Discuss about the Strategies of a Mining Industry.
BHP is an entity made for trading for BHP Limited and BHP Billiton plc. An Anglo-Australian multinational company is involved in mining of metals and petroleum. The company has its headquarters in Melbourne. It was founded in 1885 and by the year 2015, it was the largest mining company of the world and the fourth largest multinational company of Australia.
This report includes the various businesses of the company BHP Billiton and the various strategies to be taken for improvement. The structure of the organization, problems, software uses and the vulnerabilities in the system is also included in the report. This report includes the software accounting packages that maybe included in the system.
In the year 2001, the merger between two different companies, Australian Broken Hill Proprietary Company Limited (BHP) and the Billiton plc introduced BHP Billiton that is supposed to include all the shares of both the company (Friederich and van Leeuwen 2017). According to market capitalizations of Australia, it ranks among the top largest companies whose business lies in mining.
The company has recently announced the introduction of a new model of operation that is supposed to help the company to grow and to be ready to face the challenges from the market (Ranosz, 2017). The company wants to focus their infrastructure to get geographical operation and global services with high expertise and scaling.
Fig: Organizational structure of BHP Billiton
(Source: CRONJE and VAN WYK)
Many operational problems are present due to the organizational structure of the company. These risks are evident due to the vast evidence of the international scope created by the organization and all the other industries that are currently involved in doing business that can have an impact in the operation of the company.
The company has revealed information about investment in software models of operation in decision automation of the industry and security of information. It has also made another investment to make the company go digital (Pillay 2017). The technology will be concerned with the digital roles of the company. The company is also looking to create a new and innovated hardware that will focus on improvement of automated operations of the industry.
The company BHP Billiton has an architecture that is designed for a hybrid method of operation, which will be automated, and provide use in management and scaling. The software used here is software defined networking (SDN) for processing the IT operations.
The company successfully acquires the sale of its products and made auctions for the sale of certain products.
Fig: Sales flowchart
(Source: Washbourne)
The company aims to focus on low cost and large assets that can be expanded. The company is committed to provide focus and investment in the economies of the company, which includes ten operations and four commodities (Washbourne 2017). The operational cost across industries and the robust demand of the products has made the company to give continuous support to the core majorities in the company.
Due to the competition of the market for manufactured goods and commodities, the increased resource acquisition from the natural sources for the development of the economy has made the industries a target for cyber threats, which may be disruptive or destructive (Lee et al. 2017). These threats are due to the presence of certain technologies to help thrive in the market.
The supply chains of the company in a global level are the main sources of resources for these cyber attacks. These attacks are very targeted and resourceful and the hackers are targeting these industries due to their global impact on the market and their supply chains management. The main vulnerabilities of the mining industries are their major dependence on integrated services to achieve automation in their activities (Walker 2017). As the industry for mining is a target for the economies of a country, the main objectives of hacking into the system is achievement of information about the government, policies and trying to get the analyzed results of a competitor. Stealing insights from a company about the mining prices, which are subjected to volatility due to the market, is a common problem associated to the mining industry.
The company is also subjected to natural problems that affect the system of operation. The change in industry is the most common problem that is associated with the industry. The change in the price of ores on a daily basis may affect the cost of operation and if the profit acquisition is not made, the company will not be able to thrive (Kapranov 2017). In addition, the separation of a sister company from the main company led to decrease in asset prices. South32 when separated from the company to get more provisions, it only got a reduced stock prices and this led to downfall. Moreover, the company is associated with tax troubles. Taxes are an important acquisition for a government and if the requirements are not met, extreme actions might be taken. The company is accused of maintaining their operations by doing their activities associated with Australia from Singapore for lowering the tax to be paid to the government.
The accounting software is used to define a special type of software that is used to record and process transactions relating to the account of the company involved in modules like payable, receivable or balance (Hall 2012). It works as an information system to store the account related transactions. The software may be purchased or third party based which can be used from anywhere. The presence of internet access is a necessity to access the software.
This software can be personal, accounting for personal information. These types of software are mainly used to aim their uses for the benefit of home users. The main advantages provided are the budget analysis and the transaction accounting. The low-end market type of accounting software allows general business organizations to use this. The low-end products that have small interfaces can be accounted by this package (Artho et al. 2012). The mid-market package is used to serve organizations that are basing their activities on the medium level of market acquisitions. The high-end market package is used to notify the businesses with high activities on a global scale. The most typical uses are the acquisition of global data and large-scale transactions of the company.
The company BHP Billiton also uses accounting software for maintaining their transactional records and provides insights of the financial aspects. The software used by the company is XBRL. The full form of XBRL is extensible Business Reporting Language (Doni, Gasperini and Pavone 2016). The software is intended to be used by both the companies who are dealing and the companies who are purchasing. The basic use of this software is to get accounting insights and financial reports made by the company. The clients and the consumers are the most important aspect in a company and the need to maintain the sales transaction of a company is a necessity. The software is a simple way for financial business reporting.
The main features of the software are the ease of transfer between users. The main usage of the software is Excel based and this makes the transfer of reports to users very easy. The software can be used in any computers who have the Microsoft Office version (O’Riain, Curry and Harth 2012). Moreover, the report provided by the software can be used to be converted to any types of documents supported by Java. The software also allows resolving any types of error that are made by the document. In addition, the software supports the easy allocation of information to different types of templates. The templates are readymade and allow easy incorporation of data.
The use of XBRL has helped the company to participate in the process of creating IFRS financial reports that had US SEC compliance.
BHP Billiton ranks among the top companies in Australia. Due to a commodity prices surge, the company made a profit in the first half-year of 2017. The company made a profit of 3.2billion$ and the company expects to see a profit of 4.2billion$ in the next half-year. The investors associated with the company is now getting a 0.52$ per share (Floris, Grant and Cutcher 2013). The main cause of such profit acquisition is the rise in prices of the iron and coal ore due to the increase in demand from China.
Fig: Market share of BHP Billiton
(Source: Floris, Grant and Cutcher)
The company BHP Billiton is supposed to have achieved a market cap of 98.3 billion$ by may, 2017. The sales made by the company are 33.95 billion $.
The BHP Billiton is the top mining company in Australia. But this does not mean that the company will not have fierce completion in the market. The top companies in the global market are surely trying their best to grab a hold of the top ranks (Miller, Van Megen and Buys 2012). The Rio Tinto is another mining company who gives a serious competition to the BHP Billiton. Glencore is another such company in the global market who also gives competition to the company. The presence of better infrastructure and operations are the necessary things that are required for the company to thrive in the global market. Other leaders of the market include the Xstrata PLC, Anglo American plc, MMC Norilsk Nickel and rest.
Fig: Share price of BHP Billiton
(Source: Miller, Van Megen and Buys)
The accounting software packages are used in nearly every business companies to get financial and accounting aspects of the company. The advantage it provides is used to get more efficiency in transactional accounting of the system. However, the main disadvantages are the increased cost (Noble and Smith 2014). The cost of the software is not the only requirement in terms of pricing that are needed to be met but includes the prices of all the other aspects like system requirements, internet access and many more. The possibility of a backup in the system require more technical support and the overall cost to install the system is more and this gives a significant disadvantage. The next disadvantages are the complex nature of the software. Most accountants are not conversant with the software and may need the presence of learning to understand the system. This causes an increase in expense for providing information for learning and gives a stress to the accountants for learning the software. Another disadvantage is the time required for the process to work (Bagley, Dalton and Ortegren 2012). The time that required in storing the information in the software is more than the manual work that can be done. Maintenance is another aspect that provides stress to the company who is implementing it. The time requires for maintenance is much greater and can hinder a day’s performance. The time and money both spent for maintenance are much greater than the advantage received.
These problems need to be referenced as the use of software accounting packages are a necessity for the company. The company needs to hire efficient personnel to handle the software and the company also needs the presence of training materials to be provided to the staffs handling them (Moorthy et al. 2012). The system needs to be made effective and modern to allow effective modernization so that this and any other software can be installed without the need of installation of computer parts every time.
Conclusion:
The company BHP Billiton thus ranks among the top companies in Australia. The organizational structure present in the company needs to have certain tweaks in the system that will help the company to thrive. The company also needs the presence of certain software for accounting purposes that effectively captures the content without posing any problem for the company. Thus, it is concluded from the report that the integration of certain software in to the system needs to be first analyzed and then implemented to mitigate the risks in the market
References:
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