Strategic Information System Bad Cloud Management

Question: Describe about the Strategic Information System for Bad Cloud Management. Answer: Introduction Accounting information systems has a key role in determining success for a firm, as it is utilized in various computations(Robinson 2012). Business transactions and deals are recorded on a day-to-day basis by use of accounting software packages. An Australian business makes use of several accounting packages for their computational needs and in order to adhere to International norms submission needs. Australian Accounting Standards Boards (AASB) lays down that every business needs to submit their Books of Accounts and adhere to the principles laid down in the guidelines(Khaneja 2015). The report is a comprehensive literature review on the various accounting software packages that are used in Australia. The most prominent amongst the various packages used that has been analyzed is Xero. The total size of the accounting software packages market in the country and the competitive advantage Xero has over other accounting software packages. Though the Australian market is very promising i n terms of markets for accounting software packages yet certain framework within the packages is hindering the growth for the market itself. The challenges faced by Xero in the markets of Australia have also been highlighted in the study. At the end of the report several recommendations for Xero has been developed that it can apply in order to overcome its current challenges. Literature Review Businesses in Australia were using primarily paper based accounting systems prior to the year 2000. Post introduction of GST made it relevant to use accounting software packages in order to compute data. Increase in number of transactions made it difficult to compute data. Business Activity Statement (BAS) further added to the work load in computing such high volume in data. The prominent accounting software packages that are available in Australia are QuickBooks Online, Reckon, Xero, MYOB, MoneyWork Express and so on. The usage of accounting software packages has greatly reduced computing time, included flexibility and added to speed of computing. The current literature review has been built around Xero software amongst all the alternatives available. Smith (2015) provided a comprehensive outlook on the Xero accounting software package. Xero is primary developed by a New-Zealand based software company in 2006, that develops cloud-based accounting software packages for small and medium sized businesses(Smith 2015). Xero was founded by Rod Drury along with help from his personal accountant. The software was developed to overcome the shortfalls and problems of traditional accounting packages. Rod Drury is the current CEO of the company and Chris Liddell is the Chairman. The companys headquarters is located at Wellington in New Zealand. The product is wholly based on software as a service (SaaS) model. The company has around 1450 employees as of 2016 and its current revenue is NZD $ 207 million(Vasilchenko 2011). The product is sold according to subscription on type and number of company entities, and is actively managed by the subscriber(Drury 2015). Figure 1 : Xero Company Logo Source : (Vasilchenko 2011) Xero was first open for public subscription in the New Zealand Stock Exchange in the year 2007, with an IPO of NZD$15 million. Xero is used in New Zealand, Australia, United States and several other markets in the world. The production is adopted in various business and world markets. The ease of using the products results in its wide spread adoptability. Howard (2012) highlighted that, Xero has been awarded by Forbes as being The Most Innovative Company, in consecutive years of 2014 and 2015. Xero has also received an award for being Overall Partner Solution of the Year for Small Business. Xero received two Webby Awards in 2009 along with Peoples Choice award for Banking/Bill Pay. It is also recipient of Fast Company Innovation by Design Award in the year 2012. The company was named one of Macworlds recommended online business accounting apps. Xero was crowned as the best accounting software in Cloudswave Awards with a score of 83(Howard 2012). Market size for accounting software packages in Australia is huge and growing. The distribution pattern amongst various companies has changed greatly in the past 10 years(AO'Brien 2006). Xero alone occupies 65% market share amongst all companies. Sage 50 has a 10% share and Intuit has a 20% share of the market. Figure 2 : Leading Accounting Software Packages Source : (Cohen 2012) MYOB in Australia is trying to maintain its own giant market share by raising US$831.7 and AUS$833.8 million through their IPO. Xero has also evolved from being a New Zealand start-up to spending AUS$250 million for developing its accounting software. The company currently has more than 400,000 paying customers from 180 countries worldwide with 95 millions invoices(Zhang 2016). US giant Intuit is also trying to establish and build its business base in the Australian markets. Though MYOB continues to be the leader in the market with its unique software package systems and cloud computing facilities. Drury ( 2015) in his article highlighted that the several products offered by Xero renders it competitive advantage. Xero offers automatic bank and credit card feeds, accounts payable, expense claims, invoicing, purchase orders, fixed asset depreciation along with standard business and management reporting. Xero software has inbuilt capability to automatically import bank as well as credit card statements. The package has free API that provides customers with flexibility to use third-party software vendors for integrating external application with Xero. Xero supports over 275 3rd-party vendor software. Xero has the capability to enter and compute multiple tax rates as well as currencies. Xero unique payroll feature provides to compute pay-roll related data for employees. R. Powell ( 2015) diagnosed that Xero users have the advantage to store single unified ledger in cloud storage, which allows users take locational advantage and access data from any place(Powell 2015). Xero has devis ed Xero Touch mobile app for iOS and Android devices that enables users for issuing invoices for on-site clients. King (2015) identifies the current challenges that users of Xero is facing in regards to its computation(King 2015). There is a time lag associated with the Xero accounting software packages in banks and customers. Due to the heavy inflow of data and speed of computing, there is a disruption in cloud computing for the software packages. Users who are facing the trouble needs to wait till such time the software starts working again. In rush hours of banking this has proved to be a major challenge but the customer service associates at Xero are very promt and helpful(Forbes, S.L. and Kennedy, R. n.d.). They provide immediate online help in order to pace by the process and lessen queuing time. Birchall (2013) further analysed that Xero faces cloud computing issues that needs to be sorted out(Birchall 2013). The cloud computing systems at Xero has integrated systems which takes tie to upload causing delays. Once these challenges are sorted out Xero can compete and acquire market place close to its competitors MYOB. Recommendation and Conclusion Australian market has several accounting software packages but the dominant role is played by MYOB due to various issues. Xero and other similar accounting software packages is trying to make their mark in the market by acquiring significant market space but has not been able to due to certain challenges faced. Xero needs to overcome these challenges in order to become the market leader in the accounting software package space. Following are some of the recommendations developed for Xero; Xero needs to adopt a faster cloud up gradation technique for its accounting software packages. As the company renders solutions to banks and credit card companies it becomes imperative to have a fast paced response system. this additional feature will improve performance of its overall software and systems, hence resulting in customer satisfaction. Xero has to design specific systems for specific businesses as banks require a different system compared to credit card companies. Often developing an integrated phase for accounting packages leads to computational errors that is faced by several customers of Xero. Xero has to increase its spending in regards to designing customer suited accounting packages for Australian markets to capture greater market share. Xero is a highly potential and innovative company, with a tremendous growth prospect. The company has the capability to become a leading accounting software package company in the Australian markets. It needs to adopt suitable strategies and techniques in order to overcome the current challenges and meet the future expectations of its customers. Bibliography AO'Brien, J., Marakas, G.M., Hills, T.M.G. and Lalit, M.R., 2006. Management information systems. Birchall, A., 2013. Who's afraid of the big bad cloud?.Management Today, (July 2013), p.34. Business, I Retrieved on 20th August, 2016, 'Accounting Software Package market, Australia', https://www.businessinsider.com.au/charts-the-battle-for-supremacy-in-australias-cloud-accounting-market-2015-4. Cohen, J.R., Holder-Webb, L.L., Nath, L. and Wood, D., 2012. Corporate reporting of nonfinancial leading indicators of economic performance and sustainability.Accounting Horizons,26(1), pp.65-90. 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