Strategic Information System Report: A Case Study of Brickworks

This report provides an in-depth analysis of Brickworks' strategic information system, focusing on its organizational structure and the accounting software packages used in Australia. It highlights the company's functional organizational structure and the operational problems associated with it, such as communication breakdowns and conflicting departmental goals. The report also discusses the adoption of commercial software, specifically Xero, as a system acquisition method, detailing the sales procedures and associated control challenges. Furthermore, it explores the evolution of accounting software in Australia, from traditional manual methods to cloud-based packages like Xero, MYOB, and QuickBooks, emphasizing their benefits and market presence. The report concludes by examining the competitive landscape of the accounting software market, with a focus on the strategies employed by key players like Xero, QuickBooks, and MYOB to gain market share.

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STRATEGIC INFORMATION SYSTEMS
Student’s Name
Course
Professor’s Name
University
City (State)
Date

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Introduction
This research focuses on the organizational structure of Brickworks company and the
accounting software/ package in Australia. Brickworks is an Australia based company that
was started in 1943 during the time of great depression. It was formed by a group of brick
manufacturers located in Sydney. It was formed to ensure the local brick industry remains
viable. This company quickly grew over the years due to great technological innovations and
a strong team of managers. Brickworks is the leading brick manufacturer in Australia today.
They also produce things like roofing tiles, pavers, timber products and concrete panels.
Organizational structure is a technical term and has been defined differently by different
researchers. According to Bloisi et al. (2007, p.710) organizational structure is a creating a
group of people and tasks that are in different units so as to enhance coordination and
communication, decision-making and actions in a company. This helps the company
members realize the close connection between activities that take place within a company
hence making it easier to understand how to direct an organization efficiently.
Accounting software/ packages This refers to a type of application software that is developed
so as to perform accounting processes and services. It records and process accounting data
and helps come up with the accounting records like ledgers. It also performs functions like
payroll management and trial balances. It functions like an accounting information system.
These packages are mainly cloud-based, there provide integration of functional modules and
provide storage space.

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Literature review
The current organizational structure
The company uses the functional organizational structure. This is a structure that has been
adopted by many small companies like the manufacturing companies and hotels (Carmel and
Becker,1995). In this kind of structure, employees in one area respond to all the directors
above them. This is a very effective structure. Employees from one department, say human
resource, might be called in by another employee in another department, say finance to
handle things in their department that are related to the human resource. This kind of
structure goes a long way to reduce centralization in a company.
Brickworks limited has three major segments and they include Building products, Investment
division, and property division. All these segments are responsible for different duties but in
case there is a financial problem in the building products segments, the property division
might come in to help.
The Building product group is in charge of operations of the company’s brand products. This
includes activities from sourcing, manufacturing, warehousing, distribution, marketing, and
sales. It also concentrates on the research of the development of products.
The land and development group (property division) is in charge of the lands created and
bought by revenue created from building product business. The activities include property
trust, management of waste and the sales of land.

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Finally, the investment group is the one that takes care of making decisions, seek available
markets and business opportunities, generate projections and calculate risks. It is the branch
that makes plans and safeguards the financial reports integrity.
Brickworks has a board of directors which include:
 The managing director
 Non-executive Director, Deputy chairman
 Non-executive chairman
 3 Independent Non-executive directors
 Lead Independent Director
They all answer to the directors above them and so do the other employees.
Operational problems associated with functional organization structure
Despite this organizational structure being the most popular organizational model today, as
observed by Peters (1993), it has some operational limitations. Only the CEO or topmost
manager have the clear picture of the company’s goal. The company is divided into functions
and each function has its goals. This becomes a problem when a manager suddenly vacates
his/her position. This would leave no other qualified persons and worse it might leave no one
knowing the end goal hence the company might lose its sense of direction. The leader might
as well become so overwhelmed by all the weight of the company and the increase in
decision making if the country grows bigger. This will obviously affect his/her efficiency.
Hostility between or among departments might also be a big problem for the company. This
might come up when the goals of a function contradict with another function’s goals

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(Compeau and Higgins,1995). There might also be conflicting customer interactions. For
example, when a customer comes to talk to the finance department today, and human
resource department tomorrow there might be information missing on what each department
told the customer. This could lead to information breakdown since they communicate
vertically internally.
The most likely system acquisition method
Brickworks will probably use the commercial software as their system acquisition method.
Commercial software is where a company buys a software package that would be ideal for its
system. It is also referred to as off the shelf method of system acquisition (Heikkila et
al.,1991). This method of system acquisition is admirable since it is way more affordable than
the other methods. It also requires a little time to implement. Brickworks will not need to hire
much technical staff for this purpose. In case of future upgrades and maintenance, it will not
be up to Brickworks to pay for them. Upgrades are solely on the vendor. One of the most
important advantages of this method is that the software would have a proven reliability and
performance benchmark. This is the method they used to acquire Xero accounting software.
System flowchart of the sales procedures for the chosen organization
A customer makes a purchase order. The sales department accepts the customer’s request to
purchase the products. The credit history of the customer is checked the order is processed.
Then it is sent to the inventory management cycle. This department confirms if the products
are available. They are released if they are available and shipping arrangements are made and
then documents prepared. The sales invoice is sent to the customer via email. The customer

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then pays for the products and the money is put in the account receivables. In case of any
problems, the products can be returned to the company and the credits to be issued.
(The flowchart of this process is in the appendices section.)
This system has some control challenges. They include:
Unauthorized disclosure of sensitive information. To control this, the system should have the
restriction of access to master data.
Theft of inventory. This could be controlled by restriction of physical access to inventory.
Development and adoption of the accounting software packages
For many years most Australian businesses used the traditional way of accounting which
included manually entering entries using paper and pen. It was not until the 1990s when
accounting software and spreadsheets were introduced. However, these spreadsheets had their
own limitations since they could not be connected to the internet and they could only be
installed (Jadhav and Sonar, 2009). There was no integration since different accounting
functions could hardly interact. It was hard since purchase, sales and inventory management
could not coordinate. During that time, there was an increase in regulation complexity hence
every discipline in a business, even the non-accounting ones needed to evolve (Edmundson
and Jeffery, 1994). This led to the creation of modules like secretarial functions, payrolls,
taxation and compliance functions. These functions need to be integrated hence a decade later
when cloud-based accounting packages were introduced. These accounting software/
packages have made accounting so easy. They have revolutionized the accounting functions
(Hyvonen et al., 2006). They include software like Xero, MYOB essentials, QuickBooks, and

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others. These packages are much easier to use. They are internet connected and based. Due to
these functions, use of accounting packages has spread, increasingly, all over the country.
These accounting software/ packages have grown to become more like management tools
(Jadhav and Sonar,2011).
The cloud computing concept was not adopted easily. For a while, there was a problem and
lack of implementation due to issues faced by traditional accountants while using them. They
had no knowhow and they had not been taught how to use them since it was a new concept.
Today, things have changed. More accountants have been trained to use them and many
businesses, small or large, have adopted this new technology in Australia. Different software
packages have been introduced in Australia which has very similar services due to lack of
competition. Therefore, the key benefits offered by these accounting packages are the
integration of accounting functions and automation ( Pollock et al., 2003). They have features
like integrated payroll, smart reports, online billing payment, fast bank reconciliation, easy
invoicing, accessibility through android apps and faster inventory management. These
packages are cloud-based therefore allows multiple access to accounting data.
The adoption of accounting packages In Australia is happening at a very fast rate. Even firster
than all the other countries in the world, according to Elikai et al., (2007). Most businesses
are adopting these packages to reduce the tedious work that comes with the traditional
methods of accounting. They are also being embraced because of their accuracy and the time
management aspect. All the packages require is inputs of the correct accounts and it
automatically generates the reports. Due to the efficiency of these systems, the adoption is
swift and will continue growing.

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The current market size
By June last year, Australia had 2,238,299 million registered businesses that were actively
running. According to the media release, more than 2,00,000 business have adopted the
accounting software packages. This industry has a high growth rate 8.5% per annum and a
revenue of 3.5 billion. This industry has 8,006 employees. The accounting software
application that has the highest market share is Xero which owns 54% of the market and 1500
employees. It has 312,000 subscribers. MYOB comes in second at 37% with a total revenue
of $416,483,000 as per last year. It had 195,000 subscribers by mid last year in both Australia
and New Zealand. Its number of employees is however not known. and finally, QuickBooks
comes in third with more than 63,000 subscribers in Australia.
The leaders in the market and what gives them the competitive advantage
The big players in the accounting packages market are Xero, QuickBooks, and MYOB. These
three companies compete to dominate this huge market. They have removed the need for
bookkeepers as every business needs to take charge and keep track of its accounts. These
packages run on desktops and mobile applications. These companies have been in the rivalry
and they are not shy to show it to the public. They are all competing for market shares.
According to Business Insider, earlier in 2015, a representative of one of the companies
handed them a piece of sheet comparing the type of tactics in play, pricing, and features. This
was done off the record and the representative claimed the sheet did not come from him.
Xero boss Rod Dury came out later in April 2015 claiming that MYOB was unfit and they
couldn’t recommend it to anyone. According to them, MYOB had left out key things in the
report. Xero and QuickBooks had gone further and introduced cloud services while MYOB

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had raced to build their own offerings hence maintaining the largest market share and raising
millions of dollars with every share costing between 3 to 4 dollars. Xero has evolved from a
small start-up to a big company spending almost 250 million dollars to come up with
software. By 2014, this company had more than 400000 customers across 180 countries.
According to Nicolette Maury, Intuit (QuickBooks) Australia’s MD, the industry is shifting,
therefore, the game should change for everyone. And that is why Intuit invested so heavily in
Australia.
As seen above these three companies are all fighting for the largest market shares in the
industry. However, we can tell that they are the giants in the market. What makes them so?
 Costs. These accounting packages are affordable for all businesses, be it small or
large.
 Usability. They are cloud-based and can have many users at a time. They can also be
used in mobile applications. The human-computer interface is also friendly and can be
used by anyone with just a little skill. They are easy to use and are memorable.
 Features. These accounting packages have amazing features. They track inventory and
offer ancillary services. They also offer project management and payroll services.
Intuit and MYOB even have features like time tracking. They also offer tax
preparations and third-party integrations services.
Current challenges encountered by users of accounting software/packages and relevant
suggestions.
With the introduction of this cloud-based accounting software, many benefits were realized.
However, challenges were part of the package too.

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Lack of security is one of the biggest challenges for the customers. The accounting packages
companies have come up with security measures like firewalls but still, there is a lot to be
done to solve this problem (Shanks et al., 2000). Users do not feel safe. They are afraid that
foreign parties might access their data. This problem arises because cloud computing does not
have technologies to face this problem and security standards are still low for this reason, the
risk of cybercrimes is very high. To solve this issue, an IDM (Identify Management) could be
used to authenticate users and services based on the credentials provided and the
characteristics of the user (Lai, 2008). Information Centric security approach could also be
used to increase data security in the cloud. This is only possible through a trusted computing
framework. Encryption is also required so that the system can run and compute in a cipher-
text environment (Daniele et al., 1999).
There are also other minor problems like:
Size of files.
With accounting packages, came the ability to email big sized files. However, with time, the
sizes of files increased and it became a problem again.
Double filing system.
Accounting packages came with both paper and digital filing system. One has to have two
entries for each document. This is tiresome as one wouldn’t know which copy to keep. Which
of the copies is the original copy? It is recommended that you have two people managing
different filling systems (Bromson et al., 1994).
Remote desktop.

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This is very slow and tiresome. You have to reconnect every time you drop your connections.
When you click on something there is always some seconds lag. This is very hard, frustrating
and boring if you are dealing with very large data. You are recommended to use this if you
have very small data or business.
Conclusion
With the above information in mind, it is evident that accounting software packages have
been adopted by all type of businesses regardless of nature. Due to the improved innovations
and discoveries that are being made in the technological sector then it is wise to say that this
industry is still growing and will continue to grow in the days to come (Xu et al.,2003).
However, the developers should come up with ways of making this innovation more secure to
increase the customer trusts in it.

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