency of the company.
Examine potential security risks, data breaches
Cyber-attacks on firms, especially banks are rapidly increases in the current era. While
implementing integrated ERP system in the organisation, manager must keep in mind the
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following security risks that are associated with Corniche ERP technology. Below are the
security risks that are associated with ERP systems:
 Unpatched or Unauthorised Software: Unpatched and unauthorised software can lead
to major breach of security. Corniche does not provide any update or patch on other
websites except its own website. Cyber hackers always provide free patches for this
expensive software. After installing the unpatched software in computers, they can hack
and acquired all the personal information.
 Poor Configuration: The installation manual provided with Corniche explain the
process of installing ERP efficiently (Lenart, 2011). Sometime users finds its useless and
casually install the software. They skip some essential process which results in security
leakages. Cyber hacker taking advantages of this steal all their information in their
database.
 Inadequate Access Control: It is the responsibility of manager to provide access control
to specific employees only. The inadequate access control can lead to data breach and can
result in security risk.
 Service Attacks: There are various fake copies of Corniche available on several websites
on internet. This leads to constantly increase of service attacks by cyber hackers. These
attacks result in security breach and can lead to leakage of vital data stored on the
database of enterprise resource planning system (Salmeron, and Lopez, 2010.).
 Lack of Compliance with security standards: The data protection act of Australia
mandates that it is the responsibility of organisation or firm to protect the personal and
vital data of employees working in their company. Due to lack of awareness about
advance and integrated ERP system, managers implement it in their organisation
casually, thus lead to major security loophole and risk.
 Outdated Web interface: Outdated web interface can result in major security risk and
data breach. Web based attacks are frequent, especially in banking sectors. If the interface
of web is not properly updated with SQL injection programming, than attackers can hack
the database and acquire all the important and vital information updated on the database
of ERP.
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Provide guidelines on how these risks could be mitigated
The problems faced by the organisation in relation to the software can be dissolved by
following the instruction given by the vendor. Also, certain given problems can be avoided by
the common wealth bank by following the guidelines.
 They should not download any patch or up grade of the ERP system from the site other
than the official website of the company. Downloading software may lead to corruption
of the software ill handling of the data of the customers.
 The access of the usage of software must be given to the employees with the
responsibility of the data. Also, the bank must provide specific passwords to those which
are change on a daily basis to avoid any kind of security breach.
 To avoid the major loopholes and risks in the implementation of the software the
managers must take assistance of the vendor company to protect the data and information
of the employees and customers of the bank.
The top concern for the bank is to find s secure host for all the business operation that it performs
(Morris, 2011). When the ERP software is installed premise there a crucial problem of having
the technical team in the bank to support the working of the software. Whereas, the software
which on cloud gives the responsibility to the vendor to maintain and control the software.
CONCLUSION
The report concludes that ERP systems are highly influential in the working of the bank.
These systems can be used by the banks to improve their efficiency. The processes of the banks
such as account management and data collection can be efficiently improved by the use of the
ERP software. The issue faced by the common wealth bank of Australia regarding the reporting
of transactions above $AUD 10000 can also be solves by the use of the Corniche ERP system.
Moreover, it concludes that the use of this software may create security risks and data breaches
in the bank's system. The report recommends following the guidelines to prevent any kind of rsk
or breach.
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REFERENCES
Books and journals
Babu, K.V.S.N. and Bezawada, M., 2012. Enterprise resource planning.
Martovoy, A. and Mention, A.L., 2016. Patterns of new service development processes in
banking. International Journal of Bank Marketing. 34(1). pp.62-77.
Tanrikulu, Z. and Ozcer, T., 2011. Standardization of information systems development
processes and banking industry adaptations. arXiv preprint arXiv:1105.4468.
Leon, A., 2014. Enterprise resource planning. McGraw-Hill Education.
Monk, E. and Wagner, B., 2012. Concepts in enterprise resource planning. Cengage Learning.
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systems on management control systems and firm performance. International Journal of
Accounting Information Systems. 12(1). pp.20-39.
Momoh, A., Roy, R. and Shehab, E., 2010. Challenges in enterprise resource planning
implementation: state-of-the-art. Business Process Management Journal. 16(4). pp.537-565.
Shaul, L. and Tauber, D., 2013. Critical success factors in enterprise resource planning systems:
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Sedera, D. and Gable, G.G., 2010. Knowledge management competence for enterprise system
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Motiwalla, L.F. and Thompson, J., 2012. Enterprise systems for management (p. 245). Boston.
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Morris, M.G. and Venkatesh, V., 2010. Job characteristics and job satisfaction: understanding
the role of enterprise resource planning system implementation. Mis Quarterly. pp.143-161.
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Morris, J.J., 2011. The impact of enterprise resource planning (ERP) systems on the
effectiveness of internal controls over financial reporting. Journal of Information Systems. 25(1).
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HassabElnaby, H.R., Hwang, W. and Vonderembse, M.A., 2012. The impact of ERP
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Salmeron, J.L. and Lopez, C., 2010. A multicriteria approach for risks assessment in ERP
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