Discuss about the Accounting Software Implementation For Woolworths.
This report discusses an accounting software implementation for a company which is facing operational problems due to its current organizational structure. Woolworths Australia has been chosen as the organization for this report. The report has mentioned the organizational structure of the company in detail and has mentioned the operational problems that it is facing. The system acquisition methods by which the company can resolve these issues have been discussed and evaluated. A flowchart of the sales procedure of the mentioned company has been given. The possible control problems due to the new implemented system and the possible frauds associated with it has been mentioned.
The report further discusses how the accounting software packages were adopted and developed in detail. The present market size of the software packages have been evaluated and the market leader has ben identified. The challenges associated with the accounting software packages have been identified and recommendations are provided for each of the challenges.
Increasing and maintain the shareholder value is the main objective of the Board of Directors. In Woolworths Australia, the Board of Directors is at the top of the organizational structure where they check and maintain the business objectives of the organization. The Board of Directors are responsible for serving the best interests of the stakeholders and evaluate the policies, performance and strategy of the Group (A brief history of Woolworths, 2018). The directors of the Board has to comply with the Board of Charter where all the rules are outlined. The responsibilities and power of every board member are mentioned in The Board Charter as well as how they represent the interest of the shareholders.
Since 2013, Goardon Cains have been the chairman of Woolworths Australia. The managing director and Chief executive officer is Brad Banducci. Holly Karmer, Jillian Broadbent, Richard Dammery, Siobhan Mckenna, Michael Ulmer and Scott Perkins are the other members of the group.
The group executive committee comes just around the Board of Directors. These members are responsible for carrying out the organizational goals of Woolworths. They carry out the administrative tasks and evaluate if proper services are provided to the employees in the organization as well as prospective customers. By analysing the management operations and decisions, their duty is to report the Board of Directors about the project (Woolworths Group: Quality Brands and Trusted Retailing, 2018).
For assisting the Board of Directors, four permanent committees have been set up to carry out certain responsibilities. The responsibilities are Audit, risk management and compliance, People performance, Sustainability and Nomination (Woolworths.co.za, 2018).
Woolworths Australia is facing some serious problems due to this organizational structure. As four separate committees are maintained by the Board of Directors, reporting back to several bosses becomes very cumbersome for the employees. Several messages and queries are provided by the Board of Directors. The variety of messages can become very difficult for the employees to understand. Moreover, there are often conflicting information in the messages which becomes confusing for the employees (Woolworths checkout shutdown, 2018). For huge organizations like Woolworths, it is common to have separate departments for different business operations.But due to this structure, the customer service of the company suffers as for proper customer service, a good collaboration between several departments are necessary (Hyvönen 2013). The customers can be transferred to different departments as no one really knows whose responsibility it is to manage the query. This can lead to the loss of business for the company. Separate departments can also lead to lack of cooperation between the members of the departments unless they are told by the supervisor. The lack of teamwork increases inefficiencies in business processes (??????? and Kharakoz 2015).
The separate departments can result in another operational problem for Woolworths which is lack of communication. The problem normally occurs between supervisors and managers where in some cases, one of them takes up an authoritative role for the team. This confuses the members of the team and leads to wastage of time and resources for the organization (Woolworths: the rise and fall of the department store, 2018).
Commercial accounting software- Small and medium sized organizations normally use this accounting software to create customized functions for their business operations. These softwares have the ability to summarize the data and display them in reports and graphs. A wide range of commercial accounting softwares are available in the market which have their own share of advantages and disadvantages such as Quickbooks, Freshbooks and Turbocash. These softwares have a number of error detection layers to spot the entry of wrong information (ENTERPRISE RESOURCE PLANNING 2016). These softwares require a maintenance team on site and takes some time to implement.
Custom accounting software- These softwares are custom made for a particular business. Occasionally, these softwares are made by accident when the employees are told to make a particular software to handle some company- specific accounting problems. These softwares slowly grow in capability over the year and are marketed as a complete custom accounting software by the organization. Another reason of adopting a custom accounting software is when the company is unable to find a proper accounting software that can take care of its specific business requirements (Kohler 2013). These softwares often require periodic maintenance and contain a lot of bugs.
Enterprise Resource Planning or ERP software- ERP softwares are customised to integrate data from various parts of the business to a central database. The problems that arise with independent departments in an organization such as Woolworths can be eliminated with the integration of this technology. Unlike the other two options, the cost of implementing this technology is substantial. Separate modules need to be purchased for this software in general. These modules focus on a single business operation such as Accounting, HR, finance, inventory and distribution control (ENTERPRISE RESOURCE PLANNING 2016). The software can help in eliminating several problems that are associated with supply chain management, distribution management, accounting applications, customer services and redundant tasks.
The most likely acquisition method for Woolworths is the ERP system as it can help the Board of Directors to manage four independent departments efficiently (Arli et al. 2013). The company is capable of affording this expensive system and in the long run, it will be beneficial for the organization.
Several control problems associated with the ERP are written as follows:-
The possible frauds associated with the system are written as follows:-
The adoption and development of the accounting softwares are very tedious due to their high adoption costs. To prevent exposure to business risks, the conversion process takes a lot of time and resources for the company (ENTERPRISE RESOURCE PLANNING 2016). Due to technological innovation, organizations face a lot of pressure to shift from their traditional ways of doing business accounting. The organizations are tempted to try different alternatives of the new software packages. Several software packages involve time consuming activities and cumbersome processes. Moreover the adoption process and module development process needs to be conducted in parallel to the daily activities of the organization. The process needs to be conducted while running both the old as well as the new business activities to guarantee improved results (??????? and Kharakoz 2015). The adoption process can also involves human errors that might creep into the system which results in immense pressure from stakeholders for ensuring proper accuracy of the new system. Inconsistency of data is a common factor during this phase due to the minimal knowledge about the data structures that the company is working with.
The market size of the accounting software packages varies from country to country as well as from time to time. For example, in Australia, Xero has taken up more than 66% of the market share. Sage has taken up almost 50% of the market share and 20% of the market share has been taken up by Inuit (Knox 2015). Inuit however has 56% market share in USA. Sage has taken up 33% of the market share and other vendors have taken up the rest of the market share. SOHO recently released a recent study which showed that Sage has taken up 25% of the market share all around the world followed by Inuit which has around 33%. In the case of mid-range companies, Sage has taken up around 42% of the total market share followed by Inuit which has around 22% market share (Monk and Wagner 2013).
The most renowned accounting software currently present in the market is Freshbooks. Several features are present in the software package to give it a competitive advantage. Recurring voices and subscriptions are provided by the software. Various vendors of Credit cards and PayPal are supported by the software for online payments (Hyvönen, 2013). The process of integration with other applications is hassle-free. The software comes as a package which negates the need for buying other applications. Entire business processes can be checked from a single dashboard. The software also assures data security by making proper backups from time to time. The cost of the software is also flexible depending on the business requirements. Moreover, the software can be accessed from mobile devices.
Challenges faced by Accounting softwares are written as follows:-
The recommendations for the mentioned challenges are written as follows:-
Conclusion
To conclude the report, it can be stated that to counteract the operational problems that Woolworths is facing the company needs to incorporate ERP system into its business processes. The Organizational structure of Woolworths have been evaluated in the report. The inconsistencies and inefficiencies due to the present organizational structure has been discussed. Three system acquisition methods have been discussed and the proper option has been chosen as ERP for the proposed company. A sales procedure flowchart has been provided for the report. The adoption and development of various accounting softwares have been discussed and their market size has been assessed. The current challenges faced by the accounting software has been mentioned and recommendations have been provided accordingly.
References
A brief history of Woolworths, 2018. [online] Available at: https://www.woolworthsmuseum.co.uk/aboutwoolies.html [Accessed 2018].
Woolworths checkout shutdown, 2018: Supermarket apologises for …. [online] Available at: https://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: https://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.
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 https://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.
??????? and Kharakoz, Y. (2015). Features of application of erp-systems in management accounting. Auditor, 1(3), pp.71-76.
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