Computer-Based Software Used by Adairs Limited Assessment Answer
Accounting information system (AIS) is broadly defined as a structure used by the businesses for the collection of the accounting data and to manage it. The management of the data is crucial because this data is used by the company and investors to make future investment decision (Hla and Teru, 2015). AIS is a computer-based system developed to eliminate the errors that usually occur in manual system. It is used by the organization in the current market so that the companies can compare themselves with other organizations and can make decisions for better performance and profitability. The report describes what type of computer-based software can be used by the client company Adairs Limited, a retail enterprise for betterment of the organization. The cloud-based software are commonly used by the companies to gain a competitive advantage. Therefore, the company evaluates the features of the software so that are needed in the company. In doing so, the report compares the available software first and them the best suited software is suggested to the client company.
Overview of the company/expenditure cycle/weak internal controls
Adairs Limited is an Australia based retailer of homewares, furniture, beddings, and linen. The company is a leading firm in the sector and it owns about 100 stores in Australia. The team of the company is knowledgeable and skilled thus the company is preferred in the market. The commencement of the trade by the company was in 1918 in Victoria and ever since then, it has been recognized as amongst the leading companies (annual report, 2019). Until 1980, the company appeared as a mini department store but after 1981, it opened its boutique and started spreading after it. The company have started investing in the computer software to align its expenditure cycles.
Internal controls of the company are somewhere found lacking due to which it has faced several risks such as loss of shareholders. The company is determined to implement a new computer-based software so that shareholder trust can be gained and the company can improve its profitability. The internal controls of the company have also experienced slight weakness in the cash outflow as the cash flow for the financial activities in the company has observed an increase. The online distribution channel has been established to reach more customers in the international market. However, the supply chain management of the company still lacks at places. The online channel for distribution of the products is not yet well developed and needs a lot of working. The macro environment is another factor that is currently out of the control thus it requires a better and profound accounting information system to eradicate the weaknesses of the internal controls. The business activities also faced reduction due to which a loss of 7.9% was made by the company in the final year 2017.
Weak internal controls can increase the probability of fraudulent activities because the management fails to observe their occurrence. The strengthening of the internal controls is important to control the loss of the revenue (Retail, 2019). A software system would help the company to take collective decisions before jumping to the conclusions in terms of the investments. Moreover, the competition is at souring heights and the risks can further reduce the tendency of the companies to run efficiently. Therefore, a proper software tools is needed that can assess and evaluate the weaknesses in the internal controls and can provide proper data to the investors.
Software features and functionalities to be considered
The retail sector is dependent on the cloud computing because it enables them to access the real time data at any given time. This access to the departmental data can improve the effectiveness of the company, reduce the expanses and helps them to take better business related decisions. Cloud computing manifest a number of features that the client company can select from them for the betterment of the company (Wu et al, 2015).
- Supply chain management: SCM is a huge process starting from the production of the goods and services and ending after the product is supplied to the customers. Decisions for the raw material, processes involved in productions, skills, etc. are important to be strictly observed by the management. The company was earlier supplying the products through offline physical stores. However, it has initiated the online distribution channel for the supply of the products in the market and to the customers. Therefore, the need of the cloud computing has felt. The software help in supply chain management by keeping a detailed documentation of the number of products sold, product that are not sold and the cost incurred in the processes such as for obtaining raw material etc. are tracked by the software. Therefore, Adairs would be needing this feature of the software in the company.
- Track customer preferences: the cloud computing software uses the information of the customers to improve their experience on either distribution channels. To improve their experience, their feedbacks are collected and they are used to make decisions. The computer-based software track the insight of the customers for the products and that is utilized by the company to improve their services, sales and support. The in-store and the online experience of the customers matter therefore, a computer-based is necessary to be implemented.
- Merchandising and marketing decisions: the computer-based software collect the information of the likes and dislikes of the consumers provided in the form of reviews. This data is used to improve the merchandising process as well as the marketing decisions are also strategized. The client company have made loss in the investment activities thus it seems that the company would lag behind if it fails to adopt an efficient software for data collection. The company can develop products based on the needs and requirements of the people. Therefore, it would be beneficial for it to adopt the system.
- Track real time data: real time data such as the availability of the resources, current inventories and the supply demands in the market can be identified with the help of the computer-based software. The client company can use this data to improve its production and to prevent the loss of the data.
- Inventory and monetary management: the management process of the inventories is as important as the development process. The availability of the product can be easily identified from the computer-based data. The exact amount of the product formed and the number that is sold, all the data is in front of the manager. Therefore, the possibility of the fraudulent activities reduce remarkably. The overstock or understock of the product is needed to be assessed so that a shortage of the product does not occur. Similarly, the monetary management is also important so that the staff cannot involve in the deceiving activities and thus a lot of loss can be prevented by the client company. The manual process of accounting is not very effective in such a large size company thus, accounting system is necessary.
- Customer relationship management: CRM enables the company to focus on the trends and behavior of the consumer to understand them better and to make reliable decisions for the long-term. The software would shows sales history, personal information of the customers to make them aware of the updates of the new inventories or new practices. This will help the company to get in touch with the feedbacks of the customers directly.
All these needs of the organizations can be addressed by the use of the computer-based software. Therefore, Adairs can look for a beneficial and suitable computer-based software because they provide above spoken features which are greatly helpful for the company.
Selection of the suitable software
The need of the computer-based software have been realized by the organization to increase the profitability of the company. To increase the profit margin, the company has to look into controlling the finances and to invest strategically in the market. The investors will only shift their attraction towards the client company if it has reliable financial resources (Schmidtler et al, 2019). To provide the companies with required computer-based software, the software companies have started developing such software so that they can use them for different processes such as to strengthen the internal controls or to improvise the supply chain management and the customer relationship management (Liu, Accenture Global Services Ltd, 2015). Therefore, a comparison has been carried out among various computer-based software and the vendors who are developing them.
Vendors and their software
Oracle software: oracle software is a multinational corporation in information technology and deliver develop cloud-based software for the organizations. The software developed by the company are highly efficient and covers a wide range of areas such as supply chain management, customer relationship management, enterprise resource planning and so on (Hani, Paputungan and Hassan, 2015). All these features provided by the corporation are needed by the client company to take coherent decisions and to for betterment of the accounting system. The product and services delivered by the company include complementary training and consulting to the clients. Oracle database is the software provided by the company that assures effective provision for the management of the data and additional benefits to strengthen the internal controls.
SAP SE: the company belongs to an information technology background that develops software for development of the business operations. The organization develop and provide the clients with a wide range for software so that they can acquire better market opportunities for the growth of the company (Raja et al, 2015). The products of the company are highly dependable because it has partnered with other IT firms to expand the opportunities such as Adobe, OpenText and so on. Apart from it, the company has efficiency similar to the Oracle software thus they both are effective to be used by the client. The vendors provide better vendor management and software to be used to enhance and expand the growth opportunities.
Comparison between the software
There are wide range of software that are available to be used by the company to enhance its business operations and to strengthen the internal controls. The information technology firms develop these software so that they can have a better control over the operations and the finances thus better and logical decisions can be taken. To identify the best among the available software, a comparison has been carried out below between Oracle database and SAP SE.
SAP and Oracle, both provide the software with special features such as accounting, budgeting, pricing, human resources, CRM, SCM and inventory management. However, the efficiency provided by both the software varies in providing these features.
The ERP system of both the corporations manifest outstanding financial management to control the expenses of the company. The fixed asset management, accounts receivable and accounts payable, all these features work greatly for both the software. However, the Oracle database outgrow the efficiencies than the SAP SE. The major reason that SAP SE lags behind is that Oracle database manages the risk better than SAP SE can (Buehl, SAP SE, 2015). Oracle database ensures automation of several compliances which is not a feature of SAP SE. This tendency of the Oracle database prevents cash leakage and ensures better policy enforcements by the company that leverage better risk managements. However, the risk management of SAP SE is slightly lagging but it is also considerable for business operation management.
Budgeting is provided by both the software but Oracle provides significantly better budgeting when compared to the SAP SE software. The budgeting of SAP software is basic and manages general planning (Elbahr et al, 2019). Contrastingly, Oracle helps in realizing the financial potential of the facilities such as equipment with the assistance of the ‘Asset Lifecycle Management’. Unlike SAP SE, Oracle database manage the handling of typical needs for business budgeting.
Oracle database does pricing for the companies better then SAP SE could. It change the company’s base price to match the exchange rates, market segment and so on. On the other hand, SAP SE simply does normal pricing for the company. Therefore, here also Oracle database outscored SAP SE.
- Human resources
Human resource management feature is good in both the software however, the SAP SE software is better than the features delivered by the Oracle database. The internal users of the company can manage plethora of the functions of HR at single platform. The software is accessible for the employees thus they can update their part of information in the software. This software help the company for several other things such as payrolls and e-recruitments. Contrarily, the reporting in the Oracle database is effective but not as robust as in SAP SE. This can help the company to make HR decisions that are solely based on the data. The data showcased by Oracle database is easy-to-visualize therefore, Oracle is not a bad choice.
- Customer relationship management
in the CRM, both the software are satisfactorily appropriate. Oracle database is not perfect for any type activity. Similarly, SAP SE have general features while some are extraordinarily excellent. The marketing support to the companies is best provided by the Oracle database where SAP SE is normal. However, the CAM feature of Oracle is just normal but SAP excels and outscores Oracle database (Lahiri et al, 2015). SAP SE helps better in knowing the customers which is important to increase the profitability. However, oracle is also fine to be used here.
- Supply chain management
The help provided by both the software is excellent at different levels to make SCM efficient. The distribution channels management is effective in both the software such as processing of the purchase orders. The management of the purchase through SAP SE is done by a module named as procure to pay (HANA, 2016). Unlike SAP, Oracle contains a different processing module for the management and it includes thins such as contract creation, supplier registration, invoice payment and so on. Therefore, bot the software are effective to be used in this case.
- Inventory management
To maintain the supply chain of the company and to determine the warehouse capacity, inventory management is another important feature for which companies invest in the computer-based software. SAP SE and Oracle software, both are competitive in this feature because both are equally attractive as they deliver better control on the inventories of the companies. The real time information of the inventory is delivered by both the software and provide better understanding of how the goods and services move in the organization and out of it. A better control on the inventories help in cooking healthy relations with the customers as transparency is maintained with them (Gellaw, 2016). SAP SE in the inventory management stress on the prevention of stock shortage while Oracle database emphasizes on the boosted productivity of the company.
Best suited software
The comparison derived between two different computer-based software for the effective management in the company of the various resources. The issues identified in the company were that the supply chain management of the company is not very effective as it has recently started investing in the online channel of distribution of the goods and services. Apart from this, the company has experienced an increase in the financial loss in the year 2019. Therefore, the company is in the need of a computer-based software that can assist in evaluating the accounts to make coherent decisions for the investments based on the financial data. The comparison between SAP SE and Oracle database, software that are delivered by the vendors SAP corporations and Oracle corporations respectively showed that both the software are having a neck-to-neck competition (Raja et al, 2015). Both of them are highly effective in delivering best services to their clients. However, a distinction is identified where Oracle database is more likely to be effective than SAP SE in the case of the Adairs Limited. The reason is that however, the supply chain management of both the software is equal and effective but the budgeting, accounting and pricing are the features that are best delivered by the Oracle database. The company has faced increased loss in the financial resources that can occur due to a weaker internal control. Therefore, it would be beneficial for the company to invest in the Oracle database as a computer-based software to strengthen the internal control and to manage the supply chain management along with the CRM and inventory management. SAP SE does not lack much behind Oracle databases but the features required by the client company are best provided by Oracle database. Therefore, the suitable database for the client company would be Oracle database.
The selected computer-based software provide other advantages that would help in creation of the competitive advantage for the client company. The advantages are (Das et al, 2015):
- Market presence
- Version change
- Backup and recovery
- Cursor support
- SQL dialect
- Multiple database support
- Declarative integrity
All these features are effective to be used for the client company to increase the productivity and the performance of the company.
The cloud-based software are mostly used in the companies to strategize the decisions for the sustainability. It can be concluded from the report that the internal controls of the client company are not very strong and it leads to the loss of the financial data. Apart from it, the company has ineffective online distribution channel because it was recently implemented in the company. Therefore, the company has decided to implement a software tool to improve the decisions. It can be concluded from the comparison between the SAP SE and Oracle software that the latter is more effective in the case of the client company to enhance the productivity and to achieve a competitive edge.