Business development management assignment essay on: “Pressure hydraulics”  

About Business and Structure

‘Maintenance and Specialised Servicing’ business plan for ‘pressure Hydraulics’ is summarised in this report. They are currently into three services including Newcastle, Toronto and Maitland. there service centres are responsible for giving Specialised services and maintenance services for hydraulics that are used trucks, cars and earth moving equipments. Each service centre is operated as an independent service centre and has 8 employees working in the centre. The employee force includes a workshop foreman and an office assistant. A special service is provided for the mining industry by the Maitland service centre were mining equipments here are supported by the two purpose built trucks that are sent from the centre.

The owner of the service centre is Allan Taylor and he has a plan to expand his business by opening more service centres at Coffs Harbour and Gosford. Allan also has a few future plans for other service centres along with east coast of NSW. Alan also has a feeling that as it is the right time for him to step ahead and modernize and update his traditional style with the help of information technology (IT). Information Technology will help him to support his existing business and there by implement his future business plans.

As the owner Allan is responsible for the service centres and monitors them. This is one of the reasons why he has a tight schedule and fails to dedicate enough time for the purpose of developing the plan for implementation of information technology and new service centres that are to be inaugurated soon in Coffs Harbour and Gosford service centres.

Services provided

Following are some of the services that are given by company. Allan is good at developing and maintaining business relationships with transport companies and technicians from his company goes to these companies when requirement arises and services the hydraulics on trucks, cars and any transport that are handled by them.

These transportation companies are also provided with a special van that has all necessary equipments required for a basic workshop. The van also has a full range of components and parts that are required by the client site due to the various requirements of parts opted for servicing. There is also a variation in the time that is taken for completing the jobs and in most cases the time variation is unpredictable.

Workshops foreman is responsible for keeping track of the work and the major reason behind it is lack of information technology. The completion of work and time required is then intimated to the office assistant who is also responsible for developing an invoice to the transport company. The copies of these invoices are used for rating the efficiency and other work methods of the employees.

Services are also provided for the mining industry by the Maitland service centre. It has often been noticed that repeated mistakes had happened where wrong instruments and components were taken to the site for servicing the machines and has to return back for collecting the real instruments. This would not only mean loss in terms of cost but also in terms of travel time. These delays will not be taken positively by mining companies as they have restricted time allotment for Pressure Hydraulics because of their tight maintenance schedules.

Management

Each service centre is independently manages and has eight employees including the workshop foreman and an office assistant. The management of these companies were conducted manually and in a traditional way. Orders for works were received through phone and the people who were looking for quotes in relation to work were given a verbal quote in reply in accordance to what was written in the price book.

Customer

Bookings and time allotments for services were registered by the customer through phone calls and the office assistant was responsible for keeping track of these details with the help of his register which was also the journal. This was even made more difficult when there were cancellations of services as the whole chart tend to go wrong. There were also stages where the time for services will conflict with one another and cause misinterpretation (Hall, 2011).

A job card and a prescription of the rate to be paid from the price book will be given to the customers when a customer comes to the service centre for availing the service. There are events when the price book and the quote given to the customers have been different. This occurs due to the lack of precise recordings. When the prescription is completed the workshop foreman is responsible for aligning the Job Card to the most suited job technician. On completion of the Job the workshop foreman is intimated by the technician who then passes the card to the office assistant. The office assistant is responsible for the collection of payment. Payments are also received through various media including EFTPOS, cash and credit card. The job cards and later used to replace the stock in the garage by the office assistant.

Description of the problem

As it can be seen the major problem here is the traditional way of doing business is the central problem that is faced by all the service centres here. the office assistant is doing all the manual work of keeping workbooks, registers, invoices etc. it can be clearly seen that the office assistant is extremely busy for the purpose of updating the details and cannot always be blamed when mistakes occur. The time gap that is taken for completion of one task from another one and this time delay in certain cases results in losing the customer. There are problems that may arise when the customers are overbooked and the technicians have to work for. A day off taken by the office assistant will also prove deadly to the company.

Another problem that is faced by the company is Goodwill. As their Maitland service centre provides its services to the mining industry clients are very rigid and strict about timeliness and have very tight maintenance schedules, they won’t tolerate any delays in the servicing that is to be made available for their machineries. Allan is also worried about the lack of communication or miscommunication. This is one of the reasons why the technicians carry the wrong tools and machines to the worksite and the completion of work delays. This affects the good will of the company.

Suitable Solutions

Implementing the following solutions are the major objectives of Pressure Hydraulics

• They should have customer loyalty and ensure that the customers who utilises their services once will come back for the same service.
• There should be an increase in the control over the stock details. This requires a shift in the way the business is conducted. Bulk purchase can be done by the three independent units on the basis of requirements and this will allow Allan to have a better bargaining power with the suppliers.
• An instantly available stock chart where data in related to each stock can be readily retrieved is highly required.
• The generation of invoice should become an automatic process
• There should be an improvement in the process of payments. The requirement of constant communication between the staffs for generation of invoice of Bill Payments should be reduced. Simultaneously the factors that are fed in the system should be converted in to salary and thereby making salary payments for them on time.
• A close contact should be established with the customers. This will be allowing Allan to conduct repeat business with them by giving them special offers.
• The issue that are in relation with the price books should be removed to ensure that there is reduced rate of time consumption and online record of the price fluctuations to ensure surety for the customers.
• Sufficient amount of technology to support the changes.

Constraints

Implementation of the changes will be productive and effective only if the employees are making use of the available technology. This would also mean that certain amount of control will be brought on the employees also who are working in the organisation. The checking measures that are thus implemented are highly beneficial for the company. The control that is thus established can be of external or internal nature (Stair. Reynolds & Reynolds, 2009). The internal controls are the controls and the checking system that are placed on the employees of the company including the managers and the directors. Implementation of accounting information system is also a common phenomenon now as many companies are switching from traditional management to modern management (Gelinas, Dull & Wheeler, 2009). The advantage of implementation of the modern information system is reliability, speed and accuracy in the case of processing accounting information. The internal controls of the company have to be adapted accordingly as required by the systems on implementation of the new accounting systems. This also means removal of the older systems ad addition of new controls to make sure that the newly implemented computer systems work optimally (Stair. Reynolds & Reynolds, 2009).

The internal auditors have to follow a trail of papers in the case of manual systems and this makes the process very difficult. But on the other side auditors also have a complete control on the dealings of the firm when there are hardcopies of the bills. Computers lack paper trails and there is easiness of information processing. The documents are rarely looked for when full services are available from the computers. The amount of documentation will also be lesser in the case of computers as manual documentation and calculations can be neglected in the case (Stair. Reynolds & Reynolds, 2009) .

There is a difficulty in determining the user of the computer and who entered the data. It is not possible manually as identification of handwriting will help in identification of the person who entered the data. This would mean that the fraud detection and error detection will be difficult in the case of computerised transactions.

Development Plans

There are five stages that can be included in developing the accounting information system. They are planning, analysis, design, and implementation and support (Kaliski, 2001). The time allotted for the implementation of these changes can be as few as a week or as long as years.

Planning

This is the first stage of the information system development. The objectives and the techniques that can be used for the management of information system are planned in this stage. The various objectives would include determining the scope and objectives, control requirements, the definition of the projects, responsibilities, project deliverables and project budgets (Kaliski, 2001).

Analysis

The current processes that are used by the organisation is analysed in this stage. the processes including the documentation are checked for and the best and the most effective processes are redesigned and taken full advantage of in the future with the support of the modern computer solutions where as the processes that are not effective are replaced. Data analysis will also have three stages in the process that are data analysis, decision analysis and process analysis (Kaliski, 2001).

Data analysis

A review will be conducted for the current accounting information that is available in the organisation. This data is compared to the data of the organisation. It is then decided that which of this data can be completely be applicable to the managerial purposes. Accounting transaction processing systems are formulated by making use of this method (Kaliski, 2001).

Decision Analysis

The decisions that are made are by the managers are thoroughly reviewed in this stage. This is a method that is made use of when the primary objective of the system is decision support. The decisions that are taken by the managers here are identified on the basis of the individuals. This decision is then analysed on the basis of the various financial and related information. This will make it possible to generate better and effective alternatives and then choose a method from the range of choices (Kaliski, 2001).

Process analysis

The business process of the organisation is thoroughly reviewed in this stage. Various processes are identified in this stage. These processes are then divided and applied into various processes. The various processes that are identified are are improved so that the cost that is consumed by the process reduces and there is an improvement in terms of service, quality and information management. This is a method that is adopted when there is automation (Kaliski, 2001).

Design

This is stage where in the effort and the suggestions of the analysis phase is converted into the reality. The various details and developments that were suggested in the analysis phase are then implemented into the subsequent phase. This will require a detailed design and should be error free as this will be the model that would be adapted for work. The detail should be concise to the extent where input, processing, storage and outputs for the proposed accounting system are explained so that there will not be ay restriction is farther implementation of the same. Major tools are used for developing the designs. Some of them are application generators, screen layout tools, flowcharts, business maps. The logic behind the processes is easily defined through the help of these charts. Relationships are modelled for the organisations resources, agents and events through diagrams so that logical data storage designs are identified. All the requirements of the design phase can be fulfilled with the help of special software tools (Kaliski, 2001).

Reporting

One of the major driving forces behind the accounting information systems development is reporting the effectiveness of the reporting stage is highly dependent on the on the analysis and the design stage. A variety of the scheduled and on-demand reports are made with the help of the AIS. The reports can be made of any kind depending up on the requirements in this process. That is tabular, graphical, pictorial, and complex relationships to show different dimensions. The reporting requirements have to be defined carefully. Some of the major criteria behind this are that they should be accessible to the systems interface and should convey information proactively and should on par with the cognitive level of the employees who are to interpret the information (Kaliski, 2001).

There can be different types of reports. they are filter reports that can be used for retrieving data of a special kind, responsibility reports that can be retrieved on the basis of requirements of a particular user and comparative report for showing the various differences on terms of percentage, price, sales or whatever factors as required by the user and helps in better comparison of factors the time (Kaliski, 2001).

These processes will have to be undertaken by Pressure hydraulics for implementation accounting information systems. System interfaces and screen designs are pivotal to the firm because they are used for capturing data. A variety of tools should be used for its development. The storage function is also pivotal to Pressure Hydraulics and can be fulfilled by making use of databases that are reliable, flexible and functional. The operations and processes and can be tracked with the help of business process maps. An accounting information system can also make use of specialised databases for supporting special functions that are required for the accounting operations and will be of a great use to internal control (Kaliski, 2001).

Implementation

Implementation phase has two primary parts that are delivery and construction. The requirements for implementation in hydraulics will include that of hardware and software. Implementation will not be possible without the vendors. Once the communication system is established they should build and test the network, the functionalities of the databases, and testing new program modifications and overcoming the restrictions of implementation from a technical attitude. This will include installation and testing. The process delivery can only be possible once the users are trained, the production data base is installed and all the functions and operations are converted to AIS (Kaliski, 2001).

Tools

Tool sets will help in making vendor-specific and customised delivery system application. It will also mean that the accessibility and the security levels can be set for retrieving data and ensuring access to important information (Kaliski, 2001).

Security

Security levels can also be different from one another. It would mean both physical security and software security. The software security can also be implemented at different level and this will be adequate as here can be security on the network level, operating system level, data base level and then application security. testing can also be done at various levels includes unit testing to ensure proper operation, program testing to ensure modification along with the program, system testing to ensure that the modifications of the programs work as a whole and acceptance testing to ensure that the performance is up to the users requirements (Romney & Steinbart, 2011).

Conversion

Though this method should not be used in Pressure Hydraulics, it would mean that there can be a change from AIS used currently to new AIS. This process can be made possible by two parallel systems for a specific period of time or by making the new AIS directly take over the implementation of the new system or by alternating the system on the basis of the location (Kaliski, 2001).

Support

Support face can have two objectives that include updating and maintaining the current AIS. This will require up gradation of the systems on the basis of environmental tools. A change in the Generally Accepted Accounting Conventions will require change in the whole system. Support phase can also be used for continuing to improve the processes that are used and there by updating the various requirements. This will ensure various opportunities are made available to Pressure Hydraulics (Kaliski, 2001).

Attestation

The way internal controls are implemented in an organisation will be highly affected through Accounting Information Systems. This would mean that the professional accountant should be involved in the designing the system so that the internal process is still in track. The accounting firms should be involved or ensure that the system therefore designed adhered to the reporting standard of the nation and internal control. The attestation should also require adherence to the international standards like ISO 9000-3 so that the all the standards for the control of information technology. There are also requirements for AIS for the maintenance of compliance to the business functions (Kaliski, 2001).

Potential solutions

Enterprise resource planning systems have the capacity to affect the AIS of an organisation. The other systems that impact the AIS are Supply chain management and customer relationship management. The EARP systems here have a broader view point in comparison to the traditional Accounting Information systems. There will be an improvement in the style of managerial reporting in case enterprise resource management is promoted. But the affordability will be factor for consideration as Pressure Hydraulics is expending and updating technology at the same time. This can be used for integrating the functions of the firm (Leon, 2007).

Components of Accounting Information System

Accounting information system can be said to be composed of six parts that are data procedures, people, software, instruction, information technology infrastructure and internal controls (Hall, 2007). It is adequate to look in these components

People

 People in the case of AIS are professional who are to makes use of the information systems in the organisation. The users include business analyst, managers, auditors, accountants, and many others including Allan and the chief financial officer. AIS help to integrate different departments in an organisation. This connection will make the processes easier for the various interrelated departments and erase the opportunity of making a mistake (Shelly et.al, 2008)

An example for a benefit in the case of Pressure Hydraulics organisation would be automatic renewal of the stock details in the garage. This will allow the office assistant to place order and update the stock. The billing process can be automated and assignment of jobs can also be automated. The log in time and calculations of salary can also be made easier with the help of the accounting information system. Accounting information system is prone to fulfil all the requirements that are required for updating the technology and expansion.

There will be increased amount of information accessible to employees from different parts of the world and this would mean easier better accessibility. Also, data can be blocked from various users depending on the various requirements. This will reduce the task of the office assistant and will help them to broaden their base by providing better service, increasing the customers and increasing the number of employees. The customers can also process the data and other requirements by one self and so do the regulations of accountability and internal control be applicable. AIS should be designed in a simple way to meet up to the requirements of the various people who would be its users. This would mean that the information system will be easier to use and will not hinder efficiency.

Procedures and Instructions

Procedures and instructions have got to deal with the methods that are made use of for the purpose of feeding, retrieving, storage and processing of the data. The methods that are used for retrieval can be automated or manual in nature the information that can be used on this can also be from internal sources which is compromised of the employees and external sources that are customers. The users of this information system should be trained for making maximum use of the services. The data base structure of the accounting information system that runs with an SQL or oracle will provide sufficient details on already available knowledge. It is also possible for AIS to have multiple features so as to fulfil the requirements of a hard core technician and a normal customer or employee.

Data

AIS have all data that is in relation to financial information. Any transaction or dealings that have a relationship with the company’s finances will be saved in the data base. The data that would be retrievable from the data base includes various factors and some of them are orders for sales. customer requirements, billing of the customer, sales analysis report, purchase requisitions track, invoices by the vendor, registers of cash, ledger, data on inventory, timeliness or time keeping, pay roll information and information on tax.

The data that is available in the AIS can be used for preparing records and creating information in relation to the accounts, profits and loss, depreciation schedules aging for the customers, trial balance and so on. This would mean that report generation is made much easier with the implementation of AIS. There are also multiple uses that are granted by the same including record keeping, decision making, analysis and other auditing activities. But useful data should be fed in to the database on a timely basis.

It is also important to analyse that there are also that there are information that cannot be found in the AIS including memos, correspondence, manuals, workbooks and many other presentations. These are documents that are highly relevant in an organisational context but are not a part of the financial record keeping.

Software

There is a software component for AIS and this is used for the purpose of storing and retrieving various processes and to analyse financial information. In the beginning information systems were papers and account books. Now all the companies in the world have started using computer for accounting. There are also various soft wares’ that are available for the small companies. Some of them are Peachtree accounting, intuit’s QuickBooks etch. SAP business one can be used by middle sized businesses. Large businesses can make use of Oracles people soft or Sage Groups MAS 90 or MAS 200 (Shelly et.al, 2008)

Information system can be of many types. But it also has to be understood that quality, security and reliability are the most important components that would define the effectiveness of any information system. The quality of the information that is imparted by the IS should be superior level because this is further used by the company to make sound decisions for the future.

Pressure Hydraulics also has an option of customising information in accordance with the requirements that are charted. Both the possibilities that are getting instant software and customising it and developing new software can be easily accepted by the owner of the firm and will entirely be dependent on his choice. A suitable company can put up a very favourable information system.

Pressure Hydraulics is not a publicly traded company and will take some time to reach top to that status. In the case of publicly traded companies, Sarbanes Oxley regulations tend to regulate the structure to be used for building up accounting information system. The rules and regulations that are published through Sarbanes Oxley are to adhere where internal controls and auditing procedures are concerned.

Information Technology Infrastructure

 This is an alternative name used for the hardware system for operating the accounting information system. The hardware items that are required include servers, printers, routers, backup power supply, surge protectors, and personal computers. Some of the major factors that are required for hardware selection are storage capacity and speed and the option of up gradation and expansion in case if required. A plan for maintenance, service, replacements and other unused and other hardwires are destroyed (Shelly et.al, 2008).

Internal controls

Security measures are required in the case of AIS so that sensitive data are protected; the methods that can be used for the same can differ from one another. Pressure hydraulics can be making use of passwords for the purpose of protecting important information as biometric identification is not required. The passwords will protect important files from being accessed by the unauthorised people. But still let them access information that is intended for them to retrieve. Confidential information of both the company and the customers should be protected. There are many of these information’s including social security number, personal details, credit card details and phone numbers. Internal control can also be used for the purpose of protecting the AIS from various verses which would otherwise try and disrupt the whole information. Loss of information cannot be affordable for any company (Romney & Steinbart, 2011).

Recommendations for Allan

The objective of implementation of AIS systems are very practical and also can be considered the requirement of the day. ERP systems can be used by middle sized organisations and that will be most suitable for Allan’s requirements. Though software’s for smaller companies can be used, it is not recommended for Alan to make use of the same. This is because the firm will soon become middle sized and the speed of the service cannot be compromised as Allan is looking forward to expand the firm.

The various components of the AIS will help the employees to fulfil all the requirements that are required by the users of the service. It is very important to train the users for using the serve. There are also chances for initial inertia from the employees as there are chances that they would feel their freedom is taken away (Accountininformationsystem.info, 2012).

It is also very important to ask for feed back to the employees and the current requirements that are faced by them. The requirements and the difficulties that are faced by the employees should be wiped off if possible with the help of accounting information system.

Conclusion

To conclude, it can be said that AIS is no more an option for employers but it is a choice. One of the major reasons for it is that AIS is no more and option but necessity. Allan is doing the right thing by implementing technology in his Pressure Hydraulics. Technological advancements keep up the pace of fulfilment of set goals. Expansion and accessibility of information is higher in the case of implementation of technology because of its strong support.

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