Question:

Discuss the Strategic Information System.

Answer:

Part 1

1. Current organisational structure

Every organisation consists of a certain structure that allocates the task of the organisation among the employees or the stakeholders so that no confusion about the role of the different designations occur (Friesen et al. 2014). Through the structure, the organisational operation, the supervision of the task through coordination is carried out in order to achieve the organisational goal and its objective. The structure that prevails in Wesfarmers is the hierarchical structure. The organisational structure of Wesfarmers includes the director at the top of the organisation followed by the manager and regional manager who handles the different regional offices where the organisation operates (Wesfarmers.com.au 2017). After that comes the team leader in the different departments where they look after the execution of the operation in the organisation at the ground level that is being carried out by the employees of the organisation. The general manager designation also prevails just after the director who supervises the different departments of the organisation like the production, finance, marketing and R&D (Sorensen and Stanton 2013). Without a proper organisational structure, it can be difficult for Wesfarmers to maintain the level of consistency it has in the Australian business market. This can hamper the growth of the organisation.

2. Operational problems that Wesfarmers could experience because of this structure

The operational problem that the organisation could experience includes the problem related to hierarchy. The operation of the hierarchy at the top level is always very clear but with the descending order of the structure, the issue that surfaces create confusion among the members of the organisation. According to Hill, Jones and Schilling (2014), the real problem that arises is that the manager or the supervisors often take up an authoritative role in the organisation or branch of the organisation. They dominate the employees or the executives in a wrong way that de-motivates the employees, which in return affect the organisational operation. Another issue related to the operational problem within the organisation is that of communication. The lack of communication within the members of the organisation creates confusion and the scope of improvement within the organisation in relation to the role of the employees is hampered. Cost is another operational problem that may come up with employing multiple designators. A delegation of job roles is another problem that the authority of Wesfarmers may face in future. The problem may arise when the delegation of the responsibility is not circulated among the employees properly.

3. Preferred system acquisition method

The engineers always face a problem while choosing the appropriate method of system acquisition in relation to the requirements of the organisation. Systems that are software-oriented and is appropriate for an organisation depends on the type of organisational operation that is carried on. There is no guidance available in the choice of the acquisition method as there are numerous system acquisition methods available that confuses the people (Yen et al. 2015). Wesfarmers is a conglomerate that deals with multiple types of products. The ERP software is best suited for Wesfarmers. It is said to be effective software with all required prospects that are needed by the organisation. The ERP (Enterprise Resourcing Planning) is used by organisations to manage the operations that the organisation is operating. The ERP is apt for Wesfarmers because the organisation as mentioned earlier is a conglomerate that is very diverse in its products and services. The management of the operations is multifaceted as the organisation deals with supermarket services, home furnishings, coal mining and many other industries (Leon 2014). To manage such hugely diverse industry, Wesfarmers must use the acquisition method of ERP that suits the demand of the organisation in relation to the managerial operation and accounting system of the organisation. The most important benefit of using ERP is that the service it provides is far worthier than the initial cost that is required during the installation of the software. Moreover, this particular system is very time efficient and performs all types of demands of accounting software with better analytics and regulatory compliance that is simple and therefore it is apt for this conglomerate.

4. Describing and preparing a system flowchart of the sales procedures of Wesfarmers

Figure: Sales Project

(Source: Young, Castleberry and Coleman 2016)

The Sales procedure of Wesfarmers includes the four levels that is the marketing, qualifying, proposing and delivering in the sales of the services and the products (Morse 2016). The process is carried out in relation to the business objectives, suspects, opportunities, agreements and satisfied customers.

5. Identifying any control problems in the system

Göllmann and Maurer (2014) stated that with advancement in technology, problems regarding the installation and up gradation are taken into consideration in the acquisition of the ERP in several organisations and country. However, technology is not the issue in the implementation of the software of the ERP. The recurrent issue is that of risk management within Wesfarmers and the change of the people. In most organisations, the implementation of the ERP counts for the budget and timeline consideration and ignores considerations like the expectation of the compliance and the risk management. The major risks identified with the implementation of ERP consist of the following:

• Losing control over the projects and the delays in the implementation of ERP within the organisation
• Issues related to process, data integrity and control
• Cost issues and live rework
• Lack of knowledge and skills in relation to the in-house operation
• Compliance issue
• The alignment that lacks are the organisation’s structure, objective process and the implementation of ERP

Detection of fraud in relation to the ERP implementation is extremely complex but is handled by the fraud examiners and the auditors. The detection is primarily done through auditing the log. Few fraudulent specifications are particular to different fields. The manual process of transferring data and data alteration is another risk related to the business operation with ERP installation (Schaltegger, Etxeberria and Ortas 2017).

PART 2

1. Development and adopting accounting software packages

Any organisation often faces problem in choosing between the existing accounting software that is already in implementation within the organisation and the one that the organisation is opting to implement in the sector. The reason behind this confusion is the investment that the organisation bears in relation to the implementation of the accounting system that also needs up gradation (Mas et al. 2014). The computer power is increasing day by day that encourages or rather pressurises the experts to develop or upgrade their existing software. The same reason works for the organisation who always wants to be the first in the race in accordance with the competitive advantage or internal fraudulent. In adoption, any organisation goes for the total change of the accounting system that is replacing the existing accounting system with the new system in order to meet the required acquisition method that matches operation of the organisation. According to Schaltegger, Etxeberria and Ortas (2017), the other way of adoption is the conversion of the accounting software package. This includes the running of the existing accounting software along with the newly adopted accounting software. There has been rapid adoption of the accounting software in Australia and Wesfarmers is no exception. Wesfarmers adopts the MYOB ERP accounting software.

2. The current market size

The current revenue of Wesfarmers is AUD$65.98 billion in 2016, that brought the organisation among the top most successful business enterprise. The organisation account for a shareholder of 530,000 bases spread across different parts of Australia. It largely operates in Australia and has market presence in New Zealand too but this organisation does not operate internationally or possess global presence (Mayer, Melitz and Ottaviano 2014). The organisation has a great cover of the market in Australia since it is a conglomerate. The industries that Wesfarmers operate include the retail market, the industry in coal mining, products of home furnishing, departmental stores, subsidiaries and insurance business. The business under the name of Bunnings, Coles, Target, Kmart, chemical and fertiliser industry, home and office appliances operates through numerous warehouse and stores. This is the reason that the share of the Wesfarmers is quite expensive in the market. The organisation has just started operating in the market of Ireland. The reason behind such big market share is the diversification, long-term strategies that provide long-term growth. Dividends are another factor for the expense of Wesfarmers share that is 5.2% fully franked dividend (Wesfarmers.com.au 2017).

3. Identifying leaders in the market

Wesfarmers, the most diverse company in the market of Australia has become the first company to beat Woolworths. Wesfarmers deal with multiple services and products. Hence, a conglomerate has been successful in operating in different types of industries. The closest competitors of Wesfarmers include Woolworths, Metcash Limited, Caltex Limited who is giving tough competition to Wesfarmers. The success of Wesfarmers lies in its choice of the industries where the other competitors have not yet arrived. According to Nica (2013), Wesfarmers is extremely versatile in its products that help the organisation to operate in different types of industry. Therefore, the organisation has diverse markets along with diverse customers that the other competitors do not possess (Jin, Ji and Gu 2016). The other leader or the competitors only deal in the supermarket or in the home furnishing or other industries like the railroad, mining, food service, departmental stores, chemical and fertilisers, insurance institutions and so on. In contrast to this, Wesfarmers deal in multiple industries. In that case, the leaders are in the disadvantage of operating in a diverse market.

4. Identifying current gaps or challenges encountered by users

Wesfarmers use the MYOB ERP that is accounting software, which is used by the organisation to meet the acquisition system method. This particular ERP is used widely by most of the organisation that opts for an all in one software package in meeting the demand of the organisational operation. XERO is the new ERP software that is being widely used by multiple organisations in Australia. This is because MYOB is the ERP software provider that provides its customers with the advantage of the first mover but otherwise all the features are similar that XERO provides (Schaltegger, Etxeberria and Ortas 2017). The MYOB is far more expensive than XERO with just the same features of online help, application availability, and browser supported whereas the MYOB needs a browser for installation purpose, unlike XERO. Therefore, it is highly recommended that Wesfarmers should go for the change that installs the XERO ERP as the accounting software.

Reference List

Friesen, J. P., Kay, A. C., Eibach, R. P., and Galinsky, A. D. 2014. Seeking structure in social organization: Compensatory control and the psychological advantages of hierarchy. Journal of Personality and Social Psychology, 106(4), p.590.

Göllmann, L., and Maurer, H. 2014. Theory and applications of optimal control problems with multiple time-delays. Journal of Industrial and Management Optimization, 10(2), pp.413-441.

Hill, C. W., Jones, G. R., and Schilling, M. A. 2014. Strategic management: theory: an integrated approach. Cengage Learning.

Jin, J., Ji, P. and Gu, R., 2016. Identifying comparative customer requirements from product online reviews for competitor analysis. Engineering Applications of Artificial Intelligence, 49, pp.61-73.

Leon, A., 2014. Enterprise resource planning. McGraw-Hill Education.

Mas, J. F., Kolb, M., Paegelow, M., Olmedo, M. T. C., and Houet, T. 2014. Inductive pattern-based land use/cover change models: A comparison of four software packages. Environmental Modelling & Software, 51, pp.94-111.

Mayer, T., Melitz, M. J., and Ottaviano, G. I. 2014. Market size, competition, and the product mix of exporters. The American Economic Review, 104(2), pp.495-536.

Morse, J. M. 2016. Mixed method design: Principles and procedures. Routledge.

Nica, E. 2013. Marketing implications of consumer behavior. Economics, Management and Financial Markets, 8(1), p.124.

Schaltegger, S., Etxeberria, I. Á., and Ortas, E. 2017. Innovating Corporate Accounting and Reporting for Sustainability–Attributes and Challenges. Sustainable Development, 25(2), pp.113-122.

Sorensen, L.J. and Stanton, N.A., 2013. Y is best: How Distributed Situational Awareness is mediated by organisational structure and correlated with task success. Safety science, 56, pp.72-79.

Wesfarmers.com.au. (2017). Home. [online] Available at: http://www.wesfarmers.com.au/ [Accessed 24 Aug. 2017].

Yen, H. R., Hu, P. J. H., Hsu, S. H. Y., and Li, E. Y. 2015. A Multilevel Approach to Examine Employees’ Loyal Use of ERP Systems in Organizations. Journal of Management Information Systems, 32(4), pp.144-178.

Young, S.Y., Castleberry, S.B. and Coleman, J.T., 2016. Advanced Selling: A Comprehensive Course Sales Project. American Journal of Business Education (Online), 9(3), p.119.