Accounting Information Systems Kudler Fine Foods Research Proposal

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Accounting Information Systems

Kudler Fine Foods

The investments Kudler's Fine Foods has made in technology to this point to automate and secure the most strategically important processes in their company is woefully inadequate and bordering on being a liability to their company. The reliance on manual processes for such key areas of cost control and Profit & Loss (P&L) analysis, the lack of integration between store locations and their POS data, and the lack of cost controls to the line-item level of financial statements show that the store chain has significant room for improvement in their use of technologies to streamline and automate key processes.

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Research Proposal on Accounting Information Systems Kudler Fine Foods the Assignment

The lack of integration at the process level within Kudler's Fine Foods is the most pressing business and accounting information needs. The three locations of the chain do not share POS data and in fact store this data on separate servers, not having the ability to create a company-wide view of operations. The stores in Del Mar, Encinitas, and La Jolla do not share pricing; sourcing, real-time supply chain, or variance analysis of costs either. Until Kudler's can create an enterprise-wide accounting system it is highly advisable for the company to not seek out new locations in other affluent areas including Greenwich, CT, Naples, FL and Scottsdale, AZ. There is no consistent approach to being able to define standard costing reporting, no traceability of supplier costing, a lack of supply chain processes and systems to deal with perishable products, in addition to a lack of e-commerce integration between the Kudler's website and the online catalog, inventory management and order capture systems. In essence the company is comprised of a series of siloed and stand-alone systems that need to have much greater levels of integration for Kudler's to experience any significant long-term growth. Processes that specifically need to be targeted for improvement include both the perishable and non-perishable products that Kudler's sources, as the collaborative planning and forecasting processes that are necessary for each are different. Second, the entire aspect of measuring the profitability of their supply chain - which is critical to their survival and growth - is not being accomplished today. This must happen for Kudler's to know such basic measures as inventory turns, Return on Sales (ROS), Return on Assets (ROA) and Return on Invested Capital (ROIC), all critical measures for performance any small business needs to know to better manage its finances. There are also the processes of cash management, inventory management both on a centralized and specific store locations, and supply chain costs and process management as mentioned before. The Kudler's website is not integrated to either their content management or order management systems, which further hampers their ability to generate additional business in this channel as well.

Instead of concentrating on each of these areas individually however, Kudler's needs to take a much more process-centric view of the business and complete extensive business process re-engineering on each of these specific areas, with a focus on how to make them more efficient at a systemic basis first (Walker, 2008). Process re-engineering is essential prior to any information systems being installed and used in the company. By completing process re-engineering first, Kudler's will be able to more efficiently automate the key areas of their company and gain greater cost and time savings as a result.

Analyze Kudler's current system including hardware and software by performing an analysis of strengths and weaknesses regarding Kudler's current computer system and technology use.

The current systems at Kudler's lack the necessary integration across functional areas, and also do not integrate between stores on a real-time basis to track inventory positions. Form an analysis of the income statement there is also significant potential for cash management systems within the company as well. The strengths of the current Kudler's series of systems is the ability to manage single stores effectively using POS data, the generation of income statements and balance sheets in addition to basic other measures of financial performance, and the ability to track pricing by supplier. The weaknesses are the lack of real-time integration between stores, the lack of advanced inventory management and cash management systems, and the inability to better manage both the non-perishable and perishable supply chain partners as well. There is also a lack of traceability to the process level of their advertising and marketing efforts - there is no visibility into the ROI of their marketing campaigns and their impact on the broader performance of the company as well. On this specific weakness, there needs to be extensive business process re-engineering to be able to tie back to specific marketing and promotional campaigns their impact and contribution to increased sales, potentially tracking greater inventory turns as well - in short a process re-engineering of marketing strategies as they relate to the broader Profit & Loss (P&L) statements of the entire company (Walker, 2008).

Explain what opportunities Kudler has in terms of technology and provide suggestions for improving Kudler's ability to maximize these opportunities through technology.

There are many opportunities for Kudler's to grow their business, both in their existing stores with a growing base of loyal customers, but also in the three other cities of potential expansion as well. Prior to attempting such an ambitious growth strategy however, Kudler's must transform their supply chain, its processes, systems and costs into an asset and not a liability. As has been mentioned this can be achieved with business process re-engineering (Walker, 2008). There is also the potential of creating an entirely new line of business through the use of online catalogs and online ordering - yet this can only be achieved with an enterprise-wide accounting system. A second major opportunity is to create a more efficient supply chain for non-perishable and perishable goods, getting much greater levels of visibility or tracking of shipments in both categories of suppliers. This can be delivered in many of the small business accounting systems available today (Collins, 2006) and would give Kudler's the opportunity to have much greater control over their inventory carrying costs. Third, their stores' greatest levels of automation are for POS data, and these systems are not integrated to provide an enterprise-level view of sales at any point in time. This is a major shortcoming of their existing processes and systems and will emerge as serious disabler of growth if not dealt with quickly. For Kudler's, a viable enterprise-wide platform that includes these accounting applications is hosted accounting software, or as it is called, Software as a Service (SaaS) (Davis, 2008). Given the modest budget that Kudler's has for replacing their Finance and Accounting system of $22,500, it is critical that they consider hosted or SaaS-based systems as this class of applications can fit into their budget. A second advantage of SaaS-based accounting systems is the scalability for their expansion plans. Kudler's can significantly increase the level of performance at the process level by first concentrating on making those areas of greatest weakness mentioned earlier in this analysis, including cash management, inventory management, supply chain management, interstore integration, into a strength through business process re-engineering first and then the use of accounting applications on a hosted or SaaS platform second.

Evaluate the threats which Kudler may encounter given their current systems and your suggestions, in terms of using technology.

The greatest threat of the current systems is the lack of consistency of reporting with no single version of the truth being created. There is no system of record being in place that can accurately reflect what is happening in the business. With no enterprise-wide system to track sales across stores and also to manage costs within the supply chain, the company lacks the necessary insights to run profitably and grow as well. There is also the risk of… [END OF PREVIEW] . . . READ MORE

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