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Nestle Australia Limited Information System Analysis

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Question:

Discuss Nestle Australia Limited Information System Analysis?
 
 

Answer:

Introducation:

Nestle is a food and beverage company headquartered in Vevey, Vaud, Switzerland. It is actually one of the largest food and drink producing companies in the world. It was formed in the early years between 1866 and 1900 after which it grew and developed to be an international company. The company on different parts of the world with a large number of branches in almost every part of the world. With this fact in mind, Nestle Australia is one of the main and largest branches of the company that deals with the consumers in Australia (Mitra et al, 2014). The Nestle Company specializes mainly in the production of various brands of foods and drinks which may include the following: baby food, coffee, dairy products, bottled water, nutritional cereals, pet foods to name just but a few. Therefore, means that most of the company’s branches will also focus on production and distribution of those same products.

Nestle Australia one of the largest food and beverage producing companies in Australia being ranked at position 179 in the country. It was established around the year 1908 and has been operational to date. The company has focused on the manufacture of products like processed milk, coffee (e.g. instant coffee and other drinks), baby foods, nutritional snacks, chocolate and sugar confectionary, pet foods, culinary products, among others (Stuckler et al, 2012). In addition to that, the company has a large number of product brands which include the following: Nescafe, Kitkat, Nespresso, Maggi and milo, butter menthol, cerelac to name a few of them. Additionally, the head offices of Nestle Australia Limited are located in Rhodes Australia which is the center of all the business operations. To be able to meet the consumer needs and demand, the company has established a number of factories, distribution centers and office branches in Australia, New Zealand and the Pacific Islands. Basically, it is clear that Nestle Australia Limited operated under the Nestle Company in Switzerland. Being one of the best companies, then it is clearly a business that utilizes the modern accounting systems to carry out its operations and that the reason why it’s the best company to use for this assignment.

 

Literature Review

Current Organizational Structure

A business’s organizational structure are the internal rules and regulations, laws and policies that govern and indicate how business operations are to be carried out and by who. Basically it shows what is to be done, by who and at what time the activities should be done. The organizational structure of Nestle Australia is a simple that enables the company’s management and running to be easy and possible. The company is a publicly owned company with a large number of branches in most parts of the country. Apparently, the number of branches is around 406, 250,000 shareholders and is still capable growing and attracting more investors. Nestle Australia Ltd has a large number of product brands which are manufactured in the company’s factories and distributed to the consumers accordingly. The company has always earned a large revenue over the years from the sale of those products which is one of the reasons as to why it is still in the market and able to operate. In addition to that, it has always met the consumers’ needs and market demand level through the help of its factories that are located in different parts of the country.

The company has employed a good number of trained, skilled and experienced employees who enable the running of the business operations on a daily basis. Without forgetting the management team, the Nestle limited is managed by a group of board of directors who carry out the responsibility and duty of directing, organizing, planning and controlling the business operations in the company. The business has been able to succeed with this kind of organization structure with the help of the joint venture that it has created with many other companies in the world; which include: Dairy Partners like Fonterra, Cereal Partners like General Mills, Beverage Partners like Coca Cola Company to name a few of them. With this in mind, it’s is obvious that the business has a very developed accounting system to help it manage all these organizational structure operations. In other words, the accounting information systems help the business come up with effective policies and principles (especially to govern the finance sector), that help both the management and the employees to carry out the operations.

Operational Problems Resulting from the Structure

Every organizational structure always has some challenges that come in handy. However, it is vital for a business to device ways of solving those solutions with as much ease as possible (Amrollahi et al, 2014). The following are some of the challenges that Nestle Australia likely faces with its organizational structure:

Challenges in demand prediction

Nestle Australia operates in very many towns in Australia. Also, because it a very well-known company that operates under the popular and famous Nestle Switzerland, it certainly has a large and wide range of market share. With the production of different brands of products, it has a very wide market segmentation. With this fact, it has cover all of these factors in its operations which becomes an immensely difficult job especially since it is supposed to know the change way earlier or before. However, with the presence of the accounting information systems in place, the business will be in a position to predict future market demand as well as analyze the market. This will certainly help it to have a clear understanding of the market structure and therefore be able to meet the demand.

 

Challenges in meeting the market demand

It is difficult for an organization to meet the exact consumer demand level or quality especially for a food and beverage business. For the case of nestle Australia, with the fact that it has  very large and wide market share and segment, it is sometimes difficult for it to meet the market demand. However, this is especially when the raw materials seem to cost more or are not easily available which means they are lacking. This fact interferes with the production levels which affects the quantity and quality of products produced hence low sales and then no profit. This affects the operational schedules of the business in general and therefore its success levels.

Lack of support from the joint ventures

Nestle Australia has created some joint ventures with some other industries and business to be able to support its business operations. This means that some of its operations highly depend on those other industries and the companies that work directly with Nestle. Therefore, in that case, the company can be faced with challenges in case its partners do not give the expected support towards nestle. For instance, Nestle uses Coca Cola Company to market its ready to drink teas and coffees like Nestea. Therefore, it becomes a challenge for nestle in case Coca Cola does not offer that support.

Nestle Australia Limited and ERP System Acquisition

Just as mentioned earlier, Nestle Australia operates under the Nestle Company S.A. The company decided to acquire and install the ERP system software to be able to manage and control its business operations effectively and efficiently. Therefore, this caused a change for Nestle Australia as well because it had to keep with the pace of the whole company’s objectives and goals. Therefore, the ERP system is the best system for Nestle. It is currently using it as the new software system under the management of SAP. This system has brought a lot of benefits to the company’s business operations (Galliers et al, 2014). It is currently able to harmonize all the productions, distributions, supply chain operations and the data standards of all the products and brands with the help of the ERP system. This systems has basically played an important role in making its business operations in whole of Australia effective and efficient. Therefore, this brings out the point that the best acquisition method is the ERP system. Also, it becomes clear that the company has also been using the accounting systems to conduct its operations in different departments.

Nestle Australia’s Sales Flowchart System

Control Problems in the Sales Flowchart System

A sales flowchart system shows the procedure that are undertaken to complete a product sale or service offer. However, even though the sales process may seem simple and direct, it has some challenges that may lead to lack of completion. These include the following:

 

Lack of perfect order description

Some businesses use online selling which means that the customer must look at the product or service features and then order the item. However, some customers may overlook some characteristics which may lead them into making the wrong order, therefore, when the order is received and delivered to the customers, they may not go through with payment (Salleh et al, 2015). This is a challenge that a business like Nestle may face and therefore it ends up not getting the payment hence no profits and the sale system fails.

Technical errors

The system flow charts depend on technology and technological machines e.g. the internet, computers and business internal systems. Also, these kind of materials requires technical support like electricity, expertise, skills and manpower which helps them to run and function accordingly. Therefore, if the expected technical support is not available, then the sale system will not be completed and hence no business profits.

TASK 2

Development and Adoption of Accounting Software Packages

It is obviously clear that Nestle Australia is highly developed in terms of technology usage. The company certainly uses highly rated technology and materials in its product production. In addition to that, for its accounting operations the business has adopted the usage of the most updates systems and accounting software to manage its financial operations. However, the company has not only used the systems to manage its financial operations but also its supply chain, distribution, marketing and advertising operations as well (Lunkes et al, 2015). The business has used these packages to manage the revenues earned to increase and improve its production, expansion and growth and development rate and plans which is pretty good for it. It has basically adopted the systems especially in its accounting departments amongst other department to manage their operations.

Current Market Size for Nestle Australia Limited

Nestle Australia is listed as one of the largest companies specializing in food and beverage in Australia. Its operations spread to some of the large towns like New Zealand and Rhodes where it has grown at a high rate and developed its business activities. The company has a large number of product brands which are preferred by a good number of consumers I the country. The fact that it produces that large number and variety of product brands, it means that the number of consumers is large and the variety is wide as well. This means that the company has a very wide and large market share and segment in the food and beverage industry. In addition to that, the company also operates under the well-known, popular and famous Nestle Company, SA. This gives it more credit when it comes to the quality as well as the price of its products and services offered. I can say that, the business has been using its accounting information systems to control and manage its market share and that’s why it has kept its large market till now. It has been able to know and predict the market demand and make sales using the accounting information systems.

Leaders in the Food and Beverage Market and their Competitive Advantage

Every business has a competitor in its business industry which helps it work harder towards being better and producing the best product or service for its consumers. As for Nestle Australia Limited, its competitors in the food and beverage industry include the following companies: Coca Cola Amatil, JBS Australia, George Weston Foods Inghams Enterprises to name just but a few. All of these businesses specialize in the production of food and drinks that are very highly rated in termed of quality and prices. This is the case for Nestle Australia as well which gives all a chance to compete for the market. The companies have a competitive advantage over Nestle with the fact that their business operations are less involved with illegalities like that of Nestle. Nestle SA, is known for its famous child abuse because of dealing with baby food and therefore that attribute affects Nestle Australia as well. In addition to that, these companies have quite a larger market share than that of Nestle Australia and therefore increases their competitive advantage factor against Nestle.

 

Challenges Faced by Accounting Software Users in Nestle Australia

Lack of experience

For the users to be able to operate the accounting software of a business, they must have the skills, expertise and experience needed to operate them (Hovelja et al, 2015). Therefore, if the Accountants of Nestle Australia software do not have the required qualification there are high chances of not being able to deal with the packages.

Technical challenges like electricity and enough manpower to support the software operations

Recommendations

Nestle Australia Limited should ensure that all its employees have the requires skills and knowledge to operate the software; especially those that use the systems in their daily activities

Also, Nestle should ensure that all the required support is available including the manpower, computers, systems, internet and electricity to enable the effectiveness of the packages.

 

References

Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.

Amrollahi, A., Ghapanchi, A.H. and Talaei-Khoei, A., 2014. Three decades of research on strategic information system plan development. Communications of the Association for Information Systems, 34(1), p.84.

Missimer, M., Robèrt, K.H. and Broman, G., 2017. A strategic approach to social sustainability–Part 1: exploring the social system. Journal of Cleaner Production, 140, pp.32-41.

Lunkes, R.J., Fey, V.A., de Oliveira, P.D.T.R., Campelo, L.M., Sellera, P.E.G. and Curvo, N., 2015. Development of an information system at the Strategic Management Support Office of the Brazilian Ministry of Health. Revista Cubana de Información en Ciencias de la Salud, 27(2).

Salleh, S.M., Kassim, E.S., Sari, N.A.M. and Yunus, N.A.M., 2015. Conceptualizing User Bonding on Strategic Information System Development Success. Advanced Science Letters, 21(6), pp.2024-2027.

Shapiro, C. and Varian, H.R., 2013. Information rules: a strategic guide to the network economy. Harvard Business Press.

Borén, S., Nurhadi, L., Ny, H., Robèrt, K.H., Broman, G. and Trygg, L., 2017. A strategic approach to sustainable transport system development–Part 2: the case of a vision for electric vehicle systems in southeast Sweden. Journal of Cleaner Production, 140, pp.62-71.

Cassidy, A., 2016. A practical guide to information systems strategic planning. CRC press.

Hovelja, T., Vasilecas, O. and Vavpoti?, D., 2015. Exploring the influences of the use of elements comprising information system development methodologies on strategic business goals. Technological and Economic Development of Economy, 21(6), pp.885-898.

Alwan, Z., Jones, P. and Holgate, P., 2017. Strategic sustainable development in the UK construction industry, through the framework for strategic sustainable development, using Building Information Modelling. Journal of Cleaner Production, 140, pp.349-358.

Mitra, A. and Neale, P., 2014. Visions of a pole position: Developing inimitable resource capacity through enterprise systems implementation in Nestlé. Strategic Change, 23(3-4), pp.225-235.

Stuckler, D. and Nestle, M., 2012. Big food, food systems, and global health. PLoS Med, 9(6), p.e1001242.

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