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STRATEGIC INFORMATION SYSTEMS

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Introduction

The business environment of a company is the most significant component that decides the competitiveness of that company. In this war of businesses, strategic planning plays an important role in the process of decision-making which includes devising the course of actions as well as grabbing new opportunities. In such cases, the information system is the one-stop solution to all such problems. Information systems are designed and implemented in a way that it helps the company in creating opportunities and actions accordingly. As a result of this, it helps in identifying problems too. Hence the part of the information system that supports the long-term planning for the company by providing relevant information is known as the strategic system of information. 

In this study, the retail company chosen is JB HI-FI which is based in Australia. The company is known to house electronic goods of the latest and the best brands and sells at lowest price possible. This assignment is done to study the organisational structure of the said company, its loopholes in the structure as well as the information system adopted. It will help analyse and identify the accounting package used and the information provided by it regarding market size, leaders and the competitive advantage of the company.

Literature Review

Part 1

The current structure of JB HIFI 

The organisation structure of a company provides the support to the company to prosper. It refers to the fact that how a company is working and the cooperation of the team members and the executives. JB HIFI Company, one of the largest retailers in the fields of home appliances, has a well-integrated company structure (jbhifi.com.au, 2018). As it is connected with the retail business it has a strong background in sales and market executives who support the sales department of the electronic goods. On the other hand, an excellent team of production managers take care of the production department. The software and IT department connected with the company has been chosen on the excellent skill and knowledge of the sector. The organisational structure of the company comprises of the departments of management, marketing, software development and financial accounting as well. It includes the supply-chain management that takes care of the demands of the consumers and availability of the products in the market. The main importance to have a proper organisation is to get all the departments clearly divided into sections to generate a functional method of progress (Schwalbe, 2015, p.51). The company JB HIFI fulfils all the criteria of providing sectional services to their consumers. They also have an IT and software development department who manages the queries of the customers and match the demands up to the date.

Operational problems 

While working in an organisation, there can be a number of issues faced by the employees. As the structure of the organisation is like a skeleton the human body, a problem appeared in the structure affects the whole system. JB HIFI is no different from it. Though there is a good interrelationship between the employees and the executive, sometimes there appears conflict in the department. In a company structure there are some divisions in the reporting sections like management, finance, sales, manufacturing, customer support etc. sometimes these divisions generate a conflict and power struggle while making it tougher for the employees to cope up with the situation (Hill, 2014, p.112). In case of JB HIFI, the main challenge in the organisational structure is the poor communication among the departments. The employees are so much involved in their respective departmental works that often they forget to cooperate with each other. As a result, there occurs mismanagement in the sales process and customer satisfaction. On the other hand, as the departments access their works independently according to their work plan, the company often faces inconsistency (jbhifi.com.au, 2018). The different departments of the company not being able to interact properly with each other frequently fail to generate a constant performance. This is one of the major failures in the system of the company of not being able to establish a clear goal for the members of all departments. It is lagging the company behind from achieving the expected results despite their hard work and dedication.

Method of system acquisition

Information systems are one of the major assets of an industry. In order to utilise it properly for the benefit of the company, it is important to understand the relevance of the systems (Correa, 2016, p.76). The major systems that are adapted for this purpose are Custom Software, Commercial Software and ERP. Commercial Software has mainly used for the business purposes for sales and marketing related facts. Hence, the discussion revolves around the significance of the two other software systems. Talking about the Custom Software, it is necessary to be accommodated with the business. Besides JB HIFI has discovered that this software system is not the most efficient to do all the operations. They prefer a more flexible software system that is out-of-the-box to identify robust features in order to accommodate process variations of business without a start of a costly investment. As the current marketing system has become more competitive, it has been mandatory for the company to choose a more flexible software system. In this case, the company has chosen the ERP software as the Custom software is apt when there is either a small group. Another reason for the preference for ERP is that compared to other software systems it is less expensive as it does not need to start the evaluation from a scratch. Besides the aforesaid reasons, ERP system takes a shorter time for installation which makes it easy to adapt to a more effective software system.

Flowchart of the sales procedure

The main key to a company's service lies within the procedure of providing service to its consumers. The sales procedure of the company JB HIFI comprises of several steps. After getting the consumer's order, it is converted into a sales order and then the quantity of the item is determined. In the next step, a work order is created and the ordered item is assembled or manufactured following the packaging procedure. Now the department creates the packaging slip and invoice. The item is ready to ship to the customer. The process of sales and delivering the goods to the customers follows a very simple though efficient process. The sales and marketing department ensure that there is no possibility of the products. Besides the online shopping system, the retail stores of JB HIFI follow the same kind of procedure regarding sales. This sales process makes it easier for both the service providers and the service receivers to have a good understanding of the supply of the goods and demand for the services.

Identification of control problem and fraud

 

 

 

 

 

 

 

 

Frauds in retail can be a major hurdle in the way of success for the company. As a result of the internal and external control problems, the number of fraud and inconvenience has increased. In accordance to resolve these problems, a company should take some control measures (Whittington, 2014, p.89). The security system and design of the retail store should be changed including adequate lighting in all the corners of the store and putting cameras or mirrors to cover the blind spots of the store. In order to resolve fraud in the store, the company should modify the structure of their sales terminals. On the contrary, to be free of the internal fraud JB HIFI has chosen to make the employees aware of the fraud by generating a system report and internal controls over company's assets and accounting records are implemented. Besides, the company has started to monitor the vacations taken by an employee and decided to rotate the jobs off to various sectors of the company to detect fraudulent activity. JB HIFI is also hiring experts and trying to follow a more effective corporate culture. Though all the measures are being taken to lessen the scope of fraud and any kind of inconvenience, there remains a risk in the system to be broken and to resolve that the company is trying its best.

Part 2

Adoption and development of Software packages for accounting

The consultants always recommend the companies to adopt application software for maintaining and controlling the accounting processes. The process to adopt a software package for accounting is tedious and requires a sudden investment of huge amount of money (Salome and Chukwunwendu, 2014, p.112). However, in the competitive world, to compete with other companies and stay on the top of the chart, JB HI-FI adopted accounting software. Adopting the software caused a sudden work conversion as a part of the accounting is assisted by the software in case such software is newly adopted by the company. Historical data has to be recorded in the system as new charts which occupy a lot of time of the clerical operations. All the detailed information regarding the departments like inventory, sales, suppliers and customers must be entered. However, JB HI-FI changed the existing software to a new one and in such cases, it has to run both the systems parallel to obtain considerably sufficient results.  This increases the workload of the accounting department and a lot of time is consumed learning the new systems. Changing the existing accounting software denotes that it lacks features that could provide a critically acclaimed analysis. The accounting software adopted is NetSuite. Since the business is segmented and extended over a wide area covering Australia and New Zealand, NetSuite provides integrated business in the cloud and helps the companies that have retail business and e-commerce. It facilitates business operations, ERP, e-commerce and CRM.

Current size of the Market 

JB HIFI is a retail company that is based in Australia and New Zealand. The subsidiaries of the company are The Good Guys,  JB HIFI Insurance Replacements, Network neighbourhood Pty. Ltd., Clive Anthonys Pty Ltd., JB HIFI Limited of New Zealand and JB HI-FI Group Limited in New Zealand (Jbhifi.com.au, 2018). Electronic chain JB HIFI is among the top 250 retailers in the world by the revenues. It had first appeared on the list at the 218th position. The company had first bought The Good Guys and added the sales to $1 billion in the year 2017. It has posted an in-line along with the consensus of 37.4% increase in statutory profit of net value $151.7m. The company paid the investors who are eligible around $0.86 for every share of interim dividend. JB HIFI has a total of 311 stores and added seven new stores were opened in Australia while one was closed in New Zealand. According to the reports of the company it had a mixed start of the calendar year with 6.9% sales increased for the JB HIFI and on the contrary, 3.5% fell for The Good Guys (Commsec.com.au, 2018). However, their shares had surged by 20% in the month of January in 2018.  

Identification of the leaders and competitive advantage

JB HIFI faces competition in the Australian market for the retailers from companies like Wesfarmers Limited, Woolworths Limited (Gleeson, 2017).On the subsidiary level, there are other smaller businesses which are competing. These are the state-based Bing Lee and Kogan.com who are turning out to be leaders in the appliance market with Bing Lee largely operating in the state of New South Wales. Certain companies, as well as the departmental stores like Big W, are also providing tough competition as they have chosen the policy of low pricing which has already been adopted by JB HIFI long time back. After the emergence of the global giant, Amazon the retail market of Australia is visualising a seismic change.

In order to give back the response, the company, that is, JB HIFI has taken relevant and price worthy steps to gain the advantages of the competitive market of the retail sector in Australia. The low pricing policy of the company gives it the competitive advantage of attracting more customers in this radical environment of the retail sector business of Australia. Moreover, the company stresses on brand loyalty which assures every buyer regarding the authenticity of the products sold by the company. The easy returns and exchange facility of the purchases done brings in the flexibility of choices made by the buyers. This, on the other hand, lets the customers draw their attention towards JB HIFI and win the advantage over other competing retail brands. Unlike other companies, JB HIFI charges a low price for delivery and installations too. The company is always on the edge to develop and adopt new policies, measures and even stocks that assure higher levels of performances beating other companies in the market.

Challenges faced by users of accounting software and recommendations

Problems regarding the development, installation and adoption of the accounting software are common. The users of the software face most of the problems when the software is outdated or the system was chosen is less user-friendly and JB HIFI delays in adopting a new version of the software. Sometimes the problems arise regarding the security of the data as the data may get exposed to the foreign parties as at times the firewall does not work. The search tools of the software are not much intuitive as it does not easily return information based on the searched keywords. Moreover, the accounting software used by JB HIFI that is NetSuite does not provide payrolls which are built-in and individual modules of the system cannot be installed in case a particular segment of the software system malfunctions. The software puts a lot of restrictions and hence the user cannot customise on the basis of their preferences. The company of the accounting software do not necessarily provide technical support which it assures of at times of discrepancies.

Conclusion

 

As the competitive market becomes modernised with the latest technologies and instruments, there seems an urgent need to be efficient with the system technologies to be apt to the current scenario. In order to survive in the market and make a stand for the business, a company has to maintain a proper system technology to be applied. It is a necessary instrument to focus on a particular segment of the market. Concerning the current market, the company JB HIFI is facing competition and trying to strategize the marketing policy according to the consumer’s demand while improving the software systems.

References

 

Commsec.com.au (2018) JB Hi-Fi Ltd (JBH) - Half Year Results 2018 Available at: https://www.commsec.com.au/market-news/reporting-season/feb-18/JBHi-FiLtd-JBH-half-year-results-2018.html [Accessed on 23 March 2018]Gleeson, B., (2017) The Top 6 Priorities For Building High-Performance Organizations Of Tomorrow Available at: https://www.forbes.com/sites/brentgleeson/2017/06/06/the-top-6-priorities-for-building-high-performance-organizations-of-tomorrow/#19fc06243ff2  [Accessed on 21 March 2018]Jbhifi.com.au (2018) JB HI-FI Available at: https://www.jbhifi.com.au/ [Accessed on 21 March 2018]                                                                                                                             Salome, N. and Chukwunwendu, F., (2014) Integrating information and communication technology (ICT) in accounting education instruction in Ekiti State Universities. International Journal of Business and Social Science, 5(6).

Correa, P.R., (2016), May. Most Popular Theories in Information Systems Research. In Proceedings of the XII Brazilian Symposium on Information Systems on Brazilian Symposium on Information Systems: Information Systems in the Cloud Computing Era-Volume 1 (p. 76). Brazilian Computer Society.

deloitte.wsj.com  (2016) Detecting Fraud and Growing Margins in Retail Using Analytics Available at: http://deloitte.wsj.com/riskandcompliance/2014/01/28/detecting-fraud-and-growing-margins-using-analytics-in-retail/ [Accessed on 22  March 2018]

deloitte.wsj.com Detecting Fraud and Growing Margins in Retail Using Analytics (2016) Available at: http://deloitte.wsj.com/riskandcompliance/2014/01/28/detecting-fraud-and-growing-margins-using-analytics-in-retail/ [Accessed on 23 March 2018]

Hill, C.W., Jones, G.R. and Schilling, M.A., (2014). Strategic management: theory: an integrated approach. United States: Cengage Learning.

jbhifi.com.au (2018) JB HI-FI Available at: https://www.jbhifi.com.au/General/Corporate/Shareholder-Matters/Executive/ [Accessed on 22  March 2018]

Schwalbe, K., (2015). Information technology project management.United States: Cengage Learning.

Whittington, R., (2014). Information systems strategy and strategy-as-practice: a joint agenda. The Journal of Strategic Information Systems, 23(1), pp.87-91.

Bibliography

 

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Cassidy, A., (2016). A practical guide to information systems strategic planning. United States: CRC press.

Cecez-Kecmanovic, D., Kautz, K. and Abrahall, R., (2014). Reframing Success and Failure of Information Systems: A Performative Perspective. Mis Quarterly, 38(2).

Cui, T., Ye, H.J., Teo, H.H. and Li, J., (2015). Information technology and open innovation: A strategic alignment perspective. Information & Management, 52(3), pp.348-358.

Davies, C.A. and Brown, G., (2014). Using design principles to deliver strategy in a new organisational structure. Statistical Journal of the IAOS, 30(4), pp.1-12.

Dwivedi, Y.K., Wastell, D., Laumer, S., Henriksen, H.Z., Myers, M.D., Bunker, D., Elbanna, A., Ravishankar, M.N. and Srivastava, S.C., (2015). Research on information systems failures and successes: Status update and future directions. Information Systems Frontiers, 17(1), pp.143-157.

Investopedia.com (2018) Organizational Structure Available at: https://www.investopedia.com/terms/o/organizational-structure.asp  [Accessed on 21 March 2018]

Ismail, N.A. and King, M., (2014). Factors influencing the alignment of accounting information systems in small and medium sized Malaysian manufacturing firms. Journal of Information Systems and Small Business, 1(1-2), pp.1-20.

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Pearlson, K.E., Saunders, C.S. and Galletta, D.F., (2016). Managing and Using Information Systems, Binder Ready Version: A Strategic Approach.United States:  John Wiley & Sons.

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