A Property Management Company uses many different accounting systems that don’t communicate with one another. The 1 person
accounts payable department uses… Timberline Software. The 2 person accounts receivable department (as well as the 40 on-site property
managers) uses Rentroll Software. The General Ledger and Financial Statements are maintained on MRI. None of the software is compatible to the other. Borger Management faces a problem of gathering information from different platforms and converting them to a single platform to create the financial statements.
Background of problem statement
Borger Management has different accounting systems in different department leading to issues like gathering of information from all these platforms and then integrating it to a single platform for creating the financial statements. It was seen that Timberline Software was used by one person accounting the payable department and Rentroll Software was used by accounts receivable department and the on-site property managers. Additionally, MRI was used by Financial Statements and General Ledger. All these software were seen to be highly incompatible with each other. This led to the complication of the activities as the information had to be gathered from all the platforms first, converted to the single platform and then the financial statements were created. Therefore, the organization was facing critical issues related to increased workforce, increased expense and less productivity. The paper discussed the concern over this problem and analyzed the risks associated with it along with a discussion on the suitable alternative solution.
'Why was the specific problem statement selected?
A disorientated system fails to integrate the accounting of the organization with their strategic goals and cannot provide any insight to the business practice. This leads to reduced visibility, productivity, and accountability of the business operations. Additionally, an integrated accounting system helps in providing operational control, limits, credit control, payment issues and invoice along with enhanced security (Robert S. Kaplan and Robin Cooper, 1998)
The organization was facing the following challenges due to disoriented accounting system:
Adaptation – The organization has to convert the general accounting solution into specialized and integrated one. Therefore, a specialized and integrated accounting system was required.
Data Entry Errors- Entering of data twice in the management provided software and then into the integrated once increased the chances of data typing errors. The mistakes were difficult to be recognized.
Decreased Revenue and productivity- Due to the same work being integrated again, the incurred expenses were seen to be high which led to decreased productivity.
Reason for acquisition
The organization has realized the need for improving the efficiency of the related business processes and an integrated accounting system would be the best choice to solve the problem. Therefore the acquisition of IT services is required in the organization. Additionally, productivity suffers from the complication of the work. The different accounting system increased the double key information present in multiple systems leading to sluggish communication speed (Stiller, B., Fankhauser, G., Plattner, B. and Weiler, N., 1998) This led to maximizing the chances of the errors and mistakes. Therefore, there was a need for the organization to give the high level of visibility so as to access information across an operation in real-time. The businesses are being squeezed on to their operating margins and an improvement in the accounting system will make a big difference for the organization.
With the acquisition of IT services the organization would be more organized, secured and downsize during the hard economic times. The organization required a computerized package for invoicing their accounting process to run faster in an efficient manner. The business activities related to the accounting systems will become seamless, automatic and fast.
The risk identified in the study are mentioned as given below:
Risk Probability of the Ease of identification Accurate Measurement
-With the alternative solution proposed the managers, employees, users and customers are likely to be affected, and the organization might take the time to recruit qualified individuals who can manage the project.
-Additionally, the employees might face problems and issues in training provided to them.
-The loss of senior management and resistance for a change by managers can be identified easily. Yes
-As the organizational risk is associated with the employees, their dissatisfaction, and inadequate training, a simple survey or open-ended discussion will be beneficial for measuring it accurately.
Information Security and Privacy Risk
This risk can be identified with ease as it deals with meeting all the established standards for information security and privacy.
-With the help of efficient and expert IT managers in the organization’s management, this risk can be identified easily.
-The higher degree of complexity of the proposed solution will affect the employees directly, and the dissatisfaction amongst the employees can be seen easily.
-With a higher degree of complexity, the employees might face problems, and there is a higher probability of possible unrecognized assumptions along with problems inaccurate forecasting costs and benefits. Yes
The complexity risk can be identified with the responses from the employee. Surveys, questionnaires, face to face discussions, etc. can be a useful tool for assessing the risk.
The infrastructure risks pose low risk but it difficult to identify. The special demand is placed on the infrastructure of the organization like IT Infrastructure.
-The non-project costs incurred due to this risk would not be identified easily
- The other processes might slow up leading to confusion on the actual risk associated with it.
- If the solution is not able to be interoperated suitably, it will lead to increased cost without identification of the risk. Yes
The infrastructure risks can be dentified with the proper management plan. With the exceptional execution of the management plan, the identification of this risk would become easier.
-It is difficult to identify the external risks as they rely on the external environment and are associated with a plethora of areas like environment, compatibility with law, effect on corporate partners and stakeholders, etc.
- Therefore, the risk leads to increased confusion among the employees and the staff. No
The external risks are beyond the control of the organization and therefore they are difficult to identify and control.
These risks are therefore difficult to foresee and usually takes the project managers by surprise and confused due to the deficient analysis of the external threats, making them difficult to be analyzed.
Analysis on key vendors, product trends, and market potential\Alternative Solution #3 (Tentative Solution Rank Order #3): Use Software as a Service (SaaS) - Use Software as a Service (SaaS)\The organization must use Software as a Service (Saas) according to the market analysis. The benefits of using SaaS by the organizations are mentioned below:
-Very low cost of entry as there is no need to buy hardware for hosting new application.
-Reduced time to benefit as the software application is already installed and configured.
-The vendor takes full responsibility of updating and upgrading the system and ensures the security of the system.
-SaaS vendors can create APIs and allow their connections to ERPs/ CRMs/ other SaaS providers.
The vendors like Abiquo, AccelOps, Akamai, CloudSwitch, Eloqua, Oracle, etc. are presenting various services like SaaS, hybrid cloud, etc. in a different and unique manner. The organization can easily manage entire computing infrastructure along with reporting, analyzing, etc. thereby presenting a new dynamic to the organization. Not the vendors have to keep a watch on:
Supply Chain Management
Enterprise Resource Planning
Enterprise Content Management
Project and Portfolio Management
Customer Relationship Management
Digital Content Creation
Enterprise Contract Management
Teaming Platforms and Social Software Suites
The Complexity is seen to Increase as SaaS enters Into the Large Enterprises
Vertical SaaS (for particular industry) vs. Horizontal SaaS (For software category)
Mobile SaaS available
SaaS Sales Will be Almost Double by the end of 2019
SaaS Leads to the Adoption of Public Cloud
The Traditional Applications are being replaced by the SaaS Deployments and are Adding Net-New Applications
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Robert S. Kaplan and Robin Cooper, 1998. Cost & Effect: Using integrated cost systems to drive profitability and performance. Harvard Business Press.
Stiller, B., Fankhauser, G., Plattner, B. and Weiler, N., 1998, July. Charging and accounting for integrated internet services-state of the art, problems, and trends. In Proceedings of INET (Vol. 98, pp. 21-24).
Bhardwaj, S., Jain, L. and Jain, S., 2010. An approach for investigating perspective of cloud Software-as-a-Service (SaaS). International Journal of Computer Applications, 10(2), pp.40-43.
Waters, B., 2005. Software as a service: A look at the customer benefits.Journal of Digital Asset Management, 1(1), pp.32-39.
Bonabeau, E., 2007. Understanding and managing complexity risk. MIT Sloan Management Review, 48(4), p.62.
Yeo, K.T., 1990. Risks, classification of estimates, and contingency management. Journal of Management in Engineering, 6(4), pp.458-470.