Strategic Information System Implementation and Analysis: Woolworths

This report provides a comprehensive analysis of the implementation of an accounting system within Woolworths Australia. It begins by examining the organization's structure, identifying operational problems arising from its design. The report then explores various system acquisition methods, ...Read More

Running head: STRATEGIC INFORMATION SYSTEM
STRATEGIC INFORMATION SYSTEM
Name of the University
Name of the student
Author Note

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Organizational structure of Woolworths................................................................................2
Operational problems due to the organisational structure......................................................4
Examples of system acquisition methods and the favourable method...................................5
Sales procedure system flowchart of Woolworths.................................................................6
Problems and frauds with the ERP system............................................................................7
Accounting software package adoption and development.....................................................8
Current market size................................................................................................................9
Leaders in the market and reason for their competitive advantage........................................9
Challenges of accounting software implementation............................................................10
Recommendations................................................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................12

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Introduction
In the following report, the implementation of an accounting system in the business
process of a particular organisation has been evaluated. Woolworths Australia has been
chosen as the selected organisation. In the report, the organisational structure of Woolworths
Australia has been mentioned and the proposed organisational problems has been discussed
thoroughly. Several acquisition methods have been discussed and a sales procedure flowchart
has been made for the chosen organisation. The control and fraud problems of the new
technology has been evaluated as well. The development and adoption of accounting
software packages has been discussed and their market sizes have been compared
accordingly. The leader of the market has been identified. Possible challenges and
recommendation for addressing the issues has been mentioned as well in the report.
Discussion
Organizational structure of Woolworths
The Board of Directors is present at the top level of the management board. Their
prime function is ti increase the shareholder value as well as check whether the business
activities of the organization are carried out effectively or not (A brief history of Woolworths
2018). They are responsible for maintaining the interests of the shareholders and every
director’s activities are mentioned in the Board Charter. It contains all the responsibilities and
power of every member of the Board of Directors.
Below the board of Directors comes the Group Executive who are responsible for
pushing the business towards its organizational goals. They are responsible for reporting the
organizational progress back to the Board of Directors (Woolworths Group: Quality Brands
and Trusted Retailing 2018).

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Figure 1: Details of the committee membership
(Source: Woolworths.co.za 2018)
To check certain responsibilities of the organization, the Board of Directors has
appointed four independent committees namely Audit, risk management and compliance
committee, People performance committee, Sustainability committee and Nomination
committee.
Operational problems due to the organisational structure
Woolworths Australia is facing some serious problems due to the mentioned
organisational structure. Due to the independent nature of the departments, reporting process
becomes difficult and complicated as several bosses need to be updated. Also, the messages
and queries for resolving the issues often change from one board to another which makes the
members of the departments confused. This results in the several problems such as bad
customer service. For running a proper customer service, integration with the other
departments is crucial (Hyvönen 2013). Due to the lack of collaboration, the customer
requests are transferred from one department to the next as no one is sure whose
responsibility it is to resolve the situation. Moreover, due to the organisational structure, the
members of different teams refuse to work with one another unless told by a supervisor.

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Lack of communication is another issue for the organisational structure. This issue is
facilitated even more when an authoritative role is taken up by a manager or supervisor of the
team which confuses the members of the particular department (Woolworths: the rise and fall
of the department store 2018).
Examples of system acquisition methods and the favourable method
Commercial accounting software- These softwares are used normally by medium to
small sized industries. The software is used fir customizing business functions and providing
special statistical graphs through summarisation of the data. Some example of commercial
accounting software are Freshooks and Turbocash. The softwares have the capability to
prevent wrong data entry due to their multiple error detection layers (ENTERPRISE
RESOURCE PLANNING 2016). The downside of adopting this software is its requirement
of maintenance crew and long installation time.
Custom accounting software- Custom accounting softwares are used for helping a
business in a particular accounting problem that is specific to the business. These softwares
are normally created when a business asks an employee to design a software which can
handle a particular accounting function. In time, the software grows in a capability and the
organisation sells the software to other businesses as a different product (Kohler 2013). These
softwares are also adopted when ERP and other softwares fail to provide a solution for the
particular acconting problem. The downside of using these softwares is their high
maintenance cost and buggy environment.
Enterprise Resource Planning or ERP software- ERP is used by organizations who
want to integrate information from separate business areas. This is particularly useful for
Woolworths. The software is expensive as well as takes a long time to install. Separate
modules need to be purchased which provides separate functionalities. Adopting the software

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allows for proper financial data management and efficient working of the supply chain
management system (ENTERPRISE RESOURCE PLANNING 2016).
Hence, choosing ERP as the proper system acquisition method will be beneficial for
Woolworths as they can afford the high cost of the software. Moreover, the Board of
Directors can put separate modules in every separate department to look after their working
and manage them proficiently (Arli et al. 2013).
Sales procedure system flowchart of Woolworths
The sales procedure of Woolworths is discussed in the following flowchart:-
Figure 2: Woolworths’ Sales procedure
(Source: Created by the author)

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Problems and frauds with the ERP system 100
The control problems of the mentioned system acquisition method is written as follows:-
 Absence of maintenance plan
 No regular communication between the departments
 Little investment on the implementation team(Харакоз and Kharakoz 2015)
 Ignoring the change in the managerial level
 Quick implementation of the ERP without proper analysis
 Too many features can distract the organization from its goals
 Industry specific solutions need to be incorporated in the decision making process
The possible frauds of the present system are written as follows:-
 Abuse of the accounting software
 Unethical employees trying to take advantage of the new system by checking the core
business processes
 Misplacement of sensitive documents (King and Thobela 2014)
 Unauthorized access to the financial processes
Accounting software package adoption and development
Due to the business risks involved, the adoption process of the accounting software
packages are normally slow in organizations. The development and adoption process of
several modules of the accounting packages are slow as well as cumbersome. Moreover, the
accounting software needs to be implemented by keeping the old system running at the same
time. The conversion process needs to incorporate the regular organizational activities as well

7STRATEGIC INFORMATION SYSTEM
(Харакоз and Kharakoz 2015). Human errors and pressure from the prospective stakeholders
are real issues during this procedure.
Current market size
The market size of different organizations depend from the time to time as well as
from country to country. For example, Xero, an accounting software has taken up 65% of the
market share in Australia (Knox 2015). 22% has been taken up by Inuit and 50% by Sage.
Similarly in USA, Inuit has over 55% of the market share and 32% is taken up by Sage. The
rest is taken up by the other vendors (Monk and Wagner 2013).
Leaders in the market and reason for their competitive advantage
Currently, the leader of the accounting software market is Freshhooks.
The software provides subscription services and has an online payment system with a
number of vendors. It has integrated support with other softwares. As the software comes
inbuilt with a number of the other softwares, the total control of the accounting softwsre can
be accessed from a single dashboard (Hyvönen 2013). Automatic backups are made and a
mobile application is also present.
Challenges of accounting software implementation
The common challenges due to the implantation of the accounting software are
mentioned as follows:-
 No proper budgeting
 Management team commitment
 Choosing the proper accounting software
 Lack of training of the personnel who will handle the accounting software
 No proper testing

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Recommendations
Some recommendations are mentioned as follows:-
 Organization needs to check the challenges properly
 The personnel needs to be included in the decision making process of the accounting
software implementation (ENTERPRISE RESOURCE PLANNING 2016)
 Adequate training of the staffs
 Proper testing procedures
 Budget testing needs to be analysed carefully
Conclusion
To conclude the report, it can be stated that the ERP system needs to be implemented
in the business processes of Woolworths to mitigate the operational problems that it is facing.
With the inclusion of the new system acquisition software, the management of different
departments will become much easier. The report discusses the organizational problems of
Woolworths and proposes suitable acquisition methods to address the issues. Flowchart has
been provided for the sales procedure and the market share of different accounting softwares
have been discussed. The report ends by providing the potential fraud and issues of the new
system and provide suitable recommendations.

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References
A brief history of Woolworths, 2018. [online] Available at:
http://www.woolworthsmuseum.co.uk/aboutwoolies.html [Accessed 2018].
Woolworths checkout shutdown, 2018: Supermarket apologises for .... [online] Available at:
http://www.news.com.au/finance/business/retail/woolworths-explains-technical-glitch-and-
apologises/news-story/f5476d22eea131858908768c181d5230 [Accessed 2018].
Woolworths Group: Quality Brands and Trusted Retailing, 2018. [online] Available at:
https://www.woolworthsgroup.com.au/ [Accessed 2018].
Woolworths hit by nationwide technical outage | SBS News, 2018. [online] Available at:
https://www.sbs.com.au/news/woolworths-hit-by-nationwide-technical-outage [Accessed
2018].
Woolworths Supermarket, 2018 - Buy Groceries Online. [online] Available at:
https://www.woolworths.com.au/ [Accessed 2018].
Woolworths.co.za, 2018 | Food, Home, Clothing & General .... [online] Available at:
http://www.woolworths.co.za/ [Accessed 2018].
Woolworths: the rise and fall of the department store, 2018.[online] Available at:
https://www.theguardian.com/business/2008/nov/19/woolworths-retail-department-stores
[Accessed 2018].
Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and
Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business &
Accountancy Ventura, 16(1).
ENTERPRISE RESOURCE PLANNING., 2016. [Place of publication not identified]:
SPRINGER.

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Hyvönen, T. (2013). MANAGEMENT ACCOUNTING AND INFORMATION SYSTEMS:
ERP VERSUS BOB. European Accounting Review, 12(1), pp.155-173.
King, L. and Thobela, S., 2014. Woolworths farming for the future. International Food and
Agribusiness Management Review, 17(B).
Knox, M., 2015. Supermarket monsters: The price of Coles and Woolworths'
dominance (Vol. 6). Black Inc..
Kohler, A., 2013. Woolworths invests $20 m in data analytics. Retrieved 17/7/2013, from
http://www. businessspectator. com.
au/news/2013/5/2/information-technology/woolworthsinvests-20m-data-analytics.
Monk, E. and Wagner, B., 2013. Concepts in enterprise resource planning. Australia: Course
Technology Cengage Learning.
Patel, K. and Vij, S., 2013. Enterprise resource planning models for the education sector.
Hershey, Pa.: Information Science Reference.
Харакоз and Kharakoz, Y., 2015. Features of application of erp-systems in management
accounting. Auditor, 1(3), pp.71-76.