Strategic Information System at Abode Free-Samples for Students

Question: Write a Literature Review on an Organization that is using Accounting Software Packages in Australia. Answer: Introduction Abode is founded in 1991 and is leading manufacturer of fines luxurious bed linen. As of date, it manufactures numerous products like Bathmats, bathrobes, skin care, pillows, blankets, quilts and limited clothing as well as furniture. It is fully based out of Melbourne and warehouse, factory, showroom all are located at 1 place at Melbourne. They sell the products at retail stores, at their showrooms as well as take bulk orders from various hotels (https://www.abodeliving.com/ ). Their products are also hit in various hotels especially their thick linen and takes bulk orders online. They import their material from suppliers from Europe as well as other countries. Standards and quality is very high at Abode. It manufacturers standard specifications products which are often make to stock and available at retail shops and it also takes makes to order for bulk orders. It is currently using ERP Australia which is point of sales systems to get data directly from retail stores about their p roducts. They have also created their website but their systems are not integrated as such. For instance, ERP systems are maintaining the latest data about on hand inventory but is not linked or synchronized with the website where customer places order. Thus, there is redundant effort of updating data at the backend of the website from ERP and Abode is looking to replace its existing systems with the new IT systems that provides better support. This paper will deal with analyzing their requirements and conclude by suggesting them the suitable accounting software aligned with their requirement. Abode Living Analysis Current organizational structure Abode is family owned and run business and thus not as professional as large organizations. The advantage is that decision making is quick and there is no bureaucracy and multiple levels of approvals. Current management is actually fifth generation to follow this trend of bed line and textiles businesses. Thus, different family members head different product line like Bedroom products, bathroom products, Kitchen and Dining products, Homeware products, Clothing and so on and takes decisions accordingly. For common requirements of raw materials, they coordinate to get the bulk discount. Operational problems at Abode Abode is facing numerous issues due to different IT systems that works in silos. To keep both the systems, there is manual effort required. Data does not flow from their Backend/ERP systems into the system that feed its website. As a result, sometime, the price are not updated, product quantity is not updated and when people orders from the website, it can cause issues as people can see the different prices on different days and become sceptic. Systems should be integrated ideally. Functionality of the existing system is quite limited and there is no provision of e-procurement which is the latest trend (Vaidya, Campbell, 2016). Also, there is no way to record quality of manufacturing processes and quality of materials send by the suppliers in the IT systems. They also need system which can calculate the appropriate cost of various products by taking into account the bills of material data, various resources and manufacturing operations to get more granular level of costing (Ising, 2 014). Some of the other issues as Abode are their inability to calculate GP margin, no standard reports, and difficulty in reconciliation mismatch in inventory in systems and in reality. Current systems also lacks functionality like reorder point planning which is used to control the inventory levels. Most suitable system acquisition method commercial software, custom software, or ERP? The business at Adobe is not very complex as there is only 1 location that has been used as everything from warehouse, office to manufacturing facility. Also, Abode is also operating in 1 country and exporting materials worldwide. Custom software does not make sense until you have a business which is highly customized or has the business processes which can be supported by the standard products available in the market or you need to develop huge customizations in standard products to make them fit for their business. Clearly, this is not the case here. ERP systems are suitable for those organizations that have their operations in numerous countries, have manufacturing location in different parts of the world and buy material from numerous suppliers. This is also not the case here as Abode is a medium scale company (Susan, 2014). Big companies like Toyota, GE, and Emerson electric will fall into this category. The best option would be to acquire the commercial software which will be available on cloud. Time to implement will be less and Return on Investment (ROI) will be higher by choosing commercial software. Sales cycle at Abode Abode living sells material directly at its Showrooms where people walk in and gives order for their particular requirements and specifications. After manufacturing the products tailored to their needs, it ships them the product. Payment can be either prepayment or sometimes customer pays after products is shipped. It depends upon the quantity of order and the contract with the customer whether it is 1 time customer or the one who orders regularly. Abode also sells at various retailers particularly those products which are suitable from household purposes. These products are generally standard products. It also bids for the larger contracts from the Hotels chains, Hospitals for providing thick bed linen and other products for a continuous period of 5 years or so. And it also gives the option of ordering online via its website. Thus, it can be said that it has suitable distribution channels to capture different segments of the markets. It also maintains account receivables for the customers having credits and close the sales order line in the system once it receives the money. And then during every month closure, it posts all the transactions from sub ledger to general ledger for that particular month. Control problems and frauds possible in current system Currently systems are not integrated i.e. data from 1 system does not flow into other system. Point of sales data flows into ERP databases which is not synchronized with the database that feeds its website. As a result, at a given time, different systems have different quantities and data and this can results in issues during audit. There are no reporting and analytics and users spend huge time in crunching data to analyze about the performance of various indicators and to make some intelligence out of the given system There is no security provided by the current IT systems. As it is family owned business, it is possible that Abode does not require much security but going forward as the business will increase and more and more users will come into picture, it certainly needs security (Eruguz, Jemai, Sahin, Dallery, 2014). Accounting software Analysis The accounting software analysis can be carried out as: Development of the accounting software packages Evolution of accounting software packages has come a long way. It was in 1955, about 60 years before, that computer was sold to a business for accounting purposes. Then In 1983, Teleware has developed accounting software. In the same year, Intuit also developed a software for accounting which was called Quicken during that time. Telewares software was brought by another company that change its name to MYOB in 1999. Since then, there is no looking back. There are numerous players that have entered in to the market like SYPRO, XERO, RECKON along with Quicken and MYOB. Not only this, each of this software has multiple versions for small, medium and growing businesses. Each version is supported on desktop as well as on cloud. MYOB which was the bestselling accounting software in Australia has recently lost its status to Xero because of its lack of focus on cloud. The current market size This is the age of disruption, transformation and digital revolution. Customer is very demanding in this globalized world where it has options to buy from across the world. At same time, organizations are also facing the huge pressure. Thus, most of the organizations are using or planning to use the accounting software packages. Not only this, organizations that already have accounting packages are now looking for advanced systems that provides more functionalities and also capture analytics and provides intelligence. There is a huge potential market for accounting software packages and its market size is currently around 20 billion industry. Per the report from IBIS, accounting IT packages have grown at 2.6% from 2012-2016 (https://www.ibisworld.com.au ). And ready for much higher growth rate with the advent of cloud computing and growing awareness among the organization in coming years. Leaders in the market and their competitive advantage Cloud applications are the current flavor of the world due to their attractive pricing structure while on the premise applications are not only expensive and often take more time to implement (Senarathna, Warren, Yeoh, Salzman, 2015). On premise are traditional software that are more suitable for large corporations while Clouds are suitable for small and medium scale companies. MYOB has been the leader in selling on premise software and Xero has been the biggest cloud computing company. Thus, While MYOB was the leader few year back, Xero has been the leader currently in Australians markets as the rising wave of Cloud has turn the tide in its favor (Yigitbasioglu, 2015). MYOB is also now pushing aggressively for Cloud and fighting hard to regains its lost glory, though it still has 2nd largest market share. Xero has the competitive advantage in having the biggest cloud infrastructure while MYOB has the advantage in its existing customer base which if upgrades to MYOB cloud will be a huge growth driver for MYOB. Current gaps or challenges encountered customers of accounting software/packages and recommendations There are many software available in the market designed for manufacturing as well as for retail companies. As per the current business model of Abode, it needs IT systems that can support both manufacturing and retail side of its business. Currently existing systems are not integrated. Considering the requirements, controls and frauds at Abode, MYOB exo will be a good fit as it provides inventory control techniques like min ma planning, economic order quantity, supports e-procurement, has distribution modules and also provides decent reporting and analytics. There is not much requirement of integrating with Bolton sytems and MYOB also does not have much flexibility on that front. On the other hand, SYSPRO and Xero provides good integration with 3rd party bolt on system. Also, MYOB was earlier known for advanced features in finance, GST, taxation but not in Inventory modules .However, latest offering of MYOB exo removes all the gaps of earlier versions and can be configured for diffe rent business environments (https://www.myob.com/au ). Also, MYOB has excellent customer support and has been in the market for close to decades having worked with numerous of clients had gained the superb credibility with numerous testimonials. Not only this, Early settler which also has similar business lines as Abode has implemented MYOB exo and quite satisfied. (https://www.myob.com/au/enterprise/case-studies/early-settler-retail ) Conclusion This paper analyzes the current challenges faced by the Abode living in Australia due to their IT infrastructure which is not integrated. It also discusses the history of the accounting software packages development in Australia and the current market size and competitive landscape. After analyzing the software and controls and requirements at Abode, MYOB exo is recommended for Abode s as this software package is closely aligned to Abode business requirements and also their closest competitors early settler is also using the same accounting package. References Eruguz, A. 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