HI5019 Strategic Information System- Assignment 1 (T2)- Holmes Institute

Accounting Software in Qantas Airline

Table of Contents

The accounting system in Qantas Airlines Limited:

Introduction:

Part 1

1. The current organizational structure: 3
2. What operational problems (e.g., inefficiency, errors) do you think the organisation could experience because of this structure?. 4
3. What is the most likely system acquisition method— commercial software, custom software, or ERP? 5
4. Describes and prepare a system flowchart of the sales procedures for the chosen organisation (company)? 5
5. Identify any control problems in the system and what sorts of fraud are possible in this system? 6

Part 2: 7

1. Development and adoption of the accounting software packages: 7
2. The current market size: 7
3. Identify the leaders in the market and what gives them the competitive advantage: 8
4. Identify the current gaps or challenges encountered by users or customers of accounting software/packages: 9
5. Relevant suggestions or recommendations. 9

Conclusion: 10

References: 10

Introduction:

The Qantas airline is not only the oldest airlines in Australia but the third oldest still running airlines in the world. This airline started their operational activities in 1920 as domestic passenger airline and started their international services in 1935. This airline has retained their brand image for almost a century and still is considered to be one of the favourite airlines of the customers in Australia and across the globe. This report would focus on the accounting system utilised by the organization for executing and recording their financial and accounting transactions across domestic, international, cargo services and other subsidiary business services under their brand name.

Part 1:

1.    The current organizational structure:

In order to understand the organizational structure of Qantas airline, we need to understand their business operating products and their subsidiaries which execute their operations in association with Qantas Airline. Qantas airline provides domestic and international passenger services to the customers across the globe. They are also a part of the fleet services which would carry cargo and couriers from one destination to another. They also operate the express ground handling services for themselves as well as other small and regional airline services which cannot manage on their own.

The organizational structure of the airline is very complex in nature and decentralized. The decision-making authority is assigned to the respective managers and the top executives of the respective subsidiaries in order to ensure quick decision-making process is executed. The top management is responsible for the crucial and strategic decision-making for the airline; however, the managers are allowed to make their decision based on the situation. They follow a functional organizational structure separately for every subsidiary in order to maintain a clear and transparent delegation of responsibilities and authorities. This complex organizational structure leads sometimes to the delay in the decision-making process during some crucial time (Al-Mashari2003).

2.    What operational problems (e.g., inefficiency, errors) do you think the organisation could experience because of this structure?

The Qantas airline is executing different operational activities and needs to ensure that they are able to execute their activities with minimum error and maximum accuracy. There are various operational problems which the airline could encounter due to the structure would be primarily about the delay in the decision-making process. The airline market is very dynamic and the top management is responsible for the strategic decision-making process to be conducted. If the market provides an opportunity to adapt to new technology and there is the delay in the decision-making process than it would lead to inefficiency of the airline to benefit from the opportunity (Allahyari, 2012).

The complex structure could lead to miscommunication between the management and the ground level employees which could lead to delay in providing the services or service failure. For instance, if the booking team fails to identify that the airplane is full and overbooks the seats, and then there are high chances of the customer getting irritated due to service failure as he won’t be able to fly due to the wrong misrepresentation by the booking team.

3. What is the most likely system acquisition method— commercial software, custom software, or ERP?

When the organization has so many business activities and other operational activities associated with them, then the organization should prefer Enterprise Resource Planning (ERP) software which would be able to streamline all the business operations and provide on time information to all the associated and relevant departments and avoid any kind of disruption or inefficiency in performance. ERP system is the most suited system for Qantas airlines because this system would help the airline to maintain better database management and storage system than any other commercial software. It would help all the operational and other related departments to coordinate among themselves in relation to the requirements of the raw material, customer services, maintaining service and product quality.

ERP system has the efficiency to support the airline to perform the analytics on the customer behaviour and preference pattern and develop better products and services based on their requirements and expectations. ERP system would support to reduce the probability of occurrence of the number of errors since the information is transported to the respective departments in a timely manner with minimum defects (ASEAN Secretariat 2009)

4.    Describes and prepare a system flowchart of the sales procedures for the chosen organisation (company)?

The system flowchart of the Qantas airlines would begin with the development of the product and the target audience. In case of the passenger airlines, the target audience is the passengers who are willing to utilise the services of the airlines to fly from one destination to another destination. In this case, the sales procedure would begin with the inquiry by the customer about the services for the preferred destination and the associated complementary services and cost of the services. The sales executive would provide the details to the customer and pitch to convince them to utilise the services with offering possible discounts or attractive offers(Brazel2005).

Then the customer would purchase the services for the specific flight, at preferred time and destination and book the seat on the airplane. The customer has the option to book the ticket for the preferred flight through internet or third party vendor which is partners of the airline for providing the services to the customer. The fleet or freight sales procedure would be completely different from the regular passenger flowchart or sales procedure(Wei 2006).

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5.    Identify any control problems in the system and what sorts of fraud are possible in this system?

There are various problems related to the control system which the airline could encounter in the passenger airline services. The sales execute could make fake promises to the customer about the complimentary services which would damage the image of the airline. The automated online system for payment could commit fraud in case if it is not secure and the account details get leaked or hacked by professional hackers. The other possibility of fraud could be committed by the third party vendor in greed of increasing their sales revenue. They could charge more than the desired amount of the travel for the passenger who is in urgent need without letting the airlines know about the extra charges charged. The cashier at the counter could steal the cash collected during the particular day and make the false representation of the data in order to protect themselves from getting caught. The airline’s data is very crucial since it has details of the passengers and their modes of payments and account details which could be stolen or reused by the cashier for making payment for some other person without the information to the customer(Chung 2007).

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Part 2:

1.    Development and adoption of the accounting software packages:

The accounting software package should be able to record accurately all the details of the transactions in a systematic manner. It should be user-friendly for the employees in order to avoid or reduce the time taken by the employees to learn and get hands-on experience with the software. This accounting system should minimize the steps of recording the data and improve the efficiency of the employees and storage system of the data to ensure maximum information is stored at any given point of time. It should be able to provide the necessary information to any department without wastage of time and the retraction process of extracting information should be quick and secure(Spathis2004).

There is various accounting software available in the market but they cannot fulfill the requirement of the Qantas airline because of the complex process. This would require a proper ERP system which would support all the technological needs of the airline and minimize the possibilities of the occurrence of the errors in the accounting and cash flow of the airline. Due to the complex process, the airline cannot afford to implement different systems to satisfy their technological needs because they need to be compatible with each other and doesn’t cost extra for the airline(Davenport 1998).

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2.    The current market size:

With the development in the information technology and advancement in the information system, it has become mandatory for every small, medium and large organization to implement the different accounting system. The current players prevailing in the Australian market for small and medium-size organizations are MYOB, QuickBooks, Xero and Reckon One which is competing against each other to maintain their market share. Currently, MYOB has the maximum market share with more than 35 percent of the market followed by the QuickBooks, Reckon one and Xero which is gaining speed and occupying the market share away from the MYOB (Soja 2006)

The large organization cannot depend on the small accounting software and hence prefer big technology companies like Oracle, SAP business one, and IFS. These software vendors are known for providing best of the accounting and ERP solutions to their customers which could support the business functions and other operational activities in order to maintain their efficiency and improve their productivity(Federici 2009).

3.    Identify the leaders in the market and what gives them the competitive advantage:

The current leaders in the ERP and accounting software systems in the market are Oracle and SAP business one which lead the large-scale organizations. The small and medium scale organizations are currently ruled by MYOB and QuickBooks. The Oracle has the NetSuite software and the SAP S/4HANA are currently the most popular software in demand from the large-scale organizations. The Qantas airline is in the large-scale organization which has a complex organizational structure and requires accounting software which is flexible in nature and user-friendly(Shehab 2004).

NetSuite is popular due to its flexible nature wherein any employee could alter the fields in the software with correct access and authority. It doesn’t stick to the traditional method wherein the alteration can be made through specific IT guys or the system administrator. It is scalable and can provide the opportunity to make the addition to the modules or delete them when required. It is a complete ERP solution which could automate all the business operations and incorporate them into the single application. It provides the benefit of collaborating information from different subsidiary entities into one application and streamline and evaluate the performance of strategic decision-making process(Laudon 2012).

4.    Identify the current gaps or challenges encountered by users or customers of accounting software/packages:

There are many issues related to the customer booking that happens in three different locations. The booking can be done at the airport, through the internet and third-party vendor. This leads to mis-coordination between the employees and the service provider related to the actual capacity of the airplane and actual distribution of tickets and fulfilment of the seats. There has been the rise in complaints about the overbooking of the airplanes which cause a lot of trouble for the customers. There have been complaints about the payment portal not been supportive to particular windows model and doesn’t allow the payment to go through for the customer which leads to the loss of business for the airline(Peng 2009).

5.    Relevant suggestions or recommendations.

The new accounting software should be able to provide services more than just being the traditional software. The Qantas airline is one of the biggest airlines and it requires a very powerful but flexible software solution like NetSuite which should be able to fulfill the requirement of the airline and streamline their business operations in one single application. The requirement of Qantas airline is complex and vast which cannot be satisfied through small-scale accounting software like MYOB or QuickBooks which cater to small and medium scale companies. They require a software solution which could be more than just traditional accounting software and support the extensive business activities and complex structure(Prokopiev2006).

Conclusion:

The Qantas airline needs to identify their requirements before making the crucial decision of implementation of the new software system because it requires huge investments and time to yield the results which are even not visible directly in the books of accounts. The ERP solution would be beneficial for the airline to improve their efficiency and productivity and reduction the occurrence of the errors and make the process transparent and beneficial for all the departments and functions associated with the airline.

References:

Al-Mashari, M., 2003, “Enterprise resource planning: a taxonomy of critical factors”, European Journal of Operational Research, Vol. 146, pp. 352-364.

Allahyari, A., 2012, “Assessment of Effective Factors in ERP Acceptance: Case Study of Manufacturing and Service Companies (LME) of Iran,” Asian Journal on Quality, Vol. 13, No. 2, pp. 177-184.

ASEAN Secretariat, 2009, “ASEAN Political-Security Community Blueprint,” Jakarta. retrieved from http://www.asean.org/archive/5187-18.pdf.

Brazel, J., 2005, “A Measure of Perceived Auditor ERP Systems Expertise: Development, Assessment, and Uses,” Managerial Auditing Journal, Vol. 20, No. 6, pp. 619-631.

Chung, B., 2007, “An Analysis of Success and Failure Factors for ERP Systems in Engineering and Construction Firms,(Doctoral Dissertation) University of Maryland, College Park. Maryland, USA.

Davenport, T.,1998, “Putting the Enterprise into the Enterprise System,” Harvard Business Review, pp. 121-131.

Federici, T. 2009, “Factors influencing ERP outcomes in SMEs: a Post-introduction assessment,” Journal of Enterprise Information Management, Vol. 22, No. 1, pp. 81-98.

Laudon, K., 2012, Management Information Systems: Managing the Digital Firm, 12th Ed. New Jersey: Pearson.

Peng, G.,2009, “Identification and Assessment of Risks Associated with ERP post-implementation in China,” Journal of Enterprise Information Management, Vol. 22, No. 5, pp. 587-614.

Prokopiev, S., 2006, “An Empirical Investigation of Factors Affecting ERP Impact,” Managing Information in the Digital Economy: Issues & Solutions, pp. 415-423.

Shehab, E., 2004, “Enterprise Resource Planning, An Integrative Review,” Business Process Management Journal, Vol. 10, No. 4, pp. 359-386.

Soja, P., 2006, “Success factors in ERP systems implementations, Lesson from Practice,” Journal of Enterprise Information Management, Vol. 19, No. 4, pp. 418-433.

Spathis, C., 2004, “Enterprise resource planning systems’ impact on accounting processes” Business Process Management Journal, Vol. 10, No. 2, pp. 234-247.

Wei, C.,2006, “An ERP Performance Measurement Framework using a Fuzzy Integral Approach” Journal of Manufacturing Technology Management, Vol. 19, No. 5, pp. 607-626.

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