Campbell Soup Company - Accounting Systems Design and Development - Case Study Example

ACCG250 Accounting Systems Design and Development Campbell Soups Report Table of Contents Table of Contents 2 Introduction Accounting Information Systems An accounting information system is a set of procedures that are involved in gathering, storing and processing data that is mainly financial or of the accounting nature. An accounting information system is a software that runs on a computer system which is used for controlling accounting activities in an organization through the use of information technology materials. After tracking the accounts, the information obtained is useful to the management for decision making and also by other outside stakeholders who require this information such as the creditors, investors and the government to make decisions regarding the tax procedures. This system shows the relationship that exists between accounting and information technology. This relationship may be viewed from the following dimensions: how the information systems can be controlled and reviewed, how information technology can be managed, and the application of artificial intelligence tools in accounting, emerging trends in accounting and information systems, methodologies used in information technology, validation and verification of information systems and the human-computer interaction in the field of accounting.(Leech and Grabski 2014) Business Process Reengineering (BPR) In today’s world, everything is evolving to meet the unending needs of the people. The only thing that is constant is change. Globalization of the world’s economy is also increasing at an alarming rate and it is being driven by three crucial factors namely, Customers, Competition and Change. (Kamal 2013) Customers are becoming the focal points of all businesses around the world. Every business is struggling to ensure that they can attract as many customers as possible and not only attracting new customers but also maintaining the available customer base. In many organizations, customer satisfaction is becoming very important for the overall success. Competition is another aspect that is dominating the world market. Due to market liberalization, every single organization is struggling to remain in the market amidst other organizations in the same industry. Companies are therefore striving to thrive in the market with increasing number of customers whereby they are offering affordable prices to the customers to maintain them. Lastly, change is a major pointer in the business environment. Today, business needs are growing vastly hence the need for the organizations to change their operations to meet these needs. For instance, in the current time, paper work is reducing drastically and people are switching to automated methods of operation. For instance, many companies are using online billing methods where customers can receive invoices online without waiting for long hours. This is where information systems come in relation to business. Business process reengineering is one example of the change being experienced in today’s business environment. This process refers to the set of activities that are used in analysis and recreation of workflows in an organization and between one business enterprises to another where end-to-end processes are optimized with automation of services without any added values. Reengineering refers to the recreation and redesign of activities so that better results can be achieved in an organization. Business process reengineering was used first the 1990s during the Michael Hammer’s Harvard Business Review after a book was published namely “Reengineering Corporation” authored by Hammer and James Champy. These writers discussed that recreation and reorganization of a business is very important because it helps in reducing the cost of production thereby increasing the returns with improved service quality. Information technology is the tool that is being used to bring out this reengineering process. (Ali, Green, and Robb 2015) James and Hammer suggested that there are various elements that need to be employed by any organization that wants to increase quality of services, increase profitability and timely completion of tasks. These elements include: Conduct operations based on the desired results not tasks. Determine all the processes in the enterprise and arrange them in a hierarchical structure based on the need for redesign earnestness. Include information dispensation activities into the actual actions that disseminate this information. All the resources that are distributed in various a geographical locations should be treated as if they are local. That is, there must centralization of resources. The activities that can be conducted simultaneously should be mixed in the workflow as opposed to assimilating their outcomes. Decisions should only be made at the critical points where actions are being performed and control should be exercised on these processes. Information regarding any activities should be fetched only once where it emerges. Business process reengineering connects most operations into one single application. For instance, one application that traditionally involved several steps, it can now be conducted as a single application by the help of information technology. This can be used to refer to a “one stop shopping” process. In order to understand the role of business process reengineering, let’s consider the following example. Suppose a customer wants to place an order for a particular product. This process entails passing through several departments before the product can be delivered to the customer. The sales department will be involved in taking the order, accounting department will be involved in invoicing and credit management, and inventory management will be conducted by the logistics department and the order will be produced by the production department. In a case where the customer complains that the product has not been delivered, it is not possible to locate the fault in the above departments because no party is willing to be responsible for this fault. Every department leaders are likely to deny the fact that their department is the cause for this delay. In order to solve such a problem, this is where business process reengineering comes in. in this case, the organization is not designed in form of departments but rather in processes. The order will be placed in a processing segment countering the departments’ bottleneck. The case manager will be appointed who is able to control the customers’ requests. In case the customer does not receive the products, this system is able to track electronically the source of the problem and the department involved will be held responsible. (Zigiaris, 2000) The aim of implementing information technology in an organization is to create a logical picture of the organization where business activities are laid out as processes. In this case, physical departmental barriers are eliminated in the organization making it easy to control the activities in the entire organization. If one department is not functioning towards the goals of the organization, then this department will be easily located and the relevant action taken this is because all the deliverables can be detected coming from all the segments of the company. The outcomes will be important in determining the production level of these segments. This process will be very effective in correcting operations that are not contributing to the mission and vision of the business enterprise. The overall outcome is increased returns and quality of service. Case Study: Campbell Soup Company Campbell Soup Company is an organization that has developed gradually since its establishment. The main reason why this company is of concern is the fact that it is an example of companies that have implemented accounting information systems and specifically business process reengineering by redesigning its processes for improved productivity. This company has applied SAP technology in its system creating a wider market base across North America. The company applied this system without a fall that is usually experienced by many companies when they redesign their operations. The company’s strategies include, relating the outputs of projects to the top management, employing the most appropriate talent to ensure that process planning and implementation are achieved effectively, employing experience of other stakeholders external to the organization and lastly creating a learning environment where stakeholders can acquire new skills from other stakeholders in a similar environment and using the learned knowledge for the benefit of the company. Campbell Soup Company is a clear epitome of business transformation from single business system to an integrated system through transparency and learning capability.(Ross and Beath 2008) Question one The four main objectives of IT governance according to the IT governance institute include: The first objective states that the Information Technology being used in an organization should be relevant to the goals of the organization, secondly, IT should be used to improve the applicability of business opportunities and benefits, the IT resources should be used well in an organization and lastly there should be accessible management strategies that can be employed to deal with information technology risks. Using Campbell’s soup company, it is correct to say that the company has employed the main objectives of IT governance. Looking at the first objective, the company has implemented Information technology to increase sales and improve the delivery of services to the customers. This means that the company is able to accommodate more customers than before hence increasing the output. The goals of the organization are to expand, provide customer oriented services and increase output. Information technology has made this goal realizable. Secondly, before the introduction of information technology systems, Campbell’s company could not handle as many customers as it handles today. This means that although opportunities were available, the company could not exhaust them due to inadequate resources or management platform. The information system portal has made it possible to access numerous customer requests and at any one point in time, the company can serve an added number of customers meaning that this innovation has attracted added benefits and opportunities. Looking at the third objective, it can be concluded that information technology resources are utilized wisely in the organization. By deploying SAP, the company was able to conducting accounting more effectively, handle sales and store information regarding the organization electronically for safety and easier retrieval. Since the goal of this endeavor was to ease the operation of the organization and ensure customer transparency, then the system is categorized as being successful in realizing these goals. In dealing with risks that may be associated with information technology systems, the company has deployed a team of personnel who are specialists in the management of infrastructure. Such team entails; the process advisory individuals, the project personnel, operating committee, senior management sponsors and others. This team is composed of people with varied expertise in the field of project management and information technology. In case of ay risks, this team is well equipped to deal with such an occurrence. Question two Using the AS8015 model for IT governance, in managing information technology in an organization, there are two factors that are considered in this process. One of the factors is external forces that have a certain level of pressure that can impact the organization either positively or negatively. Such factors include, technology that interfere with the normal operation of the business, economic factors, social factors and the government influence and other legislative pressures. The second factor refers to the consideration of the information technology needs of the business enterprise. The corporate governance of information communication technology involves direct evaluation of planning policies, business proposals and monitoring of performance conformance. All these factors are linked to the business processes which include the ICT projects and ICT operations in the organization. In regard to the Campbell Soup Company, the proposed changes can be compared to the model in the following manner. Initially in the planning of the implementation of information technology systems, Wright suggested that the company should outsource the system components rather than developing them in the organization. Although this approach was considered costly, Wright argued that it is the best approach to the planned change. This is because of the benefits tied to this endeavor. This is because the outside suppliers are capable of developing the best quality products, always available when needed and they are capable of enhancing protection. This is an indicator that the organization has considered outside forces that influence the organization. Secondly, the company has been able to identify the IT needs. First of all, the company should apply SAP which is aimed at reducing the maintenance cost of the organization, the organization should ensure that manual systems are eliminated with minimum paper work, improve customer service, enhance productivity and improve processes through KPIs. Other business needs for the company include enhancing transparency, improve flexibility and ensure that there is a closer connection between the company and the customers. These components can be compared to the AS8015 components explained above. Question three An Enterprise Resource Planning (ERP) is a component of business planning and management that shows the application of improved technology. This process offers several benefits for an organization and it is the dream of various organizations in the modern world. Nevertheless, there are numerous risks that are associated with ERP especially during the implementation phase in an organization. Implementation process is very time consuming, requires a lot of resources, extensive training and waiting time. For any business that is willing to implement an Enterprise Resource Planning, it is very important to understand the risks associated with the process.(Arik Ragowsky 2002) One of the risks is inadequate training. During implementation in an organization, most of the users are not able to operate this system. This is because this percentage of users are not properly trained to use this process. In such cases where the employees are not able to interact with the system correctly, they may disregard this system because they do not understand it and thus they do not know the value of it and secondly, the employees may embrace the system but since they are not equipped to operate it, they use it in an inappropriate manner this only means that the system is not used for its designated purpose.(Kerzner 2013) ERP system is likely to experience stability problems similar to other computer based systems or software. An ERP system should be tested critically to ensure that it is cleared of all the faults before implementation. Although testing the system before implementation is a good procedure, there are certain stability issues that cannot be detected when the system is new. Some problems can only be noted after a long period of time or when new components are added in future. The implementation process takes a lot of time due to the complexity of operations that are involved in the system. In order to deploy such a software, the ERP system should be chosen wisely, analyzed and tested for any bugs, it is later implemented and left to run for a specific period of time before the desired outcomes can be achieved. If the company is not able to wait until the time of results manifestation, such a scenario could be very risky for the enterprise. Software selection is another risk associated with ERP. This software is not platform independent meaning it can fail to run in certain software and hardware combinations. ERP systems are specifically designed for particular machines and for specific purposes. Purchasing an ERP therefore mean studying the existing system and ensuring that the purchased software can run in the system. A risk would occur when the software is implemented on the platform where it cannot run effectively. Finally, the risk associated with implementing the ERP system refers to the method of implementation. Similar to other systems, there are two methods of integrating ERP into an organization’s system. One of the methods is known as “The Big Bang” method. (McAfee 2003)This method refers to a speedy implementation of the system by getting rid of the old system abruptly. Very many changes are made in the organization and the employees are expected to deal with the changes and move on with normal business activities. This approach is very risky because when such a system breaks down or crashes, then the entire organization is at stake because of the probable loss of data and the operations are stopped to deal with this breakdown. The other implementation process is the implementation in phases. This is where the application is divided into modules that are integrated in a sequential process. After each module is installed, it is well analyzed for productivity before implementing the consequent component. This process is less risky than the big bang approach. Due to the risks outlined above, Campbell Soup Company should employ various measures to counter the occurrence of ERP implementation risks. In order to minimize the hazard that is associated with implementation of ERP and alignment issues, Campbell’s company should engage in Business Process Reengineering. The company should plan effectively concerning requirements for the Enterprise Resource Planning and the organization should also conduct detailed testing of the organization before implementation of the ERP system whereby the responsible parties are supposed to control the performance of the system. Secondly, in order to deal with the issue of devolving decision making, the company should form a committee, appoint a sponsor and conduct internal auditing in the organization. The team appointed is very important in controlling the project writing reports to the senior management concerning the progress of the reports. The project sponsor is support to oversee the ERP implementation procedure to ensure that it is done correctly and within the allocated time span. The organization should have a comprehensive understanding of the systems that run in it including the ERP type that can efficiently operate in their systems. This will ensure that the correct version is installed with minimum faults. In addition to this, the organization should appoint a team that is aimed at studying the implemented software. This is to ensure that the system is monitored closely and faults are detected early enough and resolved before they become harmful to the organization. (Kirchmer 2012) Moreover, implementation should be conducted in phases to study its applicability and prevent any loss of data and affect the normal operation of activities. Big bang process should not be an option especially to an organization where data is very important for its survival. The main idea is that before implementing an ERP system, it is important for the company to study the suppliers and make sure that the people who develop this system are experienced in the particular field. This will help in minimizing the risks and failure occurrence. Question four The proposed transformation can be achieved efficiently at Campbell by appointing a team that will drive the company through the transformation phase. This team is supposed to inform the employees that there are changes that are going to be made, the employees are supposed to be trained regarding the changes to be made for instance intensive training should be conducted to teach the employees how to use SAP and ERP effectively so that the results can be as anticipated. In addition to this, the transformation should be done slowly and gradually to ensure that the employees fully accept the transformation and that they are fully committed in this journey. Although this change is effective for the company, caution should be taken to ensure that the change is accepted because it can lead to failure as opposed to success. Change is constant but the process of implementing this change should be chosen wisely.(Kirke 2015) Conclusion Change management is very important but a difficult undertaking. Different factors are used depending on the organization type and other external factors. Campbell should use the following steps to manage change. First, it is important to create a need for change. This is the building block of the need for change and the direction the organization wants to follow. The employees should be informed of the intended change and why it is important to the company. The second step entails sharing the values and vision with stakeholders. The employees and other stakeholders should be communicated towards the point where the organization wants to reach and what will happen when the organization reaches this point. Thirdly, resources should be deployed that are needed to bring out the desired change. The needed human resources, information technology and financial resources should be deployed as necessary. Fourthly, the managers and other leaders should be at a position to handle and monitor the change. They should possess the needed skills in the event of change. Lastly there should be effective communication in the organization to notify the members of every stage in the transformation process. This process is effective in ensuring acceptance and familiarizing people with the new system. References Sotiris Zigiaris, 2000. Business Process Reengineering BPR. Dissemination of innovation and knowledge management techniques. Ali, Syaiful, Peter Green, and Alastair Robb. 2015. “Information Technology Investment Governance: What Is It and Does It Matter?” International Journal of Accounting Information Systems 18 (September): 1–25. doi:10.1016/j.accinf.2015.04.002. Arik Ragowsky, Toni M. Somers. 2002. “Enterprise Resource Planning.” Journal of Management Information Systems 19 (1): 11–15. doi:10.1080/07421222.2002.11045718. Kamal, Neel. 2013. “Business Process Reengineering.” http://www.slideshare.net/NeelkamalSharma/business-process-reengineering-15362180. Kerzner, Harold R. 2013. Project Management: A Systems Approach to Planning, Scheduling, and Controlling. John Wiley & Sons. Kirchmer, Mathias. 2012. Business Process Oriented Implementation of Standard Software: How to Achieve Competitive Advantage Efficiently and Effectively. Springer Science & Business Media. Kirke, Dale. 2015. “Steps To Effective Change Management.” Small Business Trends. Accessed September 21. http://smallbiztrends.com/2012/10/steps-to-effective-change-management.html. Leech, S., and S.V. Grabski. 2014. International Journal of Accounting Information Systems. http://www.journals.elsevier.com/international-journal-of-accounting-information-systems/. McAfee, Andrew. 2003. “When Too Much IT Knowledge Is a Dangerous Thing.” MIT Sloan Management Review. January. http://sloanreview.mit.edu/article/when-too-much-it-knowledge-is-a-dangerous-thing/. Ross, Jeanne W., and Cynthia Beath. 2008. “Campbell Soup Company: Harmonizing Processes and Empowering Workers.” SSRN Scholarly Paper ID 1881723. Rochester, NY: Social Science Research Network. http://papers.ssrn.com/abstract=1881723.  Read More