Organizational structure of Woolworths
Discuss about the Accounting System Of Woolworths.
The implementation of accounting system in a company has been mentioned in the report. Woolworths Australia is the particular organization that has been chosen for this particular report. The organizational structure of the mentioned company has been assessed and the issues related to the structure has been highlighted in the discussion section. Several system acquisition method has been discussed and a proper acquisition method for the company has been mentioned. The report also shows a sales procedure flowchart of the mentioned company.
The adoption of different accounting softwares has been discussed in the next section of the report. The market leader of the accounting software market presently has been evaluated and the reason for its competitive advantage has been mentioned conclusively. The frauds and challenges related to the accounting softwares have been discussed to address the issues. Recommendations for the mentioned issues have been provided in the report.
In Woolworths Australia, the Board of Directors is present at the top of the management board. The job of Board of Directors is to maintain the value of the existing shareholders and assess if the rest of the organization is conducting its duties properly or not. The Board of Directors is also responsible for appraising the policies, performance and strategies of the organizational group and strives to maintain the stakeholder’s interests (A brief history of Woolworths 2018). All the responsibilities of the Board of Directors are mentioned in the Board Charter. It carries all the information regarding the responsibilities of the directors and how to properly represent the shareholders. Gordon Cains has been the chairman of the mentioned company since 2013.
Brad Banducci is the chief executive officer of Woolworths Australia. He is also the managing director. The other members of the Board of Directors are Michael Ulmer, Scott Perkins, Holly Karmerb, Jillian Broadbent and Siobhan Mckenna.
Under the Board of Directors comes the Group Executive Committee. This committee is responsible for taking the company towards its business goals and checks if the employees of the company are provided with quality services along with the customers. They are incharge of analysing and reviewing the decisions taken by the management and reports the Board of Directors about the progress of the company (Woolworths Group: Quality Brands and Trusted Retailing 2018).
Four separate departments are created by the Board of Directors to assist them in certain responsibilities. The departments are mentioned as follows:-
- Audit, risk management and compliance committee
- Nomination committee
- Sustainability committee
- People performance committee (Woolworths.co.za 2018)
Operational problems due to the organizational structure
As per the mentioned organizational structure, some operational problems have been highlighted for Woolworths Australia. The reporting procedure gets very difficult for the four independent departments as they have to report back to a number of bosses present in the Board of Directors at a particular time. Sometimes, the queries and resolving messages directly contradict one another which makes the entire procedure more cumbersome (Woolworths checkout shutdown 2018). This makes the employees of the departments confused and they get distracted from the organizational goals. These types of independent departments are common in large organizations but it has its own share of disadvantages. Poor customer service is one example (Hyvönen 2013). As the departments are not sure whose responsibility it is to facilitate a customer service, the customers are transferred from one department to the other. This affects the customer directly. Moreover, lack of coordination among the members of the separate department is another concern ??????? and Kharakoz 2015). Often, the employees refuse to work with members of another department until and unless they are directed by a manager or supervisor.
The lack of communication also facilitates other organizational issues. Sometimes, an authoritative role is taken up by a prospective manager or supervisor in a department which confuses its employees. This leads to loss of money and resources for the company and leads to bad decision making (Woolworths: the rise and fall of the department store 2018).
Commercial accounting software- These accounting softwares are used in certain industries for conducting business functions for an organization. Normally, the commercial accounting softwares are used in medium and small scale organizations. The software provides the added benefit of providing specialized graphs and statistics by summarising the analysed information of the business health. It has other advantages such as it prevents the entry of wrong information with the help of several error detection layers. Two disadvantages of the commercial accounting software are that it takes a large onsite maintenance crew to look after the system and the system takes a lot of time to install for a particular organization (ENTERPRISE RESOURCE PLANNING 2016). Some examples of commercial accounting software are Freshooks and Quickbooks.
Custom accounting software- The custom accounting softwares are normally used when a business needs a software to help in its custom accounting processes that is particular for the organization. These softwares are created when a personnel of an organization is asked to create a software for assisting in a particular business process. In time, the software grows in capability and is marketed as a separate product by the respective organization. Another reason why this software is adopted by organization is when the commercial softwares or ERP accounting system cannot provide the customized accounting function that is required by the organization (Kohler 2013). The disadvantage of using these software is that they occasionally tend to be buggy and requires timely maintenance.
System acquisition methods and the favourable method
Enterprise Resource Planning or ERP software- The Enterprise Resource planning software has the capability to integrate various information from separate business areas into a single database. This software can be used in the independent department of Woolworths. The ERP system manages all the information by placing different modules of the ERP software in different departments. The software can be installed by Woolworths Australia as it is expensive. Moreover, it takes a lot of time to install as the modules has to be created for different departments specifically such as HR, inventory control, Accounting finance and distribution (ENTERPRISE RESOURCE PLANNING 2016). The advantages of using an ERP system are financial data management, standardization of important business functions and distribution system improvement.
From the above analysis of the accounting software packages, it is quite evident that Woolworths will benefit if ERP software package is chosen as the likely system acquisition method. The Board of Directors will be able to coordinate the functioning of the different departments with the help of the new system (Arli et al. 2013). Moreover, the organization is capable of using the software despite its high cost which will be beneficial in the future.
The control problems of the Enterprise Resource Planning system are written as follows:-
- No proper maintenance plan
- Irregular communication between the departments
- Less investment on the team which is implementing the system
- Disregard for the change at managerial level
- Quick implementation of the new system
- Too much features in the new system can confuse the organization in meeting its organizational goals (??????? and Kharakoz 2015)
- Solutions which are industry specific needs to be included in the decision making process of the organization
The frauds that are related to the system are written as follows:-
- Access to financial process without proper authorization
- Mismanagement of documents
- Unethical employees trying to understand the core business information with the help of the ERP system (King and Thobela 2014)
- Inappropriate use of the accounting system
Adoption of accounting softwares in prospective organization are normally slow and involves a lot of risk during the implementation process due to the high adoption cost. During the conversion procedure, the company has to shell out a lot of money and employ a lot of resources for the proper development of the accounting package. With the advancement in information technology, organizations face the immense pressure of choosing between different ERP systems and choosing the right one. They are tempted to avail the better option that is present in the market. Most of the times the adoption procedure is complex and time consuming (ENTERPRISE RESOURCE PLANNING 2016). The adoption process is much more complicated as the company has to continue its regular day to day operations while facilitating the conversion process. The old as well as the new system has to run simultaneously for better results.
The risk factor faced by the organization should be considered as well during the adoption and development process. To incorporate the system properly, the organization faces immense pressure from its prospective shareholders. Human error is another factor that is common during this process while maintain the database (??????? and Kharakoz 2015). Due to a number of data structures, inconsistencies are common during the developmental phase.
Problems and frauds with the ERP system
The market size of different accounting packages depend from time to time and country to country. For example, 66% of the market share is taken by Xero (an accounting siftware) in Australia. This is directly in contrast with Sage which has a market share of 54% in Australai along with Inuit which has around 19% market share. In USA, the market share of Inuit is around 54%, Sage with around 32% and the other vendors taking the rest of the market share (Knox 2015).
SOHO conducted a study recently which showed that around the world, Sage has a market share of 24% and Inuit has over 30%. In medium sized industries, Sage has around 40% market share and Inuit has around 23% (Monk and Wagner 2013).
In the present market scenario, the leader of the accounting software package is Freshbooks.
For its competitive advantage, the software provides a number of features. Freshbooks allows online payment systems by collaborating with a number of vendors like PayPal. It integrates efficiently with other accounting software (Hyvönen 2013). As the software come with a number of other softwares, it provides the entire control of the accounting processes of the organization from single dashboard and negates the need for other accounting softwares. It also provides data security by backing up the data in remote server. The pricing of the software is flexible and a mobile app is also provided which helps in versatility.
The common challenges that is faced during implementation of the mentioned software is written as follows:-
- Properly choosing the correct accounting software that is needed in the organization
- Lack of proper testing during the implementation phase
- Lack of proper budgeting before the implementation phase
- Providing proper training to the personnel who will be accessing the ERP software
- Total commitment from the members of the management team
Recommendations
Some of the recommendations as per the challenges are written below:-
- The needs and requirements of the organization needs to be assessed carefully before implementation phase
- When the system is being deployed, the key personnel need to be involved in the decision making process which increase their commitment to the entire process (ENTERPRISE RESOURCE PLANNING 2016)
- Adequate Training needs to be provided to the personnel who will be using the new system
- Testing procedures need to be conducted properly to detect system vulnerabilities
- Proper budget testing needs to be conducted before the implementation phase
Conclusion
To conclude the report, it can be stated that the Woolworths needs to be incorporate the new mentioned ERP accounting system package to enhance its business operations. Organisational problems are common in every industry. The best way to cope with these challenges is to first accept that the system has a vulnerability and assess suitable methods to address those problems. This is same in the case of Woolworths Australia. Despite being a renowned retail store, the organization had a minor organizational issue that was causing serious problems. This report helps to identify the problems in particular and develops suitable solutions for addressing the issue conclusively. Moreover, other information related to accounting software packages have been mentioned in the second part of the report. With the new system in place, the Board of Directors can properly communicate with the independent departments resulting in better decision making for the entire organization. The report has discussed the various organizational problems that Woolworths is facing due to its organizational structure. The organisational structure has been discussed in detail in the discussion part of the report. Several accounting softwares has been mentioned in the report out of which ER system was chosen as the proper accounting software for the prospective company. The report also shows a sales procedure flowchart of the mentioned company. The flaws and challenges related to the new technology has been mentioned. The report also discusses the adoption process of the accounting packages and mentions the leader of the market. The challenges faced by the accounting software packages have been discussed and recommendations have been provided to address those particular challenges.
References
A brief history of Woolworths, 2018. [online] Available at: https://www.woolworthsmuseum.co.uk/aboutwoolies.html [Accessed 2018].
Woolworths checkout shutdown, 2018: Supermarket apologises for …. [online] Available at: https://www.news.com.au/finance/business/retail/woolworths-explains-technical-glitch-and-apologises/news-story/f5476d22eea131858908768c181d5230 [Accessed 2018].
Woolworths Group: Quality Brands and Trusted Retailing, 2018. [online] Available at: https://www.woolworthsgroup.com.au/ [Accessed 2018].
Woolworths hit by nationwide technical outage | SBS News, 2018. [online] Available at: https://www.sbs.com.au/news/woolworths-hit-by-nationwide-technical-outage [Accessed 2018].
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Woolworths: the rise and fall of the department store, 2018.[online] Available at: https://www.theguardian.com/business/2008/nov/19/woolworths-retail-department-stores [Accessed 2018].
Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business & Accountancy Ventura, 16(1).
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King, L. and Thobela, S., 2014. Woolworths farming for the future. International Food and Agribusiness Management Review, 17(B).
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Kohler, A., 2013. Woolworths invests $20 m in data analytics. Retrieved 17/7/2013, from https://www. businessspectator. com. au/news/2013/5/2/information-technology/woolworthsinvests-20m-data-analytics.
Monk, E. and Wagner, B., 2013. Concepts in enterprise resource planning. Australia: Course Technology Cengage Learning.
Patel, K. and Vij, S., 2013. Enterprise resource planning models for the education sector. Hershey, Pa.: Information Science Reference.
??????? and Kharakoz, Y., 2015. Features of application of erp-systems in management accounting. Auditor, 1(3), pp.71-76.
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