BHP Billiton: Strategic Management, IS, and System Acquisition Report

This report provides a comprehensive analysis of BHP Billiton's strategic management and information systems. It begins by examining the company's organizational structure, identifying operational problems arising from its dual-listed structure and complex decision-making processes. The report then explores the most likely system acquisition model, focusing on ERP systems and their role in managing the company's technological needs. A system flowchart of sales procedures is presented, followed by a discussion of control problems and potential fraud risks within the system. The second part of the report focuses on the development and adoption of accounting software packages, the current market size of BHP Billiton, and the identification of market leaders and competitive advantages. Finally, it addresses the current gaps and challenges encountered by consumers of accounting software, providing a well-rounded overview of BHP Billiton's strategic approach to information systems and its impact on business operations.

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Strategic Management and Information System
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Strategic Management and Information System
Contents
Introduction......................................................................................................................................3
Part 1................................................................................................................................................3
Current organizational structure.............................................................................................3
Operational problems that organization faces due to this structure.......................................3
Most likely system acquisition model....................................................................................4
Preparing a system flowchart of procedures involved in sales for BHP Billiton...................4
Control problem related to the system and possible frauds....................................................6
Part 2................................................................................................................................................6
Development and adoption of accounting software packages...............................................6
The current market size of BHP Billiton................................................................................7
Identifying leaders in market and things that make competitive advantage..........................7
Current gaps or challenges encountered by consumers of accounting software....................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
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Introduction
In the modern world of business, it is important for the firms to manage their business process in
a smarter way. For doing so it is essential for the firms to make use of Information and
technology systems. There are many software packages that are available for the company which
they can utilize for their different business processes (Swayne, Duncan and Ginter, 2012). BHP
Billiton Limited is the mining, metal and petroleum public limited problem. This report
highlights the ways operational errors are removed by the use of IT software. It also describes
the system that is designed for solving many kinds of problems. The current position of the
company is also described in this report.
Part 1
Current organizational structure
According to the views, Hitt, Ireland and Hoskisson, (2012) Organisational structure is
described as the hierarchy that is followed by the organization. It represents the levels of
the different workers of the company. This company operates under a dual listed firm
structure with two parent firms (BHP limited and BHP Billiton Plc). It is operated as a
single economic entity, which they refer to as BHP. They are running a unified
management and Board. The Board committee members consist of the chairman of
nomination and governance committee. They have the board of members at the top, and
then they have executives below them like Managing Directors and Chief Executive
Officer. Below them, there are Advisory members. Below them line managers at the
workplace and then staff members at the lower place.
Operational problems that organization faces due to this structure
As per the views Heras‐Saizarbitoria and Boiral, (2013), there are several kinds of
operational problems that are faced by the BHP Billiton due to its organizational structure.
Due to its dual-listed structure, the decision-making process gets complicated. Since there
is a large amount of members that are involved in the process of decision making and
providing feedback hence the process gets weaker. Some of the operational processes like
human resource management is being maintained by the executives and hence they are
unable to understand the organizational needs in various sections of the firm. The
leadership has not involved lower-level staffs members in important processes within an
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organization. This is a matter of problem in terms of employee confidence. They must have
to involve people from different levels of the company. It will increase the chances of
taking decisions that are not favorable to the government. Since both companies in the
collaborations have a different kind of business statements and culture of working and
hence the collaboration makes it difficult to work with same productivity. This poses a
question mark on the efficiency of the firm working process. Strategic decision-making
process is the highly complex process.
Most likely system acquisition model
There are many kinds of system acquisition model that has been used various companies.
Customised software is highly helpful in making the processes of the firm easier since they are
designed as per the need of BHP Billiton but they do not satisfy the needs of people that can be
very effective when concerned with the organization of such scale. The most difficulty with such
type of model is that various software is made for different works which may not be capable to
work with each other. Since this company is in many fields then the system acquisition model
that is used is ERP. The acquisition process based on a rational or normative decision-making
process. It is an approach embedded within the ERP system life cycle. An ERP system suppliers
are today striving to penetrate the segment of the market. Enterprise Resource planning typically
drives all the options right through the use of a system. The Priem, Li and Carr, (2012) state that
ERP acquisition model is used for managing the technological needs of the company. This model
understands the needs of the company and changes can be made easily. This kind of changes is
made according to the evaluation that is made after monitoring. Since it is an integrated
management of major business processes more likely in real time and medicated by technology
with the help of software (Hill, Jones & Schilling, 2014). This system model helps in the wide
range of business processes starting from product planning to the time when it is sold in the
market. It helps in financial management as well as the accounting of different functional units.
Preparing a system flowchart of procedures involved in sales for BHP Billiton
Ordered flowchart of the processes involved in sales is as follows:
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Strategic Management and Information System
5
Sales Order
Customer
Purchase order
POP
decision:
pick ,
order or
produce
Determining
order quantity
Create purchase
order and send
Receive items
Assemble or
manufacture
item Box and
package the
item
Determine
Quantity
Ship to
customer
Create Pick
order
Pick up items
from current
inventory
Create a
work order
Create packing
slip and
invoice
PICK Produce
Order

Strategic Management and Information System
Control problem related to the system and possible frauds
According to Trovão et. al., (2013) these systems have some kinds of control problems.
This control problem raises the issues of the firm when concerned with increasing the efficiency
of the people. If there is any discrepancy in the control system then the result that is obtained
from the system can be repetitive and may have faults in it. One of the biggest problem related to
the system is the communication. It is always difficult to maintain the communication standards
while using such a large system. Apart from this, there are many risks that are associated with
the system. Data can be taken by external people by hacking the system. Since in ERP financial
and operational task s also managed hence if the control is loosed then it may lead to long-term
loses for the company ultimately resulting in business failure. It is difficult for the system
administrators to manage the fraud that can be done to the system.
The López-Nicolás and Meroño-Cerdán, (2011) States that in the technology advances,
fraud is becoming increasingly complicated and difficult to detect, especially when individuals
collide. Surveys show that the median loss from the collude fraud is much greater than the fraud
perpetrated by individuals (Hahn & Powers. 2010). Despite its prevalence and potentially
devastating effects internal auditors often fail to consider collusion in their fraud assessment and
detection efforts. There are several techniques that are used for detecting such kind of frauds.
Transaction mining is one of the most used methods. It is important for the firm to detect such
kind of frauds as it helps in managing data and keeping it safe which is extremely crucial in the
case of bigger firms like BHP Billiton.
Part 2
Development and adoption of accounting software packages
As per the views Aspara et. al., (2011) it is important for the firms to choose its accounting
software packages. It can be developed or can be adopted from the available software. Some of
the companies use their own customised software. In present times cloud-based accounting
software in Australia is highest. Connecting accounting software with internet empowered
organizations in managing its accounting data. The two major benefit associated with such kind
of adoption software is automation and integration of accounting functions. Both helps to
provide firm with a competitive edge over other rivals. Features such as invoicing, fast bank
reconciliation, accessibility through mobile-based apps, faster inventory management, integrated
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Strategic Management and Information System
payrolls, dashboard, smart reports, expenses claiming and bill payments makes this accounting
software more user-friendly. The design of accounting software hugely varies based on
complexity and cost (Grey, Emer & Sheng, 2014). It also assists in the financial management of
the company and hence used in managerial decision making. One of the biggest problems with
the modern day accounting software is related to the incompatible formats as well as duplication.
Xero accounting software is one of the most widely used software that can be used inside BHP
Billiton. It uses the system model known as Software as a service (SaaS). Using SaaS with
internet helps a company with an application that can be operated with simple web browsers. It
can be changed from time to time as per the demand of people. Since there is lack of security
standards that are present in cloud hence use of firewalls is necessary. Identify management
measures can be beneficial for providing authentication to service.
The current market size of BHP Billiton
According to the Barney, (2012) this company is one of the biggest firms that is operating in
Australia. The market size refers to the market share this company is having in which it is
operating. This company is having the turnover of around 207,556,649 dollars. Apart from this,
it has a market capitalization of around 87936 dollars (Fleisher & Bensoussan, 2015). The
company revenue is around 60 billion US dollars. Its size can be understood by the fact that it is
the second largest mining firm in the whole world. It has made a profit of around 6.2billion US
dollars. It is the largest firm inside Australia in terms of market capitalization. It has a primary
listing in that London Stock Exchange and it’s also the constituent of FTSE 100 index. This
company is operational in around 25 countries all around the world. It is employing around
41000 people. It is having four primary operational units. It is dealing in the business of Coal,
Copper, Iron ore, Petroleum as well as in potash. In the year 2015, it has produced an around 256
million barrels of oil equivalent, 1.7 million tonnes of copper, 233 Mt of iron ore, 43 Mt of
metallurgical coal and 41 Mt of energy coal. Underlining all these data, it can be said that it is
the largest diversified natural resources firm.
Identifying leaders in market and things that make competitive advantage
In the views of Stead and Stead, (2013) there are many market leaders in the industry in which
BHP Billiton is operating. Competitors are increasing day by day and it has risen to cutthroat
level. Some of the biggest competitors is Arconic Inc, RIO TINTO Ltd. Both these companies
use various kinds of strategies for leading in the market. To attract number of customers towards
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its business all competitor company is using aggressive marketing which is dangerous for the
business of BHP Billiton. For achieving competitive advantage over other there are following
strategies that have been used:
 Making use of technologies that reduces the operational cost which helps in
increasing the profit margin of the firm.
 Taking use of customised or ERP software is helping a company in making their
working process easier as well as taking decision according to it.
 Managing data that is produced in the daily operations which is a difficult process
is resolved through the use of cloud computing software.
 For gaining competitive advantage they are providing training to their employees
which helps them n adding value to their products.
Current gaps or challenges encountered by consumers of accounting software
As per the views of Ward, (2012) there are many kinds of gaps or challenges that is encountered
by customers of accounting software. Xero is one of that largest company in providing
accounting software used by users. Some of the biggest challenges that are faced by the users
are:
 Lack of security (Anwar, 2016).
 Weak reporting service
 Lack of efficiency
 Out-dated and lack of accuracy
 It is not user-friendly as well as customisation is difficult
 Some kinds of features are missing as well as it is expensive
 Poor customer relationship management
 There is some kind of software compatibility problems.
 No 24*7 technical support
 The poor speed of access (Anderson, Narus & Narayandas, 2009).
Some of the recommendations that can be given in this regard are as follows:
 Use of firewalls can protect them from increasing hijacks.
 Cloud-based accounting software can help users in accessing it at the faster rate.
 Take use of technical experts can reduce software compatibility problem.
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Conclusion
From the above-based report, BHP Billiton is one of the best biggest mining and petroleum firm
in the world. It is important for the firm to manage its processes by making use of various kinds
of software. Enterprise resource planning is one of the best software that can be utilized by the
firm so as to make many kinds of planning. The customised software can also be used by the
firms. Since there are many kinds of accounting software that is used by the firm for managing
their financial resource. There are several kinds of gaps and challenges that are present in the
accounting software and all these can be reduced by the use of other software. There are many
bigger firms that are working in the same industry. They are using different kinds of
technological software for gaining competitive advantage.
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References
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Hahn, W. & Powers. T.L. 2010, Strategic plan quality, implementation capability, and firm
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Trovão, J.P., Pereirinha, P.G., Jorge, H.M. and Antunes, C.H., 2013. A multi-level energy
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