Organizational Analysis of Austral Fisheries Samples for Student

Question: Discuss about the Organizational Analysis of Austral Fisheries. Answer: Introduction This case study starts with the organizational analysis of Austral Fisheries. Austral Fisheries is the Australias leading fishing firm, founded in 1981, that catches fishes and prawns and does seafood trading in domestic market as well as international. With the tremendous growth in last few years, it also needed IT (Information technology) systems that can support the growth of the business and sustains the 24/7 operations. Austral fisheries major domestic customers are Woolworths, Coles and other retailers. Though the company has good processes and maintains inventory but still often there is stock-outs at retailers thus reducing the revenue. According to Greg Johnston, CFO at Austral fisheries, often orders are promised to customers only to find out that there are no stocks and systems was reflecting inaccurate results (https://www.australfisheries.com.au/) Apart from discussing the challenges faced by the Austral fisheries domestic and export market, this paper will also discusses about the how the accounting software Industry is booming, who all the major players and how even the small scale companies are showing their interest to implement accounting software has turnaround days for software companies. Lastly, this paper will recommend the software to Austral fisheries to improve their processes and increase the revenue and also supports the recommendation. Austral Fisheries Analysis Current organizational structure Austral fisheries have segregated its operations based on its 3 business lines. Its 3 business lines are Toothfish operation, Prawn operation and seafood solutions are directly headed by the CEO of the company (https://www.australfisheries.com.au/ ). Each business line operated independently with its own head who is responsible for all the major operations and decisions. Finance dependent is common for all and reports to CEO. Figure 1: Organization Structure Operational problems (e.g., inefficiency, errors) Seafood trading is one such business which requires conducting business on the spot due to the nature of the business and perishability of some of the items unless they are stored using preservative. This is both the advantage as well as disadvantage of this business. Sales process took place immediately which is the biggest disadvantage. Another is sometime you do not get the sufficient time to check the credit limits of customers and other important things because they are stored in the Information systems which can be accessed only when salesperson is in the premise (Brooks, Schirmer, Pascoe, Triantafillos, Jebreen, Cannard, Dichmont, 2015). As a result, sometimes customers that were put on hold were sold the material that increase risk of getting money back. Sometimes, material is left on the docks and it took time to update its quantity and valuation in the system. As lot of labor people are involved, there is often theft in small quantities. Thus, there is theft and no accuracy in inventory counting these are few of the biggest operational issue at Austral fisheries. As the business transactions actually happens at the sea cost and software systems works in the premise, it is difficult for the sales team to provide appropriate sales order copy to their customers. Sometimes, data entry is missed and sometimes it is duplicated. Also, the sales people sometimes do not have the very good knowledge about pricing of different SKUs and this also results in the loss as there are huge numbers of SKUs in this industry. Acquisition method commercial software, custom software, or ERP The most basic requirement for the Austral fisheries is the ability to host their IT systems on a cloud or search for a similar vendor as their businesses happens in a real time basis near seas and they need their sales people to access to IT systems over their smart devices outside of the premises. Apart from it, their IT systems should also have modules and functionalities like Order Management for sales order, finance, inventory, inventory planning systems that can calculate the expected promised date to customers based on the lead time of the products they ordered. Custom software will be too complicated for them as IT is not the core competency and it is still treated like an overhead though it is not so (Jalil, Bakar, 2017). Also, as there business processes are quite standard, they should go for commercial software like MYOB cloud version, Xero clouds version, SYSPRO based on their requirements. Full fledge ERP is not required at this time since it will be too expensive and i s suitable for companies that have facilities across the world. Flowchart of the sales procedures Austral fisheries take orders from distributors and sometimes on the spots also at the sea shore. Its sales representative promises a date to its customers based on their experiences and books sales order in the system. The demand is very seasonal in this industry and some categories of the fish available during only few months and some varieties are just available for 1, 2 months in a year. For example, banana prawns are catch only in May and April months. Thus, the most critical part of sales procedure at Austral fisheries is that its order promising should be very accurate because if particular variety is sold already, then it will take another 9, 10 months for the company to replenish the order of the same variety and this huge timeline is quite unrealistic and unacceptable which results in the loss of the customers (Mangi, Dolder, Catchpole, Rodmell, Rozarieux, 2015). Thus, the organization should be conservative in its order booking and at the same time not become too much con servative that it has to sell the extra inventory at a discounted price later on. Once the sales order is booked, it ships the materials to its customers and updates the account receivables. Once revenue is received, entire transaction is transferred from subledger to general ledger. Due to the nature of the products, it sells standard products but it cannot plan its supplies because supplies vary highly from season to season on many external factors like weather conditions. Figure 2: Sales Slow Control problems and frauds possible in current system Below are the various control problems at Austral Fisheries: Sales representatives do not have access to company information systems at the shores and find it difficult to promise orders and sometimes this loss of control and inability to replenish orders on time can lead to poor reputation among its customers. As there are 3 business lines in the systems, both are using the same IT systems and there is no segregation or functional security built in the system which can lead to various issues and access of inappropriate data by unauthorized personnel (Kitchin, Lauriault, McArdle, 2015). As the IT systems are not designed to capture various key performance indicators like inventory turnover ratio, load ratio, on-time delivery, it become difficult for the management to gauge their existing performance and setting up the benchmarks. Effective dashboard is required to capture the performance and improve the same. Revenue recognition, financial entries, accounting conciliation happens manually and there is probability of human errors. Also, there is no control in the system by which accounts manipulation can be prevented and hence system can be misused (Ng, Harrison, Akroyd, 2013). Accounting software Analysis Evolution of the accounting software packages Computers are being used in finance and accounts since 1960s however the first such program designed particularly for finance accounting is Quicken in 1983 which was developed by Intuit. Today, it has grown to much larger products that offers entire interrelated suite consisting of Inventory management, purchasing management, sales order management and distribution modules and came to known as Quickbooks. In 1983, one another software was developed which was brought by MYOB in 1999. This then become the best selling software for accounting purposes and one of the best even today specially in finance functionalities like GST, reconciliation automation, Taxation (https://www.myob.com/au) . With time, several other software like SYSPRO , XERO also appeared in the market. Each such software has different specialty. While one is good in offering ease of integration with 3rd party software, others provided much better functionalities. Austral fisheries first requirement is to have systems on Cloud. Though MYOB is a leader in accounting software on premise, Xero is the leader in providing cloud services. Thus, Xero will be the best software for Austral fisheries and also it has wider capabilities like sales order management, payroll management, and inventory handling which is very much aligned to the need of the Austral fisheries. The current market size This is the age of digital revolution and change. There are some basic rules for surviving in this fast paced world where customer is demanding like never before due to intense competition and good IT systems to handle customer effectively is one of such rule. With this revolution, there is huge potential in the Australia as currently also there are many small scale enterprise who has resistance to change and still using legacy systems (Timotheou, Riordan, 2014). The market size of this industry in around $20 billion (https://www.ibisworld.com.au ) and is expected to rise in coming years. Demand for cloud will be increasing and that of on premise will decrease. Leaders in the market and their competitive advantage There are 2 leaders in the market currently among numerous players. MYOB is the oldest player and thus has very good penetration in the market buts its drawback is that it has focused more on its on-premise software package which is quite expensive but now a days organization are moving towards Cloud which is very advantageous for Xero which is the largest provider of accounting software on cloud. In last 2 years, the growth rate of the Xeros business is larger than that of MYOB but MYOB is commanding good market share due to first mover advantage. MYOB also has started offering its products on cloud and will give competition to Xero in this space. Current gaps or challenges encountered customers of accounting software/packages and recommendations Current accounting systems has many gaps and unable to fulfill the requirements at Austral fisheries. Current system is deployed on the premise which makes it impossible to access the system for sales representatives when they are outside the office facility and access real time information about the inventory, lead time. If we consider this and other requirements at Austral fisheries, MYOB exo and Xero will be the 2 closest choices as both of them offers inventory management and planning modules, sales order management, available to promise features. However, on further analysis, Xero would be the better choice because it is highly configurable (Parthasarathy, Sharma, 2016) and as the business model of Austral fisheries is not very similar to standard manufacturing companies, it is possible that it faces new requirements in the future and requires customization. Xero also has excellence integration with 3rd party and bolt-on (https://www.xero.com/au/) and it is also known for this feature in the entire industry. It also possesses excellent testimonials and list of satisfied customers. Also, in a nutshell, it can be said that each accounting software is designed keeping some requirements in mind while ignoring some other requirements, each has its areas of strength and weaknesses and the organization should select the one which it finds suitable and closely aligned with its business processes. Conclusion This paper talks about the evolution of finance accounting software packages in Australia. Digital revolution which was in nascent stages couple of decades back has now achieved new heights and more and more companies are automating and streamlining their systems by using software and that too on cloud. It also talks about the size of the industry, current leader in the industry and fastest growing player in the industry. It also discusses the case of Austral Fisheries in details and comes up with a recommendation of Xero software for streamlining their IT operations and saves the costs and solves issues. References Brooks, K., Schirmer, J., Pascoe, S., Triantafillos, L., Jebreen, E., Cannard, T., Dichmont, C. M. (2015). Selecting and assessing social objectives for Australian fisheries management.Marine Policy,53, 111-122. Jalil, D., Bakar, M. S. A. (2017). Adapting Software Factory Approach into Cloud ERP Production Model.International Journal of Computer Science and Information Security,15(1), 221. Kitchin, R., Lauriault, T. P., McArdle, G. (2015). Knowing and governing cities through urban indicators, city benchmarking and real-time dashboards.Regional Studies, Regional Science,2(1), 6-28. Mangi, S. C., Dolder, P. J., Catchpole, T. L., Rodmell, D., Rozarieux, N. (2015). Approaches to fully documented fisheries: practical issues and stakeholder perceptions.Fish and Fisheries,16(3), 426-452. Ng, F., A. Harrison, J., Akroyd, C. (2013). A revenue management perspective of management accounting practice in small businesses.Meditari Accountancy Research,21(2), 92-116. Parthasarathy, S., Sharma, S. (2016). Impact of customization over software quality in ERP projects: an empirical study.Software Quality Journal, 1-18. Timotheou, S., Riordan, B. (2014). Our IT survey shows wine industry still has a way to go.Australian and New Zealand Grapegrower and Winemaker, (601), 87.