Strategic Information Management and Challenges

Question: Discuss about the Strategic Information Management and Challenges. Answer: Introduction Information systems have developed to be a mandatory requirement in strategic direction of every business organization in the contemporary business environment. The most significant implementation of information systems in strategic purposes is observed in the accounting information systems which address the accounting requirements of an organization. As per Abdelhak, Grostick Hanken, every organization requires stability and control in the accounting framework in order to ensure sustainable business practices (Abdelhak, Grostick Hanken, 2014). Accounting information systems have been widely referenced in business management literature and are largely associated with the primary function of continuing the operations of internal control systems. One of the significant functions which are executed by the accounting information systems refers to the estimation of present and predicted economic scenarios in terms of quantitative data. The development of a varied assortment of accounting software has contributed to institution of flexibility in the domain of AIS alongside expanding its scope (Amrollahi, Ghapanchi Talaei-Khoei, 2014). Arvidsson, Holmstrm Lyytinen said that the utilization of the accounting software for obtaining cash flow statement, income statement and balance statements serves as a potentially beneficial outcome which can be obtained from Accounting Information Systems (Arvidsson, Holmstrm Lyytinen, 2014). The packages and different software used for the purpose of processing financial data could be subsequently helpful in establishing a functional information system along with the facilities for credible data collection and processing. Efficiency of Accounting Information Systems Leaders and managers of business organizations rely on the efficacy of accounting information systems in order to frame strategic decisions pertaining to issues which are associated with financial parameters. As per Baskerville, Spagnoletti Kim, the efficiency of accounting information systems on a qualitative basis can be determined in the form of their usefulness for the distinct business activities of the organization (Baskerville, Spagnoletti Kim, 2014). Accounting information systems or AIS have been functionally involved with distinct outcomes pertaining to internal controls in an organization. The introduction of AIS in an organization can lead to credibility of accounting reports, enhanced integration in the organizational framework and safeguarding assets. Apart from the above mentioned benefits, AIS are also responsible for different internal and external audits, cost effectiveness, improving the documentation standards and security. As per Cassidy, the development of sev eral accounting packages has also led to the advantage for organizations by utilizing their IT resources and competences for accomplishing organizational control objectives especially in the domain of financial accounting (Cassidy, 2016). The distinct controls which are implemented by the accounting software refer to corrective control, application control, preventive control, general control and detective controls. Preventive controls have been associated with the distinct elements of selecting proficient personnel and monitoring the physical access to assets and are primarily predictive in nature. Detective controls can be identified in the specific issues which have not been resolved and some of the common instances where detective controls are observed include bank reconciliations and documentation of monthly trial balances and the calculations checking. As per Galliers Leidner, general control is concerned with the application of stability and management in accounting information systems in order to ensure their sustainable operations. Examples referring to general control include software development, maintenance control, acquiring new accounting software and development of a secure infrastructure (Galliers Leidner, 2014). Corrective controls have been identified as major contributors to the identification of problems in the accounting framework of a specific organization as well as providing the facilities of data recovery in case of vulnerable data. Corrective controls can be found in an organization through the examples of processes such as development and storage of backup files, resolving the data entry errors and repeating the transactions with the objective of processing. Application controls are meant for resolution of transaction errors and frauds through the distinct stages of detection, prevention and resolution of errors. Application controls can be realized aptly through improving the sophistication in the instruments and methods used for data collection, entry, processing, storage and transmission. Accounting Frameworks Accounting frameworks in an organization are particularly meant for inducing stability of financial resources. The history of accounting can be traced back to ancient civilizations and empires and traditional accounting frameworks have evolved into the digital platforms for accounting objectives in modern business organizations. As per Haux et al, the distinct methods implemented by organizations conventionally refer to the use of bookkeeping (Haux et al., 2013). Despite the availability of technological assistance for monitoring financial aspects of the organization in the form of accounting software and spreadsheets, many organizations in varied sectors continue to rely on the physical form of accounting in accounting books. The selection of accounting software by a business organization is dependent on specific parameters (Haux et al., 2013). As per Ward Peppard, the requirements of a business organization from the software refer to the variability and volume of financial data as sociated with the organization (Ward Peppard, 2016). Specifically, the software must be able to address the objectives such as interfacing capabilities with other systems, stock management capabilities, financial record monitoring in individual departments, supervision of the progress of work, implications of foreign currency, CRM facilities, task management, capabilities for monitoring the different bank accounts of the organization at the same time and ability for encompassing the different payroll requirements comprising of references to leaves such as annual and long service leaves. The continuous increase in the number of entrepreneurs in Australia reflects on the development of several companies on smaller scales. Key Objectives of Small Scale Organization The key objectives of small scale organization are directed towards sustainability in a competitive environment which can be catered only through efficient financial monitoring. Some of the commonly used accounting packages and software in Australia refer to the distinct characteristics of catering financial management needs of business organization at comparatively reasonable prices. Cashflow manager, Sage, MyOB, Xero-online, Nominal and Reckon One are some of the most commonly observed financial accounting software used by business organizations in Australia. As per Malhotra, Melville Watson, the functions of the different accounting software are observed in the distinct illustration of sales revenue, liabilities, expenses and assets which are considered as imperative elements of an organizations financial records. The distinct demarcation of the individual accounts as mentioned above can be also expanded to the integration of main accounts and subordinate accounts (Malhotra, Melv ille Watson, 2013). The classification of different accounts is responsible for determining the credibility of the accounting information systems and is also useful for flexible access to data in case of future references. Accounting information systems are also considered resource friendly as the mere requirement of data storage devices, computers and servers does not impose any considerable pressure on the organization. As per Pearlson, Saunders Galletta, the accounting systems also require human resources for monitoring the operations in the system. Therefore individuals with appropriate skills and experience in documentation and interpretation of financial data as well as with promising knowledge of software requirements are considered as suitable for the task (Pearlson, Saunders Galletta, 2016). The understanding of requirements of data in individual fields is considered as a mandatory requirement for efficient processing. Therefore AIS serve as appropriate strategic informa tion systems for different organizations of varying scales in Australia through effective monitoring of the financial liabilities and resources of the organization. Functions Of Accounting Software The functions of accounting software are not merely limited to the domain of AIS in an organization (Salleh et al., 2015). The use of accounting software for monitoring functional modules and delivering performance can be observed in the estimation of payroll, receivable and payable accounts and trial balance. Packaged accounting software has contributed to the flexibility for organizations to acquire a wide assortment of accounting management functions through comprehensive records of accounting reports and financial transactions. As per Uaktrk Villard, accounting software is largely concerned with the objectives of accomplishing competitive advantage as well as improving the efficiency of strategic decision making (Shapiro Varian, 2013). Various references in literature have indicated the profound features of accounting software and the observation of real life examples could be also considered as viable citations of the efficiency of accounting software (Uaktrk Villard, 2013). MyOB accounting software used in Australia allows organizations to use flexible interface for online payments which is supported by payroll and accounting applications. Data management has been attributed as the foremost influence on the distinct strategic activities of an organization such as risk management and asset management. Conclusion The distinct approaches which are suggested for improving the financial accounting systems through integration of ICT systems in the AIS can be considered as major contributors to the development and sustainability of small businesses in Australia. Financial resource management is a major concern for business managers as they have to identify the prolific outcomes by utilizing accounting software to improve sales, ensure cost saving, develop the levels of internal communication, performance improvement of business strategy, provision of superior customer service and induce flexibility in business strategies. Some of the common factors which could be considered as drivers of change in the existing framework of accounting packages include resistance of users, IT expertise, and availability of external consultants, magnitude and cultural background of the organization. However, Accounting information systems (AIS) are subject to limitations derived from the technological ambiguities associated with IT which is the basic requirement for information systems. Therefore organizations should assume the support of external consultants in order to address the requirements of technical expertise in IT. This would enable the accounting management personnel of an organization to avail appropriate training and development in order to acquire viable suggestions for troubleshooting as well as improvise on existing skills and competencies pertaining to management of AIS. Hence it can be observed that the different types of accounting software have contributed substantially to the financial management prospects for Australian organizations thereby providing strategic advantage which suggests that AIS can be aptly considered as strategic information systems. References Abdelhak, M., Grostick, S. and Hanken, M.A., 2014.Health information: management of a strategic resource. Elsevier Health Sciences. Amrollahi, A., Ghapanchi, A.H. and Talaei-Khoei, A., 2014. Three decades of research on strategic information system plan development.Communications of the Association for Information Systems,34(1), p.84. Arvidsson, V., Holmstrm, J. and Lyytinen, K., 2014. Information systems use as strategy practice: A multi-dimensional view of strategic information system implementation and use.The Journal of Strategic Information Systems,23(1), pp.45-61. Baskerville, R., Spagnoletti, P. and Kim, J., 2014. Incident-centered information security: Managing a strategic balance between prevention and response.Information management,51(1), pp.138-151. Cassidy, A., 2016.A practical guide to information systems strategic planning. CRC press. Galliers, R.D. and Leidner, D.E., 2014.Strategic information management: challenges and strategies in managing information systems. Routledge. Haux, R., Winter, A., Ammenwerth, E. and Brigl, B., 2013.Strategic information management in hospitals: an introduction to hospital information systems. Springer Science Business Media. Lederer, A.L., 2013. The Information Systems Planning Process Meeting the challenges of information systems planning.Strategic Information Management,216. Malhotra, A., Melville, N.P. and Watson, R.T., 2013. Spurring impactful research on information systems for environmental sustainability.MIS Quarterly,37(4), pp.1265-1274. Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016.Managing and Using Information Systems, Binder Ready Version: A Strategic Approach. John Wiley Sons. Shapiro, C. and Varian, H.R., 2013.Information rules: a strategic guide to the network economy. Harvard Business Press. Salleh, S.M., Kassim, E.S., Sari, N.A.M. and Yunus, N.A.M., 2015. Conceptualizing User Bonding on Strategic Information System Development Success.Advanced Science Letters,21(6), pp.2024-2027. Uaktrk, A. and Villard, M., 2013. The effects of management information and ERP systems on strategic knowledge management and decision-making.Procedia-Social and Behavioral Sciences,99, pp.1035-1043. Ward, J. and Peppard, J., 2016.The Strategic Management of Information Systems: Building a Digital Strategy. John Wiley Sons. Whittington, R., 2014. Information systems strategy and strategy-as-practice: a joint agenda.The Journal of Strategic Information Systems,23(1), pp.87-91. Wahyudin, A. and Hasibuan, Z.A., 2015, October. Research classification in strategic information system planning development: A critical review. In2015 International Conference on Science in Information Technology (ICSITech)(pp. 287-292). IEEE.