Discuss About The Concepts In Enterprise Resource Planning.
In the following report, the accounting system implementation in the business processes of particular organization has been mentioned. In this report, the organisation that has been chosen for the accounting software implementation is Woolworths Australia. The report describes the organizational structure of the chosen company. The discussion part of the report discusses the operational problems that the organization was facing due to its organizational structure. The report discusses several system acquisition methods such as commercial and custom accounting software as well as ERP. A flowchart has been proposed for the sales procedure of the chosen organization. Moreover, due to the incorporation of the new technology, the frauds and control problems that are associated with the new system has been discussed as well.
The development and adoption of the accounting software packages have been mentioned in the second half of the report. Each software has been evaluated and the present market size of each of the softwares has been mentioned. The leaders of the accounting software packages have been mentioned and the reason for their competitive advantage against the other softwares have been evaluated. The present challenges that the accounting softwares face has been evaluated and discussed and possible recommendations to address the issues have been provided.
At the top level of the managerial board, lies the Board of Directors. Their job is to maintain and enhance the shareholder value and also check whether the business activities in the proposed organization are carried out effectively or not. They are also responsible for maintain the interests of the prospective stakeholders and also to appraise the performance, strategies and policies of the organizational group (A brief history of Woolworths 2018). The board charter mentions all the responsibilities of the directors. The process of representing the interests of the shareholders, their power and responsibilities are all mentioned in the Board charter. Since 2013, the chairman of Woolworths organization has been Gordon Cains.
The managing director and chief executive officer is Brad Banducci. The other members of the Board of Directors are Scott Perkins, Siobhan Mckenna, Jillian Broadbent, Michael Ulmer and Holly Karmer.
The Group Executive committee comes just under the hierarchy of Board of Directors. They are responsible for propagating the business towards its organizational goals. The executive committee’s members are in charge of providing quality services to the employees of Woolworths as well as to the prospective customers that the company serves. By reviewing and analysing the management decisions and operations, the members of the executive committee are responsible for reporting the progress back to the members of the Board of Directors (Woolworths Group: Quality Brands and Trusted Retailing 2018).
Figure 1: Details of the committee membership
(Source: Woolworths.co.za 2018)
Four permanent committees are set up by the Board of Directors to help them with certain responsibilities such as Nomination Committee, Sustainability committee, People performance committee and Audit, risk management and compliance committee (Woolworths.co.za 2018).
To help the members of the Board of directors in certain activities and responsibilities, four permanent committees have been set up. The committees are listed as follows:-
Woolworths is facing some serious problems due to the mentioned organizational structure. The reporting process of the four independent committees to the Board of directors becomes cumbersome and difficult because several bosses need to be reported at a single time. Moreover, the resolving queries and the messages vary from one board member to another making the process even more difficult (Woolworths checkout shutdown 2018). Due to the conflicting instructions, the workers of the independent organisations can get easily distracted and confused. The independent nature of the organisations is very common in large organisations like Woolworths. Nonetheless, this organizational structure has its own share of disadvantages such as poor customer service (Hyvönen 2013). A proper collaboration and cooperation between the members of several departments are necessary for providing good customer support. The prospective customer who is need of service can be transferred to different departments as no department is sure whose responsibility the problem lies in which directly affects the customer (??????? and Kharakoz 2015). Unless told by a supervisor, the workers of the different departments sometimes refuse to work with the other departments which affects the team performance and coordination of the organizational management.
The next operational problem is the lack of proper communication that arises due to separate departments in Woolworths. Here, the problem arises not from the Executive committee or the Board of Directors, but from the supervisors and managers of the various departmental teams. Sometimes, an authoritative role is taken up by the managers and supervisors of the departmental team which confuses the members of the respective teams. This leads to loss of money and time and leads to ineffective decisions (Woolworths: the rise and fall of the department store 2018).
Commercial accounting software- These commercial softwares can be handled by medium sizes as well as small sized business organizations. It is used in particular operations by the respective businesses for creating customized business functions. Several features can be found in these softwares such as summarization of data by displaying specialized graphs and special statistics to show the business heath. These accounting softwares have their own share of pros and cons. Some examples of commercial accounting softwares are Turbocash, Quickbooks and Freshooks which are used to configure the business processes moderately (ENTERPRISE RESOURCE PLANNING 2016). These softwares have the capability to prevent wrong entry of data with the help of multiple error detection layers. The only downside of using this softwesre is that the software takes a lot of time to install and requires a maintenance crew (on-site).
Custom accounting software- Sometimes, the business needs a custom functional software which are made for the business in particular. These softwares are normally created when the employees are told to create particular softwares for handling some specific accounting functions of the business. The custom software slowly grows in capability over time and are marketed as a separate product by the business. In other scenarios, the custom accounting softwares are taken up by the business when no other softwares (COTS or ERP) can perform the specific accounting tasks that are specific to the business (Kohler 2013).The downside of using these software is that the software occasionally tends to be buggy and needs maintenance from time to time.
Enterprise Resource Planning or ERP software- Enterprise resource planning integrates all the information into a database from several business areas The ERP software has the capability to reduce all the problems that arise due to the separate departmental areas of Woolworths. The separate departments have to run their own specific software with respect to their department. Although the software is expensive and takes time to install, it can be afforded by large scale organizations such as Woolworths. Several modules need to be purchased differently which can be applied to several departments of an organization such as Accounting finance, distribution, inventory control and HR (ENTERPRISE RESOURCE PLANNING 2016). Adopting the software provides a lot of advantages to the organisation such as critical business process standardization, enhancement in the operations of distribution, supply chain and financial data management.
Thus for the mentioned scenario, adopting the ERP software package will be beneficial for Woolworths organization as the likely method for system acquisition. It will allow the Board of Directors to proficiently manage the four separate departments that are present in Woolworths (Arli et al. 2013). Also, the company has the capability to acquire the high cost of the ERP which will be beneficial for them in the long run.
The sales procedure of Woolworths has been mentioned in the next diagram in the form of a flowchart:-
Figure 2: Sales procedure of Woolworths
(Source: Created by the author)
The control problems of the proposed ERP system has been mentioned as follows:-
The adoption of several accounting softwares are generally slow in process due to the business risks that are involved as well as the high adoption costs. Significant resources and time of the organization are also used in the conversion process. The organizations face difficulty in choosing between their traditional accounting system and adopting a new better option with the rise of digital innovation (ENTERPRISE RESOURCE PLANNING 2016). Just like other businesses, they are tempted to develop and adopt a better software package. The adoption process is however, very time consuming and cumbersome. Moreover, the organization needs to facilitate the conversion process while continuing with their regular organizational activities. Both the old as well as new system needs to be run at the same time for the best results.
During the adoption procedure, the risk factor that the company may be facing needs to be taken into account as well. The organization faces pressure from the prospective stakeholders for assuring the accuracy of the system. Moreover, during the development of the modules, human errors can get in to the system while maintain the database. Also, the inconsistencies can arise due to different data structures which is a common issue during the adoption and developmental phase (??????? and Kharakoz 2015).
The present market size of the prospective accounting softwares depends from country to country and time to time. In Australia alone, 64% of the market share has been taken up by the accounting software known as Xero. Intuit has a market share of around 20% and Sage has a market share of 50%. Similarly in USA, 55% market share has been taken up by Inuit and Sage has taken up a market size of 33%. The rest of the market size are taken up by other accounting software vendors (Knox 2015).
Recently, a study was conducted by SOHO which showed that globally Sage has taken up a market share of 25% and Inuit has taken up a market size of 32%. 42% market share is taken up by Sage and 22% market share is taken up by Inuit in mid-range institutions (Monk and Wagner 2013).
Presently, Freshhooks is the leader of the accounting software market. This software is very popular with organizations lately and provides multiple features for gaining competitiveness in the present market scenario.
First of all, the software supports recurring as well as subscription services. The software has collaborated with several vendors to provide online payment services such as Paypal. Moreover, the software integrated with other accounting softwares smoothly (Hyvönen 2013). Most of all, the software comes bundled with a couple of other softwares which reduces the need for other accounting softwares providing the user with total control of the accounting operations through a single dashboard. The software also makes secure backups timely maintain data security and has maintained a flexible pricing for the software depending upon its usability. Moreover, the software can be used through mobile apps providing versatility.
The common challenges faced due to the implementation of accounting softwares are mentioned as follows:-
The recommendations for the mentioned challenges are proposed as follows:-
Conclusion
To conclude the report, it can be stated that Woolworths need to implement the Enterprise Resource Planning system in its business processes to mitigate the operational problems that have cropped up due to the organisational structure. The management of different departments by the higher level hierarchy will get much easier with the incorporation of the system acquisition method. In the report, the organisational structure of Woolworths have been mentioned in detail. The inconsistencies that rise due to the faulty organisational structure has been evaluated and explained. Several system acquisition methods have been discussed from which the ERP system was chosen as the most advantageous of the lot. A flowchart has been provided which mentions the sales procedure of the respective company. In the report, the adoption and development of the new systems have been assessed and the market leader has been identified. The reason for the competitive advantage of the market share has been identified and discussed in the report. The market share of several softwares has been identified and the challenges and frauds that are linked with the adoption process has been identified. The recommendations for countering the significant challenges has been mentioned as well in the report.
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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