Strategic Information System Assesment 1

Literature Review Strategic Information Systems: A Case Study of Accounting Software Packages in Australia

Table of Contents

Overview .................................................. ....................................................................................... 4 Part 1 ............................................................................................................................................... 4 Organizational Structure of Commonwealth Bank ..................................................................... 4 Organizational Structural Problem ............................................................................................. 5 System Acquisition Method ........................................................................................................ 6 Commercial Software ............................................................................................................. 6 Custom Software ................................................ ..................................................................... 7 ERP ......................................................................................................................................... 7 Sales System Flowchart of Commonwealth Bank ...................................................................... 8 Figure 2: Sales Flowchart of Commonwealth Bank ................................................................... 9 (Source: Author) ......................................................................................................................... 9 Commonwealth Bank Accounting System control Problems and Possible Frauds .................... 9 Part 2 ............................................................................................................................................. 10 Development and Adoption of Software Packages .................................................................. 10 Current Market Size of Software Packages .............................................................................. 10 Competitive Advantage ............................................................................................................ 11 Market Challenges .................................................................................................................... 11 Use software packages by the Commonwealth Bank ............................................................... 12 Recommendations .................................................. ................................................................... 12

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Summary ....................................................................................................................................... 13 References ................................................ ..................................................................................... 14

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Overview

In this study reflects the implementation of accounting software packages in Australian market. Commonwealth bank is one of largest bank of Australia; based on this bank the study has analyzed the accounting software implementation in the Australian market. The organizational structure, estimated organizational structural problems, System Acquisition Method, Sales system flowchart, Accounting system problems, Market analysis of software packages has been discussed in this study.

Part 1 Organizational Structure of Commonwealth Bank

Organizational structure of an organization can be described as a corporate structure, which followed by an organization as well as the work procedure of an organization has been maintained by the help of organizational structure. In the context of commonwealth bank also has followed a organizational structure, which maintain the activities of the organization. Ian  Narev is the CEO and Catherine Livingstone Chairman of the company, the organizational structure of Commonwealth bank work under these two people. At first the director president Lauren Sullistiwati comes top of the structure, who controls the whole activity of the organization. The other directors and Chiefs such as Director of Retail banking (Rustini Dewi), Chief Treasury and markets (Liliawati Gunawan), Chief of Strategy and Digital Solutions and customer Franchise (Ida A. Simatupang), Director of Risk Management (Adhiputra Tanoyo), Directors of Operations and IT (TBA), Directors of Compliance (Angeline Nangol), Chief of Finance (Jonada Yattha Saputra), Chief of Human Resource (Bagus Harimawan), Chief Audit Executive (Reza Soemadipraja) are comes under the President Director. These people are

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operating the whole organizational Marketing, Operations, Human Resource and Financial activities of the Common wealth bank (Bank Commonwealth, 2017).

Figure 1: Organizational Structure of Commonwealth Bank

(Source: Bank Commonwealth, 2017) Organizational Structural Problem

In order to Commonwealth bank has followed a strong organizational structure to maintain the activities of the organization. Though commonwealth bank has maintained properly their

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organizational Structure it may face some issues regarding the operation, estimated issues are discussed below:

 Management E fficiency : In Accordance with Xie, Zang and Qi, (2016), management plays a major role in an organization, the entire organization work under the management team, for that reason their efficiency is essential for the organization. In the case of Commonwealth Bank, if organizational management efficiency has fallen down then it can be considered as a major structural issue of the organization.

H uman Resource Management : According with the Armstrong, and Taylor, (2014), Human resource Management (HR) has controlled the entire workforce of an organization. Hence, any workers have faced any kind of issue regarding work environment and other issues such as salary and organizational policy issue that can be considered as an Organizational HR structure Dispute. In case of Commonwealth Bank, it is also not an exception.

Consumer B ase: Consumer satisfaction can be considered as the main objective of any organization across the world. The commonwealth bank also follows this rule to enhance organizational profit but if the customers are not satisfied by this organizational service then it may raise a major issue for the organization. System Acquisition Method Commercial Software

In Accordance with de Jong and Karreman, (2017), Commercial software can be described as a financial software service, which was used to analyze the banking financial statements. It also has used for customer data analyzing. In the context of Commonwealth bank has followed this kind of software such as MYOB to analyze the consumer banking data as well as the bank’s Page | 6

internal data. This type of software has assisted the banker as well as the organization to maintain the all data adequately, which has enhanced to increase the productivity of the bank, its  profit, and maintenance. Entire commercial activity has been recorded, analyzed, calculated, and elaborated by the help of this type of software, which has assisted to achieve the main objective of the bank. Custom Software

According to the Schlagwein, Thorogood, and Willcocks, (2014), Custom software can be described as specific software which has developed by an organization to analyze common and critical data of the organization. In case of Commonwealth bank has partnered with QxBranch to develop their internal custom software. The organization has launched a data analysis computer simulator to operate their organizational functions, as well as this computer, also has assisted to develop the algorithm of the bank. The computer has accessed with CQC2T software, which is more efficient software than previous one. Apart from this, the new technology of bank also has reduced the time for work process which can increase the productivity of the organization.

ERP

According with the McDonald, (2016), ERP or Enterprise Resource Planning can be described as an application software, which has used for creating financial statement of the organization as well as it has determined the resource availability of the organization. It has been specially used for creating organizational resource planning. For that reason, it can be considered as resource management software for the company. Commonwealth bank also has used this kind of software such as SAP, Westpac to control their resources. This software is also used for maintaining

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human resource functions. This kind of software can increase the workforce and capability of the organizational workers. Sales System Flowchart of Commonwealth Bank Commonwealth Bank

Cloud Storage

MYOB

Greater Inventory Management

Mobile Banking Online

Sales

and

Online Payment

Bill

or

Mobile

Accessibility

Purchasing

Financial Management

Consumer Growth in Sales

Management

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Figure 2: Sales Flowchart of Commonwealth Bank (Source: Author) Commonwealth Bank Accounting System control Problems and Possible Frauds

Although the Commonwealth Bank followed advance technology regarding organizational operations this accounting system can arise some issues during the time of business operation. The estimated issues are described below: Software Access: Entire software system has operated by a software system. The system has developed by the key people in the organization. It may be a particular situation that the banker or worker may not access software due to a technical fault. Security: This kind of software has maintained high-level security. It may happen the worker has forgotten the security password, as well as the security, can be breached by hackers, which can introduce major problem while controlling the software.  Network Control : Entire software System is connected via network within the bank. It may happen that the network may disconnect due to electricity or technical disputes. It can raise a  prime issue regarding the proper controlling of the software.  Data Encryption: Every bank has used different types of software to manage their internal activities in Australia. Therefore, it may happen that the banking software has been not encrypted and decrypted properly due to use of the different software.

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Part 2 Development and Adoption of Software Packages

According to the CBS Interactive, (2017), it has observed that, Commonwealth bank has introduced Quantum computer simulator to develop their internal activities. Apart from this the  bank has adopted various accounting software such as SAP, Xero, Quick Books and other software, which has enhance the organization work process quality (Mitra, 2016). These software packages have helped to analyze internal and external financial data. The employees of the bank have been worked in proper manner by the help of this software packages. The organizational work process as well as working environment has developed by using above mentioned software packages. On the other hand, these software packages have assisted to calculate payroll, taxation and compliance functions of the consumers as well as the employees of the organization. However, backup of financial data is very important for a bank. For that reason bank has used cloud storage system to store every important financial data of the organization. In the case of consumers, they can easily connect with bank every time by the help of these software. Based on that it can be determine that, banking sector activities has developed and adequate in respect of old days by adoption of this accounting software. Current Market Size of Software Packages

Previously the banking activities had been processed manually by the workers but nowadays the whole financial activities of bank has incorporated different software packages such as Xero, Myob, Quick Books, Zoho and other packages Ossimitz, Wieder and Chapman, (2016). Commonwealth bank also follows this software package trend to enhance their organizational growth. According to the Shen et al., (2014) demand of cloud storages is high as well as this  process of storage has been increased rapidly in recent Australian accounting market. Cloud base Page | 10

software packages has provide advanced backup facility, which has assisted reduce the threat of data loss. On the other hand, most of the accounting software packages work similarly, for that reason price of the software packages has increased market competition as well as popularity. Every organization needs a efficient software in reasonable price, due to this the market size of software packages has dependent on quality and price. Some software packages such as Myob, Xero and Quick Book software packages are very popular due its quality and price as well as Commonwealth Bank has used specially Myob and Xero to analyze their financial factors. Competitive Advantage

A market cannot be created without any competition, based on this it can be claimed accounting software market also follow this rule. In the context of Commonwealth bank has uses advance software packages to enhance their productivity as well as growth. Commonwealth bank is the one of oldest bank in Australia. ANZ, Bank of Melbourne, AMP Bank Limited and others Australian banks can be considered as main competitors of Commonwealth bank. For that reason, they have to use a advance software package to maintain their financial activity, which can be considered as a competitive advantage of Commonwealth bank. On the other hand, the  bank has used Myob accounting software which provides Better input speed, premium accuracy, cost reduction and greater processing speed. Considering uses of these features of Myob can be a competitive advantage of Commonwealth Bank. Market Challenges

Although Commonwealth bank uses advance software packages but competitors of the bank also used this kind of software packages, which can be considered as a market challenge of commonwealth bank. Apart from this, Commonwealth bank has provided high quality services to their consumers by the help of advance software packages. Therefore, if other Australian bank Page | 11

may use technology better than Commonwealth bank then it can introduce market challenge for the organization. In respect of accounting software packages companies they also faced market challenges regarding price and quality. Introducing innovative and unique accounting software, which price wills competitively low can increase marketing challenges for accounting companies. On the other hand, if any particular Australian bank has invested high amount of money to develop their accounting software packages, then it can be increase market challenges for others as well as Commonwealth bank of Australia. Use software packages by the Commonwealth Bank

As per the viewpoint of Schlagwein, Thorogood and Willcocks, 2014, commonwealth Bank uses many software packages to operate their financial activities but most of the cases bank has used Myob accounting software in their organization. Myob has assisted the Bank to analyze and calculate consumers’ data as well as it also used for record and store entire financial data of organization. The software has incorporated with Cloud, it increases data storage efficiency and reduce the threat of data loss. The Myob has provide many features such as Greater inventory management, mobile banking or mobile accessibility, greater bank reconciliation, invoicing, online bill payment, smart financial reports and integrated payroll system. Apart from this, the accounting software also has provided Multi currency transactions, online sales and purchasing feature, online tax returns and adequate asset and liability calculation of the organization. These features of Myob have assisted Commonwealth Bank to create multipurpose financial statement at a time. Recommendations

Based on the above scenario it has determined that, the Commonwealth bank has used advance accounting software packages to enhance their organizational growth. Therefore, bank has been Page | 12

highly depended on these software packages, if somehow the software has been corrupted by the hacker or technical default, then it can be considered as a prime issue of the organization. For that reason the organization have to focus on software maintenance as well as they have to use  proper software, which reduce market competition as well as cost of the organization.

Summary

Based on the above study it can be summarized that, the Australian banks has followed different kind of accounting software such Xero, Quick Books, Myob, Zoho and other financial software  packages. These packages have provided high quality financial processes, which has assisted to enhance the organizational growth of Australian Banks as well as Commonwealth Bank.

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References

Bank Commonwealth, 2017. Organization Structure.  About us [Online]  Available at: https://www.commbank.co.id/upublic/mod_home/default_content.aspx?code=pr_strorg# [Accessed on 18th September, 2017 ] Xie, X.M., Zang, Z.P. and Qi, G.Y., 2016. Assessing the environmental management efficiency of

manufacturing

sectors:

evidence

from

emerging

economies. Journal

of

Cleaner

 Production, 112, pp.1422-1431. Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management  practice. Kogan Page Publishers. de Jong, M.D. and Karreman, J., 2017. The Image of User Instructions: Comparing Users' Expectations of and Experiences with an Official and a Commercial Software Manual. Technical communication, 64(1), pp.38-49. Schlagwein, D., Thorogood, A. and Willcocks, L.P., 2014. How Commonwealth Bank of Australia Gained Benefits Using a Standards-Based, Multi-Provider Cloud Model. MIS Quarterly Executive, 13(4). McDonald, D., 2016. Opinion: Assessing risk. Company Director , 32(6), p.48. Mitra, A., 2016. Fundamentals of quality control and improvement. John Wiley & Sons. CBS Interactive, 2017. The Commonwealth Bank of Australia has partnered with QxBranch to  build a quantum computing simulator as it readies for the availability of the real thing. Commonwealth Bank prepares for quantum computing with launch of QxBranch simulator.

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[Online] Available at: http://www.zdnet.com/article/commonwealth-bank-prepares-for-quantumcomputing-with-launch-of-qxbranch-simulator/ [Accessed on 18th September, 2017] Shen, B., Ghatikar, G., Lei, Z., Li, J., Wikler, G. and Martin, P., 2014. The role of regulatory reforms, market changes, and technology development to make demand response a viable resource in meeting energy challenges. Applied Energy, 130, pp.814-823. Ossimitz, M., Wieder, B. and Chapman, P., 2016, May. Management Accounting Functionality in SAP Solutions – Implications for Research and Practise. In International Conference on  Enterprise Systems, Accounting and Logistics (ICESAL) 2016 .

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