Analysis Of Xero – An Australian Based Departmental Store Chain

Organizational structure of Xero

The following report focus is to produce an analysis of a business or enterprise. The selected organization for this report is Xero. It is an Australian based departmental store chain selling clothing line of products, accessories, footwear, house ware, books and stationary items. It is one of the largest departmental store chain based in Australia. In October 2007, Xero started its online departmental e-commerce website. It currently consists of more than 67 retail stores across Australia.

The report puts emphasis on the different aspect of the organization including the organizational structure and the status of the organization, the operational problem involved in the organization, the flow chart of the sales procedure of the organization, these all factor directly affect the working of the organization.

The organization selected is Xero and has the following organizational structure:

There are many problems, which the organization faces due to the current organizational structure:

• Everyone in the organization should know what is going on around the workplace. A department can explain the details of the process they are working on but the other department does not know what kind of work is going on. This needs to be eliminated. Everyone in the origination should know the details of the working that is being done around the workplace (Pettigrew, 2014).
• Diagrams and flowcharts being used in the organizations are not explained properly. If only the person designing the diagrams knows the specification of them then the others will face a problem during evaluation. There should be a detailed explanation of the processes and the diagrams being used in the organization (Stark 2015).
• During the process improvement, procedure the organization must be able to answer all the questions being asked. The problems being faced by the management of the workplace, which problems should be focused on and the objectives to mitigate the problems should be answered by the organization.
• One of the major problems, which the organizations face, is not to involve many people in the working of the management procedures. The organization should involve more people so that the workload can decrease considerably.
• The organization should draw up a plan to understand the problems the stakeholders face in the organization. Understanding the problems at a micro level would help them to mitigate enough problems before they can start occurring (Stark 2015).

Using a system acquisition method is an important aspect of any organization. An organization can use three kinds of system acquisition method: commercial software, ERP or custom software.

• Commercial software is a program that is developed to be licensed and sold by the developer to the end user. Though there are a number of free and open source software’s which are being developed for the end users. Commercial software’s include games and off the shelf which are available in computer stores and grocery stores to be bought(Zhang, Gong and Versteeg 2013).
• Enterprise resource planning (ERP) is dedicated software used by core business organizations to maintain real time data of the organization. It helps the organization to plan purchasing of products, manufacture them, marketing, sales, material management, shipping and payment(Leon 2014).
• Custom software is a tailor made software for a specific organization with the specs to be followed by the developer as stated by the organization. As the software is developed to be used for a particular customer the software can be made to the specification of the user. Large companies commonly use custom software because they can then implement all the different working of the company into the system to be worked out automatically(Davis 2013).

For the organization selected they use a customer software tailor for their use. The software can contain different objectives like ERP, logistics management system and many more(De Vries and Van der Poll 2016). The components can be of different other software’s in the market but the designing of the software is made specific to the requirement of the transition.

The following flowchart shows the sales procedure that has been taken up by the organization to have a systematic flow of sales invoice and orders (Ward and Sobek II 2014). It ensures the proper working of the organization and appropriate approach towards a pre set goal about the organization. A sales process is comprised of eight steps initial contact with the client, planning the sales procedure, approaching the sales team, assessment of the order placed, presentation of the shipment requested, meeting the objectives of the shipment, gaining commitment from the company’s end and follow up on the order completion. Assessment of a sales procedure can help the organization to understand the prediction of the sales order.

Figure 1: Sales Procedure flowchart

(Source: Author Made)

Controlling of different problems in an organization should be managed using proper management steps. The areas where frauds happen are during purchasing using purchase to pay, using corporate credit cards for personal gain, payroll fraud using phantom employees, collision of employees and vendors causes them to order large shipments(Kar et al. 2013). There can be fraud due to the theft of organizations data and providing sensitive information to external individuals. These can be controlled by using proper security measures and keeping information and data hidden from all employees. There should be hierarchical use of information management in the organization.

Operational Problems of Xero

There was a low demand of cloud based accounting software during the last decade, but since the advancement in the cloud network, all organizations want to get access to the best integration of the cloud system with the accounting software’s. This helps them to synchronize the information the organization among all the employees (Seethamraju 2015). The major limitation which most of the accounting software’s consist is that it cannot connect to the internet. Introduction of cloud based accounting software’s like Xero, MYOB and Quick Books has brought around an evolution in the accounting functionality of the business sector. The new software’s are increasingly becoming mere accounting software’s than being a business management tool. The problem which was previously there was different work required different software’s to work on. They could not be integrated into one. Using different software’s made the coordination between the software’s to be absent (Sorensen and Stanton 2013). There was a slow rise in the amount of accounting software’s which used cloud based integration in Australia. The recent situation has changed and organizations have started to take up accounting software’s with cloud integration. Automation of the different accounting procedures and integration of the systems into one are the main two benefits of the cloud based accounting software’s. These benefits again provide rivalry to among the different firms(Seethamraju 2015). The features of the software packages, which attract more customers, are fast banking usage, easy invoicing, smart reports and accessibility through mobile software. In addition, they also provide multi-currency transactions, generating purchase and sales orders and accounting for the fixed assets.

The current market size of Xero is displayed in the following tables (Xero 2017):

Capital Structure

Historical Financials

Balance Sheet

Market leadership is defined as the highest position a company can reach in terms of profit margin and market of goods and services to offer. To have a competitive advantage in the market is essential for the organization. Once an organization reaches the top they have to work on its product and services to stay on the top (Keune, Mayhew and Schmidt 2015).

The competitive edge of Xero is its ability to implement the best supply chain mechanism and to improve the retail execution capability. They also have a strong customer service focused business, which helps them to be popular among the consumers.

The problems, which the accounting software user faces due to the software, are as follows:

• Lack of software security may cause data theft by outside invaders. The firewall is not enough for the system to hold on to the data that is being stored in the software.
• The return of the inserted information is not as reliable as the way the information is put into it. Users often face issues in trying to get a reasonable output from the software (Boulianne 2014).  
• Outdated software’s being used by the organization lacks many security and working procedures, which needs to be upgraded.
• They are many a time non-user friendly in nature, which makes the usage a big burden for the users.
• Many features require expensive price to be paid by the consumer.
• The software’s are not always compatible with the working procedure of the organization (Boulianne 2014).
• There is no 24×7 support responsibility from the software’s end.
• Slow working of the software requires lot of time for it to finish working.
• There is no customer relation management procedure in the software’s.

Conclusion

To conclude this report, it can be seen that Xero has come a long way since it first opened in 1900. Changing their sales and marketing objectives, tools to change their business strategy, targeting growing consumers and opting for Xero has always welcomed Omni-business. They can make a better organization out of the drawbacks it has faced.

References

Boulianne, E., 2014. Impact of accounting software utilization on students’ knowledge acquisition: An important change in accounting education. Journal of Accounting & Organizational Change, 10(1), pp.22-48.

Davis, A., 2013. Just enough requirements management: where software development meets marketing. Addison-Wesley.

De Vries, H. and Van der Poll, H.M., 2016. The influence of Lean thinking on organisational structure and behaviour in the discrete manufacturing industry. Journal of Contemporary Management, 13(1), pp.55-89.

Drew, J., McCallum, B. and Roggenhofer, S., 2016. Journey to lean: making operational change stick. Springer.

Kar, A., Bhattacharyya, S.D., Perez, K. and Williamson, G., Mastercard International Incorporated, 2013. Method and system for proximity fraud control. U.S. Patent Application 13/949,850.

Keune, M.B., Mayhew, B.W. and Schmidt, J.J., 2015. Non-Big 4 local market leadership and its effect on competition. The Accounting Review, 91(3), pp.907-931.

Leon, A., 2014. Enterprise resource planning. McGraw-Hill Education.

Xero (2017). Xero  Investor Relations. [online] Investor.xero.com.au. Available at: https://investor.xero.com.au/Investor-Centre/ [Accessed 15 Aug. 2017].

Pettigrew, A.M., 2014. The politics of organizational decision-making. Routledge.

Seethamraju, R., 2015. Adoption of software as a service (SaaS) enterprise resource planning (ERP) systems in small and medium sized enterprises (SMEs). Information systems frontiers, 17(3), pp.475-492.

Sorensen, L.J. and Stanton, N.A., 2013. Y is best: How Distributed Situational Awareness is mediated by organisational structure and correlated with task success. Safety science, 56, pp.72-79.

Stark, J., 2015. Product lifecycle management. In Product Lifecycle Management (Volume 1) (pp. 1-29). Springer International Publishing.

Ward, A.C. and Sobek II, D.K., 2014. Lean product and process development. Lean Enterprise Institute.

Zhang, H., Gong, L. and Versteeg, S., 2013, May. Predicting bug-fixing time: an empirical study of commercial software projects. In Proceedings of the 2013 international conference on software engineering (pp. 1042-1051). IEEE Press.

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