Operational problems due to the structure
Discuss about the Institutional Explanations for ERP Systems.
The British American Tobacco deals with the production of cigarettes. The company holds a robust market in almost every corner of the world. The company has leadership in over 50 markets. The company works with farmers who supply tobacco to the factories. The company produces 724 billion cigarettes from 50 factories in 41 countries. The company has employed over 600,0o0 people globally. The various factories across the world have exercise multicultural and operate within a devolved structure that allows each local company to take responsibility for their actions and operations. In the organization policy framework, policies, strategies, standards, delegated authority, and principles are customized in the best possible way to suit the local stakeholders of each business (Dale, 2015).
The organization champions employee welfare through conducting employee opinion survey, also known as your voice to give them secure confident way to voice their concerns.
The management of the company consists of the director of legal and external affairs and general counsel, regional director, director of operations. The other directors are director of human resource, in charge of human resource management in the Australian and director of research and development. Finally, there is the director of business development. (“British American Tobacco – The global market,” 2017)
The management of BAT makes use of the four managerial functions. These are, organizing, controlling, leading and managing.
The organization structure of British American Tobacco is highly specialized, and due to this, the organization lacks teamwork. This is due to specialized units in the structure, which perform at a high level of efficiency. When a certain activity requires that these units to join forces, every unit may pursue their interests instead of the overall organizational goal, this brings fights within the organization and lagging of projects. The lack of teamwork also is further encouraged by the multi-cultural structure in the organization (Byrd, & Megginson, 2013). Also, the structure used by the British American Tobacco poses a challenge to the top management due to the expansive nature of the organization. As the organization continues to expand, the top management is required to delegate the duties of decision making to the functional units of the organization. This challenge is more evident especially when the organization expands to a new geographical area
The structure also faces a challenge in policy implementation. The implementation of new policies that are mandatory for all the companies to observe becomes difficult, as the structure of the organization has allowed the companies to handle their issues independently; furthermore, the multicultural nature poses a lot of resistance (Byrd, & Megginson, 2013).
System flow chart on sales procedure description
The most preferred system of acquiring the accounting software package would be custom software. The organization comprises of many companies in 41 countries. These companies handle their operations and actions independently and locally. Due to this these companies face different challenges concerning technology, acquiring a customized software will ensure that they can tailor the software according to the organization needs. Also tailoring the software will reduce the risk about data security (Dale, 2015).
A custom software is that software which has been developed to suit the needs of a specific organization or specific users. The custom software is also known as bespoke software or customized software. The customized software takes care of nuances and possible hidden risks. Most big companies use the customized software to handle different functions within the organization such as content management and inventory management. This software is designed to fill the gap that exists in the commercial software. However, the development of this system software is very expensive compared to its similar commercial software (Dale, 2015).
The system starts at the point here the customer places a purchase order for the purchase of cigarettes. After the order has been placed, the Rep logs of purchase quantity are entered in the electronic system; an electronic invoice is generated. The contact agent receives the order and verifies its authenticity by calling the customer to confirm the order indeed was placed. After the confirmation, the order details are assessed by checking them to ensure they have met the standards; this stage is termed as standard terms. After the purchase order details have met the standards, the order is approved, and a pickup log statement is launched which is then followed by shipping the order. If the order fails to meet the standards, the agent requests for the approval, which requires that the order details pass through an attorney. When the attorney approves the order and says that it is OK, the order is taken back to the agent who then approves it and a pickup log sheet is launched. If the attorney marks it NO, the order is taken to the Agent who the cancels it and the order is not shipped. Depending on the situation of the order, the agent might pass the canceled order to the Rep logs who calls the customer to inform them on what made the order to be canceled (“Sales Process Flowchart,” 2017).
The development and adoption of the accounting software packages
The BAT Company is a large organization that closes millions and millions of sales every year with the help of the sales process flow chart. Human involvement, however, makes the chart to have a problem as the staff handles the various functions required to ensure the order goes through. The processes might experience errors or even favoritism. This may lead to loss of revenue or loss of sales due to incompetence, thus a more improve system is required to handle the human error. Moreover, the staff handling these functions may collude and defraud the company, by allowing unqualified orders to go through (Simkin, Norman, & Rose, 2013).
The process begins by identifying the areas, which require the implementation of the system and how it would benefit the organization. From there the company analyses the financial capabilities required to fund the development. After this, a qualified accounting software developer is contracted to develop the software based on the organization requirements and needs. The software developer splits the process into phases in which pilot operations is conducted to determine the suitability of the software in the various areas in the organization that required to use the software. Once the software is completed and tested, the project manager takes over.
The project manager is in charge of implementing projects as well as evaluating them. The project manager oversees the adoption of the accounting software in that; he develops a plan on how the implementation will take place. The first step involves bringing on board all those who will be affected by the implementation next is to communicate to them about the changes that are about to take place in the organization. The third step is to delegate the implementation to the specific departments and assuming a supervisory role to the implementation. The implementation is done in stages to ensure that the organizations’ activities are not disrupted. From there the manager will be evaluating the performance of the system to ensure it is performing effectively and efficiently (Simkin, Norman, & Rose, 2013).
The market size controlled by the BAT Company continues to grow as the value of global market on cigarettes grows. According to statistics, there are about one billion adult smokers worldwide. These smokers consume about 5,600 billion cigarettes every year.
The statistics also estimate that the cigarettes market size could be about US$ 770 billion. However, the overall cigarette volume is progressively declining from one year to another; the market value of cigarettes continues to grow. The BAT Company has continued to increase its share in the market by 50 basis points by the end of last year.
The current market size
In most countries economies, the tobacco industry continues to be a substantial contributor to the economy of these countries. The industry sustains millions of people’s livelihood including retailers farmers and all those employed in the tobacco industry. However, some governments are on the verge of killing these industries through the continuous increase of excise duties. This leads to competition distortion, due to the rise of cheaper and illegally trafficked cigarettes. (Dale, 2015)
Three tobacco companies mainly dominate the Australian tobacco market, they include, British American Tobacco Australia, Philip Morris though it ceased production of tobacco products in 2014, and Imperial Tobacco Australia. The dominating company is the BATA, which before 12014 it had a market share of 40%, which expanded to 140% once Philip Morris seized tobacco production. As for Imperial Tobacco Australia, which was controlling a market share of 40% by 2014, reduced to 17% once Philip Morris seized production.
Other significant competitors in the Australian market include Peter Stuyvesant Horizon, and JPS (“Tobacco companies operating in Australia – Tobacco In Australia,” 2017).
Current gaps or challenges encountered by users or customers of accounting software suggestions or recommendations
Most challenges faced while using the accounting software are due to the outdated nature of the software. However, the following are some of the challenges encountered by users (“Software Reviews,” 2016).
Users have experienced cases where the security of the software has been compromised, and foreign parties gained access to their data. Thought the computer firewalls are meant to counter such attacks, it fails at times, and proper attention needs to be directed to data security (“Software Reviews,” 2016).
Users are complaining that the accounting software is exhibiting a tendency of impossibility in data retrieval. The software permits the input of data but becomes hard to access this data once it is required.
Owners of businesses are time cautious and prefer software that strives to save time by doing things quicker. Also, some software is not user-friendly and are difficult to operate on using the normal input devices. They also lack expanded features and capabilities.
Outdated software always experiences system errors almost every time; these errors lead to data inaccuracy hence unreliability. The outdated software also has limitations regarding features and functionality.
The system restrictions set during the development of the software, makes the software user-unfriendly, as one cannot customize. Moreover, others are cluttered and hard to understand.
There is software that contains a limited number of features though they are charged expensively. Customers are required to be upgrading the software from time to time to increase the number of features.
Despite the exorbitant fees paid for the software, at times it may be incompatible with the machine.
Every software including even the accounting software is made to ensure that it reduces the workload and give an alternative and reliable way of analyzing the information. Therefore a company should ensure that it sources for qualified software developers who will be able to create a software that has improved security features, accurate and takes less time to process data as well as allow data to be retrieved with ease. This will not only improve the security features but also the performance of the software.
References
The major tobacco companies operating in Australia – Tobacco In Australia. (2017). Tobaccoinaustralia.org.au. Retrieved 16 April 2017, from https://www.tobaccoinaustralia.org.au/chapter-10-tobacco-industry/10-4-major-tobacco-companies-operating-in-australia
British American Tobacco – The global market. (2017). Bat.com. Retrieved 16 April 2017, from https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DO9DCKFM
Byrd, M., & Megginson, L. (2013). Small business management (1st ed.). New York, NY: McGraw-Hill.
Caplan, S. (2010). Streetwise Finance And Accounting For Entrepreneurs (1st ed.). Cincinnati: F+W Media.
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Dale, E. (2015). Planning and developing the company organization structure (1st ed.). Ann Arbor, Mich.: Xerox University Microfilms.
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Hyvönen, J. (2015). Adoption and Benefits of Management Accounting Systems: Evidence from Finland and Australia. Advances In International Accounting, 18, 97-120. https://dx.doi.org/10.1016/s0897-3660(05)18005-2
Hyvönen, T., Järvinen, J., & Pellinen, J. (2016). The role of standard software packages in mediating management accounting knowledge. Qualitative Research In Accounting & Management, 3(2), 145-160. https://dx.doi.org/10.1108/11766090610670677
Sales Process Flowchart. (2017). https://www.conceptdraw.com. Retrieved 16 April 2017, from https://www.conceptdraw.com/How-To-Guide/sales-process-flowchart
Simkin, M., Norman, C., & Rose, J. (2013). Accounting information systems (1st ed.). Hoboken, NJ: John Wiley & Sons.
Software reviews. (2016). Accounting Education, 8(4), 377-380. https://dx.doi.org/10.1080/096392899330856
The tobacco growing and manufacturing industries. (2014) (1st ed.). [Belconnen, A.C.T.].
Ugrin, J. (2013). The Effect of System Characteristics, Stage of Adoption, and Experience on Institutional Explanations for ERP Systems Choice. Accounting Horizons, 23(4), 365-389. https://dx.doi.org/10.2308/acch.2009.23.4.365
Varajao, J. (2010). ENTERprise information systems (1st ed.). Berlin: Springer.
Whittington, G. (2015). The adoption of International Accounting Standards in the European Union. European Accounting Review, 14(1), 127-153. https://dx.doi.org/10.1080/0963818042000338022
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