Information system refers to the collection, organization and storage, usage of information in an organization. As Hassan et al (2012, pp. 204–227) elaborate, information system that a company uses can determine the efficiency of company’s operation. The contemporary business society requires proper strategic information management system that is incorporated with the current state of the art technology. In the modern business world company can collect, organize, store and pass information on finance and accounting using computer software. Information systems may be categorized into bookkeeping information and transactions processing systems, database management systems and office information system. Dostal (2007, pp. 540), indicate that one of the most important reasons why most of business fail is lack of good bookkeeping systems in those organization. Currently bookkeeping is done using accounting software inmost organizations. According to Gogouvitis et al (2012, pp 193–209), some of the most popular accounting software used in Australia is Xero, Quickbook, MYOB, Cashflow Manager and Reckon.
There are many companies in Australia that uses accounting software to run and manage their financial records and transactions. Commonwealth Bank of Australia is a good example of companies that have so much invested in information system. According to D’Atri, Marco and Casalino (2008, pp. 1–416), Commonwealth Bank of Australia is one of the largest companies in Australia by wealth. The overall accounting software used by commonwealth is massive though currently the bank uses cloud computing. In addition, Commonwealth Bank though is not leading accounting software user in Australia play an important role in software market.
The current organizational structure
According to Theodore (2012, pp. 6–7), before discussing information system organization structure bank general structure is critical. Commonwealth Bank strategic management has five divisions namely Retail Banking Services, Business and Private Banking, Institutional Banking and Markets, International Financial Services and Wealth Management. Agarwal and Lucas (2005, pp 381–398) explains how Commonwealth Bank provide financial management to small business and personal banking. To achieve this objective Commonwealth Bank develops user friendly application that help individual and small business mange their financial information through simple accounting software. Secondly, as shown by Asalino and Mazzone (2008, pp. 89-96) Commonwealth Bank division for private banking offers customer financial advice to business and other online trading platforms. Internet bank is another important division of Commonwealth Bank assisted with NetBank application platform.
On the information system that controls the databases and other accounting systems, the organization structure composed of internal cloud, private cloud and public cloud. The cloud computing platform at the apex of the structure includes web interface, database and applications. Firstly, as explained by Alcaraz et al (2012, p. 329) internal cloud interface control the overall system through integration with Multi-Provider Cloud Management System. Internal cloud application interface is connected on Multi-Provider Cloud Management System by external and privet cloud interface. Financial management system software that control banking operation are installed in this three interface for easier communication between all interface and web interface. Similarly, Skala et al (2015, pp 16–24) indicate that at the apex of the organization structure there are four interfaces that each has application, web and SQL database connected to each other at the Multi-Provider Cloud Management System. Therefore, as demonstrated by Kroenke (2015, pp.10) Multi-Provider Cloud Management System provide communication link between all connected interfaces though this has been synchronized to work in single Commonwealth Bank application software. Finally, to simplify the complexity of the information system in commonwealth bank, the company develops and deploys accounting software incorporated into a single banking application available for customers.
Operational problems
There have been technical errors that sometimes affected the operation of Commonwealth Bank for instance in June 2011 customers struggle to access online accounts only later to realize NetBank accounting software shutdown. Though the bank itself never explained what happen, the truth remains that Commonwealth BankNetBank shutdown. Commonwealth Bank structure especially the division of internet banking that uses NetBank. One of the identified problems in structure of information system within Commonwealth Bank includes the integration between accounting software in the internal cloud and ERP system within the NetBank interface.
System acquisition method
Commonwealth Bank of Australia according to Alcaraz et al (2012, p. 329), deals in a range of accounting software that include commercial software and ERP. System acquisition used at Commonwealth Bank includes recruitment of young software developers that develop software for the company. Commonwealth Bank of Australia is a software developer that develops its software using graduate interns as developers. As compared to study conducted by Theodore (2012, pp. 6–7), Commonwealth Bank firstly develop retail software used in online account information system and mobile banking. As indicated by Gong and Janssen 2011, pp 61-71), an information system that uses accounting software has enable large organization like Commonwealth Bank to manage online baking information. Commonwealth Bank develops commercial software that is readily integrated in various devices such as mobile phones, tablets and personal computers. Prior to own software development, Chairman of the Joint Chiefs of Staff, U.S. Army (2012, p. 18) describe how Commonwealth Bank acquire software from Enterprise Data Systems currently manages by Hewlett-Packard Enterprise Systems. Software development has been aided with the cloud computing services that bank currently use.
Sales procedures for the chosen Commonwealth Bank
The sales procedure for Commonwealth Bank of Australia includes use of credit cards, cash transfer and deposit, and sales of shares. Commonwealth Bank normally has credit cards that are issued to their customers who are willing to use them for transaction. Procedure for selling or buying Commonwealth Bank shares include identification of online share broker, obtain Security holder Reference Number (SRN), to sell share to another person customer need to complete an Off Market Transfer Form and pay the applicable fee (Theodore 2012, pp. 6–7). An example of share selling procedure is explained below.
Control problems in the system and possible fraud
With the current cloud computing that is implemented in commonwealth bank, Kurdi et al (2010, p. 34) states how controlling data and information hosted in the cloud providers. According to Gong and Janssen 2011, pp 61-71), one of the serious concerns is on the data sovereignty since data are directly on the control of hosting country’s laws. Those the Commonwealth Bank directly controls its accounting information systems, the challenge remains on the onshore security of data hosted by cloud hosting companies. In addition, online banking as a service offered by Commonwealth Bank when linked to cloud hosting offers the most challenging system. As Asalino and Mazzone (2008, pp. 89-96) explain NetBank division often experience integration in the banking application installed by most Commonwealth Bank customers. Manipulation of data according Kroenke (2015, pp.10), is possible with cloud computing since cloud hosting company control the database.
Part 2
Development and deployment of accounting software
Development of accounting software takes some consolidated steps that is divided into development and deployments. Firstly, cloud computing require application programming interface (API) that is readily offered by Google App Engine and Amazon’s Elastic Compute Cloud. The virtual desktop that is provided by cloud computing software has interface with appendages used to join various software components to the main server. According to Alcaraz et al (2012, p. 329), Commonwealth Bank recruits graduates that develop accounting software for back on this virtual desktops interface. Secondly, O’Sullivan and Sheffrin (2003, p. 551) cites that developed applications are sold to customers and some are used internally by bank employees managing bank information systems. For instance, NetBank and Commonwealth Bank applications that allow customers to do transaction within the internet or on their phones are posted in various apps store across the internet.
Current market size
Within the software market ERP is the leading accounting software that is used widely in Australia. Financial management system ERP is the leading banking software followed by the accounting software according to Hassan et al (2012, pp. 204–227). The translated ERP software market size in the world remains very high as compared to other computer software. This did not contradict similar study conducted by Skala et al (2015, pp 16–24) that shows the projection of accounting software to rise up to USD 48.22 billion in 2022. In addition, Commonwealth Bank being one of the largest users of accounting software spend more money in software project than most of its assets.
Leaders in the market
Though commonwealth is the not the leading accounting software retailer in Australia, Commonwealth Bank play a key role in since it the leading accounting software user in Australia. According to Agarwal and Lucas (2005, pp 381–398), there are three main leading companies that retail in accounting software in Australia; theses are MYOB, Intuit and Xero. Xero for instance spend $250 million on developing accounting software. Xero processing about $240 billion in transactions and 95 million invoices just with a year. Another accounting software leading company MYOB, have been competing to build their own offerings, indicating that market share rose between $AU831.7 and $AU833.8 million according to an indicative price range of $3–$4 a share in its IPO. US giant Intuit has also rolled into the Australian market taking a strategic management position in the Australian software market. As cited by Haghighat, Zonouz and Abde (2015, p790–791), MYOB is the largest accounting software provider in Australia; Xero is the biggest cloud accounting company. MYOB has 116,000 cloud customers compared to Xero which has about 320,000 across Australia.
The three giant companies have different competitive advantage that allow them to attract or have many customers. Firstly, the main advantage that Xero have over its competitors is the accessibility. Xero users can easily access their account once the device they are using is connected to the internet. Secondly, MYOB on the other side has competitive advantage over its competitors due to its good cloud computing capabilities. As other companies struggle to produce hybrid of internet banking and cloud computing, MYOB is already advance in cloud computing. Thirdly, unique customer driven strategy through its “follow-me-home” programs incorporated in their customer system. “follow-me-home” allow monitoring of accounting software sold to customer to enable them check and fix problem.
Challenges of using accounting software
Alcaraz et al (2012, p. 329) identifies some key challenges that most users experience in their bid to manage their finances. Some of the cited challenges include data security, lack of efficiency, difficult to customize, no bank reconciliation feature, Poor Customer Relationship Management (CRM), Poor speed of access and technical support. Firstly, data security is one of the main concerns as data lies in the hand of other foreign company (Gong & Janssen 2011, pp 61-71). This is the same challenge is even worst in Commonwealth Bank being a large organization. Secondly, accounting software lack efficiency since some software is sophisticated and is not user friendly. For instance, software used by Commonwealth Bank that allows cloud computing and foreign hosting is technically advance making users find difficulties in using. Thirdly, accounting software is not easy to customize through re-writing of software. NetBank being an important internet banking application software for Commonwealth Bank cannot be customize since it is not open source software (Sheffrin 2003, p. 551). Fourthly, some accounting software lack bank reconciliation that reconciles some services such as credit card transaction making it difficult to trace wrong transactions. The key customer concern is Poor Customer Relationship Management (CRM leaving customer without knowledge on usage. In Commonwealth Bank applications are complex to understand and users just install software in devices without background information.
According to Kroenke (2015, pp.10), the most conspicuous gap that remain in the development, deployment and usage of accounting software remains customer usage knowledge. Gong and Janssen 2011, pp 61-71) indicates that it is difficult to use accounting software without prior knowledge. This does not contradict similar research done by Haghighat, Zonouz and Abde (2015, p790–791) that explains the customer experience on using Commonwealth Bank application software to do personal banking. Customer support system that gives customer information on how the information system works, financial theories that are involve in accounting software. In contrast, Theodore (2012, pp. 6–7) tries to show some help system that are part of application software a claim that is disputed. On disputing this help system on NetBank application software of commonwealth bank, Hassan et al (2012, pp. 204–227) explains that the help interface on NetBank application only work give simple steps that need internet connection so as to retrieve help information from servers.
Recommendation for accounting software development
Accounting software needs incorporation of Customer Relationship Management (CRM) interface that gives customer training and guideline on how to use various accounting software applications. Within customer support interface there is also need for accounting software developers should make training section. Secondly, rigidness of accounting software should be develops that are flexible open source and customer friendly. I concur with O’Sullivan and Sheffrin (2003, p. 551) about cloud hosting security that show, there is need to host data internally as oppose to foreign country data hosting. Internal hosting though need high management has proved to be secure once all the security firewalls have been installed.
Conclusion
In conclusion, information system especially the data management system and accounting software play an important role in large companies such as commonwealth bank. There are some accounting software such as Xero, Quickbook, MYOB, Cashflow Manager and Reckon though companies sometimes develop company application software that have incorporated accounting software. Commonwealth Bank develop application using graduate recruitment project and deploy to apps store for ease in accessing applications. In addition, development of accounting software through cloud computing has already attracted reactions though it is promising innovation. There are also some challenges that are affecting development and usage of accounting software and this include data security, lack of customer’s support system, difficulty to customize and no bank reconciliation.
References
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Alcaraz, C, et al 2012, Cross-Layer Monitoring in Cloud Computing. In Rashvand, Habib F.; Kavian, Yousef S. :Using Cross-Layer Techniques for Communication Systems. Premier reference source. IGI Global. p. 329.
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