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Adoption of Enterprise Resource Planning Systems

Question:

Discuss about the Adoption of Enterprise Resource Planning Systems.

Answer:

Introduction

This report will provide a detailed description regarding the strategic information systems which are being utilised in an accountancy firm in Australia. For the purpose of this report, the organisation chosen is Grant Thornton Australia. This report will provide a detailed analysis of the organisational structure being followed by the company and how they would be able to tackle the problems and challenges they are facing in their business.

Grant Thornton Australia follows a tall (hierarchical organisation structure) wherein there are many level of business hierarchy. The organisation is divided into various functional levels and each of those levels has their own managers who are controlling a small group of employees. The managers have a limited sp[an of control within the company as they are mostly assigned the responsibility of those individuals who are working under them. The main benefit of this organisational structure is that there are a lot of career growth opportunities for the employees who are willing to work with proper dedication and commitment. This hierarchical organisation structure plays a very important role in ensuring a disciplined workforce and fosters better motivation and inspiration among the employees (Chatzoglou et al., 2011).

Operational problems faced by the organisation as a result of their organisational structure

The main operational problem which is faced by Grant Thornton Australia as a result of their organisational structure is the increased complication and time associated with their decision making process. The organisation has to satisfy the interest of their large workforce while undertaking their business decisions and this invariably increases the time of the decision making process resulting in unnecessary delays. The fact that there are various functional levels within Grant Thornton Australia and each level has different size of employees, there is a greater chance of lack of communication among the employees which is bound to create confusion at the workplace. This eventually has a negative impact on the quality of accounting services which are being provided by the organisation to their clients in Australia (Abdullah & Ahmad, 2009).  Moreover the cost associated with maintaining a hierarchical organisation structure is more as compared to a flat organisational structure and this invariably increases the operational expenses for the organisation. The increased business expenses has eaten up the profits and revenues earned from their business and as a result Grant Thornton Australia has been unable to optimise their business productivity in the Australian market (Chatzoglou et al., 2011).

The most effective system acquisition method which could be utilised by the organisation is ERP (Enterprise Resource Planning) systems. With the rapid development and growth of industries around the world it has become extremely essential for the business establishments to manage their resources and business processes in an effective manner so as to ensure improved business productivity within their business. ERP is a software tool which enables an organisation to address this specific business need. It helps an organisation to align their business operations with their organisational goals and objectives in the market and this enables them to enhance and improve their business output in the market (Romney & Steinbart, 2012). With the use of ERP, the organisation will be able to integrate all the diverse aspects of their business, such as management, quality of accounting services, advertising and sales, which would play an important role in promoting better understanding and coordination among their employees. This would help Grant Thornton Australia to provide better quality of accounting and auditing services to their clients in Australia. This would enable Grant Thornton Australia to effectively tackle the market competition with their business rivals, thereby providing the organisation with a competitive advantage in the market (Basoglu et al., 2007).

The ERP systems would play a very important role in promoting an effective communication channel within the organisation which would enable Grant Thornton Australia to ensure better delivery and availability of information which are required for undertaking accurate and effective business decisions. ERP systems will enable Grant Thornton Australia to evaluate and analyse the latest market trends and this helps them to understand the different risks which could be encountered by them in the future. The organisation will be able to undertake real time business decisions by addressing their business risks and this will enable them to sustain their business operations in an efficient manner (Ahmad & Cuenca, 2013). ERP systems would play an instrumental role in helping the organisation to bring down the cost associated with their business operations by enabling Grant Thornton Australia to ensure an optimum utilisation of their available resources and this will enable them to reduce the unnecessary wastage of resources. This will enable the organisation to foster customer satisfaction among their clients by enabling to provide more improved quality of services in their respective business sector (King, 2015).

Describing and preparing a system flowchart of the sales procedures for the organisation

The sales procedure for Grant Thornton Australia is a complicated process which requires many steps. This has been illustrated above in the flowchart diagram. The process begins with their clients (providers) submitting their claims via EDI or web portal. The data provided by their clients is then validated by the organisation. The process of validation involves validating the provider data, recipient data and reference data. All these data and information are analysed in order to validate whether they are conforming to the rules enforced by the Benefit Provider Administration (BPA). After this process is complete, the organisation requires prior authorisation to in order to perform the necessary changes in the data. In case the authorisation is not provided or suspended, the organisation performs the necessary editing of the financial records in order to carry out an accurate auditing process (Tuli et al., 2007). In case the authorisation is provided, the organisation needs to validate the prior authorisation data and then carry out the editing process of data for the auditing process. After the auditing is complete, the organisation determines the claim disposition for their clients. If the claim disposition is denied, then the claim is saved in the organisation’s database. In case the claim disposition is paid, them the organisation performs the final pricing and stores it in their database.

Ensuring the security of the data and information which are being provided by the clients is one of the major issues which are being faced by the organisation in the market. Ensuring the safety of the sensitive business data and information is extremely essential and the overall market reputation of the organisation is largely dependent on this aspect. Corporate data is highly susceptible to online theft and misuse by hackers who are constantly trying to utilise them for their own selfish gains. This has compelled the business establishments to incorporate more security mechanisms so that they would be able to prevent their illegal and unauthorised access by unscrupulous individuals who are hell bent on causing financial losses to the organisation (Romney & Steinbart, 2012). The main types of frauds which could be encountered by Grant Thornton Australia include the case where a hacker is able to obtain the sensitive financial statements which provide vital information regarding market performance of an organisation and provide those details to their business competitors in the market at a hefty price. Another corporate fraud will be when a hacker manipulates and changes the corporate business data provided by the clients and this would invariably compromise the accuracy of the accounting and auditing process which is carried out by Grant Thornton Australia (Clarke, 2012).

Adoption and development of the accounting system software would play a very important role in helping Grant Thornton Australia to maintain the privacy and security of the sensitive business data provided by their clients. This will enable Grant Thornton Australia to enhance the customer satisfaction levels of their clients and they will be able to significantly improve the quality of services that are presently being catered to their customers. The ERP systems will play a prominent role in helping Grant Thornton Australia to develop good accounting software which will help them to integrate all the diverse aspects of the accounting process in an effective manner. This will go a long way in helping Grant Thornton Australia to undertake better planning, designing and controlling of the accounting process. The company will be able to maintain a backup of all their important business data and information which could be utilised by them in case of future reference (Johansson & Sudzina, 2008).

Present Market Size

The accounting industry is one of the most lucrative business sectors in Australia which employs a total of 115,557 individuals generating total revenues to the tune of $20 billion in the year 2016. The accounting industry is one of the few business sectors in Australia which escaped the fallout of the global financial crisis which occurred in the year 2008. There is no death of accounting firms in Australia and presently there are almost 10000 small and medium accounting firms which are operating in this business sector. The majority of the accounting industry is dominated by small firms which employs less than 20 people. The fact that there is no shortage of accountants in Australia makes the salaries and wages extremely low and further minimises the growth prospects for the accountants. The Australian accounting industry is expected to generate steady growth in the next few years due to the growing demands from the different business enterprises to ensure an accurate and thorough auditing process (Ibisworld.com.au, 2017). A sizable chunk of the Australian accounting market (30%) is dominated by the big 4 accounting firms in Australia which are Deloitte Touche Tohmatsu, Ernst & Young, KPMG and PWC Australia.

The lion’s share of the Australian accounting industry is dominated by the large four firms which are KPMG, Deloitte Touche Tohmatsu, PWC Australia and Ernst & Young. These big accounting firms provide a wide variety of accounting services to their clients which mainly comprise of big multi-national corporate establishments. These large firms do not pose any business threat to the smaller and medium accounting firms as they are catering theor products and services to entirely different clientele. The large accounting firms have a lot of technical expertise at their disposal and this enables them to provide customer services which can satisfy each and every accounting needs of their clients. There is a high level of business competition among these four large accounting firms and they are leaving no stones unturned in order to develop a competitive edge over their business rivals (Ibisworld.com.au, 2017). These large accounting firms are extremely proficient in identifying and understanding the different market trends which exist around the globe and this enables them to provide effective consultancy and guidance to their clients regarding how they can further enhance their business profits by saving on their business expenses and corporate taxes.

Identifying the existing gaps or challenges which could be encountered by users or customers of accounting software packages and making relevant recommendations

The main drawback or challenge which is faced by the users of accounting software packages is technical expertise in order to use the software systems in an effective manner. Many accounts lack the proper technical understanding regarding the diverse aspects of the software systems and this is what prevents them from utilising the software system in a desirable manner in order to obtain maximum tangible benefits. Another challenge which could be encountered by the users of accounting software packages is the existing compatibility with the operating systems which are being utilised in their computers. The user interface needs to more user friendly so that more people will be able to utilise them for their accounting and auditing requirements (Tuli et al., 2007). The users of accounting software packages should be imparted with the necessary training which will help the users to develop a good understanding regarding the diverse aspects of the software. This will go a long way in ensuring that the users will be able to utilise the accounting software packages in an effective manner.  The system requirements specifications must be clearly explained to the users before they install the software system into their computers. This will help in preventing the unnecessary performance issues which could be encountered by the software (Wiegers & Beatty, 2013).

Conclusion

From the above discussion, it could be clearly stated that the strategic information systems are playing a vital role in influencing the growth and success in the market. Organisations needs to incorporate more advanced accounting software which will enable them to evaluate their business performance in an effective manner. This will enable them to take appropriate measures to sustain their competitive advantage in the market.

References

Clarke, S. (2012). Information Systems Strategic Management. 1st ed. Hoboken: Taylor and Francis.

King, W. R. (2015). Planning for information systems. Routledge.

Sheldon, D. (2014). Class A ERP Implementation. 1st ed. Boca Raton: J. Ross Publishing, Incorporated.

Chatzoglou, P. D., Diamantidis, A. D., Vraimaki, E., Vranakis, S. K., & Kourtidis, D. A. (2011). Aligning IT, strategic orientation and organizational structure. Business Process Management Journal, 17(4), 663-687.

Abdullah, H. S., & Ahmad, J. (2009). The fit between organisational structure, management orientation, knowledge orientation, and the values of ISO 9000 standard: A conceptual analysis. International Journal of Quality & Reliability Management, 26(8), 744-760.

Ahmad, M. M., & Cuenca, R. P. (2013). Critical success factors for ERP implementation in SMEs. Robotics and Computer-Integrated Manufacturing,29(3), 104-111.

Galliers, R., Leidner, D., Leidner, D. and Galliers, R. (2014). Strategic information management. 1st ed. London: Routledge, Taylor and Francis.

Grantthornton.com. (2017). About us | Grant Thornton. [online] Retrieved from: https://www.grantthornton.com/about-us.aspx.

Ibisworld.com.au. (2017). Accounting Services in Australia Market Research | IBISWorld. [online] Retrieved from: https://www.ibisworld.com.au/industry-trends/market-research-reports/professional-scientific-technical-services/accounting-services.html.

Tuli, K. R., Kohli, A. K., & Bharadwaj, S. G. (2007). Rethinking customer solutions: From product bundles to relational processes. Journal of Marketing, 71(3), 1-17.

Galy, E., & Sauceda, M. J. (2014). Post-implementation practices of ERP systems and their relationship to financial performance. Information & Management, 51(3), 310-319.

Wiegers, K., & Beatty, J. (2013). Software requirements. Pearson Education.

Romney, M. B., & Steinbart, P. J. (2012). Accounting information systems. Boston: Pearson.

Sia, S. K., & Soh, C. (2007). An assessment of package–organisation misalignment: institutional and ontological structures. European Journal of Information Systems, 16(5), 568-583.

Basoglu, N., Daim, T., & Kerimoglu, O. (2007). Organizational adoption of enterprise resource planning systems: A conceptual framework. The Journal of High Technology Management Research, 18(1), 73-97.

Johansson, B., & Sudzina, F. (2008). ERP systems and open source: an initial review and some implications for SMEs. Journal of Enterprise Information Management, 21(6), 649-658.

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