Accounting Information Systems I (ACCTING 1003)

Heritage is looking to upgrade its enterprise system to handle online sales efficiently, automate manual processes, and respond to high volume transactions. Heritage need an enterprise-wide integrated system is needed to replenish a wide range of information about all key business processes in the organization and to share it across different departments. Most importantly, Heritage needs the scalability, which is the system should be able to grow with the business. This means it should be able to handle increased volume of transactions and additional features as the business expands. 

give the reason why the cloud-based SAP can meeting these demands

Heritage aims to have an enterprise system that is not only integrated company-wide, but also can be seamlessly integrated with their upgraded website to handle the online sales efficiently. The management sees the importance to revamp their processes as well. Currently, the revenue cycle and expenditure cycle involve a lot of manual processes that can be automated. For an example, the revenue cycle is focusing on bulk wholesale customers. Each customer’s orders are entered manually by the sales associate into the accounting system. These sales orders are then will be reviewed, printed and signed off by the Sales Manager. Every day, the warehouse staff packs goods according to the approved sales order and process the delivery.

In view of those deficiencies, Heritage understands that they will not have the adequate capacity to respond to the demands from online retail customers and potential international markets. They anticipate some of the processes with other stakeholders such as the bank are due for a significant upgrade if the company expects to deal with high volume of transactions in future. With the current system, the company’s bank account is accessed via internet on every Monday morning and the bank data must be uploaded into the account system on the same day. Heritage requires an enterprise system that is not only affordable, but also offers scalability should the business needs to adapt to future strategies or exposure.

From your first meeting with Heritage’s management team, you noted that they have shown a great interest in the cloud-based enterprise system, as they now have access to the National Broadband Network (NBN). The management had also expressed their need to implement a system that can ensure good corporate governance are in place and was wondering whether they should adopt SAP like their direct competitor. As a consultant, who is an expert in the field, you need to help Heritage working out what they should do.

To determine, within reasons whether or not Heritage should follow its competitor’s IT strategy in adopting cloud-based SAP.

Heritage aims to have an enterprise system that is not only integrated company-wide, but also can be seamlessly integrated with their upgraded website to handle the online sales efficiently. The management sees the importance to revamp their processes as well. Currently, the revenue cycle and expenditure cycle involve a lot of manual processes that can be automated. For an example, the revenue cycle is focusing on bulk wholesale customers. Each customer’s orders are entered manually by the sales associate into the accounting system. These sales orders are then will be reviewed, printed and signed off by the Sales Manager. Every day, the warehouse staff packs goods according to the approved sales order and process the delivery.

In view of those deficiencies, Heritage understands that they will not have the adequate capacity to respond to the demands from online retail customers and potential international markets. They anticipate some of the processes with other stakeholders such as the bank are due for a significant upgrade if the company expects to deal with high volume of transactions in future. With the current system, the company’s bank account is accessed via internet on every Monday morning and the bank data must be uploaded into the account system on the same day. Heritage requires an enterprise system that is not only affordable, but also offers scalability should the business needs to adapt to future strategies or exposure.

To identify facts about Heritage and relate them to current technologies used and future technological trend.

In the last decade, the company has been using two different systems: the manufacturing system for its production and warehouse processes, and the accounting system to support its sales, purchasing and accounting processes. These two systems are not integrated, and the data that flow into each system are either using file transfers or manual inputs. All paper documents generated by the systems are pre-numbered and filed in numerical order. Each permanent staff is assigned with a unique user ID, which make it possible for anyone to determine the source for each data entered and document generated. However, the way the current system works, which has high paper usage can lead to high risk of document loss. This is a concern because some approvals must be done on paper and for some processes - there is no approval workflow within these systems (i.e., no electronic approval). Further, there is a risk of data error due to manual inputs or transfers are based on untimely data held in different departmental systems. Overall, the lack of integration between these two systems only creates organisational silos, in which Heritage’s management team finds only hinder them from making the best use of the data that they had. Prior to the pandemic, the management saw no reason for review or upgrade as their operation’s system so far has been fairly simple.

identify facts about Heritage and relate them to current technologies used and future technological trend.

Financially, the company has shown a steady 20 percent growth in their annual sales except during the era of COVID-19. The company’s sales number, which has always been so closely tied up to the sales’ performance of their hospitality industry customers took a sharp dive down from the previous years’ sales soon after the pandemic hit. In April 2020, the hospitality sector reported an 80 percent decrease in shift- work hours and 30 percent lower rostered shift-work hours since. Though from the market analysis, Heritage had learned that there has been an increasing demand for healthier food choice post-pandemic. This trend began to emerge and clustered towards the end of pandemic, as more people realised the impacts from having a sedentary lifestyle. Currently, Heritage is only serving the Australian market, which has less than 5 percent growth annually or equivalent to less than AU$5 billions. Globally, the yogurt industry is expected to grow to US$14 billions in 2024 with China and North America leading the demand. With this new sales trend data, Heritage is interested to explore international markets and online sales to improve their online presence locally as well as internationally. For that, they need to have a more sophisticated enterprise system than the one they are currently using.

identify facts about Heritage and relate them to current technologies used and future technological trend.

You firm has recently been engaged for consulting services by Heritage Yogurt (Heritage), an Australian-based dairy foods company. Heritage yogurt (Heritage) is a family-operated business that manufactures and sells the natural pot-set yogurt range in Australia. Heritage takes pride in their traditional fermentation method and boast all natural, and artificial additives-free ingredients in their yogurts. In 10 years of its operation, Heritage has been sourcing fresh milk and cream from Aussie farming families and this consultation engagement signals their strategic move for growth.

Heritage sells a limited range of yogurt products available in different sizes for both retail and wholesale customers. The company has a website that informs customers of their fermentation speciality, product range and selected stockists in different parts of Australia. Heritage’s main customers are the local food establishments such as cafes and restaurants. Their orders are usually in standard bulk size and rarely, in big volume. Heritage does not directly deal with retail customers except those who visit their yogurt shop at the factory’s site, in Victoria or via small stockists from independent retail shops. Other than the pot-set yogurt range, Heritage also sells soft-serve yogurt ice-creams to the yogurt shop’s customers to increase their buying experience.

To identify facts about Heritage and relate them to current technologies used and future technological trend.