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Table of Content

• Introduction
• Part 1
  • Organizational structure of Coles, Australia
  • Operational problems encountered in Coles, Australia
  • Systems acquisition method adopted by Coles, Australia
  • Sales procedure of Coles, Australia
  • Control problems and potential frauds to be encountered by Coles, Australia
• Part 2
  • Development and adoption of the accounting software packages
  • Current market size of accounting software packages
  • Competitive advantages of the market leaders of accounting software packages
  • Challenges encountered by consumers of accounting software/packages
• Conclusion
• Reference

Introduction

The requirement of managing a number of operational processes in large scale organizations has necessitated the implementations of various accounting software programmes that aid in controlling the different operational processes effectively. The Australian retail organization of Coles is a renowned supermarket chain of the country that is owned by Wesfarmers. The large scale operations of Coles require managing of 100,000 employees and various daily processes comprising of purchase of raw materials, inventory management, delivery of items, sales, marketing, etc. that can efficiently handled through the quick operations of the accounting software implemented within the organization.

The following literature will discuss about various aspects of operations of Coles supermarket Australia and the ERP system that help in controlling different core business processes of the organization. It will also provide a detailed overview about the accounting software packages popular in Australia along with the competitive advantages of the market leaders of the accounting software. It will also analyse the various challenges encountered by the customers using such accounting software and provide recommendations for further improvements of such software. The researcher has conducted in depth research of various scholarly articles and journals for gathering information for enriching the literature.

Part 1

Organizational structure of Coles, Australia

The renowned retail organization of Coles Supermarkets Australia Pty Ltd. was established in 1914 by George Coles in Collingwood, Melbourne that currently operates 776 supermarket outlets throughout the country. Currently operating through its Online shopping portal under the title of ‘Coles Online’, the organization has been operating through a number divisions and departments that are entitled to manage respective works allotted to them. Thus Coles follow a hierarchical structure where the employees work as per the orders provided by the senior officials or managers. The power of decision-making remains in the hands of the CEO, John Durkan who delegates further orders to the CFO, Convenience and fuel department, Coles brands, merchandise, retail and supply chain and marketing and property sections. The dissemination of orders in such a hierarchical structure follows a top-down approach as the orders are delegated from senior authority to the subordinates (Ashkenas et al, 2015).

This kind of structure helps the retail organization to efficiently monitor the different types of operational processes and therefore contributes to the proper availability of resources and manufactured items necessary for catering the needs of the consumers (Magee and Galinsky, 2008).

Operational problems encountered in Coles, Australia

According to Magee and Galinsky, (2008), the hierarchical structure helps in determining the clarity of authority and responsibilities regarding each department of work. However this type of structure can pose several problems to a large scale organization like Coles. As Thompson and McHugh, (2009), states, that hierarchical structure limits the communication within the employees by developing clear boundaries of communication between different departments. As a result of this the employees are restricted from collaborating and share information throughout various departments of the reporting structure. Harper, (2015), supports the view by stating that this structure often results into development of groups, which again compete for power.  These impact on the productivity of the organization.  As Mihm et al, (2010), opines that lack of coordination and collaboration between the employees will affect the operational processes and the overall decision-making phenomena. On the other hand Diefenbach and Sillince, (2011), points out that the hierarchical structure restricts the employees from expressing their innovative ideas, regarding production and sales of items, with the management of the company since the decision-making power rests solely on the topmost executive. This again impacts on the overall profitability and growth of a business.

Systems acquisition method adopted by Coles, Australia

Coles is a large scale organization in Australia that requires a varied range of operational processes to be handled efficiently for the proper functioning of the company. Therefore Enterprise Resource Planning or ERP software will be the most suitable acquired systems for the organization that will help Coles in product planning, purchase of raw materials, control the inventory storage, distribution of the manufactured products, accounting, marketing, HR, finance control, etc. Magal and Word, (2011), opines that while some ERP packages can only control two functions of an organization, like Quick Books, etc. most of them are capable of handling multiple functions. An ideal ERP according to Nour and Mouakket, (2013), comprises of one single database containing data and information for different ERP software modules. The modules include the following:

• Financial: It manages the payable accounts, receivable accounts, general ledger, cash flow, etc.
• Manufacturing: It includes functions like workflow management, manufacturing processes, quality control, managing of bills, etc.
• Human Resources: It organizes the payroll, training, attendance, benefits, etc. of the employees.
• Supply Chain Management: It monitors the inventory, suppliers, planning of supply chain, managing orders, purchase, etc.
• Customer relationship Management (CRM): This software is used for supporting the customer services processes, storage information, etc.

Therefore the implementation of ERP software will help the retail organization to efficiently manage various operational functions that will contribute to the availability of preferred items and achieving greater customer satisfaction.

Sales procedure of Coles, Australia

The retail organization of Coles, Australia caters to the needs of a wide variety of products of the Australian population including baby products, bakery items, dairy products, fruits, vegetables, meat, liquor, gift cards, etc. For the regular availability of all the necessary items at the retail outlets the organization has to monitor a strict procedure of sales. In order to procure the required items the organization has to purchase the same from the range of suppliers by negotiating the price of the articles. After that as Arnold et al, (2009), opines, the purchased goods need to be stocked safely in the warehouse by distinguishing the perishable and non-perishable items. The stocks need to be monitored regularly for effective refilling of the drained items (Oke and Gopalakrishnan, 2009). The goods are then transferred to the various retail outlets of the country as per the demand of those outlets. Once available at the retail stores the products are displayed to the customers who purchase the selected items in exchange of money. Thus the entire process of sales gets accomplished in Coles, Australia.

Fig2. Sales procedure in Coles, Australia (Source: Self-created)

Control problems and potential frauds to be encountered by Coles, Australia

According to Piotrowicz and Cuthbertson, (2014), monitoring and control of various operational processes is extremely essential for conducting the business of a large scale organization. Since Coles operates at a huge scale in the retail market of Australia, therefore there are various scopes of frauds or control problems that can be encountered by the company. Since the organization supplies a variety of items as per the demands of the customers, therefore it needs to stock a large amount of reserve in the warehouse for meeting the demands of the different retail outlets. However due to lack of effective monitoring of the stocks, there can be a potential leakage from the inventory causing loss to the organization’s revenue. Apart from this the effective supervision of various reserved items of the warehouse is essential for segregating the items into perishable and non-perishable items. The perishable items according to Oke and Gopalakrishnan, (2009), must be purchased in limited quantity at a time and stored with the help of proper infrastructure and technology that will aid in retaining the quality of the edible products like meat, fish, vegetables, etc. Therefore lack of control will result in the damage or wastage of perishable items in the warehouse. Monetary frauds can also result in the billing department in absence of daily maintenance of accounts.

Part 2

Development and adoption of the accounting software packages

Since its inception in 1978, the accounting software packages have encountered several developments and changes due to the advanced technological inventions. There are different kinds of accounting software that are acquired by organizations depending on their scale of operations and the number of operational functions it has to handle. As Fakieh eta al, (2014), opines, the rate of acquisition of accounting software amounts to around 90% in the large scale business organizations, whereas the adoption of accounting software in SMEs is only about 30%. The accounting software packages implemented in the large scale organizations are different from those adopted by the small or medium sized organizations since the former has to control various operational functions such as HR, CRM, accounting, marketing, etc. as compared to that of the SMEs. As per the study of Alismaili et al, (2016), the accounting software packages contribute to the development of productivity and easy management of the organization than the utilization of manual labour.

Current market size of accounting software packages

Many small scale organizations of Australia have implemented the accounting software that functions through the cloud technology (Al-Isma’ili et al, 2016). This has provided them a leading position than the small scale organizations functioning in other countries. Accounting software like MYOB, Reckon, Xero, etc. are dominating the Australian market with MYOB being the leading accounting software to be used by the small and medium organizations of Australia for its simple mode of action. According to Armstrong et al, (2010), MYOB occupies of about 70% of the accounting software market in Australia followed by Xero and Reckon. According to several researches, XERO, the second largest accounting software used in Australia is implemented by 500,000 subscribers. However Reckon is more popular among the accountants and book-keepers of the country offering the feature of cloud accounting. As per a study conducted on 1622 SMEs throughout the world, 14% of Australian small scale enterprises are using the advanced feature of cloud computing for controlling various processes.

Fig3. Market share of accounting software in Australia (Source: businessinsider.com.au)

Competitive advantages of the market leaders of accounting software packages

The accounting software helps in streamlining the business operations especially the management of financial operations. Due to the different needs of various business organizations a range of accounting software have been developed that has elevated the market competition to a great extent.

The popularity of the accounting software varies from one country to another depending on the type and needs of the business organizations of the particular country. However the accounting software market of Australia is dominated by majorly MYOB, XERO and Reckon that are mostly utilised by the SMEs. According to the research of Hossack, (2015), the user friendly operations of MYOB along with its adaptability of GST and VAT calculations has made this the most popular accounting software of the GST country of Australia. The SMEs can easily monitor the GST output tax, input tax duty, etc. by the adoption of this software. On the other hand the implementation of XERO offers in the invoicing facility to the SMEs. However the cloud computing feature that is very popular among the SMEs is available in the Reckon accounting software (Curtis et al, 2014). Therefore these unique facilities and features provided by the accounting software have resulted in their profuse implementation and usage among the Australian SMEs.

Challenges encountered by consumers of accounting software/packages

Though the adoption of accounting software is intended for simplifying the procedure of record keeping, however several challenges are encountered by customers after the implementation of the software in their business systems. For instance as the study of Hossack, (2015), reveals that customers have encountered difficulty in accessing the interface of MYOB resulting in the adoption of ineffective and time consuming manual documentations. Moreover the enhanced online fraudulent activities have threatened the security of information stored through the cloud computing technology and access to the control panels.

However in order to combat the challenges, the software should be provided with enough security checks and implemented through a planned installation process. Moreover the design of the software should be configured in accordance with the assignments.

Conclusion

From the above analysis it is evident that the accounting software packages have become an integral part of the SMEs of Australia. However the large scale organizations like Coles supermarket chain has also availed accounting software packages for managing various operational processes and monitoring the various monetary and other records of the organizations. Though the software are implemented for controlling the documentation process in an organized manner, there are several challenges that are faced by the customers after the implementation of the accounting software in their business systems.

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