Telstra Corporation and Its Organizational Structure

Discuss about the Evaluation of Accounting Software by Telstra.

The report is prepared for reviewing literature on organization using accounting software packages in Australia. In this particular study, evaluation of several accounting software has been done in the context of benefits provided and costs incurred. Many organizations in Australia use accounting software ranging from small scale enterprises to organizations operating on large scale (Pearlson et al. 2016). Evaluation of accounting software is done by selection organization such as Telstra Corporation and explanation of organizational structure and problems faced due to employing of some system software. Telstra is a media and telecommunication company that is based in Australia. Company is involves in operation and building of market voice, telecommunications, internet access, mobile and other entertainment products and services (Telstra.com.au 2018). The current paper discusses about the operational problems faced by Telstra due to their organizational structure and identification of problems and fraud in their accounting system.

The new product division and swathe of staff’s appointment has been restructured by Telstra and a new specialist group has been created that divided mobile and fixed business.  IT functions; technology and network have been consolidated into single operations (Alamin et al. 2015).  Four functional groups will be maintained after restructuring will come into effect and this comprises of a consolidated operations, product based business, customer facing and corporate support.

With the introduction of mobile technologies, wireless broadband, cable technologies, digital television services and satellite technologies, the telecom industry is undergoing rapid technological change. A new business unit is introduced by Telstra that is Technology innovation and strategy that reflects greater focus on building world class Technology Company and innovating. The new business unit is built with strong focus on fulfilling the objectives of delivering gains in productivity and commercializing and stimulating innovation so that a stream of appealing new product and services is provided by the organization (Cassidy 2016). This will help in contributing to the revenue growth and optimizing research of Telstra with its partnering models and technology developers.

Telstra has been facing issue of network mishaps and this includes dealing with complex and large communication network. Such network mishaps are creating hindrance in the operations of bank, airline and large departmental stores. The scores of customer services are negatively impacted by the poor performance of network of Telstra. Some other problems faced by Telstra in their operations are products offerings and service quality that is below the international standards and expectations of customers. The core of problem lies in addressing the main issue and in this regard facilities should be based on competition (Boulianne 2014).

Telecom Industry in Australia

Telstra in the current scenario make use of XERO online accounting service that is designed for gaining flexible access to reports, invoices, sales taxes and other financial services. Telstra has a web based portal that is Telstra T suite that enables them to manage and purchase several software applications that is available from time to time. They have the option of choosing from three available XERO services that is small, medium and large. XERO small provides user with the facility of providing twenty reconciled bank statements lines, five accounts payable and five accounts receivables per month for approved credit notes and invoices. Users using XERO medium are provided with the facility of unlimited bank reconciliation and unlimited invoicing (Tsang 2014).

XERO on other hand are provided with the several advantages such as allowing multi currency transactions such as reconciliation of foreign currency bank accounts and managing invoices of foreign currency along with the unlimited bank reconciliation and unlimited invoicing. Telstra is able to manage their services online using their T suite application online. Using such cloud computing software helps in optimizing cloud journey and it has enabled organization in deploying, creating and optimizing sustainable cloud solutions by the accredited cloud services (Galliers and Leidner 2014). The accounting professionals help in generating desired output by making use of primary entry in the accounting books.

Although, XERO is a well set up accounting software package in Australia, but the question which arises is what it lacks and what gain it provides. There are several accounting requirement and features that are used by business ranging from small scale to large scale such as book keeping, live reporting, customer relationship management, tax compliance, job management and report filing. Telstra being an organization operating on large scale faces with several disruptions requires accounting software that provides the facility of seamlessly managing all the accounting tasks as well as easing customers with different online services (Dwived et al. 2015). Moreover, in the current situation, the company is facing issue with their billing system and the link is always unavailable for making payments. In the physical network, there are various interdependencies that make it difficult for allocation of services potential to individual projects and assets. There are considerable differences in determination of services potential in assets as there is a no direct connection between asset capacity and service requirement. Internet provider and budget mobile of Telstra have debited bank accounts of customer multiple times and have overcharged customers. There was disruption in online chatting system and many other technological adversities that made the customer service worst (Lim and Perrin 2014).

Telstra’s Issues and Use of XERO Accounting Software

It can be seen that in light of Telstra facing such accounting issues relating to technological system, implementation of ERP system will help organization in solving several accounting issues and grievances of customers (Arvidsson et al. 2014). Furthermore, it will also assist management of organization in preparing effective plan in terms of hiring of right professionals, budget preparation and solving accounting information system issues.

 

Flow chart of sales procedure of Telstra:

(Source: created by author)

The flow chart depicts the sales procedure of Telstra and this shows that sales procedure is completed when the customer accounts receivable is updated by billing clerk upon receipt of shopping notice and then the notice is filed into the department.

The issue in the accounting system procedure is related to authorization that is the person who is authorized to make entry in respective departments. It is certainly possible that the person finalizing the entire process and maintaining books of account might get involve in conducting some fraud act that would lead to manipulation of data. In the situation of absence of monitoring the expenses and costs related to sales procedures, there can be understatement or overstatement of such figures by accounting departments and the person responsible for handling such department might not check the voucher validity (Mageto 2017). Therefore, after viewing the current accounting system used by Telstra, it can be inferred that the accounting package used by company that is XERO only deals with passing primary entries and generation of accounting entries using such input (Spraakman et al. 2015). However, the current accounting package does not provide with the option of generation of MIS report and other working at project site.

In the present situation, accounting information system is being used by more than 70% of businesses enterprises in Australia and they have software that is on premise running on their computers. Some other businesses make use of cloud computing software such as Reckon, MYOB and XERO. Employment of accounting software is somewhat difficult decision for business as they need to evaluate the cost incurred along with the efficiency provided. The adoption of accounting software by enterprises in Australia is occurring at faster pace and the adoption of such software is mainly attributable to reasons such as reducing tedious paperwork that is characterized by commission and errors of omission, costly and time wasting (Yigitbasioglu 2015). Moreover, efficacy and effectiveness of accounting system are some other factors leading to their ever increasing adoption.

The accounting software market of Australia is facing increasing competition with small and medium enterprises being the largest customers of accounting software. MYOB, XERO and Intuit are some of the biggest player in the market of accounting software and they have taken the accounting software to cloud computation. XERO enjoys a market share of 65% with Intuit taking 55% of market share. MYOB on other hand is the largest provider of business management and accounting software with less than 60% of market share at present (Watty et al. 2016). A dominant market share is enjoyed by MYOB in desktop accounting solutions and the small enterprise desktop license sales is no longer pursued by them.

Limitations of XERO and the Need for an ERP System

Accounting software such as MYOB and XERO are facing increasing competition from new entrants. Other software such as Intuit and Sage are actively involved in promotion of online solutions in the market of Australia. It is required by MYOB to grow its share of small enterprise cloud computing in light of strong brand recognition and market position of XERO and other threats from new pocketed entrants (Whittington 2014).

In response to increasing preference of customers towards online solutions, the development of cloud based product is accelerated by MYOB. This particular software is taking the effort of competing with other providers by providing business with features of payroll needs and cloud based software for accounting along with attempting to convert desktop users to online suite of products (Maharaj and Brown 2015). 

Saasu is another cloud accounting software and it is regarded as the only profitable online software company operating in Australia. It has an estimated base of customer of about 20000 businesses.  Despite such features, Saasu was unsuccessful in selling and it failed to attract same number of bookkeepers and accountants as XERO software. The priorities of Saasu are different from its rival and high capable inventory module is retailer friendly feature of this software (Arvidsson et al. 2014). Compared to this, until 2014, XERO was not able to realize its inventory module.

XERO on other hand is the most popular accounting software operating in Australia claiming 540000 businesses.  A number of innovation has been brought by this software and its reflect twin trends of compliance automation and advisory. Price of XERO is one of the biggest complain as it requires organization to incur huge costs for the implementation (Spraakman et al. 2015). Intuit on other hand is seeking competition from XERO and MYOB as it is considering launching of        Qucikbooks financing small business loan service to small enterprise in Australia (Hossack 2015). For Quickbooks, Australia is the fastest growing region. Therefore, there is significant competition among the accounting software packages in Australia as each comes with varied features that help them in gaining competitive edge over their competitors.

Hence, it can be inferred from the analysis that market of software accounting package in Australia is dominated by Intuit, XERO, MYOB and Saasu. Due to several features provided by all such software, there exists an inflexible competition in accounting software market.

Users of accounting software encounter some accounting problems that are listed below:

Adoption and Competition of Accounting Software in Australia

Lack of security- Users of software has the main concern of their data security as foreign parties are able to access it. One of the major issues associated with the cloud based accounting software is that it is based on internet and makes use of internet for performing its several functions. Owner of such software can access their bank accounts from any place as such software is linked to bank account of businesses. All this is responsible for increasing the cybercrime acts such as phishing and malware (Gitman et al. 2015). Using such software can pose risk to business information confidentiality.

Costing issue- It is not easy for business to implement such accounting software as it is required by organization to have minimum standard system, hard drive memory and random access memory. Additional costs are consumed by the implementation of software in terms of creation of technical support and back up data (Yau, 2017). In addition to this, subscription costs of using software are based on number of users that is allowed by software and ad on features. All such factors results in increasing the cost of implementation of software that becomes challenging for small and medium enterprises.

Lack of efficiency- Some of the accounting software are not user friendly as they lack capabilities, features, compatibilities and expend abilities (Lee 2014).  They sometimes lack accuracy in generating information.

Difficulty in using- The main issue associated with the cloud based accounting software is that they have their own design and are not based on conventional system. Some staffs faces difficulty in using such software as they are accustomed to using traditional accounting methods (Hansnata 2016).

Time factor- The processing time taken by accounting software in creation of invoices and expenses sheets is comparatively longer than the time taken to record the same in ledger and excel sheets. Business can experience temporary slowdown in their operations in the initial phase due to the implementation of such accounting software (Dwivedi et al. 2015).

Conclusion and Recommendations:

The study conducted highlighted the evaluation of several accounting software used by enterprises in Australia. It has been ascertained that mainly small and medium scale enterprises have increased the use of accounting software. Some of the leading features offered by the cloud based accounting software are invoicing, inventory management, integrated payroll and banking transactions. However, it is required by business to conduct in depth analysis of the efficiency, costs and benefits offered by such accounting software before their implementation. Sine implementation of accounting software is expected to incur additional cost for business; it is required by them to arrange for antivirus software and necessary training sessions to their existing staffs and employees so that they become aware of way to use such software for benefitting the organization. Moreover, it is recommended to Telstra to opt for a new enterprise resource planning package that would provide assistance in solving their existing accounting system issue. They can opt for MYOB package as the existing issues of online and customer grievances can be solved by the additional characteristics of the software.

Conclusion

References list:

Alamin, A., Yeoh, W., Warren, M. and Salzman, S., 2015, January. An empirical study of factors influencing accounting information systems adoption. In Proceedings of the Twenty-Third European Conference on Information Systems (pp. 1-11). ECIS.

Arvidsson, V., Holmström, J. and Lyytinen, K., 2014. Information systems use as strategy practice: A multi-dimensional view of strategic information system implementation and use. The Journal of Strategic Information Systems, 23(1), pp.45-61.

Boulianne, E., 2014. Impact of accounting software utilization on students’ knowledge acquisition: An important change in accounting education. Journal of Accounting & Organizational Change, 10(1), pp.22-48.

Cassidy, A., 2016. A practical guide to information systems strategic planning. CRC press.

Dwivedi, Y.K., Wastell, D., Laumer, S., Henriksen, H.Z., Myers, M.D., Bunker, D., Elbanna, A., Ravishankar, M.N. and Srivastava, S.C., 2015. Research on information systems failures and successes: Status update and future directions. Information Systems Frontiers, 17(1), pp.143-157.

Galliers, R.D. and Leidner, D.E. eds., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.

Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson Higher Education AU.

Hansnata, M., 2016. The impact of digital innovation on the social structure of professional public accounting practice in Australia.

Hossack, S., 2015. Cloud-based accounting and productivity tools for practitioners and taxpayers. Taxation in Australia, 50(5), p.265.

Lee, S.S., 2014. Management information systems. Management, 166137(01), p.02.

Lim, N. and Perrin, B., 2014. Standard business reporting in Australia: Past, present, and future. Australasian Journal of Information Systems, 18(3).

Mageto, J., 2017. Accounting Softwares in Australia. An Overview. GRIN Publishing.

Maharaj, S. and Brown, I., 2015. The impact of shared domain knowledge on strategic information systems planning and alignment. South African Journal of Information Management, 17(1), pp.1-12.

Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.

Spraakman, G., O’Grady, W., Askarany, D. and Akroyd, C., 2015. Employers’ perceptions of information technology competency requirements for management accounting graduates. Accounting Education, 24(5), pp.403-422.

Telstra.com.au. (2018). Telstra – mobile phones, prepaid phones, broadband, internet, home phones, business phones. [online] Available at: https://www.telstra.com.au/ [Accessed 20 Apr. 2018].

Tsang, E.W., 2014. Case studies and generalization in information systems research: A critical realist perspective. The Journal of Strategic Information Systems, 23(2), pp.174-186.

Watty, K., McKay, J. and Ngo, L., 2016. Innovators or inhibitors? Accounting faculty resistance to new educational technologies in higher education. Journal of Accounting Education, 36, pp.1-15.

Whittington, R., 2014. Information systems strategy and strategy-as-practice: a joint agenda. The Journal of Strategic Information Systems, 23(1), pp.87-91.

Yau Yeung, P.Y.D., 2017. An exploration of risks in using cloud accounting information systems in Australia (Doctoral dissertation, Queensland University of Technology).

Yigitbasioglu, O.M., 2015. External auditors’ perceptions of cloud computing adoption in Australia. International Journal of Accounting Information Systems, 18, pp.46-62.