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Strategic Information Systems: Dynamic Business Strategies Used By David Jones Limited

Question

The literature review would be on an organisation (company) that is using accounting software packages in Australia. The research would cover:

PART 1

  1. The current organizational structure
  2. What operational problems (e.g., inefficiency, errors) do you think the organisation could experience because of this structure?
  3. What is the most likely system acquisition method— commercial software, custom software, or ERP?
  4. Describes and prepare a system flowchart of the sales procedures for the chosen organisation (company)
  5. Identify any control problems in the system and what sorts of fraud are possible in this system?

PART 2

  1. Development and adoption of the accounting software packages,
  2. The current market size,
  3. Identify the leaders in the market and what gives them the competitive advantage,
  4. Identify the current gaps or challenges encountered by users or customers of accounting software/packages and make relevant suggestions or recommendations.

Answer

Part 1
Introduction: In the dynamic business setting, various organizations are using innovative techniques to handle their business operations so that they can have a competitive edge over their competitors. A new model that is gaining popularity among the businesses undertakings is the strategic information systems (SIS). The Strategic Information Systems can be defined as the unique information system that has been developed to manage and effectively respond to the challenging “corporate business initiative”.

The fundamental purpose of the ‘IS’ is to simplify the different functions that are carried out by an organization so that it can have a competitive advantage over its rivals (Altameem, Aldrees & Alsaeed, 2014).

In the Australian business setting, the use of SIS has gained high significance as it helps firms to segregate their key business operations in the best way possible so that the operations can be managed efficiently and effectively. The organization that has been selected for the literature review is David Jones Limited. The Australian firm came into existence in the 1800s and it is known to be the oldest functional departmental store that still exists in the market setting (Arvidsson, Holmström & Lyytinen, 2014).

Various aspects have been highlighted here including the organizational structure, its operational problems, the system acquisition method, the system flowchart and control problems so as to assess the SIS model that helps the firm to have a sustainable existence in the evolving market setting. In the next section, the focus has shifted to the accounting software packages that help firms to simplify their core operations, their market share and current gaps that need to be filled (Cassidy, 2016).

Organization structure of “David Jones Limited”
Over the years, the organizational structure of David Jones Limited has undergone a dynamic change which has helped it to adapt to the evolving market setting. Between the years 1980 and 1990, the firm had a complex organizational structure. During this time, David Jones Limited became a part of Adelaide Steamship Company but after the financial collapse of the latter firm, David Jones turned into a public organization. In order to adapt to the changing market setting, it has diversified its operations into various products and offerings such as gourmet food, apparels, bags and accessories, beauty products, electrical appliances and shoes (Elysee, 2014).

The departmental store has its presence in over 45 locations in the Australian continent and as of the year 2014, its total number of employees had reached 7200. In the year 2016, the Australian business opened its first ever store in the New Zealand continent. The organizational structure of the business can be understood by referring to the chart (Eseryel & Eseryel, 2013). The CEO of the firm is responsible for the activities and operations of all the key segments such as the customers, human resource function, food and clothing segment and digital operations.

organizational structure of David Jones Limited

The firm’s headquarter is located in Sydney, Australia but it would most likely move to Victoria, Australia so that it can exploit the dynamic business setting and strengthen its sustainability and profitability. The online retail activities help the business to compete against its main competitor Myer (Henfridsson & Lind, 2014). Over the years, the online retail operations have helped the firm to enhance its presence throughout the operational location. The firm has always tried to strengthen its organizational structure by using new and innovative tools in the dynamic operational context.

Operational problems
Managing a large departmental store that spreads to different parts of a continent can be a challenging activity if the right set of tools and techniques are not used by the marketer. In case of David Jones Limited, the firm faces various challenges due to external and internal factors. The firm has to regularly upgrade its technological model and offer the products and services that meet the needs and requirements of the target customers. Similarly, it has to organize and manage the operational activities that are conducted in its various stores throughout the market setting (Hovelja, Vasilecas & Rupnik, 2013). According to the journal article “Department Store Problems” by Morris Thomson, one of the major challenges that most of the management teams of departmental stores face relates to distinguishing between a problem that can be solved and a situation where adjustment needs to be done (Thompson, 1943). A key issue that David Jones Limited has to deal with on a frequent basis relates to aligning the operational activities of all its outlets that help the business to generate revenue.

The complexity that is faced by David Jones gets further intensified due to the involvement of a large number of stakeholders such as the suppliers, employees, staff members, managers, supervisors and other organizational personnel. The firm tries really hard to manage the inventory system, coordinate with the key suppliers and customers, minimize errors in the operational process and decide the price (Kummer & Schmiedel, 2016).

These are the key challenges that the Australian departmental store faces in spite of the changing nature of the market over the decades. The retailer basically makes a sincere attempt to navigate the gap between the profits and the dividends so that it can enhance its sustainability and profitability.

System acquisition method – Commercial Software
In order to manage the business–related problems and challenges that arise before David Jones, the firm uses commercial software so that the automated model can help the firm to handle its managerial operations and processes. Since the operations of the departmental store are quite vast in nature and involve a large number of product lines, the business understands the significance of a strategic information system (Loebbecke & Picot, 2015).

It has various options available with it to automate its operational activities such as using commercial software, preferring custom software, or using ERP in the business process. David Jones uses the readily available and efficient commercial software so that its unique operational needs and requirements can be fulfilled in the process.

In layman’s language, commercial software can be defined as the program that is designed to help the end user serve its commercial purpose. As per Lowry, et al (2016), in the dynamic market context, these models play a key role to help business undertakings solve the main challenges that erode their overall business profits. Such software helps business concerns to simplify various activities relating to finance, marketing, operations and human resource management (Lowry, et al., 2016). The David Jones Limited opts for the commercial accounting software so that it can efficiently manage its financial resources and make sure that they are used in an optimum manner.

In the Australian market setting, a wide range of commercial software have been introduced that help business firms to minimize the manual process and bring about automation. The most popular Accounting Information Systems are the Xero-Accounting Software and Online Bookkeeping, Quickbooks, Microsoft’s Small Business Accounting model and many others. Business undertakings select the accounting software based on their unique accounting and financing needs so that the internal processes of the concern can be simplified. David Jones Limited uses the Xero accounting model so that it can efficiently handle its available financial capital and create value for the external customers and the internal customers (Maharaj & Brown, 2015). This accounting software has played a critical role in the Australian-based departmental store as it assists the organizational personnel in the invoicing activities, bank reconciliation process and overall bookkeeping function.

System flowchart
The system flowchart of the sales procedure of David Jones Limited has been presented below to highlight the various complexities the business undertaking has to go through in order to carry out its operational activities in the dynamic business setting. The business uses the accounting software so that it can get the much needed assistance while conducting the operational functions relating to the receiving of the goods, preparing the records, filing the same, conducting the billing process, matching the documents, assessing the warehouse reports, coordinating the inventory management activities, receiving the sales order and preparing the credit (Majchrzak & Malhotra, 2013).

The accounting model plays a critical role to strengthen the accounts receivable function by efficiently managing the credit memos, reviewing the account status, updating the customer records and updating the relevant details in the accounts receivable subsidiary ledger. The activities of the commercial accounting software do not end there but it also helps to manage the credit disbursement model and make the necessary modifications in the general ledger of the David Jones Limited business. The software is designed in a unique fashion so that in case the customers wish to return an offering to the business, they can do so without facing any kind of hassles (Popovic, et al., 2014).

strategic information system

The accounting software strengthens the strategic model of the departmental store business and helps the firm to have a control over its operational activities starting from the procurement of the goods to the very after-sales services. It helps to segregate the duties between different functions so that the business can be able to manage and monitor the risks (Silvius & Stoop, 2013).

Control problems
The David Jones Limited business undertaking has existed in the evolving market setting for over a decade and it has faced a number of challenges relating to the control aspects. It is quite natural for business undertakings to face such issues because of the change in the market dynamics and the marketing approach. In spite of adopting an innovative commercial accounting information system, the firm encounters a number of control problems in the system that can give rise to different sorts of fraudulent activities and processes that are possible in this system (Tsang, 2014).

One of the major control issues relates to the manipulation of the financial data that is inserted into the system. This challenge could arise due to the unprofessional behaviour of the employees of David Jones Limited. The next important ‘control issue’ that the business faces is due to the technological challenges. Due to the rising complexity of the departmental store operations, the needs and requirements of the firm keep on changing (Maharaj & Brown, 2015). The poor technological infrastructure could hamper the operations because the firm would not be able to keep a track of the sales operations in the market environment. There is the need for the Australian business to minimize these existing gaps by strengthening its strategic information system. The better implementation of the IS model would act as a core asset for the firm and it could gain a competitive advantage in the uncertain market backdrop.

Part 2
Accounting software packages: The relevance of the accounting software packages has increased in the recent times for the business concerns that function in the current market context because they help these firms to have a better control over their operational activities. The fundamental intention of developing these accounting software packages is to empower the business concerns to effectively manage and process the firm’s financial data. As per Forbes, the dynamic nature of the market has encouraged most of the business entities to minimize the manual operations and replace the same with accounting software models (Hovelja, Vasilecas & Rupnik, 2013).

These new innovative components play a vital role in the organizational context as they help to minimize or eliminate the existing bottlenecks like erroneous audit information and non-compliance with the standard legal requirements (Arvidsson, Holmström & Lyytinen, 2014).

One of the main factors that have helped David Jones Limited to have a sustainable and profitable existence in the evolving market environment is its robust strategic model. Due to its focused strategic framework, the firm has integrated a robust accounting information package that helps it to have a better control over its financial operations and processes. The effectiveness of the strategic information system helps the firm to manage its business operations and beat the current day industry rivals (Majchrzak & Malhotra, 2013).

Market size – Market Leaders and their competitive advantage
In the recent years, the market share of Accounting Information Packages has experienced a surge due to the rising demand from the business customers. In the evolving technological context, new and improved accounting software models are coming into existence so that they can capture the market share and create value for the target customers. Globalization has also played a vital role to boost the significance of the accounting packages for business organizations (Eseryel & Eseryel, 2013). Firms have understood the fact that the simple tools can help them to record, process, manage and track the internal financial operations. As per the analysts of Technavio, the market share of the accounting software sector is likely to grow to approximately $ 4.10 billion by the year 2021 (Maharaj & Brown, 2015).

The market leaders that operate in the accounting software market setting are the Xero Accounting Software, Intuit Quickbooks, MYOB Essentials, Reckon One and Saasu. All these players dominate the dynamic market setting and help their customers to simplify the accounting and financing operations. The main elements that help these business firms to lead in the market setting include the simple dashboard mechanism, effective operational approach, the coverage of core financial operations and the value that is created in the process for the target customers (Arvidsson, Holmström & Lyytinen, 2014). David Jones Limited uses the Xero Accounting package to efficiently and effectively manage its accounting processes.

Current gaps and recommendations
In spite of the usefulness and the effectiveness of the currently existing accounting software packages, there are a number of bottlenecks that need to be filled in order to create utmost value for the end users and clients. One of the major gaps that has been identified relates to the high cost of the strategic information system. Due to this factor, many firms are unable to afford this technology and simply their operational processes (Eseryel & Eseryel, 2013). The other important gap that has been identified relates to the complex implementation model. In case the technological infrastructure of the client is not right, the computerized accounting model can slow down the operational efficiency of the business undertaking and ultimately hamper the overall profitability of the concern (Arvidsson, Holmström & Lyytinen, 2014).

The recommendations have been designed to address the identified gaps that exist in the accounting software packages. The business firms that offer these software packages need to introduce the same in varying sizes so that the firms with limited operational activities can opt for a IS that can conduct only bookkeeping functions for them (Majchrzak & Malhotra, 2013). Such an approach can play a key role to strengthen the value that is created for the customers and it can enhance the market size of the accounting software packages. In order to simplify the software implementation process, the requirements relating to the setting up process need to be polished so that the accounting software can function in the different organisational setting.

Conclusion
In the evolving market context, business undertakings are trying to gain a competitive advantage by adopting the best possible accounting software packages that meet their operational needs. The David Jones Limited business has been assessed and the accounting package that is used by the firm has been highlighted here. The strategic information system plays a key role to give the firm a competitive advantage over its industrial rivals. In fact, it is one of the important elements that have helped the Australian departmental store to continue to exist in the market today. The assessment of the Accounting Package Software industry has been carried out and the main leaders that function in the market setting have been identified in the process. Even though these accounting packages create value for the end users, there is need to eliminate the existing gaps so that optimum value can be created for the marketers and their clients.

References

Altameem, A.A., Aldrees, A.I. and Alsaeed, N.A., 2014, October. Strategic information systems planning (SISP). In Proceedings of the World Congress on Engineering and Computer Science (Vol. 1).

Arvidsson, V., Holmström, J. and Lyytinen, K., 2014. Information systems use as strategy practice: A multi-dimensional view of strategic information system implementation and use. The Journal of Strategic Information Systems, 23(1), pp.45-61.

Cassidy, A., 2016. A practical guide to information systems strategic planning. CRC press.

Elysee, G., 2014. An empirical examination of a mediated model of strategic information systems planning success. International Journal of Business Information Systems, 18(1), pp.44-66.

Eseryel, U.Y. and Eseryel, D., 2013. Action-embedded transformational leadership in self-managing global information systems development teams. The Journal of Strategic Information Systems, 22(2), pp.103-120.

Henfridsson, O. and Lind, M., 2014. Information systems strategizing, organizational sub-communities, and the emergence of a sustainability strategy. The Journal of Strategic Information Systems, 23(1), pp.11-28.

Hovelja, T., Vasilecas, O. and Rupnik, R., 2013. A model of influences of environmental stakeholders on strategic information systems planning success in an enterprise. Technological and Economic Development of Economy, 19(3), pp.465-488.

Kummer, T.F. and Schmiedel, T., 2016. Reviewing the Role of Culture in Strategic Information Systems Research: A Call for Prescriptive Theorizing on Culture Management. CAIS, 38, p.5.

Loebbecke, C. and Picot, A., 2015. Reflections on societal and business model transformation arising from digitization and big data analytics: A research agenda. The Journal of Strategic Information Systems, 24(3), pp.149-157.

Lowry, P.B., D’Arcy, J., Hammer, B. and Moody, G.D., 2016. “Cargo Cult” science in traditional organization and information systems survey research: A case for using nontraditional methods of data collection, including Mechanical Turk and online panels. The Journal of Strategic Information Systems, 25(3), pp.232-240.

Maharaj, S. and Brown, I., 2015. The impact of shared domain knowledge on strategic information systems planning and alignment. South African Journal of Information Management, 17(1), pp.1-12.

Majchrzak, A. and Malhotra, A., 2013. Towards an information systems perspective and research agenda on crowdsourcing for innovation. The Journal of Strategic Information Systems, 22(4), pp.257-268.

Popovi?, A., Hackney, R., Coelho, P.S. and Jakli?, J., 2014. How information-sharing values influence the use of information systems: An investigation in the business intelligence systems context. The Journal of Strategic Information Systems, 23(4), pp.270-283.

Silvius, A.G. and Stoop, J., 2013, January. The relationship between the process of strategic information systems planning and its success: An explorative study. In System Sciences (HICSS), 2013 46th Hawaii International Conference on (pp. 4495-4501). IEEE.

Thompson, M., 1943. Department Store Problems. The Journal of Marketing, pp.21-24.

Tsang, E.W., 2014. Case studies and generalization in information systems research: A critical realist perspective. The Journal of Strategic Information Systems, 23(2), pp.174-186.

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