Strategic Information System Analysis: Wesfarmers Accounting Software

This report provides a comprehensive literature review of Wesfarmers, an Australian company utilizing accounting software packages. It begins with an introduction to Wesfarmers, its organizational structure, and operational challenges. The report then delves into system acquisition methods, specifically focusing on ERP, commercial, and custom software, and presents a system flowchart of sales procedures. It addresses control problems and potential frauds within the system. Part 2 examines the development and adoption of accounting software, discussing cloud-based solutions like Xero, MYOB, and Quick Books. The report provides an overview of Wesfarmers' market size and identifies key market leaders. It concludes by analyzing relevant problems faced by the organization and suggests improvements, such as enhancing security protocols and adopting user-friendly, up-to-date software. The report aims to offer insights into the strategic information system of Wesfarmers and its implications for business development.

Running head: STRATEGIC INFORMATION SYSTEM
STRATEGIC INFORMATION SYSTEM
Name of the Student
Name of the University

1STRATEGIC INFORMATION SYSTEM
Introduction
The report is aimed to provide a literature review on a company that is using
accounting software packages in Australia. The selected organization is the Wesfarmers. This
company organization has spread the business upon the retail, chemical, col mining,
fertilizers and industrial products. The company hires the largest employer in Australia
having almost number of employee of 205,000. The company provides full project
management service for implementing software platform (Klettner, Clarke and 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 vandenDriesen Group General Counsel, Wesfarmers Limited
John Durkan Managing Director, Coles
Michael Schneider Managing Director, Bunnings Group and Managing
Director, Bunnings Australia & New Zealand

2STRATEGIC INFORMATION SYSTEM
Peter (PJ) Davis Managing Director, Bunnings UK & Ireland
Guy Russo Chief Executive Officer, Department Stores
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 Wesfarmers
In the organizational and management structure large companies like the Wesfarmers
tackles many difficulties:
1. All the problems faced by the company must be identified from the root and
thus analyzed by the cause of the problems. The portable symptoms for the
problem must be avoided at highest priority (Pettigrew 2014). The symptoms
that are visible in the workplace are initially focused by the organization as
they are easier to focus on.

3STRATEGIC INFORMATION SYSTEM
2. If one root cause involves multiple problems, then the problem must be
eliminated immediately after identification since, there are chances of the
problem get resurfaced. Searching for the root problem has steps like
analyzing all the root problems and hence developing a plan to mitigate the
problems with the organization.
3. Proper knowledge should be provided to the employee about how the
organization works (Pettigrew 2014). All the departmental works must be
shared and divided such that only the departmental workers knows the work
procedures and are only indulged to the particular workplace.
4. The workers should be aware of the improvements and developments that has
been done or will take place in the future. It is vital to be able to answer to the
question that has been asked to them and have knowledge of the working
procedure in the organization (Scott and Davis 2015).
5. There may be lag in involvement of people working in the organization of
procedure of management. To keep the smooth flow in the workplace the
employees must be involved in the departments.
3. Most likely system acquisition method
To keep track and pace with the market competition, system acquisition method is
required in the organization:
1. ERP: Enterprise resources planning has a distinct type of target software that
must be used by the core business operating department of the organization
(Shaul and Tauber 2013). This helps the organization to procure order details,
manufacturing materials, invoice orders, manage sales and much more.

4STRATEGIC INFORMATION SYSTEM
2. Commercial software: Software that has been developed for the usability of
the organization or an individual. This commercial software is generally sold
in the market for a price as declared by the software developers (Morgan et al.
2015). These softwares are mainly licensed or open source software which can
be used in our daily life that include OS, games and other software.
3. Custom software: The software which is developed especially for the use of an
organization are referred as the Custom software. The main specifications of
the organization are kept in mind for the development of this kind of software
(Völter et al. 2013). This software can be a combination of the different types
of smaller software available in the market. These are used to implement
working of different complex work into single software.
Wesfarmers has a working environment enforces the employee to use the ERP for the
logistics and invoices of the management of the warehouse. The best option fir the
organization is to create custom software that targets the software that has been used in the
organization to be implemented in a single one (Völter et al. 2013). These softwares are
developed to do all types of work of the organization.
4. System flowchart of the sales procedures
The organization, Wesfarmers follows the diagram illustrated in the sale procedure.
The flowchart explains the procedures and steps that has been implemented in the
organization to keep up the sales procedure.

5STRATEGIC INFORMATION SYSTEM
Create
Pick Ticket
Sale Order
POP decision: pick, order or produce? Determine
quantity
Pick up items
from current
inventory
Customer Purchase Order
Determine order
quality
Create a work order
Create purchase order and send
Receive Items
Assemble or
manufacture items
Box and package
the item
Ship to customer
Create packing slip and invoice
Figure 1: Sales procedure flowchart being followed by the Wesfarmers
(Source: Made by author)
5. Control problems in the system and frauds in the organization
Controlling of problems in the workplace should be done effectively using 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

6STRATEGIC INFORMATION SYSTEM
larger shipment delivery (Barak 2016). The frauds of data theft from the organization can
cause privacy hampering of the employees of the company. These types 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 and 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
and 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 can work on a single
integrated software, which allows the use of cloud based integration. The recent scenario of
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

7STRATEGIC INFORMATION SYSTEM
of the organization (Sampaio and 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
RESTATE
D
2013
RESTATE
D
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
amortization
(1,296) (1,219) (1,082) (1,033) (995)
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
407 2,440 2,689 2,261 2,126

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to members of
Wesfarmers Limited
CAPITAL AND DIVIDENDS
Ordinary shares on issue
(number) 000's as at 30
June
1,126,13
1
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 dividend
components
- 100 50 - -
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
2.7 3.0 3.2 3.0 2.9

9STRATEGIC INFORMATION SYSTEM
significant items)
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
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

10STRATEGIC INFORMATION SYSTEM
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:
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 and Pedersen 2013).
2. Software’s lack in the security protocol, which is essential to keep the information
safe from the outsider, attacks. Use of firewall is not enough for the software must
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 and Pedersen 2013).
4. The software’s are not user friendly in nature and make the employees using the
software must work hard to produce a better document to be used by the
organization.

11STRATEGIC INFORMATION SYSTEM
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.