Woolworths Strategic Information System Review - HI5019 Analysis

This literature review provides an in-depth analysis of Woolworths' strategic information systems, focusing on its organizational structure, operational problems, and system acquisition methods. It examines the company's functional organizational structure, highlighting potential inefficiencies and communication issues. The review identifies the implementation of a cloud-based SAP ERP system as a key strategic move, replacing an outdated system. Furthermore, it describes Woolworths' sales procedures using a flowchart, pinpointing control problems and potential fraud risks. The study also explores the development and adoption of accounting software packages, the current market size, key market leaders, and challenges faced by users, concluding with relevant recommendations. This detailed analysis offers valuable insights into Woolworths' strategic information systems and its impact on the company's operations.

Assignment 1 (Literature Review)
HI5019 Strategic Information System
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Table of Contents
Introduction......................................................................................................................................3
Literature Review............................................................................................................................4
PART 1........................................................................................................................................4
1. The current organizational structure........................................................................................4
2. What operational problems (e.g., inefficiency, errors) do you think the organisation could
experience because of this structure?..........................................................................................6
3. What is the most likely system acquisition method— commercial software, custom
software, or ERP?........................................................................................................................8
4. Describes and prepare a system flowchart of the sales procedures for the chosen
organisation (company)...............................................................................................................9
5. Identify any control problems in the system and what sorts of fraud are possible in this
system?......................................................................................................................................11
PART 2......................................................................................................................................12
1. Development and adoption of the accounting software packages.........................................12
2. The current market size.........................................................................................................14
3. Identify the leaders in the market and what gives them the competitive advantage.............16
4. Identify the current gaps or challenges encountered by users or customers of accounting
software/packages and make relevant suggestions or recommendations..................................18
Conclusion.....................................................................................................................................19
References......................................................................................................................................20
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Introduction
The report will provide with deep insight and detailed analysis of the accounting software
applied by Woolworths, a supermarket chain in Australia. The report will provide with a
discussion towards identifying the market leaders in the same industry sector. It will develop an
understanding of the sales flowchart procedure adopted by the organization. It will further
provide with a detailed analysis of operational problems for the organization and current gaps
identified in the accounting software adopted by the Woolworths.
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Literature Review
PART 1
1. The current organizational structure
According to the thoughts and views of Frias (2014), the organizational structure of an
organization refers to the format or alignment of the human resources and other functions of an
organization are placed. This formation of structures and alignments enables an organization to
achieve the desired goals and objectives. Organizational structures involve the activities like
coordination, controlling, supervision, a division of authority and responsibility between
different functions and human resources in an organization. The organizational structure enables
to determine the activities and enhances the performance of the organization. Organization
undertaken in this literature review is Woolworths. The company operates a supermarket chain
established in Australia. It is one of the most successful and large scaled organizations of
Australia (Frias, 2014).
Woolworths functions under the division of a functional organisational structure. A functional
organizational structure divides the organization into various functions and segments. The
functional organizational structure enables to divide the organization into various diversified
segments according to the tasks and activities are undertaken in the nature of the organization
(Woolworths, 2015). A functional organizational structure also focuses towards task allocation
according to the ability and responsibility levels of the human resources. It emphasises towards
the notations of tasks specialization and effective communication in an organization. At
Woolworths vertical and horizontal communication is practised across all the functions and
divisions. The organizational structure of Woolworths is depicted as below:
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(Source: Woolworths, 2015)
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2. What operational problems (e.g., inefficiency, errors) do you think the organisation
could experience because of this structure?
As per the research and guidance of Dos Santos, et. al., (2013), the functional organization
structure is an effective structure for an organization to incorporate into its systems and
functions. A functional organizational structure also restricts the performance of an organization
to certain areas. Such as at the Woolworths it has been recognised that functional organizational
structure has established rigid systems and policies fostering restricted communication in the
organization. This organizational structure forces horizontal communication into the
organizational structure. It lays emphasis on the horizontal flow of information and
communication between the various functions of the organization. This restricts the
communication only between the divisions or functional and ineffective lateral communication is
observed. As it has been observed in the case scenarios of Woolworth functional organizational
structure had more focus towards the functional goals and objectives as compared to the
organizational aims and desires. The decreased level of integration between the functional and
organizational goals leads towards inefficiency and decreased performance for the supermarket
chain (Dos Santos, et. al., 2013).
(Source: Woolworths, 2015)
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It has also been observed due to this decreased level of integration the business model observed
severe errors in the terms of value proposition and channels of distribution. The value
propositions are different for various functions at Woolworths. For example, the consumer
relationship management functions are more focused towards resolving the problems of the
consumer rather than focusing towards increasing the performance of the organization to reduce
the problems of the consumers.
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3. What is the most likely system acquisition method— commercial software, custom
software, or ERP?
As per the precessions and reviews of Kanellou and Spathis, (2013), on average large-scale
organizations spend up to 19.6% of the earnings into the implementation and maintenance of the
system acquisition software or methods. The recent studies have analysed that Woolworths
invested an amount of US $200 million in implementing the reformative software in the
Information Technology sector for the supermarket industry of Australia. The organization
indulged in aggressive market research and software analysis in order to implement a well-
developed and multi-layered software of Enterprise Resource Planning. The organization was
functioning in the same software for the time period of 30 years. Diversification and expansion
of the operational functions and subsets of Woolworths resulted in the integration of new and
reformative software (Kanellou and Spathis, 2013).
Woolworths has now implemented a cloud-based SAP for payrolls and Enterprise Resource
Planning. The software has been implemented under a long-term planning and project that
included heavy market research and investigation of the software provided in the market. The
older ERP system included multiple software application of the Microsoft Office systems of
Excel and Access. This required filling in the employee details and information manually in the
records. This resulted in a time-consuming process and incurred huge amounts of errors and
omissions of the entries. It also resulted in problems of data duplication and redundancy for the
organization at various levels. The Project Galaxy Transformation is the project processed at
Woolworths to replace the 30 year old ERP system named CASS (Lasisi, et. al., 2017). The
implementation of this developed and well integrated Enterprise Resource Planning system in the
organization is recognised as the largest SAP enrolment and employee payroll in the history of
the Australian economy.
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4. Describes and prepare a system flowchart of the sales procedures for the chosen
organisation (company).
A sales flowchart is a valuable tool and a mechanism for monitoring and controlling the sales
procedures and activities in an organization. A sales flowchart entails details and description of
the sales tasks and activities that are undertaken in an organization to furnish with the required
levels and targets of sales. At Woolworths, the sales flowchart procedure enables to identify the
potential sale opportunities of an organization. It also increases the capacities to furnish the
targeted levels of sales (Veit, et. al., 2013). The sales flow chart procedure at Woolworths
enables to recognise and monitor the number of sales that can be processed by the organization at
a given point in time. A sales flowchart also describes the decision-making basis for various
ancillary processes and associated functions with the sales function at Woolworths.
(Source: Veit, et. al., 2013)
The picture above depicts the sales flowchart structure followed at the Woolworths. The
flowchart is interconnected with the accounting, sales and consumer functions of the
organization. The consumer cell department connects with the consumers to identify the
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demands and requirements. The sales function than processes the sales activities with the
qualified consumers (Veit, et. al., 2013). These include the current and potential consumers of
the organization. The products and services of the organization are integrated with the consumer
demands to impact positively on the consumer buying decisions. Further, the purchase of
products or services is performed by the consumer which is carried forward by the accounting
departments.
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5. Identify any control problems in the system and what sorts of fraud are possible in this
system?
As per the words of Starinsky (2016), it is necessary to depict the controlling activities in an
organization. The systems at Woolworths are structured as complex and diversified subsets and
ancillary functions. The complex nature of these systems results in various control problems and
frauds which ultimately disturbs the performance and efficiency of the organization. The systems
of Woolworths are lengthy and time-consuming. For example, the sale systems of the
organization entail various tasks and activities in its orbit. The sales function at first integrates
with the consumer department to identify the current and future consumption, which results in
delaying the development and deployment of the sales targets and levels of the organization.
Another control problem identified at the systems is ineffective monitoring and controlling
activities of the organization. The monitoring of various activities and tasks undertaken in the
sales systems is required to analyse the repetition of activities. At times mishandling of the
orders and data is preceded in the functions which disturb the equilibrium of the sales activities.
For example, wrong consumer details are furnished with the orders which lead in the wrong
delivery of the products. The order details are mismatched with other orders, which results in
repetition of activities and tasks the sales, accounting and consumer functions at the Woolworths.
Frauds take place due to ineffective controlling activities at the managerial levels. The
consumers and suppliers exchange less valued goods and services for more valued products
which are left unnoticed by the managerial departments. The exchange rates and refund policies
are altered due to satisfy the consumers which result in ineffective monitoring, controlling and
frauds activities (Starinsky, 2016).
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PART 2
1. Development and adoption of the accounting software packages.
In the thoughts of Monk and Wagner (2012), accounting software refers to the software systems
and application that are used by an organization to facilitate effective monitoring and controlling
activities of accounting functions and systems in an organization. Several factors and
consideration are required to undergo the process of adopting accounting software. Accounting
software is of immense importance and integral part of the various functions. It is a system
application or software that organises and monitors the accounting records and details for the
organization. It regulates and analyses the details of accounts payables, account receivables,
payrolls, ledgers, and general entries etc. The organizations like Woolworths consider various
determinants to adopt and quantify accounting software. There is a process of analysis and
identification followed at the Woolworths. The accounting managers and the teams firstly
engage in conducting an analysis which enables to determine the needs and requirements of the
organization. Further, the organization considers the integration of the requirements of the
organization with the specifications of the software in the market. This includes judging and
identifying the various options available in the market of the accounting software. The managers
identify most adaptable and highly integrated software with the needs and objectives of the
organization. Market analysis is performed to identify the desired features and levels of
adaptability provided by different accounting software (Monk, and Wagner, 2012).
(Source: Wallace and Sheetz, 2014)
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