Xero: Report on Organizational Structure, Problems, and Solutions

This report provides a comprehensive analysis of Xero, an Australian-based departmental store chain. It begins by examining Xero's organizational structure, highlighting key roles and responsibilities. The report then delves into the operational problems faced by the organization, such as communication gaps and inefficient diagram explanations, and proposes solutions. It explores system acquisition methods, focusing on the use of custom software tailored to Xero's specific needs. A detailed flowchart of the sales procedures is presented, followed by an analysis of control problems and potential frauds within the system. The second part of the report discusses the development and adoption of accounting software packages, emphasizing the shift towards cloud-based solutions and their benefits. It provides market size data for Xero, including financial statements, and identifies key market leaders. The report concludes by addressing relevant problems and suggesting improvements, such as enhanced software security and user-friendly interfaces.

Running head: STATISTIC INFORMATION SYSTEM
STATISTIC INFORMATION SYSTEM
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction....................................................................................................................2
PART 1...........................................................................................................................2
1. The current organizational structure......................................................................2
2. Operational problems of the organization..............................................................3
3. Most likely system acquisition method..................................................................4
4. System flowchart of the sales procedures..............................................................5
5. Control problems in the system and frauds in the organization.............................7
PART 2...........................................................................................................................7
1. Development and adoption of the accounting software packages.........................7
2. The current market size..........................................................................................8
3. The leaders in the market.....................................................................................10
4. Relevant problems and suggestions.....................................................................11
Conclusion....................................................................................................................12
References....................................................................................................................13

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Introduction
The following report focus is to produce an analysis of a business or enterprise. The
selected organization for this report is Xero. It is an Australian based departmental store
chain selling clothing line of products, accessories, footwear, house ware, books and
stationary items. It is one of the largest departmental store chain based in Australia. In
October 2007, Xero started its online departmental e-commerce website. It currently consists
of more than 67 retail stores across Australia.
The report puts emphasis on the different aspect of the organization including the
organizational structure and the status of the organization, the operational problem involved
in the organization, the flow chart of the sales procedure of the organization, these all factor
directly affect the working of the organization.
PART 1
1. The current organizational structure
The organization selected is Xero and has the following organizational structure:
Board Of Directors
Rod Drury Chief executive officer / Executive Director
Sankar Narayan Chief Operating and financial officer
Tony Steward Chief product, Platform and data officer
Anna Curzon Chief partner Officer
Racheal Powell Chief people officer
kristy Godfrey - Billy Chief Accounting Officer
Regional Leaders
Craig Hudson Country manager, NZ

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Trent Innes Country manager, AU
Gary Turner Country manager, UK
keri gohman President , Americas
Alex Campbell Managing director, Asia
Mark Cripsey Chief Digital & Data Officer
2. Operational problems of the organization
There are many problems, which the organization faces due to the current
organizational structure:
 Everyone in the organization should know what is going on around the workplace. A
department can explain the details of the process they are working on but the other
department does not know what kind of work is going on. This needs to be eliminated.
Everyone in the origination should know the details of the working that is being done
around the workplace (Pettigrew, 2014).
 Diagrams and flowcharts being used in the organizations are not explained properly. If
only the person designing the diagrams knows the specification of them then the others
will face a problem during evaluation. There should be a detailed explanation of the
processes and the diagrams being used in the organization (Stark 2015).
 During the process improvement, procedure the organization must be able to answer all
the questions being asked. The problems being faced by the management of the
workplace, which problems should be focused on and the objectives to mitigate the
problems should be answered by the organization.
 One of the major problems, which the organizations face, is not to involve many people
in the working of the management procedures. The organization should involve more
people so that the workload can decrease considerably.

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 The organization should draw up a plan to understand the problems the stakeholders face
in the organization. Understanding the problems at a micro level would help them to
mitigate enough problems before they can start occurring (Stark 2015).
3. Most likely system acquisition method
Using a system acquisition method is an important aspect of any organization. An
organization can use three kinds of system acquisition method: commercial software, ERP or
custom software.
 Commercial software is a program that is developed to be licensed and sold by the
developer to the end user. Though there are a number of free and open source software’s
which are being developed for the end users. Commercial software’s include games and
off the shelf which are available in computer stores and grocery stores to be
bought(Zhang, Gong and Versteeg 2013).
 Enterprise resource planning (ERP) is dedicated software used by core business
organizations to maintain real time data of the organization. It helps the organization to
plan purchasing of products, manufacture them, marketing, sales, material management,
shipping and payment(Leon 2014).
 Custom software is a tailor made software for a specific organization with the specs to be
followed by the developer as stated by the organization. As the software is developed to
be used for a particular customer the software can be made to the specification of the
user. Large companies commonly use custom software because they can then implement
all the different working of the company into the system to be worked out
automatically(Davis 2013).
For the organization selected they use a customer software tailor for their use. The
software can contain different objectives like ERP, logistics management system and many

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more(De Vries and Van der Poll 2016). The components can be of different other software’s
in the market but the designing of the software is made specific to the requirement of the
transition.
4. System flowchart of the sales procedures
The following flowchart shows the sales procedure that has been taken up by the
organization to have a systematic flow of sales invoice and orders (Ward and Sobek II 2014).
It ensures the proper working of the organization and appropriate approach towards a pre set
goal about the organization. A sales process is comprised of eight steps initial contact with
the client, planning the sales procedure, approaching the sales team, assessment of the order
placed, presentation of the shipment requested, meeting the objectives of the shipment,
gaining commitment from the company’s end and follow up on the order completion.
Assessment of a sales procedure can help the organization to understand the prediction of the
sales order.

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YES
YES
NO
NO
Database
Load Generation
Assign leads to Managers
Follow up Load
Qualified? Junk Loads
Convert Loads to prospectsContact Opportunity
Buy?
Deal Successful
Deal Lost
Promo Campaign
STATISTIC INFORMATION SYSTEM
Figure 1: Sales Procedure flowchart
(Source: Author Made)

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5. Control problems in the system and frauds in the organization
Controlling of different problems in an organization should be managed using proper
management steps. The areas where frauds happen are during purchasing using purchase to
pay, using corporate credit cards for personal gain, payroll fraud using phantom employees,
collision of employees and vendors causes them to order large shipments(Kar et al. 2013).
There can be fraud due to the theft of organizations data and providing sensitive information
to external individuals. These can be controlled by using proper security measures and
keeping information and data hidden from all employees. There should be hierarchical use of
information management in the organization.
PART 2
1. Development and adoption of the accounting software packages
There was a low demand of cloud based accounting software during the last decade,
but since the advancement in the cloud network, all organizations want to get access to the
best integration of the cloud system with the accounting software’s. This helps them to
synchronize the information the organization among all the employees (Seethamraju 2015).
The major limitation which most of the accounting software’s consist is that it cannot connect
to the internet. Introduction of cloud based accounting software’s like Xero, MYOB and
Quick Books has brought around an evolution in the accounting functionality of the business
sector. The new software’s are increasingly becoming mere accounting software’s than being
a business management tool. The problem which was previously there was different work
required different software’s to work on. They could not be integrated into one. Using
different software’s made the coordination between the software’s to be absent (Sorensen and
Stanton 2013). There was a slow rise in the amount of accounting software’s which used
cloud based integration in Australia. The recent situation has changed and organizations have

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started to take up accounting software’s with cloud integration. Automation of the different
accounting procedures and integration of the systems into one are the main two benefits of
the cloud based accounting software’s. These benefits again provide rivalry to among the
different firms(Seethamraju 2015). The features of the software packages, which attract more
customers, are fast banking usage, easy invoicing, smart reports and accessibility through
mobile software. In addition, they also provide multi-currency transactions, generating
purchase and sales orders and accounting for the fixed assets.
2. The current market size
The current market size of Xero is displayed in the following tables (Xero 2017):
Capital Structure
Total
Debt
Interest Long Term
Debt
Percent
Debt
Preferred
Stock
Share
Equity
Percent
Equity
$147,273 $15,44
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$147,273 12% $0.00 $1,107,765 88%
Historical Financials
2016 2015 2014
Revenue ($M) 2,780.6 2,772.4 2,728.8
Operating Margin (%) 7.4 7.9 9.1
Depreciation ($M) -65.1 -62 -63.7
Amortisation ($M) -23 -22 -25
Net Profit Before Abs ($M) 73.5 77.5 98.5
Net Profit After Abs ($M) 60.5 29.8 98.5
Income Tax Rate (%) 25 39.2 28.8
Net Profit Margin (%) 2.6 2.8 3.6

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Employees ($T)
Long Term Debt ($M) 147.3 441.2 422
Shareholders Equity ($M) 1,107.8 863 893.4
Return on Capital (%) 7 7 9
Return on Equity (%) 6.6 9 11
Payout Ratio (%) 54 53 87
Balance Sheet
2016 2015 2014
Cash ($M) 45.2 53.3 73.6
Debtors ($M) 10.02 3 4.24
Other Debtors ($M) 18.92 10.58 12.62
Prepayments ($M) 8.94 16.78 13.28
Inventories ($M) 396.3 381.9 376.8
Current Investments ($M) .35 15.21
Other Current Assets ($M)
Total Current Assets ($M) 479.7 480.8 480.5
Receivables ($M)
Inventories ($M)
Property, Plant & Equipment ($M) 926.4 891.9 863.8
Accumulated Depreciation ($M) -481 -422.9 -360.9
Intangibles ex. Goodwill ($M) 527.5 539.5 556
Goodwill ($M) 376.6 376.6 376.6
Future Income Tax Benefit ($M) 27.1 18 13.7
Non-Current Investments ($M) 9.28
Other Non-Current Assets ($M) 2.27 2.61 3.03
Total Non-Current Assets ($M) 1,388 1,406 1,452
Total Assets ($M) 1,868 1,887 1,933

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Accounts Payable ($M) 400.6 387.2 430.1
Provisions ($M) 108.4 86.3 94.7
Short Term Debt ($M)
Other Current Liabilities ($M) 11.61 7.87 6.04
Total Current Liabilities ($M) 520.6 481.4 530.9
Creditors ($M)
Long Term Debt ($M) 147.3 441.2 422
Provisions ($M) 22.6 25.9 17.4
Other Non-Current Liabilities ($M) 69.7 75.1 68.9
Total Non-Current Liabilities ($M) 239.5 542.1 508.4
Total Liabilities ($M) 760.1 1,023.5 1,039.3
Share Capital ($M) 739.3 524.8 524.7
Reserves ex. Share Premium ($M) -11.06 2.9 -10.07
Share Premium Reserve ($M)
Retained Profits ($M) 379.5 335.4 378.8
Other Shareholders Equity ($M)
Convertible Equity ($M)
Outside Equity Interest ($M)
Total Shareholders Equity ($M) 1,107.8 863 893.4
3. The leaders in the market
Market leadership is defined as the highest position a company can reach in terms of
profit margin and market of goods and services to offer. To have a competitive advantage in
the market is essential for the organization. Once an organization reaches the top they have to
work on its product and services to stay on the top (Keune, Mayhew and Schmidt 2015).

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The competitive edge of Xero is its ability to implement the best supply chain
mechanism and to improve the retail execution capability. They also have a strong customer
service focused business, which helps them to be popular among the consumers.
4. Relevant problems and suggestions
The problems, which the accounting software user faces due to the software, are as
follows:
 Lack of software security may cause data theft by outside invaders. The firewall is not
enough for the system to hold on to the data that is being stored in the software.
 The return of the inserted information is not as reliable as the way the information is put
into it. Users often face issues in trying to get a reasonable output from the software
(Boulianne 2014).
 Outdated software’s being used by the organization lacks many security and working
procedures, which needs to be upgraded.
 They are many a time non-user friendly in nature, which makes the usage a big burden for
the users.
 Many features require expensive price to be paid by the consumer.
 The software’s are not always compatible with the working procedure of the organization
(Boulianne 2014).
 There is no 24x7 support responsibility from the software’s end.
 Slow working of the software requires lot of time for it to finish working.
 There is no customer relation management procedure in the software’s.
Conclusion
To conclude this report, it can be seen that Xero has come a long way since it first
opened in 1900. Changing their sales and marketing objectives, tools to change their business

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strategy, targeting growing consumers and opting for Xero has always welcomed Omni-
business. They can make a better organization out of the drawbacks it has faced.

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References
Boulianne, E., 2014. Impact of accounting software utilization on students' knowledge
acquisition: An important change in accounting education. Journal of Accounting &
Organizational Change, 10(1), pp.22-48.
Davis, A., 2013. Just enough requirements management: where software development meets
marketing. Addison-Wesley.
De Vries, H. and Van der Poll, H.M., 2016. The influence of Lean thinking on organisational
structure and behaviour in the discrete manufacturing industry. Journal of Contemporary
Management, 13(1), pp.55-89.
Drew, J., McCallum, B. and Roggenhofer, S., 2016. Journey to lean: making operational
change stick. Springer.
Kar, A., Bhattacharyya, S.D., Perez, K. and Williamson, G., Mastercard International
Incorporated, 2013. Method and system for proximity fraud control. U.S. Patent Application
13/949,850.
Keune, M.B., Mayhew, B.W. and Schmidt, J.J., 2015. Non-Big 4 local market leadership and
its effect on competition. The Accounting Review, 91(3), pp.907-931.
Leon, A., 2014. Enterprise resource planning. McGraw-Hill Education.
Xero (2017). Xero Investor Relations. [online] Investor.xero.com.au. Available at:
http://investor.xero.com.au/Investor-Centre/ [Accessed 15 Aug. 2017].
Pettigrew, A.M., 2014. The politics of organizational decision-making. Routledge.
Seethamraju, R., 2015. Adoption of software as a service (SaaS) enterprise resource planning
(ERP) systems in small and medium sized enterprises (SMEs). Information systems frontiers,
17(3), pp.475-492.