Strategic Information System Australian Accounting Standard Board

Question: Discuss about theStrategic Information Systemfor Australian Accounting Standard Board. Answer: Introduction The role of accounting package plays a vital role in current business scenario. Different countries are following different accounting packages as per accounting standards specified for that country. In Australia, Australian Accounting Standard Board or AASB is providing the basic of accounting practices which is to be followed by the Australian companies. AASB is converging with IASB or International Accounting Standard Board for making a world-wide platform for common accounting practices(Aasb, 2015). IASB is sponsoring its own account system through IFRS. Likewise, Australian authorities are sponsoring different accounting packages to practice their accounting systems. In this present article we will discuss three such accounting packages with the history, development and adoption along with other commercial factors like present size of the market with identification of market leaders through competitive analysis of the market of accounting packages. This literature review will al so highlight present threats with the gaps found in the application of these packages by the users with subsequent suggestions or recommendations to overcome those issues(Aasb, 2016). The basic requirement of using accounting packages endorses the following factors: Initial planning of business Assess the basic required information system by accounting professionals Strategise a basic and proper guideline to ensure effective application of accounting information system Endorsement of accounting policy through effective strategies(Aasb, 2016). To realize the importance of strategic information system in accounting, it can be analyzed through Porters five forces in the form of threat of new entrants, bargaining power of both suppliers and buyers, threat of substitute products and competitors rivalry. Through this analysis the derivation of value chain analysis can be made which is possible through the system of diagnosing the assurance of identification with the subsequent analysis of primary followed by secondary operations to ensure ability which can add value to the services or products(HEBER, 2015). For the purpose of literature review, we are considering three accounting software packages which are present in Australian market to provide solution towards accounting software and business by following the basic norms of AASB(Dlken, 2014). They are MYOB, Xero and Intuit. MYOB History MYOB or Mind Your Own Business is the renowned Multi National Company of Australia which was founded by Christopher Lee with his own associates of developers who were colleagues in Telware Inc. in the early year of 1980s. They are mainly involved in development of accounting software. This company was originally generated in the US, but later it had started its operation in New Zealand and Australia since 2008(James, 2013). Products MYOB is offering its products in the forms of solutions to tax, accounting and different business mainly emphasized with the target audience identified in the segment of small and medium enterprise (SME). The offered services are also accompanied by consultation of the above subjects to prove its effectiveness more to the Australian SME business community. The services extended by MYOB are mainly available through subscription. MYOB had launched accounting software in the year 2010 which is mainly based on browser. The company had launched the premium product in the form of cloud enabled version namely Account Right Live. This product is being used by the loyal customer base of the company who believe on the quality of the products of MYOB. Market Share MYOB is holding the market share of Australian Accounting software market with the standard rate of increment @ 10% and has the present customer base of 528,000. The company has raised capital of around AUD 834 million. The company has the share price of ASX ranging from $ 3-4 in its IPO. These facts clearly determine the prosperity to do business in the segment(James, 2013). Acquisitions Important acquisitions made by MYOB are: Solution 6 Holdings in March 2004 BankLink in June 2013 Exonet in January 2003 Intuit History Intuit is also originated from USA. This company was founded in 1983 by Scott Cook and Tom Prolux in Pal Alto of California. The company has its headquarter at Mountain View, CA. This company is mainly deployed in different software to serve the purpose of financial and tax related solutions for SMEs, accountants and individuals. The products are serving the targeted community with finance software named Quicken and TubroTax. The company has other range of products in the form of QuickBooks which are used for accounting of small business. Products The company has bouquet of products which is comprised of QuickBase, the cloud based, low-code development platform; web based SAAS version of QuickBook, known as QuickBook online and other products covering the area of payroll for the SME entities. The company also takes part in global third source production through which they cater services to the international clients. Out of the above products, the most popular is QuickBook accounting software package in Australia in the segment of clients form SME. They are catering services to the 90% of the total segmented customer base and thus make serious threat to the other contender of the market namely XERO and MYOB. Market Share The company had started its operation in Australiasince 2013 and had reached a substantial market share covering the cliental base of 33000 by the time of two years. Acquisitions Important acquisition made by Intuit is: Chipsoft, a tax related software producing company from San Diego in 1993 Tax related software division of Best Programs of Reston, VA in 1994 Parsons Technology in 1994 GALT Technologies Inc of Pittsburgh in 1996 XERO History XERO is from Wellington, New Zealand and engaged in providing of cloud based software of accounting mainly used by the SMEs. The company was founded by Rod Drury with the assistance of his personal accountant when they had taken decision to make modern version of cloud based accounting package after realizing that the days of old concept desktop accounting system is loosing its importance(PULLAR, 2013). Products XERO is involved in providing of basic accounting packages which would be capable of maintaining basic accounting treatment in the form of invoicing, expense accounting, depreciation of fixed assets, credit card accounting, automatic banking, purchase orders with standard reporting of business and management. The unique feature provided by XERO accounting software is to confirm importing of credit card and bank statements. Ti is easier for the clients and third party vendors of software to ensure integration of external applications with XERO through the development of free Application Programming Interface or API. The accounting software of XERO is supporting different tax rates and currencies of different countries(Mckenzie, 2013). Share The company is possessing formidable market share globally with the cliental base of 400,000 customers along with that of Australia with the number of 262,000 customers. Acquisition of XERO Paycycle Australian Online, a formidable payroll service provider in July 2011 Spotlight Workpapers in July 2012 WorkflowMax, the solution for online job, time and invoice management in 2012 Comparative Analysis- MYOB, XERO and Intuit Comparative analysis of these three companies had shown following features: XERO is unique in its approach to the customers and end users through the possession of big portal of employees of SME employers because of its access to the domain of superannuation impact which minimises the administrative barriers for them. XERO is also equipped with the featured characteristics of ABA files for payroll and supply chain associates, specification of user role with operational access, unlimited control of users on the entering of transactions in payroll and accounts and inventory option(digitalfirst, 2014). MYOB is not featured with these customised options of service and thus is lagging behind from the main completion of the accounting software market. Intuit is the big player of this segment with possessing of 90% of total market of accounting software on the small and medium enterprises. With the above comparative analysis of the three companies, it is evident that although Intuit is holding big market share in USA through their product of QuickBooks, but they are not able to penetrate the market in Australia as XERO or MYOB can. Identified gaps or challenges faced by the customers The areas of accounting packages are very volatile with the continuous changes in the system of adaptation for new insertion of clauses in accounting standard prevailing in the country. It is the main obligation for the customers or use to stick to the exiting packages as the change of accounting packages can cause for costs involvement in the course of buying the new one and with subsequent training in the same. Hence the users are to face the challenges which the pre-fixed un-customised accounting packages provide and have to bear with them with the challenges or the gaps found in practical application. Recommendation The recommendation for the strategic information system is to enhance the ability of the package with the flexibility of the tailor made provision by the company. In Australia all the SMEs are the users of these accounting packages and the companies should find their needs to enhance the deliverable for their convenient use of the packages and thus ensure the application in its best form for the users. References: Aasb, 2015. AASB Standard. [Online] Available at: https://www.aasb.gov.au/admin/file/content105/c9/AASB102_07-15.pdf [Accessed 30 September 2016]. Aasb, 2016. Accounting Standards. [Online] Available at: https://www.aasb.gov.au/About-the-AASB/For-students.aspx [Accessed 24 October 2016]. Aasb, 2016. Australian accounting standards board. [Online] Available at: https://www.aasb.gov.au/About-the-AASB/For-students.aspx [Accessed 30 October 2016]. Dlken, F., 2014. Are Porters Five Competitive Forces still Applicable? A Critical Examination concerning the Relevance for Todays Business;. digitalfirst, 2014. Xero vs MYOB AccountRight Live Comparison A Second Opinion. [Online] Available at: https://www.digitalfirst.com/xero-vs-myob-accountright-live-comparison-second-opinion/ [Accessed 02 September 2016]. Heber, A., 2015. The cloud accounting supremacy war in Australia. [Online] Available at: https://www.businessinsider.com.au/charts-the-battle-for-supremacy-in-australias-cloud-accounting-market-2015-4 [Accessed 01 sept 2016]. James, D., 2013. MYOB accounting: 8 products compared. [Online] Available at: https://www.bit.com.au/News/364369,myob-accounting-8-products-compared.aspx [Accessed 01 September 2016]. Mckenzie, H., 2013. Xero: A billion-dollar software company that had five years in stealth at the bottom of the planet. [Online] Available at: https://pando.com/2013/05/01/xero-a-billion-dollar-software-company-that-had-five-years-in-stealth-at-the-bottom-of-the-planet/ [Accessed 02 September 2016]. Pullar, T., 2013. Great expectations for Xero. [Online] Available at: https://www.stuff.co.nz/business/industries/9302121/Great-expectations-for-Xero [Accessed 02 September 2016].