Background
Question:
Discuss about the Strategic Information System and Business Enterprise.
Modernization and globalization are the two revolutionary terms that have forced the business organizations to make changes in their organizational structures and to make the adaption of contemporary means and mechanisms for operating business. The strategic information system is one of the contemporary platforms that can be adopted by the business corporations for executing the business as per the modern era. This system aids the business enterprises on various grounds such as attainment of desired goals and accomplishments of expected outcomes. The below-presented analysis has been focused on the
Xero provides accounting software solution to many organizations in Australia. The company supports accounting operations for some of the small business. It also promotes businesses by managing their business-related operations. Xero provides opportunities to the businesses to put claims and purchase loans. The company is dealing with enterprise, banking, financials and cloud-based partners. The company has the functional organizational structure that works for the other organizations to manage their accountability. The company deals in different functional areas like cloud, IT and others; therefore, it has a functional structure. This type of structure provides better efficiency in work as there is a team of skilled employees that are grouped together (Xero, 2017).
Since the company is dealing with different organizations, they may face issues like delays in work. Due to operational issues in the software system, the companies face challenges to create a competitive advantage in the market. The system should be easily accessible to all the users for achieving better productivity. Some of them are discussed below-
- Errors in business operations- In some cases due to workload, companies make mistakes in certain calculation and that is considered as an error. It is the loss to the business itself. The out-dated version of the accounting software system creates more errors than the customized Xero must use a system which is modified and is capable of handling a large amount of information as the data is transferred more often in a day to different organizations.
- Inefficiency- due to employee issues inefficiency occurs in work performed for the other organizations (Liebowitz and Frank, 2016). This led to the loss of productivity and economic value of Xero. To resolve this issue, the company managers decided to divide the employees into different departments and provide them training.
- Team problems- conflicts between team members leads to the interruption in achieving business goals. It is important for the team members to work with accurate coordination and collaboration. Team members should be dedicated towards their work and focus on meeting business goals and objectives.
There are various methods which can be used by business organizations to perform their regular business operations. It is important to use an effective software system to analyze the current business status and to improve it (Hunton, McEwen and Wier, 2015). An effective software system can be used to make business strategies for a better business growth. I will be describing three software systems and will also describe briefly about the system that is used by the business organization.
- Commercial software- One of the biggest examples of commercial software is Microsoft Windows operating system and MS office which can be purchased from any retail shops. The commercial software is used by Xero to maintain the records. Microsoft operating system is used by the company to install useful application programs like desktop applications to perform business operations. The benefit of the commercial software is that these can be updated whenever required. There is also functionality in such system for automatic updates.
- Custom software- this type of software system runs on a specific hardware only. These software systems are developed for a company for a specific purpose (Hill, Jones and Schilling, 2014). Xero is a custom software application which is designed according to the requirements of users. The entity needs to manage accounts of other organizations and they require a custom software system.
- ERP- this type of system is used for enterprises to perform automated business operations (Kecmanovic et al., 2014). These are reliable to use and provides better business features to the users. It enables users to access different types of software applications necessary for their business. These systems provide data integration to Xero as a large amount of information is transferred each day. It provides the two-tier structure to manage the front-end and back-end processes for a business organization like Xero. Due to these features, The firm uses enterprise resource planning systems for better integration of their business processes (Jirava and Toseafa, 2017).
This type of flowchart describes the processes a company uses to sell their products or services to the customers (Goetsch and Davis, 2014). Benefits of a system flowchart are that it helps to analyze the business processes, training for new employees and managing sales through the software application. It is a part of sales procedure which is used by the corporation. The business organization deals with clients to provide best accounting services. The flowchart for Xero is as follows:
This flowchart describes the sales process of Xero when the customer applies for purchasing a product or service. A customer can give a sales order for the service and can move to complete the order details. Next process is to choose a delivery option (Galliers and Leidner, 2014). When the order is confirmed it is shipped to the customer otherwise it is canceled. The sales process consists of sensitive information as it includes the details of products and the customer details that have to be confidential to be used by the third party.
Xero’s Functional Structure and Sales Process
Implementing ERP systems have some risks to the business which needs to be identified. Managing software associated risks is a crucial task for an organization (Gelinas & Dull, 2008). From the technological point of view, risks are involved in the software system when providing satisfaction to the customers. The business organizations face the problem of unskilled employees in accessing few of the software and also the lack of quality in the software systems.
Application complexity-
This control problem is associated with accessing the application programs by the user (Romney & Steinbart, 2009). A user should be expertise in ERP system to access the software to effectively perform the business operations. It is because the ERP system consists of complex application problems which can even lead to loss of important information if accessed in a wrong manner (Eden, Sedera and Tan, 2014). To minimize this risk, staff training is important for the employees. Another option is to hire the skilled candidates who can handle the complexities of application programs (Richardson, Chang & Smith 2014). Decentralization is also an issue when it comes to accessing the software system.
User experience-
When user accesses the software system, a user needs to have clarity of the application programs. The software system should be user-friendly and it should be capable of installing updates whenever required. A system that is operational helps in managing the data which resolves the issue of user experience (Grabski, Leech and Lu, 2001).
Possible frauds
Generally, frauds are detected in order to provide efficiency in work to the users. The employees of Xero rely on the ERP system to perform daily business operations (Costa, Ferreira, Bento and Aparicio, 2016). Therefore, it is essential to analyze the frauds that might occur in the system. To determine the fraud activities, there are many different frameworks available for the ERP systems. The login details of a user have to verify to ensure that the system is protected from any kind of frauds (Islam et al., 2010).
The business organization has the vision to provide accounting services to other business organizations. To manage the information of these organizations, Xero provides accounting software. This software can be used to manage the costs and other accountability factors. To develop an effective business strategy, Xero required a software system and implemented ERP systems to manage their business operations. The accounting software packages are used by the business organizations to earn profits with their current business operations (Hall, James 2014). The development of ERP systems is beneficial for the organizations to receive profits from their field of business. There is a requirement for a planning model to evaluate the effectiveness of business strategies (Premkumar and King, 1994).
Xero comprises more than two lakh users of their accounting software. This type of software systems is demand due to increase in the number of competitors. The company is well positioned in the marketplace with the standards they include in their services. The company is also in the winning position with its competitor, MYOB. Company owners believe that there are many opportunities to strengthen their position in the market and they perform their business activities very well. Xero deals with the national and international customers from Australia and across the world. Xero holds 15% of the market share in dealing with National customers in Australia. The company is rising in the market with the belief of creating innovation for their customers. The company serves for approximately 10,000 partners which is a good count. The company has also performed well against its competitors and has earned revenue by 71% (Redrup, 2016).
Potential Software System Risks
Xero has the skilled staff including a chief executive officer who takes care of the growth and managing performance of the company. The financial officer who is responsible for managing operational tasks and focusing on increasing revenues for the company and also the data officer that covers the product operations and product development for the customers (Chofreh et al., 2014). Chief partner officer who is responsible for the design, development, and marketing of the product and the other associated leaders of Xero. These leaders make continuous research to find out which solution will be best for their customers. When each of the details like finance, overall expenses, resources required and so on is known to the company officials, it helps in developing the better strategy for the company. Development of a business strategy involves a gathering of information regarding each factor discussed above. Leaders of Xero focus on improving their current business processes by analyzing all the consequences of the business (Xero, 2017).
The accounting software is used by the organizations because it makes the work easier as compared with the manual work. However, the organization faces some challenges when they implement any accounting software for their business processes.
- Lack of security- since the company also deal with international organizations, it is more prone to unknown users. Account related information is very sensitive when it is moved to someone else’s hand. Therefore, these types of software need to be protected. Using firewalls is the convenient solution for such an issue.
- Weak reporting service- the purpose of implementing accounting software is to retrieve the information whenever required. But in most cases, software does not allow users to get relevant outputs which are annoys most of the customers. Customers need to have such a system which can store and manage information effectively.
- Lack of efficiency- some of the accounting software systems have poor features which are the challenge for the customers to access it. The hardware devices and application programs should work properly (Kecmanovic et al., 2014). In short, the software system should be user-friendly. The system should be compatible and capable to accept updates.
- Lack of accuracy- most of the accounting software system has become older in terms of trending technology. Such out-dated systems create inaccuracy of information. A customer requires a system which can install updates without any risks.
- Technical support- customers need the good response when they ask for an issue. Some of the consultants are not available 24 hours a day which makes it difficult for the customers to resolve their issues.
- File storage and organization- it is tough work to find a particular accounting file from the manual records; therefore, accounting software systems are required for the better management of files. The accounting software systems help to categorize data in a sequential manner and makes the work of employees easy (Maduqne, 2013).
Solution
- A company can implement a cloud-based accounting software system. This will help to store a large amount of information at one place (Alamri, Almutiri, Ballahmar and Zafar, 2016). It is also easy to access the account details and connect with other users.
- Software system performs hard calculations in a very less time which is the solution to most of the accountants. Since there is a lot of work to accomplish every day, the system that could perform fast calculations is required by most of the organizations.
- Multi-function ERP can be used by Xero to make the business operations volatile for its customers. This will allow a company to perform business operations more effectively and provide reliability to the customers (IES, 2016).
It can be recommended to Xero to use such ERP systems that could be modified and can easily install updates. The software system with all the necessary features will make the business processes Xero more convenient. As described above, a cloud-based system can be implemented. A cloud-based system allows multiple users to stay connected at a time. This consumes less time and provides better results for the company. The company should hire skilled candidates to perform the accounting task easily who have the knowledge to access the modified ERP systems.
Conclusion
In the limelight of the above-executed analysis, it has been identified that the strategic information system is one of the contemporary means of executing business practices within an organization and the same will be proven beneficial for the business firm.
References
Alamri, S., Almutiri, N., Ballahmar, H. and Zafar, A. (2016) Strategic information system planning: A case study of a service delivery company. Learjet 3(5), pp.78-84.
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Chofreh, A.G., Goni, F.A., Shaharoun, A.M., Ismail, S. and Klemeš, J.J. (2014) Sustainable enterprise resource planning: imperatives and research directions. Journal of Cleaner Production, 71, pp.139-147.
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Redrup, Y, (2016) Xero primed to keep gaining market share in Australia, new managing director Trent Innes says. [Online] Afr. Available at: https://www.afr.com/technology/xero-primed-to-keep-gaining-market-share-in-australia-new-managing-director-trent-innes-says-20160106-gm0b08 [Accessed: 16 April 2018]
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