Strategic Information System for Woolworths: A Detailed Report

This report provides a comprehensive analysis of Woolworths' strategic information system. Part 1 examines the organization's flat structure, operational issues, system acquisition methods (external outsourcing), and sales procedures, as well as potential control issues and fraud risks. Part 2 focuses on the development and adoption of accounting software packages, market size, and market leaders (Xero and MyOB), discussing challenges and recommendations. The report highlights the importance of strategic information systems in addressing operational challenges and enhancing financial management, emphasizing the need for efficient systems to support Woolworths' expanding operations and competitive market position. The analysis considers the implications of organizational structure on information system requirements and the benefits of adopting advanced accounting software.

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Strategic information system
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Contents
Part 1..........................................................................................................................................3
Organizational structure:........................................................................................................3
Operational issues:..................................................................................................................4
Systems acquisition method:..................................................................................................4
Sales procedure:......................................................................................................................5
Control issues:........................................................................................................................5
Part 2..........................................................................................................................................5
Development and adoption of accounting software packages:..............................................6
Market size:............................................................................................................................6
Market leaders:.......................................................................................................................7
Challenges and recommendations:.........................................................................................7
References..................................................................................................................................8

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Part 1
The following report is aimed at describing the organizational structure of Woolworths, the
leading food retailer in Australia and the issues that are associated with its operations due to
the structure adopted by the organization. Thereafter, the report would be directed towards
obtaining an illustration of the potential system acquisition methods, sales flowchart, control
issues and possibilities of fraud that can be observed in system chosen for the organization.
Information systems are perceived as a major corporate asset owing to the higher price of the
systems and the benefits facilitated by them.
The necessity for critical analysis of the available options in the domain of information
systems acquisition could be perceived as a contributor to the long term support for business
initiatives. The prominently observed sources of systems acquisition that can serve the
strategic information needs of the organization are observed in external or in-house solutions.
The flowchart for the sales procedure would provide a legible impression of one of
significant aspects of strategic information. The understanding of the sales procedure allows
the apprehension of distinct sources of revenue that can be apprehended in the distinct stages
of the sales procedure. Thereafter, the organization must also consider the specific limitations
which could be observed in the case of controls and issues of fraud that could be associated
with the information system.
Organizational structure:
The organizational structure of Woolworths is observed to be a flat organizational structure
with minimal layers of hierarchy. The characteristic element of centralization could be
observed in the form of reporting of the lower levels of management to the CEO of the
organization (Amrollahi, Ghapanchi & Najaftorkaman, 2014). The improvement of the
efficiency of organizational workforce could be assumed as a feasible outcome from the flat
organizational structure which could be noted from the reduction of middle layers of
management. The notable advantage that can be drawn from the exclusion of middle
management refers to the access to human capital that can be redirected towards other crucial
functional areas involved in the top management and ground management (Arvidsson,
Holmström & Lyytinen, 2014).
The organization derives a profound advantage from the flat organizational structure in the
form of increasing flexibility of communication among the senior management and store
staff. The different implications that can be drawn in context of the flat organizational
structure also refers to the interactions between customers and employees at the storefront as

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well as the personnel involved in the sales and marketing department of Woolworths.
Woolworths has sustained its reputation in the domain of food retail sector in Australia
alongside addressing the variations in customer preferences and the dynamic changes
observed in the external environment with the help of its flat organizational structure (Haron,
Sabri & Zolkarnain, 2013). The requirement of a strategic information system is required for
Woolworths in order to address the gradually expanding operations of Woolworths which
could support the existing system platforms of the organization in order to facilitate
efficiency in functional areas such as supply chain operations and inventory management.
Operational issues:
The operational issues that could be anticipated in the case of Woolworths due to its
organizational structure involve prominent references to the limitation of control privileges
for the organization’s management. Since the operations of Woolworths are executed on a
large scale in Australia, the organization’s management requires flexible allocation of
responsibilities to managers and employees as well as effective distribution of organizational
objectives (Henriques de Gusmão & Pereira Medeiros, 2016). The allocation of
responsibilities could become ambiguous since the flat organizational structure does not
imply any possibilities for formal communication channels that could lead to profound
operational issues. Another profound operational issue that can be perceived in the case of
Woolworths refers to the management of human resources since the human capital is
responsible for reviewing the decisions that are suggested by the senior management.
This factor leads to profound issues in the effective realization of control implications in the
management of store level staff alongside the concerns for professional relationships and the
personal interaction between employees and the management. The significance of personal
relationships could be assumed as profound implications for developing accountability of
employees for their professional objectives and responsibilities alongside the proliferation of
trust in the organization among employees (Jin, et al., 2014). Woolworths is also liable to
experience detrimental consequences in its operations due to the organizational structure such
as issues arising out of power conflicts and depreciation of employee motivation. The critical
review of these operational issues is essential to apprehend the requirements for a strategic
information system for the Woolworths (Lee, et al., 2015).
Systems acquisition method:
The selection of a viable system acquisition method is necessary for Woolworths in order to
assist the organization in addressing operational issues identified in case of the organization.

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The two prominently known methods of system acquisition involve external and internal
system development mechanisms. The external sources of deploying a strategic information
system could be observed in outsourcing, cloud computing, open source applications and off-
shoring practices (Osman, El Beltagi & Hardaker, 2015).
According to Parry, De Bock & White, internal information systems development could be
ensured through employing an in-house solution for developing the information system. The
internal information systems development approach could be classified into the distinct
methods of life cycle development and rapid application development (Parry, De Bock &
White, 2015). The preferred system acquisition method that can be applied in the case of
Woolworths is through external method of outsourcing that would enable it to acquire a
custom developed information system which could help the organization in realizing cost
effectiveness alongside catering the information management needs such as flexible retrieval
of stock information from distribution centres that would enable employees to work in real-
time.
Sales procedure:
As per Rahman, the sales procedure flowchart is considered as a crucial resource for an
organization to outline a system for ensuring sale of products facilitated by Woolworths. The
emphasis on the sales procedure could be apprehended from the factor that sales of a product
of service signify the development of relationship between customer and the service
providers (Rahman, 2016).
The sales procedure in the case of Woolworths is initiated with advertisement and marketing
initiatives to increase awareness regarding the products. The advertisement process is
followed by customer recognition and determination of pricing to address different customer
segments. It is imperative to understand the pricing is followed by customer’s analysis of the
product according to various quality dimensions. The final stage in the sales procedure is the
purchasing of product by customer.

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Control issues:
The control issues that could be identified for Woolworths refers to the implications of data
vulnerabilities observed in security frameworks accessible for the organization. The
possibilities that could be drawn from the organizational structure of Woolworths in context
of threats of fraud involve the role of interdependence among different departments of the
organization.
As per Salleh, et , the interrelationship between the different departments of Woolworths is
also reflective of the design reforms in the strategic information system implying lack of
access controls. Therefore, confidential information could be easily misplaced leading to
detrimental consequences for Woolworths which creates the necessity to prepare contingency
plans for these threats for obtaining credible outcomes from the information systems (Salleh,
et al., 2015).
Part 2
The objectives of financial asset management in contemporary business scenario are largely
addressed by development in computers as well as information and communication
technology. The proliferation of accounting information systems have not only provided

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credible opportunities for flexible documentation and management of accounts in
organizations but also provided facilities for monitoring of cash flow (Sugiharto, 2016).
The accounting information systems are considered as credible resources to monitor the
utilization and performance of financial assets of an organization thereby providing
opportunities for long term sustenance in the marketplace. Various research studies and
secondary information pertaining to accounting information systems have indicated their
effectiveness in providing stability and control over financial management of an organization.
Development and adoption of accounting software packages:
The accounting software packages could be broadly described as application software
intended for documentation and management of the different accounting transactions related
to the organization such as accounts payable, billing, accounts receivable and general ledgers.
According to Tarigan & Kraus, the software package also serves the role of a strategic
information system through assisting in simplification of the financial management process
of an enterprise. The development and adoption of accounting software packages are largely
reliant on the industry in which the organization is operating (Tarigan & Kraus, 2017). For
example, organizations in the retail sector which have a wide expanse of operations require
an accounting software package for effective control of the outflows in the outlets and the
financial inflows.
The development of an accounting software package should be characterized with the
flexibility of use and access through the internet. The accounting software package should be
able to provide managers with the opportunity to access data from mobile devices which is
responsible for drastic reduction in complexity and costs involved with departmental
operations (Wali, Sadq & Rasheed, 2016). Core models of accounting software packages
applied for inventory management and billing could also be assumed as sources for flexibility
in the adoption of the packages.
Market size:
The market for accounting software packages has expanded rapidly due to the profound
concerns presented by intensive competition with companies increasing adopting accounting
information systems to acquire feasible documentation of their books. The distinct stages of
evolution in the designs of accounting software packages have indicated noticeable
improvement in the diversity of their application. The efficiency of marketing software
packages such as MyOB, Sage, Nominal, Reckon One and Xero have provided adequate

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opportunities to business management all across the world to monitor their accounts without
the requirement of any professional or academic proficiency in accounting management
(Waters, et al., 2013).
The market leaders such as MyOB and Xero have described their prominence in the current
accounting software market with the integration of comprehensive features such as audit
services and tax management applications in the packages.
The packages ensure that the outcomes of processes involved with calculation of tax and the
audit services are independent of the potential changes in the economic environment.
Furthermore, the development of features such as provision of consultancy and advisory
services facilitated through technological means could also be accounted as a major impact
on the improvement of market size for accounting software packages.
Market leaders:
The accounting software packages provided by market leaders are capable of addressing the
different functions through the integration of core and non-core modules. The market leaders
in Australia’s accounting software sector include references to Xero and MyOB. The ability
of these market leaders to provide distinct facilities such as industry specific products,
location specific products and convenient functionality that are integrated in single software
provides customers with the flexibility to use the software.
The other characteristics that can be apprehended in the case of these market leaders in
accounting software packages refer to profound market share, service resources and extensive
scale of functions. These accounting software market leaders are capable of acquiring
competitive advantage in the form of facilities for comprehensive integration of the different
departments and relevant accounting information for a single platform alongside emphasizing
profoundly on the accomplishment of needs and requirements of potential clients (Wiyatno,
Alam Napitupulu & Abdurachman, 2017). The integration is helpful for identifying specific
details involved in the software as well as its functioning leading to exclusion of loopholes
and simplification of the accounting experience for clients. The utilization of these attributes
is significant for organizations to obtain feasible outcomes such as reduction of manual
intervention in accounting management and the simplification of processes pertaining to
billing and inventory management.

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Challenges and recommendations:
The application of accounting software packages in case of organizations which have
extensive scale of operations and the relevant activities such as development, installation,
adoption and configuration of the package could be a complicated task. Another profound
setback in context of accounting software packages is observed in the form of cost of the
packages since clients are ambiguous regarding the relevance of the package for their
business needs (Wali, Sadq & Rasheed, 2016). Furthermore, the concerns of costs are
complicated by the requirement of periodic investments for the maintenance and support
services related to the installed software. Therefore, the implementation of accounting
packages should focus on the scope of adoption which could enable the client to review the
design of the package and demand necessary reforms suitable for business requirements.
The exclusion of certain modules from the packages could also enable price differentiation
which can enable customers to acquire accounting software according to the specific modules
required for their business needs. The involvement of the clients in development process
could also be presented as a viable suggestion to improve the effectiveness of the accounting
software packages since organization specific details could be integrated for design of the
package thereby facilitating privilege of customization.
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