The current structure of the organization
Discuss about the Business model approach to public service innovation.
Commonwealth Bank of Australia is a Australian multinational bank which has its business in different countries including Asia, United States and Australia. The bank provides various services which includes retail banking, corporate banking, management of funds. This bank has been listed as the largest financial organization listed in the security exchange of Australia. The bank was founded in 1911 and became a private bank on 1996 (Thaichon et al.,2017).The commonwealth bank is regarded as one of the ‘big four’ in the Australian Banking sector. The organization has taken many effective business decisions regarding the foreign collaboration. In 2005 the bank has done an agreement with the two Chinese banks and set up a branch at India. The bank has gained some reputations. It was the only financial institution listed in the ‘Dream Employer’s ‘ top 20 list in 2010 and 2011 respectively (Laing & Dunbar, 2015). The main objective of this paper is to evaluate the business process of the Commonwealth Bank. This will include the analysis of the business structure and the business procedures of the company. In order to modify the process in the business system, further recommendations are made on the basis of position of organization in the market and the challenges and future opportunities in front of the organization. The paper tries to give the overall business process evaluation of Commonwealth Bank of Australia.
The managing director of the Commonwealth Bank declared the organization structure of the bank. The hierarchy has been designed in such a way that it will help to create the vertically integrated business.
The structure of the organization is aligned to the delivery of the service, development of the products. There are four business division in the structure- retail banking service, premium financial service , investment and insurance service and institutional and business service.
Retail banking services: This will helps the consumers to deal with their financial issues and small business consumers to take the loan for the business or the personal purpose.
Premium financial service: This section deals with the niche business deals like the wealth management and providing customized services to the customers.
Investment and insurance services: This sector includes the fund management , handling mutual fund investment and insurance business (Katsigiannis, Agarwal & Jin,2015). The services also included in this sector are handling the third party support service for the brokers and financial advisers under the rules and regulations.
Operational problems organization could experience because of this structure
Institutional and business service: This section deals with the financial deals with financial requirements of the financial institutions and corporate, the risks in the investment along with the capital management. These services are offered to the consumers through a relationship management approach.
The business structure of this bank encourages the better wealth management with improvised customer service by providing them better financial advices.
Lack of communication: The organizational hierarchy is a tree structure. There are certain advantages of this kind of structure. However, there can be a gap of communication between the lower management and higher management of the structure.
Lack in the flow of communication: The flow of information delays as it has to pass different phases of the hierarchy.
Mismanagement of the business: There are several sections in commonwealth Bank for managing the business. The miscommunication can create the mismanagement at inter departmental level.
Problems of synchronization in the operation of four departments: It has been observed the process management of the four different sections of the existing business process is different (Seltzer, 2017). In this case, there may be a synchronization problem of the workings between the different sections.
Occurrence of errors: The miscommunication between the different departments can lead to the occurrence of human and technical error in the business process.
The possible system acquisition method opted for this organization can be ERP( Enterprise Resource Planning). The main objective of the ERP software is that to integrate and manage the back office business process of the organization (Willcocks & Reynolds,2015). It also facilitate the flow of information and helps in the decision making process which is data driven. The main target of the Commonwealth Bank is to expand the business. In this situation the implementation of the ERP is useful. The ERP software helps to collect data from various levels of the organization and builds connection across different departments. There are different types of the ERP software such as on premise and cloud and multi tiered ERP system.
The deployment ERP enables the reengineering of the business process and training of the employees. Most of the companies are started to store data in cloud. The ERP vendors are started to provide services to the cloud based platform (Avkiran,2015). This helps to enable some functions of the ERP. The cloud based ERP components are coupled loosely (Moradi-Motlagh & Babacan, 2015). This reduces the cost and the complexity of the implementation. The organization can deploy the hybrid cloud model in order to run the business and the organization.
Possible system acquisition method
In multi tiered ERP approach enables the use of multiple ERP system under one environment t. This method is known as two tier ERP (Oates & Dias, 2016). The bank can adopt this implementation of ERP as there are geographic difference between the branches of the bank and the different divisions in the bank are running under different systems.
The decision of implementation of the type of ERP depends on the collaborated decision of the management of the banks and the different stakeholders of the bank. The implementation of the ERP in the Commonwealth Bank can be beneficial in following ways:
- Finance: The ERP will help to gather , manage and generates the financial reports like trial balance data and the ledgers.
- Managing the human resource: The deployment of ERP in this system will enable the gathering of data and generation of reports regarding the recruitment of the employee and review of their performance. It also helps in the decisions regarding the skill development of the employees.
- Managing the inventory process: The use of ERP in this section will help to generate the report regarding the management of assets and stock items.
The structure of the four departmental services provided by the bank can be describe through flowchart:
In the above flowchart the process of handling the application regarding account opening is shown. The opening and handling of the account is under the retail baking section. The interested consumer has to fill up the application form (Kozubíková et al., 2015). The documents submitted by the consumers are verified by the authority of the bank. The recommendation from the existing consumer of the bank is asked for, in case if it is needed (Merrett & Ville, 2016). The successful verification of the document makes the receiving and accepting of the application. In case, if the documents are not verified and there is any mistake in the application form, the request for the opening of the account can be rejected.
In case of providing the premium financial services , trust pays the interest to the lender and lender funds the premium. The grantor makes the trust to pay the interest. Heirs receives the trust proceeds from life insurance trust.
There can be certain control system problems and the fraud cases , those can be happened in the baking sector. However, the discussion is about Commonwealth Bank of Australia, there are the chances that those fraud in this bank also.
Cyber crime: The bank can be affected from the activities of cyber crime. Currently this bank is giving services to the customers through the online banking such as and e-banking. The consumers of the bank is using the ATM of the bank (Bai, Krishnamurthy & Weymuller, 2018). The attacks on the server of the bank along with the ATM can cause the hackers to access all the confidential data of the consumers along with stealing the money from the bank.
Identity theft: With the advancement of the technology and the easy available services through online has developed a chance to use the identity of the other person to access the account of the bank.
Flowchart of the sales procedure
Loss from loan: The bank can be affected from the due loans. Due to the improper regulations and monitoring the loan defaults can be increased day by day causing the bank a huge loss.
There are certain problems can occur related to the control system in the bank. These problems can be regarded as the internal problem of the banks.
Dealing with the money: There is a chance of mistake while counting the money by any employee of the bank. However, this can be prevented but implementation of the counting machine at the counter (Keneley, 2017). Though this implementation does not assure the correctness of counting the money , however, it will reduce the chances of the risks.
Problems with the rules and regulations: The hierarchy of the organizations leads to the implementation of many rules regarding deposition of the money and processing the cheques and the money (Sathye, Nicoll & Chadderton, 2017). Without proper understanding of these rules can make an employee and the customer to become confused about the process.
Commonwealth Bank of Australia is considered as the most innovative bank in terms of using technology. The bank is currently approaching to make an mobile app which will enable the users to do various retail banking functions through internet (Moro, Cortez & Rita,2015). The bank is currently using 7 vendors named-cloudera for the data management, vizier for the HR and employee management system, verint system for managing the workforce, for the cloud security tools Vasco data is used, form managing the customer relationship management salesforce is used, Oracle Exadata is used for the data warehousing, for managing the branding and advertisement agencies brand culture communications is used.
All the existing software vendors has its own functionality. The data and the process of the internal banking system is maintained by the software packages are important. However, for the accounting purpose the bank can adopt certain advanced software like NetSuit ERP and Xero. The use of these software will help in the digitization of the bank. Apart from that it will help to eliminate the problems with the manual banking system. There are various types of accounting software can be use in this context- accounts payable software , accounts receivable software, general ledger software.
The commonwealth bank is based on Australia. However, it has its business over the United States and Asia. It has total employee of 51800 across 11 countries. The Commonwealth Bank of Australia is the largest financial sector in the stock exchange of the Australia. Currently it is holding 20.5% of total market share . However, the market share of the Commonwealth Bank of Australia has been dropped from 25.5% to 15.5%. The experts says this is the result of changing the strategy of the bank. This bank has removed its focus from the major investors and the in concentrating on the marketers to meet the lending cap.
Identification of control problems and possible fraud in the system
The lenders of the bank is common people. The people who choose the bank for taking the loans are the lenders of the bank as they return the money after a certain period of time to the banks. Investors are also the lenders of the banks (Kumar, Charles & Mishra, 2016). They may use the bank for their financial business. In that case the organizations can choose the commonwealth bank for keeping the money (Salim, Arjomandi& Seufert, 2016). The common people who have chosen the bank for the deposition of their money can be considered as the lender of the bank. The bank can lend money to the common people and the business organization by using the deposited money in the bank. The whole process goes in a cycle, where the investors and the people keeps and invest the money in the bank. Bank uses those money to give loan to the organization and the people as a loan. The bank repays the depositors by the money it collects through the repayment of the loans.
The banks are advancing their services by increasing the quality of the services and the products and better consumer services. This is making the business of the banking sector more competitive. However, the main advantage of the Commonwealth Bank lies in its uniqueness and the brand value. The Commonwealth Bank can be considered one of the largest bank in the Australia. The main feature of this bank is that is makes the sustainable changes with the change of the time( Drehmann & Juselius,2014). This helps the m]bank to stay far ahead from the other banks in the competitive market (Tsai et al.,2016). The quality off the services and the expansion of the business along with the digital disruption I the banking process of the commonwealth bank give it the extra advantage. The another positive point taken by the management of the bank is that , the bank always take the opportunities and the decision making process regarding the running of the system in the Commonwealth Bank is taken with concern.
However, with the use of the accounting software in the banking process may help the process to enhance the positivity of the digitization, there are certain gaps between the familiarity of the users of these software and the level of functionality of the software. The users of these software are mainly the employees of the banks. The employees of the banks are used to the manual processing system of the accounts. At first they may feel uncomfortable using these software in the accounting system. Many of the employees may not have the equivalent knowledge about the different functionality of the software which can cause the human error. However this problems can be solved.
The recommendation for the elimination of this problem is to give the proper training to the employees and the workers about the use of the software. Trainings should be given to employees on certain time interval so that they can stay update with the changing environment of the process and the business.
Conclusion
It can be concluded from the above discussion that the Commonwealth Bank is doing well in the business and the business of this bank is expanding. However there are certain areas which should be considered by the bank for getting the advantage in the competitive market. The implementation of the digitization should be done in order to expand the business of the bank and meeting the demands of the customers. The current market condition and other important factors regarding the lenders of the bank and the business process of the bank has been discussed in this paper. The findings of this article indicates the proper implementation of the digitization and effective business plans will help this bank to doo well in the business.
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