Accounting software packages are used by the companies to manage the records related to the customers, financial, investment and etc. These software packages facilitate the organization to manage the entire business activities in the context of financial activities with any flaw (Albrecht, etal, 2010). In this context, the research paper describes, the use of accounting software packages in accounting information systems and its development in the present business scenario. To accomplish this report; Commonwealth Bank Australia has selected. In the part of this report, the structure of the organization, problems pertained to its or its operations, along with the procedure to sales and control system to stop the problem. Further the second part of this report will discuss about the accounting software packages and its impacts on the business performance, market size, and problems faces by the bank in the context of competitors and performance gap. Finally, this research will provide recommendations to deal with the gap in the performance after the implementation of accounting information systems.
Organizational Structure of Commonwealth Bank
An organization adopts organizational structure to run the business practices without any trouble. The organization structure describes in the term of accountability, responsibilities and role and ruling processes to carry the business practices from one stage to another stage. According to Handy (2007), the organizational structures of a company determine the way of communication and flow of information from one end to another end. In this context, the Commonwealth Bank has also adopted a particular organizational structure that includes the following departments:
Figure 1: Organizational Structure
(Source: Commonwealth Bank 2017)
The current organizational structure of Bank describes that it is based on the divisional and functional structure that helps to run financial services every day. The structure of bank does not only focus towards the improvement in the wealth management, but it also enables the management of the Bank to address the needs of all consumers from more complex wealth management to simple transaction service (Commonwealth Bank, 2017). This organizational structure also facilitates the organization to focus on the needs of individual customers along with the large institutional customers also.
Organizational Structure and Operational Problems
The organizational structure of the Commonwealth bank defines that this organization has different divisional structure for each product and service such as the legal division seeks the legal requirement, while wealth management division works for the improvement in the wealth of the bank (Pascoe, 2014). In this context, there are several issues which are faced by the bank. For example, the bank has faced the various financial scandals within its branches that were conducted by its employees but the top decision makers were not aware of the financial scandals (Pascoe, 2014). The similar problem is also raised by the research of Lewis, et al, (2006).through their research, the researcher says that the divisional structure of the organization allows the organization to align business strategy with the organizational structure to reduce the gap. Nevertheless, the misfit can affect the performance of the business which will cause the adverse impacts on the efforts of the organization and its performance in the market.
Further, the research of Cummings & Worley (2014) describe that the divisional structure of the organization allows the management to make coordination between the management and employees because it works on the basis of decentralization of the decision making that and gives the priorities to the managers of the division to make the decision rather the top decision makers. By arguing against the divisional structure of the organization, Daft, Murphy & Willmott (2010) says that divisional structure also gives the place to the problem. This is because of its decentralization that causes communication gaps between managers and board members.
Method for System Acquisition
To ensure the timely sharing of information and the management of the entire information can be valuable and benefits the organization, if the organization selects an appropriate vendor to develop an effective information system. According to Collier & Agyei-Ampomah (2008), there are two types of information systems of an organization. An organization can purchase a commercial system from the market that are easily available and an organization can hire the information system developer to develop the system within their boundary of with the help of their in-house activities. Hence, an organization select acquire the information management system on the basis of its needs, business strategy and organizational structure.
Commonwealth Bank is a financial institution in the context of banking services. It has opened more than 1,100 branches within the boundary of the country. It has more than 3,700 Post agencies and more than 4,300 ATMs (Commonwealth Bank of Australia, 2017). This organization has also supported the EFTPOS terminals which numbers are greater than 200,000. It has more than 4.6 million customers and 7,500 brokers for mortgage services. This bank has implemented Xero that is a cloud based accounting software (Commonwealth Bank of Australia, 2017).
According to Smith (2015), Xero facilitates the organization to create a secure data feed that facilitates them for automatically settle transactions daily, which save money and time. In the supportive manner, Digital First Pty Ltd. (2016) also says that Xero allows the organization to protect the information from any kind of data breach.
System Flowchart of Sales Procedure
System flowchart is a system that describes the steps that have involved conducting an operation within or outside the organization. This chart describes the entire processes involved in an operation that facilitates employees and staffs of the organization to conduct the business operation in an effective manner. In this context, Marley & Pedersen (2015) explore about the benefits of the flow chart of the decision makers of the organization in the context of customers benefits because it replaces the flaws in system and reduces the possibility of the errors. In this context, it can be stated that the Commonwealth bank also uses system chart to sell its services such as credit card and the customers. Following is the flow chart related to the selling of credit card to the customers:
Figure 2: Flowchart for Credit Card Selling
(Source: Marley & Pedersen, 2015)
Control on Problems and Frauds
The creation of flowcharts reduces the flaws in the decision making, which improves the efficiency of the each decision. After identifying the involved process in the selling of a product, an organization can also identify the points that can be misstated or give the place for error or fraud because it will affect the communication process which can become a root to conduct the internal fraud (Sale, 2003). Furthermore, the identification of the important points in the selling of products through flow chart will help the organization to ensure the appropriate controls on entire process. As a result the efficiency of the entire process can be increased.
During the sales of any product to the customers, organizations can face various issues or problems such as the mismatch of the customer’s identity. In this context, the research of Deshmukh (2006) describes that the un-update software system, unwanted access to the data system and the release of data can affect the control of the management of the problem in the system. Hence, an organization can address the problem by putting control on the system.
Accounting Software Packages and its Development and Adoption
In the word of Dagwell, Wines & Lambert (2011), the organization has started to use the services of external parties or the third parties because of the involvement of the cost, poor control system and less effective decision making process. On the other hand, third parties help the organization to make quick decisions by providing real time data that are already stored. After the growth of the advanced communication technology, the third parties have started to produce the entire system as an accounting software package that allows users to make analytical decisions with efficiency (Cooper, Funnell & Lee 2012). In this context, the Xero presented its online version with brand name Xero that facilitates the organization to make an analytical decision within the organization without taking help of others (Bajric, 2013). The research of Berry (2016) defines that the Xero provides various facilities to its adopter because it does not need expertise in the context of the employees and an organization can implement this accounting software package by spending little cost on getting its license only. After the use of Xero, the managers can know about the current financial position of the organization through the help of the real data. It is used online therefore; anyone can use it through their web browser that also reduces the upfront cost of business. The recent development of Xero includes the mobile based application that can be accessed by users through their mobile and get connect with the server of the related organization (Smith, 2015).
The Commonwealth bank has implementation Xero that allows the organization to include the several small and medium size organizations and facilitate them to feed the data of their customers in the system of Commonwealth bank that ensures the error less financial activities. With the help of this the organization has improved its financial services, after sales services to the customers, and other types of commercial activities through online banking process (Rotherham, 2016). But issues related to the fraud within the organization have increased the requirement of the organization to improve the changes in the software system of Xero to track the decision made by the managers in different divisions of the organization.
Size of Market
In the Australian software industry, there are several accounting software package providers such as Xero, SAP, Intuit, Open System, MYOB etc. these companies are providing the accounting systems to the small organization, medium organizations and larger organization as per their needs (Heber, 2015). The report of Xero’s financial data defines that the subscriber of Xero software has reached 380,000 in 2016 that was 262,000 in 2015. On the other hand, the report of Kiernan (2016) describes the enterprise software market in Australia will be increased by 10.32% in 2016 and will reach $10.6 bn AUS till the end of 2016 (Kiernan, 2016). This is because of the growth of the cloud based services within the country.
Leaders in Market and their Competitive Advantages
According to Smith (2015), there are players in the accounting software package industry of Australia. But the scenario in the const of Xero is just different. Xero is a web based accounting system that can be used by any size of company. It works on OSX, Windows and Linux that also facilitates the organization of communication with the customers through the internet and phone. It also allows companies to share its application with their customers after getting payment for the license key for the mobile application. In the comparison of the MYOB and other accounting software, Xero does not require huge money and a long schedule to its implementation. Any computer expert can install this software within a minute and can share its mobile application with their customers within a few seconds (Smith, 2015). Xero is easily available from its website while MYOB and other accounting software package are available offline and need time and cost to ensure their successful implementation. Hence, the limited price and time of implementation help this Xero accounting package to lead the accounting software industry of Australia.
Current Gaps and Challenges
For an organization, the implementation of Xero is not as easy task due to its operation and scope. Therefore, the finding of the gap between the planning related to Xero and its implementation can be easily found out in the term of the implementation period, required financial resources, cost of the package and overall benefits to the organization (Brooks, 2016). In this context, the lack of employees with skills, misfit with the organizational structure and business need, poor management of stored data are some challenges that can be faced by the organization during the implementation of Xero. In the similar context, the report of Curtis (2010) defines that after the use of business process re-engineering an organization can implement new system for the sharing of the information because re-engineering allows the employees to cope with the changes in the organization through training and new learning.
Therefore, it is recommended that the management of the organization should go for the implementation of the Xero after conducting the change management process (Berry, 2016). This is because it will help the organization to ensure regular communication between the management and employees of the organization that will also help the vendor of the accounting software to address the requirements of the organization. Further the selection of the accounting software package such as Xero should be based on the needs to reduce the challenges otherwise the effort of the organization towards employees training to use Xero will not benefit the organization properly (Berry, 2016).
Above discussion explored that the business organizations are moving towards the use of accounting software packages because of its significance in increasing organizational operational process without causing errors. The business organizations of Australia are using accounting software packages in aggressive ways that can be explained through example of Commonwealth bank that is using Xero. Above discussion also explored that the use of accounting software packages improves the organizational communication with the structure of the organization because it combined the entire customer related departments and reduced communication gap. Above explanation also defined that the organizations can face challenges during the implementation of accounting software packages because of the cost, required skills, involvement of the time to ensure successful implementation of the packages within the organization etc. Above report also explored that the organizations of Australia can overcome the challenges through the selection of training and the selection of the right supplier of accounting systems.
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