Accounting Information System

Discuss about the Accounting Information System.

Introduction

This report discusses about business intelligence and its application in the context of various businesses. Further, reasons of failure of payroll system implementation project at Queensland Health are discussed and recommendations are provided for future implemtation.

Meaning of Business Intelligence

Business Intelligence can be defined as a set of tools and techniques for the collection, analysis, integration and effective presentation of business information. Business intelligence consists of variety of related activities including data mining, reporting, querying and online analytical processing (Sabherwal and Fernandez, 2011). The main aim of business intelligence is to support business in making effective decision making by understanding the relation between different data and also helpful in identifying new business opportunities. In addition to this, it is effectively helpful in making successful strategic plans in organization by identifying the key trends in organizational data. Business intelligence program increases operational efficiency and helpful for business in gaining competitive advantage against its competitors.

Moreover, Business intelligence system is effectively help in providing a past, current and predictive view of business operation through historical information and newly gathered data. Business Intelligence is efficiently working system that provides increased control in every organization.  It is helpful in sharing information among different departments in organization (Herschel and Richard, 2012). The systems of business intelligence are based on data warehouse technology that collects effective information from operational systems of the organization. Furthermore, it is helpful in measuring performance of organization and benchmarking progress against set business goals and objectives of the organization.

Competitive Advantage Provided by Business Intelligence

Competitive advantage refers to advantage that is gained by organization against its competitor by offering greater customer value which involves providing various benefits or products at low price to its customers.  Business Intelligence is effectively important system that provides competitive advantage to business organization (Quaddus and Woodside, 2015). It effectively helps organization to gain valuable insight about its customer behaviour by analysing current buying trends of customers, which helps organization to make production of goods and services as requirements and preferences of customers. This will effectively lead to create competitive advantage for organization.

Business intelligence tools are helpful for organization in optimizing its operational efficiency by eliminating the excess cost through identifying the areas of waste.  This in turn maximizes revenue potential of organization and helps organization to gain advantage over its competitors (Williams and Williams, 2010). Business intelligence system helps organization to make effective decision making. From the available data and metrics decisions are made faster and in a proper way. Therefore, improved decision making increases profitability of organization and effectively helpful in creating competitive advantage for the firm. Furthermore, Business intelligence system helps organization to effectively measure its performance, which identifies the areas where modification or development is needed in order to efficiently perform the business operation that improves the productivity and ultimately increases revenue thereby creating advantage for the company over its competitors (Heesen, 2015).

Through business intelligence system, an organization can use its own data to forecast about its future growth and revenue easily even with the countless data entries. This will effectively help business to survive in the competition for long run as it is the most effective and easy way to take business to a higher level. On the other hand, this system helps organization to compare it relative weakness and strengths against its competitors and also to respond quickly to the changing conditions of the market to gain competitive advantage efficiently. Business intelligence tools helps to makes analysis of important and required data easily and also eliminate manual processes for building reports, which saves time and cost of organization that effectively helps to bring efficiency in its operations and production activities, which effectively helps to meet the needs and expectation of the current situation of the market to gain competitive advantage (Gendron, 2012). Business Intelligence system effectively helps company to create value for its customers through its effective customer relationship management tool and thereby creating competitive advantage for organization.

Impact of Data Mining in Decision Making of Organization through Using Example of loyalty Card

In a retail industry loyalty card is issued by retailer to regular customer to offer reward and benefits to them, so that they continue to shop in the same store. In this card, credits are accumulated for offering discount in future, every time a transaction is recorded. Using a loyalty card data, company can easily gather information about buying habits of its customers.  By having a look on the data gathered and analyzed through data mining, company can effectively make decision about required stock which is to ordered fast in order to meet emergency need of customer and reduce production of goods which is not required at present as per data collected about customers buying habits (Baran and Galka, 2013). This helps to reduce unnecessary cost of company. In addition to this, it enables company to segment their customer base and make products and services as per required need and purchasing power of individual group of customers.

Loyalty card in retail industry helps companies to gather data and it is analyzed through data mining to know about how loyal consumers are to the company and its products. The collected data is properly examined and effectively helps company to make decision about providing benefits to its loyal customers, so that they continue to buy in the same store. On the other hand, data collected through loyalty card impact pricing structure decision of the company because it provides information that which customer segments are buying more or less either gradually or suddenly when changes are occurred in price of products.

Data collected also impact decision of company about acquiring new customer because loyalty cards provides data about those customer who are buying only at the time of discounted offers running for the products(Cherry pickers), therefore it helps company to deselect unprofitable customers and to put its efforts on acquiring new good customers. Data collected through loyalty card are examined and analyzed efficiently, that helps company to make decision about creating more and more value for its best customer through effective customer relationship management (Parsons and Maclaran, 2010).

 Gathering of data also enables company to make decision regarding geographical targeting for new store locations as per convenience of its best and prospective customers, because loyalty card helps company to outline demographics of its best customers (Gendron, 2012). In, addition to this, it also provides data about address of existing customers which can be plotted geographically and site/ location is chooses by company which is in coverage or as per convenience of customers. On the other hand, collected data provides information about spending level of customers, which helps company to make decision about providing rewards and offers to customers through offering extra credit points on exceeding of certain specified level of purchase.

Reasons for Failure of Implementation Project 

The healthcare industry is recognised for its complexities occurring because of daily requirement. The implementation project at Queensland Health faced the big information system failure. Financial and operational costs were the main reason for failure of implementation project. The increased financial and operational cost creates an adverse effect on the employees as they were not paid or paid incorrectly. The implementation project failed because of it’s over budget and large schedules. This is related to first step of system development lifecycle which is system design. This shows that there was lack of planning at the time of system design which leads to increase in financial and operational costs (Kohlbacher, 2010). Feasibility analysis was not conducted properly. Feasibility analysis helps in comparison of cost incurred at the time of implementation with the benefits and on that profitability is analysed of system implementation.

Another reason for failure of implementation of system at Queensland Health is under estimation of project complexity and scope. The Queensland Health payroll system is multifarious because of large manpower and different employment categories and this require proper attention from beginning to end. There are varieties of reasons behind the failure of Queensland Health implementation project (Stair and Reynolds, 2012). Inefficient handling of project and deficiency in understanding of the complications related with the implementation of project lead the project towards poor management of project which is the factor contributes towards failure of implementation of project.

 There are various complication involved with the system implementation project of Queensland Health because of complications of industry, complications of project and the complications in regard to its client. This can be relating to integration and testing phase (Morle and Parker, 2012). This phase helps in establishing clear governance structure with clear lines of responsibilities and accountabilities and alignment of people process and technology and continuous review of system with the changes in factors.

Communication is considered as one of the important field for project implementation successfully in an organization. Effective communication brings positive impact on organization. In addition to this there should be proper communication between the vendor, client and top management for the proper implantation of system. But, in case of Queensland Health there was no effective communication between management and the vendor (IBM). This lack of communication between IBM and management lead to system implementation to failure. This can be related to the system design phase (Isaias and Issa, 2014). This phase will help the organization to communicate their business objectives and goals with the vendor so that the system can be designed according to the need and requirement of the organisation.

The payroll system was implemented in Queensland Health without imparting proper training to their staff. This leads to lack of familiarity of the employees of organization with payroll system. The potential impact of the payroll system was not fully implicit in the organization and the payroll system was implemented and these issues were not planned by management. This problem can be related to implementation stage which is the fourth stage of system development life cycle (Doherty et al., 2012). This stage imparts proper training to its employees and properly implements the change management in an organization.

The governance structure at the time of implementation of system between the vendors like IBM and Corp Tech was very messed up. The roles and responsibilities, authorities and accountabilities of different stakeholders were not clear leading to creation of chaos and confusion. There were tensions between IBM, Corp Tech, and Queensland Health which leads the system towards failure. The main reason behind poor governance was lack of planning by Queensland Health which is the first step of system development life cycle. In this phase proper governance structure is laid down in the organization and roles and responsibilities are allocated so that accountability can be created which reduces the risk of failure of system (Pan et al., 2011). The business process designed to deliver the payroll system are highly manual which shows the use of outdated technology in the payroll system.

The final decision of Go live of system was taken by management at an early stage. The risks were not analysed by the management and it is also not identified by the management that which category of employees have to be paid and how much. The code was referred to employees before the installation of pay roll which is not a good activity to be carried out. It raises the risk of system getting unstable. The decision of Go live was taken before integration and testing phase which leads the system towards failure. Contingency planning was also not done by management for business cut over. In case if system failure occurs, there was no contingency planning done by management (Trkman, 2010). This is relation to the first stage of system development life cycle which is system design.

Before the final decision to Go live was made, the risks factors were not quantified in the basis of extent of problem like what category of staff to be paid how much which leads towards poor risk management. There was no single entity which measures the total budget of project in respect of cost incurred by different stakeholders and this leads the system towards no accountability for cost of project (Duffield and Whitty, 2015). This becomes the reason for failure of system in Queensland Health.

To sum up the contributing factors which lead the payroll system failure in Queensland Health ware lack of planning and failure to design a systematic process, roles and responsibilities were not clear that lead towards chaos and confusion and poor governance structure of the organization. There was a big failure to link the shareholders with the system effectively and efficiently. There was tension between various departments of government. There were complex business processes before the implementation of system in the organization. The system was poorly designed and there were lack of communication and training was not implemented properly to the employees of organization which lead the system towards failure accuracy (Lewis et al., 2012). Go live decisions was made at an early stage despite of presence of flaws and technical standards. There was no risk management and lack of contingency planning.

Failure to align payroll system with organization objective will lead to collapse of the system. 

Future Implementation

The deficiencies analysed in payroll system could be managed in future by using system development life cycle. The first stage is system design which helps in understanding the technicalities so that the proper payroll system can be designed. In this phase business requirements are identified from beginning to end and this helps in designing of system according to business requirement. The business goals and objectives are also aligned with the system in this stage. If any requirements of change are identified because of change in environment then this stage also provides a prescribed scope for installing the change in system before implementation in organization. This stage helps to reduce the risk of system failure caused due to improper design or non integration of business objectives with the system (Yeoh and Koronios, 2010). This stage also reduces the risk of failure caused due to changes in external environment as this stage helps in adaptation of system according to external environment.

The second stage is system construction which helps in conversion of the system design into an upgraded system with the help of installation of hardware and software, coding, transfer of data and testing of system on various standards (Seddon et al., 2010). This stage makes the system upgraded with technologies and reduces the risk of system failure caused due to use of outdated technology.

The third stage is integration and testing which links all the parts together of the system and after integration testing is being done. Testing is carried out to find out any flaws in the system caused due to interface between one component and the other component. As all the components of the system are linked with each other, if any component performs incorrectly then it is going to affect the whole system and if the problem remains not identified then it will lead to failure of system and can lead to serious problem. So, integration testing protects the system from failure caused due to any technical flaws exists at the time of system construction. Additional tests are also carried out before the system is implemented in the organization (Beynon, 2013). In this stage a proper governance structure is being created within the organization with clear lines of accountability, roles and responsibilities and in this phase all the people, process and technology are aligned together.

The fourth stage is system implementation which includes successfully implementation of system in the organization. This stage combines organizational and technical capabilities together. The major challenge of system implementation successfully is resistance of employees. So, to overcome the resistance of employees strong leadership is required for smooth implementation of system in the organization. So, this stage focuses on comprehensive management, training and education, alignment of project management metrology (Ram et al., 2013). This stage also make an analysis of impact of the system on business and organization before going live. This helps the system to protect form the failure caused due to resistance of employees and unawareness between employees about using the system.

The fifth stage is the maintenance stage. This stage helps in periodic planning, review and control of the system at various stages so that the bugs and errors can be detected on time. By adopting the system development cycle the organisation will be able to evaluate the factors which should be considered in designing of system, implementation of system (Yeoh and Koronios, 2010).  SDLC cycle helps in successful implementation of system by integration of key factors with organizational strategy, planned change, transparency of role and process, accountability. It also helps in providing training and fostering the change with continuous learning and development.

The adoption of SDLC at the time of implementation of system has various advantages. SDLC also focuses on non technical key factors like diverse culture of organization, sharing of responsibilities in organization. The definition of requirement is a very important aspect of implementation of system because it helps in analysing problems, areas and various opportunities in implementation of system. By adopting SDLC cycle the requirements will be documented adequately and in the testing phase of implementation of system user acceptance and functionality issues can be identified easily (Thite and Sandhu, 2014). Adequate testing will be helpful in identifying data conversion and integrity issues.

The other recommendations that will be helpful in overcoming the deficiencies in future implementation are stated. Firstly, identification and documentation of the future payroll operating model should be there and prepare payroll projects list on the basis of priority with proper scheduling. It will help in reduction of pressure on staff. There should be proper governance structure so that the roles and responsibilities can be allocated properly. These recommendations will be helpful in reduction of manual data entry and accuracy (Lewis et al., 2012). The labour costs are the largest variable cost so it should be check on the basis of employment relationship on a regular basis.

To derive the benefits of technology in payroll system there should be shared service centre where all the related functions can be grouped together and this will help in reduction of cost and helps in attainment of excellence (Duffield and Whitty, 2015). The shared service centre will also helpful in enhancing transparency and focuses on efficiency of payroll system implemented in organization. 

References:

Baran, R., & Galka, R. (2013). CRM: The Foundation of Contemporary Marketing Strategy.UK: Routledge.

Beynon-Davies, P. (2013). Business information systems. UK:  Palgrave Macmillan.

Doherty, N. F., Ashurst, C., & Peppard, J. (2012). Factors affecting the successful realisation of benefits from systems development projects: findings from three case studies. Journal of Information Technology, 27(1), 1-16.

Duffield, S., & Whitty, S. J. (2015). Developing a systemic lessons learned knowledge model for organisational learning through projects. International journal of project management, 33(2), 311-324.

Gendron, M. (2012). Business Intelligence Applied: Implementing an Effective Information and Communications Technology Infrastructure. US: John Wiley & Sons.

Grossman, W., & Rinderle-Ma, S. (2015). Fundamentals of Business Intelligence. Germany: Springer.

Heesen, B. (2015). Effective Strategy Execution: Improving Performance with Business Intelligence. Germany: Springer.

Herschel & Richard T. (2012). Organizational Applications of Business Intelligence Management: Emerging Trends. US: IGI Global.

Isaias,, P., & Issa, T. (2014). High Level Models and Methodologies for Information Systems. Geramny: Springer.

Kohlbacher, M. (2010). The effects of process orientation: a literature review.Business Process Management Journal, 16(1), 135-152.

Lewis, D., Hodge, N., Gamage, D., & Whittaker, M. (2012). Understanding the role of technology in health information systems. Pacific health dialog,18(1), 144-54.

Morley, D., & Parker, C. S. (2012). Understanding Computers: Today and Tomorrow, Comprehensive. USA: Cengage Learning.

Pan, K., Baptista Nunes, M., & Chao Peng, G. (2011). Risks affecting ERP post-implementation: insights from a large Chinese manufacturing group.Journal of Manufacturing Technology Management, 22(1), 107-130.

Parsons, E., & Maclaran, P. (2010). Contemporary Issues in Marketing and Consumer Behaviour. UK: Routledge.

Quaddus, M., & Woodside, A. (2015). Sustaining Competitive Advantage via Business Intelligence, Knowledge Management, and System Dynamics. UK: Emerald Group Publishing.

Ram, J., Corkindale, D., & Wu, M. L. (2013). Implementation critical success factors (CSFs) for ERP: Do they contribute to implementation success and post-implementation performance?. International Journal of Production Economics, 144(1), 157-174.

Sabherwal, R., & Fernandez, I. (2011). Business Intelligence: Practices, Technologies, and Management. US: John Wiley & Sons.

Seddon, P. B., Calvert, C., & Yang, S. (2010). A multi-project model of key factors affecting organizational benefits from enterprise systems. MIS quarterly, 34(2), 305-328.

Stair, R., & Reynolds, G. (2012). Fundamentals of Information Systems. USA: Cengage Learning.

Thite, M., & Sandhu, K. (2014). Where is My Pay? Critical Success Factors of a Payroll System–A System Life Cycle Approach. Australasian Journal of Information Systems, 18(2), 149-164.

Trkman, P. (2010). The critical success factors of business process management. International journal of information management, 30(2), 125-134.

Williams, S., & Williams, N. (2010). The Profit Impact of Business Intelligence. US: Morgan Kaufmann.

Yeoh, W., & Koronios, A. (2010). Critical success factors for business intelligence systems. Journal of computer information systems, 50(3), 23-32.

 

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