Strategic Information System Essay For Qantas Airways.

Organizational Structure of Qantas Airways

Question:

Discuss about the Strategic Information System for Qantas Airways.

Qantas Airways is an Australian airline that operates at global level. The company has to manage its operations across the globe. The company uses ERP system to manage its operations. It also used MYOB accounting software and this is integrated with the ERP system of the company (Brewer & Sorensen, 2014).  The objective of this paper is to discuss the literature review for accounting software in Australia, with specific focus on Qantas Airways.

Current organizational structure

Qantas has a very flat organizational structure. It has some levels of hierarchy; however, the level are less. The company has close to 30,000 employees. Still, the company operates in three levels of execution. The senior management or the top leaders of the company reports to Chairman (Leigh Clifford) and CEO (Alan Joyce). The next level is mid-level management that reports to various top leaders in the organization. There are more than 1000 mid-level managers at Qantas and all the employees reports to this mid-level management. The company also has some contractual workers that also reports to mid-level management (De Lange & Jackling, 2013). It can be said that the company has very closed eco-system.

Operational problems (e.g., inefficiency, errors) Qantas is experiencing

The problem for Qantas to is to maintain and further improvise its operations and flight control management system. In general, one of the problems for players in the airline industry is inventory management. The seats are empty and sometimes seats are overbooked. It is always difficult to manage the inventory of seats for its different flights. Qantas Airways does have a flight management system in place that is used for inventory management and dynamic pricing of tickets. However, the company needs and integrated system that can come up with the pricing based on a large collection of historical data, customer trends and other factors. The current system has limited efficiency and it can be scaled beyond a limited point.

Most suitable system acquisition method— commercial software, custom software, or ERP?

There are many accounting software and every software has its own core competency. If that core competency of the software is what core requirement of the organization is, then this alignment is the best match. Having said that, some software are good at handling financial stuff very well like GST, taxation, cycle counting, min max planning, procurement but ability to integrate with 3rd party bolt-on systems while other are good at integrating with 3rd party systems but at the time provides limited financial capabilities. The company should not focus to develop the software and it is not its core competency. The company should use the ERP system and this system should be customized for Qantas Airways. There are various players in the market who can customize the ERP or accounting software based on the organizational needs. The benefit or customization is that Qantas can prioritize the modules for accounting and ERP.

MYOB has few advantages over other ERP software like XERO. The two key advantages are cost and quality. The cost of MYOB customization is less that XERO customization and the after sales support of MYOB is better than XERO.

Inventory Management Problem

Qantas’ flowchart of the sales procedures

The business model of Qantas is to earn from the tickets of domestic and international travelers. The company also makes some revenue from the airport freight system. It is important that the accounting software and ERP system should help Qantas to manage its processes and sales procedures in an effective manner (Kosalge & Ritz, 2015). The flowchart of Qantas sales procedures can be shown as:

Control problems and frauds possible in current system

The Information Systems has various advantages for the organizations. However, there is a place for various frauds system that should be observed (Watson, Brunner, Wellard, & Hughes, 2016). Here there are 2 potential problems first is the identification of appropriate inventory and thus order size and another one is that current information systems are not built that can supports e-procurement and often there is large lead time in procuring the materials (Zunk, Marchner, Uitz, Lerch, & Schiele, 2014). It is important that the frauds around the area of inventory management should be minimized.

There are various accounting software that Qantas Airways can use. It is always better to have a deep understanding of the system before implementing the system (Mastracchio & Jimenez-Angueira, 2015). The various aspects of accounting software can be discussed as:

Development of the accounting software packages

History of accounting software in Australia goes back to 1950 and later when Intuit launched computer software for finance called Quicken in 1983. It has evolved to a much better product today with different number of modules like inventory, purchasing integrated with finance suit. It also has complete finance suite consisting of sub ledgers i.e. Account payables, account receivables and other modules like General ledger. During the same time, Teleware has also developed one such software which also does the accounting which was later acquired by another company and renamed to MYOB in 1999. MYOB then become the most successful accounting software and the best of breed software among many other like Reckon, Quickbooks, SYSPRO. Xero was also gaining popularity and its unique proposition is to handle the requirement that MYOB is not capable of (Pan, Pan, & lim, 2014). For instance, it has excellent integration with numerous 3^rd party systems, mobile apps and bolt on systems. It also focuses well on reporting and provides management dashboard. It was during the year 2015 when Xero capture the maximum market share in Australia and become the top selling accounting software (https://www.xero.com/au/ ). Not only this, different softwares has different pricing and version to capture different markets.

The current market size

There is huge market size for accounting software. With more and more organizations realizing the digital revolution around us, more is their interest in switching to digital way of doing things and transform their organizations. MYOB is the biggest accounting software provider while Xero is the largest cloud provider company. MYOB has also realized the potential of Cloud and huge Australian market and investing heavily in developing could technology. As per the data from the IBIS research, accounting software market size is growing at continuous rate of 2.6% from 2013 and is around $ 20 billion currently and expected to grow at a better rate with the advent of cloud which is a way cheaper than desktop version (https://www.ibisworld.com.au ).

Accounting Software for Qantas Airways

MYOB has always sold desktop versions which were expensive however Cloud is the flavor of today with most of the companies wanted to keep the licensing cost less and focus more on their core competency by using Cloud application. Xero is the largest cloud provider and thus well placed in market having huge potential for cloud products. MYOB has also announced its massive investments in developing the cloud infrastructure and already started pushing its clients to switch to cloud version of MYOB to drive higher revenue growth (Islam, 2017).

 Leaders in the market and their competitive advantage

One of the most important benefits that MYOB could get is that it could ask his current customers to upgrade to cloud and since its customer base is the largest, it will again become the leader and its churn rate is also very good. MYOB also has the strategic plans to stop supporting its legacy software to shake people off to upgrade to its latest offering but it could backfire also. One thing that MYOB could do is to charge premium from the customers who need support of legacy systems as legacy systems are expensive to maintain (https://www.myob.com/au ). 

Current gaps or challenges encountered customers of accounting software/packages and recommendations

MYOB premium though has limited capabilities but all these shortcoming of MYOB was removed in the MYOB exo business version which as designed for large businesses and supports reimbursements, payments, tracking deliveries however it still has certain drawbacks that its supports only standard and average costing and not first in first out costing ( https://acaciacs.com.au/comparison-table-for-myob-exo-vs-myob/ ).

The recommended accounting software for Qantas is MYOB. One of the unique advantages of MYOB is that it can be customized as per the need of Qantas. There are a lot of vendors in the Australian market who will be ready to customize MYOB. Another key advantage of MYOB is the after sales support. MYOB has a dedicated support team that is willing to provide both offline and online support (Gillis & Petty, 2014).

It is also recommended that Qantas should have a phased implementation of MYOB. The phased implementation plan helps organizations to learn from their mistakes and this may not be possible for big bang implementation plan (Canning & O'Dwyer, 2016). Therefore, it can be said that phased implementation of MYOB is the way forward for Qantas Airways. There would be four key phases of this implementation plan. The first phase would be assessment phase. This is the phase where goals and objectives are set and the gap between the current state and desired state is assessed. It is important that Qantas Airways should have the support of various internal and external stakeholders in this phase. The second phase is framework development phase. This is the phase where the framework of implementation is decided (Ossimitz & Wieder, 2016). In this phase, Qantas can benchmark its accounting software implementation project with other industry players. The third phase is the actual implementation phase (Mescall & Phillips, 2016). This is the phase in which the accounting software is implemented. It is also important to mention that accounting software product lifecycle is short and every year there are new improvements in the product. The last phase would be continuous improvement phase in which the focus of the organization would be to continuously improve the existing accounting package and focus on further optimization. The timelines for implementation can be shown as:

Conclusion

This above paper discusses the accounting software industry in Australia and the need of accounting software for Qantas Airways. With the above discussion, it can be said that Qantas Airways should have a dedicated system in place where it can manage its Information Systems and accounting systems. The above paper highlights that Qantas should have a phased implementation of MYOB. The phased implementation plan helps organizations to learn from their mistakes and this may not be possible for big bang implementation plan.

References

Brewer, P. C., Sorensen, J. E., & Stout, D. E. (2014). The future of accounting education: addressing the competency crisis. Strategic Finance, 96(2), 29-38.

Canning, M., & O'Dwyer, B. (2016). Institutional work and regulatory change in the accounting profession. Accounting, Organizations and Society, 54, 1-21.

De Lange, P., Jackling, B., & Basioudis, I. G. (2013). A framework of best practice of continuing professional development for the accounting profession. Accounting Education, 22(5), 494-497.

Gillis, P., Petty, R., & Suddaby, R. (2014). The transnational regulation of accounting: insights, gaps and an agenda for future research. Accounting, Auditing & Accountability Journal, 27(6), 894-902.

Hossack, S. (2015). Cloud-based accounting and productivity tools for practitioners and taxpayers. Taxation in Australia, 50(5), 265.

Islam, M. A. (2017). Future of Accounting Profession: Three Major Changes and Implications for Teaching and Research. Business Reporting, International Federation of Accountants (IFAC).

Kosalge, P.U. and Ritz, E., 2015. Finding the tipping point for a CEO to say yes to an ERP: a case study. Journal of Enterprise Information Management, 28(5), pp.718-738.

Mastracchio Jr, N. J., Jimenez-Angueira, C., & Toth, I. (2015). The State of Ethics in Business and the Accounting Profession. The CPA Journal, 85(3), 48.

Mescall, D., Phillips, F., & Schmidt, R. N. (2016). Does the Accounting Profession Discipline Its Members Differently After Public Scrutiny?. Journal of Business Ethics, 1-25.

Ossimitz, M., Wieder, B. and Chapman, P., 2016, May. Management Accounting Functionality in SAP Solutions–Implications for Research and Practise. In International Conference on Enterprise Systems, Accounting and Logistics (ICESAL) 2016.