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Strategic information systems encompass different information systems that are designed keeping in mind the specific business needs so that they can perform their operations efficiently and effectively in the current competitive market. Most businesses prefer to introduce such kinds of information systems that suit their business nature and activity. The proper strategic information system can help a concern to strengthen its business process and gain a competitive advantage in the market (Bodnar & Hopwood, 2013). These strategic management systems are useful in different industries including retail, automobile, etc. since they help to simplify the work process of the concern.
This organization that has been selected for the literature review is the Australian retailer “Myer”.The departmental store chain has a strong presence in the island continent. The retailer deals with a wide range of commodities including apparel for men, women, and children, accessories, footwear, electrical items, confectionary items, books, etc. (Belfo & Trigo, 2013). It is necessary to identify and understand the key features of the accounting package used by the retailer which helps it to expand its business activities and simplify several processes.
The organizational structure of a retail business differs based on size and kind of business operations. In most cases, the activities performed by retailers overlap in nature. Myers is an Australian departmental store chain that operates in all the Australian states. It has over 60 stores throughout Australia and this huge presence makes its organization structure complex as compared to other smaller store chains (Bishop, 2017). It has a few thousand staff members in all its locations that help in the functioning of the retail business.
The implementation of a functional strategic information system by the Myer retail firm adds-on to its organizational structure as it allows the concern to have control over its different stores and branches while they coordinate their operations. The smart implementation of the information system model including the accounting package helps the retailer to manage its 14,000 employees, over 50,000 shareholders, about 1,200 suppliers in a simple way. Its flagship retail store is located in Bourke Street Mall, Melbourne. Over the years, the retail business has succeeded to strengthen its presence throughout the continent (Fullerton, Kennedy & Widener, 2014).
Due to the complex structure of the Myers retail outlets, the business faces several operational challenges. The rising competition in the retail business environment further adds complexity to the business setting. Myers faces concerns in several operational aspects since it has the responsibility to control the key functions including its employees’ performance, inventory management, coordination with suppliers, strategic planning in case of an error in the system, etc. (Fu, 2014). The risks that arise in the operational path in the form of work inefficiency or system error as a bottleneck for the retailer. Despite these operational issues, the business firm has continued to be Australia’s largest retailer in terms of revenue generation capacity and total store count.
One of the reasons for its effective adaptation in the changing business environment is the use of Information Technologies in its business processes. It has combined an appropriate IT model that supports its huge retail business activities and helps it to have significant control over its different business processes such as inventory, supply chain, employees, pricing model, etc. The firm’s accounting software system helps it to have better control over its financial and accounting model (Galliers & Leidner, 2014).
Myer is a large departmental chain whose retail activities spread to various parts of Australia. The accounting software package used by the business is the “Xero – Accounting Software & Online Bookkeeping” model. The commercial software has several unique features and tools like advisor tools, managing purchase orders, accepting payments, expense claims, inventory control, quotes, sales tax, reporting, etc that suit the retail business model (Peppard & Ward, 2016).
The Xero software model supports various retail types including eCommerce activities, mail order, direct retail, catalogs, etc. and ensures that all the accounting activities of the business like cash flows, taxes, payroll, and ledgers are managed and tracked most efficiently. This retail accounting tool helps Myers to streamline its various functions since it includes many joined-up tools that enhance the overall management process of the retail business (Trigo, Belfo & Estébanez, 2014). Its unique design suits the retail business and its operations. The different access levels of the model help Myers to have control over its entire business categories. Xero does not just record the transactions but it also manages the payroll operations. The cloud-based feature of the model helps the various retail outlets to access key business information from different parts of the nation.
The above-designed system flowchart has been designed keeping in mind the retail operations of Myers. The primary function of the model starts with the basic internal activity that is performed by the Myer retailer. The general ledger is maintained in the system which constitutes various sub-activities like the accounts receivable management, generation of journal voucher of the business, updation of the ledger records of the retail business, etc. It leads to the journal voucher file. In the next stage, the activity concerning the shipping of goods takes place. It involves sub-activities such as the control over the packaging slips, inventory releases, matching of actual goods and shipping log maintenance records, bill of the carrier, etc. (Peppard & Ward, 2016). In the warehouse section, the activities that are taken care of include the overall stock release, collection of goods, streamlining of inventory, and maintenance of subsidiary ledger at various stages of operations.
The billing function is crucial because it involves the external stakeholder i.e. consumer. The different sub-functions that are performed at this stage are control over freight charges, maintaining the sales order, generating sales invoices, updating the sales journal and receivables from customers, etc. The final activity that is carried out comprises checking the customer order and purchase made by him, reviewing their sales order, packaging slips, controlling the stock release and final filing procedure. The Xero accounting package that is used by Myer plays a major role in the retail business process since it simplifies the overall control aspect of the business (Galliers & Leidner, 2014).
Since Myers is a huge retailer whose operations span over 60 stores, several control problems arise. The vast scope of business processes and latent activities further introduces complexities in the business model that need to be effectively tackled to continue its productive retail performance.
As per Fullerton, Kennedy & Widener, a key control issue that arises in Myer relates to the technical challenges due to the incorporation of the information system in its business model. The accounting package adopted at Myer retail chain is effective to a great extent but it does not eliminate the risk of loss of sensitive data (Fullerton, Kennedy & Widener, 2014). In case there is a fault in the development of a strategic model, the management body of Myers can lose control over its back-end business operations. This lack of proper control over the business can increase the chances of fraudulent activities in the form of misappropriation of inventory, dummy pricing model, etc.
In the prevailing competitive business environment, the accounting software package market is growing at a rapid speed. The designing, development, and adoption of a solid accounting software model are no more a luxury for business organizations. According to Belfo & Trigo, there are necessities for businesses that can help them to have a competitive advantage against their industry rivals. There are numerous varieties of strategic information systems that are available in the market (Belfo & Trigo, 2013). They are designed in such a way so that they can be easily integrated with the work process of the firm. The main purpose of creating the accounting software packages is to simplify various types of accounting transactions that are conducted by businesses like maintaining the ledger, payroll activity, receivables from the customer, billing of goods, inventory management, etc.
The retailing business model has undergone a drastic change in the last decade. The application of a proper accounting software package can help the organization to reduce manual intervention in the business process. Myer retail giant has been using the “Xero” accounting package since it helps the concern to have control over various accounting functions. The proper application of the accounting software helps it to have a competitive advantage in the market.
The current market scenario of accounting software packages seems very bright since a number of business firms are opting for such IT models. In the last decade, many businesses decided to opt for Information Systems so that they could have better control over their business activities (Bodnar & Hopwood, 2013). The current market size of accounting software packages can be stated to be in the evolving stage. It seems like this market will be further growth due to the change in the business environment and the influence of technology on business operations.
The application of accounting software packages in retail business has brought about a revolutionizing change in the work process since it has reduced the work burden of management and automated most of the activities. Various retail activities of Myer has become automated because updated information systems form an integral part of its retail model.
Myers uses the Xero accounting software package model that has a strong presence all around the globe. It focuses on several domains concerning the business like data integrity, online bookkeeping, data security, etc. which gives it an edge over its competitors in the market. The accounting software model is specifically designed to meet some types of businesses like retail, legal, non-profit and high tech. Its pricing structure is quite reasonable and this aspect allows clients from all over the world to integrate this accounting model with their specific business structure.
There are certain key players in the market that provide applications that combine all the vital elements into a single software like – location, commodity type, industry-specific products, user-friendly attributes, etc. Some of the most popular participants in the accounting software package market include QuickBooks, Sage 50 Accounting, Xero, Zoho Books, etc. They have a high market share, and service resource availability. Their unique selling point is their ability to successfully integrate the exact requirements of their client’s business operations on one software platform (Peppard & Ward, 2016).
The unique features that separate the market leaders from the other participants of the market include their focus on minute aspects of the client business. If we consider the Xero accounting package, it has a solid position in the market and it is considered to be one of the key players in this business environment. Its competitive advantage lies in the fact that its software platform allows the clients and businesses to have a safe and comfortable experience while using their accounting application. The key plans that are covered by the Xero accounting software include accurate financial performance reports, compatibility with iPhone and Android applications, simpler cash flow statements, connection with bank accounts, integration with over 500 apps, secure and safe SSL encryption, etc.
The resources of Xero that help it to differentiate its accounting software offering from its rivals include access to business guides, simple and effective bookkeeper guides, training courses, video library, etc. These unique offerings by the accounting software business concern help it to have a leadership position despite the intense competition (Trigo, Belfo & Estébanez, 2014).
Certain gaps need to be removed to make accounting software platforms more effective and convenient for users. One of the key challenges is the complexity involved in integrating a new accounting software application with the existing business model. Another gap that needs to be filled relates to the selection of the information system package that is suitable for the particular business. When a firm’s business is huge it must carefully implement the system i.e. installation and configuration. Error at this stage can be very costly for the user concern (Trigo, Belfo & Estébanez, 2014).
One of the most effective suggestions to minimize the challenge would be to design the accounting packages that have a simple implementation process. This could simplify the integration of the tool with an organization’s business process.
The use of accounting software platforms is on the rise since it gives businesses a competitive advantage in a highly competitive environment. The careful investment in this aspect of business can be beneficial for the firm in the long run. Myers uses the Xero accounting software package and it helps the retailer to effectively have control over various aspects of the business including inventory, billing, purchase, sales and much more.
The changing business setting has encouraged many firms to modify change their organization structure and business strategy so that technological models can be properly integrated with its processes. They are currently focusing on minimizing the manual process in the work model so that automation can be expanded to a greater extent. This sort of favorable shift in the business model is vital for the development and growth of business operations. Today the use of different kinds of strategic information systems helps business concerns to enjoy a competitive advantage in the industry.
Bodnar, G.H. and Hopwood, W.S., 2013. Accounting Information Systems: Pearson New International Edition.Pearson Higher Ed.
Belfo, F. and Trigo, A., 2013.Accounting information systems: Tradition and future directions.Procedia Technology, 9, pp.536-546.
Bishop, W.A., 2017. Addressing The Challenge Of Strategic Alignment Faced By Small And Medium-Sized Entities During The Selection Of Accounting Software Packages. The International Business & Economics Research Journal (Online), 16(1), p.31.
Fullerton, R.R., Kennedy, F.A. and Widener, S.K., 2014. Lean manufacturing and firm performance: The incremental contribution of lean management accounting practices. Journal of Operations Management, 32(7), pp.414-428.
Fu, M., 2014.Design of Accounting Information System of Modern Enterprises under Informatization Environment.
Galliers, R.D. and Leidner, D.E. eds., 2014.Strategic information management: challenges and strategies in managing information systems. Routledge
Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a digital strategy. John Wiley & Sons.
Trigo, A., Belfo, F. and Estébanez, R.P., 2014.Accounting information systems: The challenge of the real-time reporting.Procedia Technology, 16, pp.118-127.