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Apple Company System Strategy Analysis

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Apple Company System Strategy Analysis

Apple incorporation is a well-established multinational corporation dealing in personal computers, software and consumer electronics (Apple Incorporation, 2010).This firm was founded in 1977. Apple currently controls an undisputable repute in the consumer electronics industry especially so in the USA. A number of information systems support Apple Incorporation. These systems include the following:

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Office automation systems (OAS)

This covers the various computer related systems including computers and associated software used to generate, transmit, collect and store all office information required to achieve the basic tasks and goals within an office. Typical sub systems within this office automation system will include data storage systems used to capture all the relevant office data and information necessary for generating required reports and other documentation aiding office management. Digital or electronic transfer systems are also a sub system of the office automation system needed to disperse data and information to a location it is most needed. Email systems and paging systems are typical example of such currently in use at Apple Company.

Enterprise resource planning systems (ERP)

Many companies are increasingly relying on enterprise resource planning systems that are necessary in order to combine both external and internal information management processes even at Apple Company. The ERP system at Apple company consists of a number of sub systems which typically include:

  • Finance and accounting system that handles financial and accounting processes at Apple company. The accounting information system (AIS) is also included here.
  • Manufacturing system that handles all manufacturing processes at Apple Company including the manufacture of consumer electronic good as well as personal computers. All innovative designs from Apple Company are managed using the manufacturing system.
  • Sales and services system that handles order processing and customer support both locally and internationally. All processing associated with marketing and advertisements at Apple Company are coordinated within this system. Billing process is covered here as well.

Data warehouse systems

Apple Company is currently a leader in consumer electronic sales within the US and beyond. A great deal of information relating to these products, for both present and future designs and innovative products must be carefully stored, categorized and accessed based on user generated queries and market segmentation strategies employed by the Apple Company. Such processes will effectively run on a well-established data warehouse such as that employed at Apple Company. This system works in conjunction with the expert system to enable the management derive analytical information that is necessary to ensure competitiveness in the consumer electronics industry.

Expert systems (ES)

Apple Company continues to maintain a lead having been voted the best-managed company in America from 2008.The management at Apple Company value information relating to their performance and projections from such information has helped Apple Company to remain competitive in the consumer electronics market. Expert systems play an important role offering the management well formatted information based on queries submitted regarding the company’s present operational capabilities as well as future profitable projections. While using such systems the management at Apple Company has been able to identify areas to cut costs thereby increasing profitability.

External users of Apple Company’s information

Major external users of the Apple Company information include:

  • Suppliers who supply Apple Company with the components and materials used to manufacture their products. Companies like Macromedia, Quick Time Intel, Western Digital, and Seagate among others are users of information originating from Apple Company. The information would include the component specifications Apple Company orders for the manufacture of their consumer electronic products.
  • Apple Company is a public owned firm featuring on the NASDAQ stock market, shareholders and investors will require information from Apple Company as far as its financial status as well as profitability is concerned.
  • The government also requires information related to Apple’s current tax obligations.

The Enterprise Resource Planning system is currently used at Apple Company. The accounting information system (AIS) forms a portion of the ERP. Investors, Apple management as well as creditors of Apple Company use this system. This system generates information that helps the management to run Apple Company strategically (Laudon & Laudon, 2009). The AIS has various outputs that include the balance sheet as well as the profit and loss accounts. The balance sheet account generally constitutes of assets, liabilities and stockholder equity accounts. All the information as far as Apple Company asset worth is concerned can be found on the balance sheet account. The balance sheet account can help the management to make any investment decisions because they can determine the company’s financial strength from this output. Some of the input to the system will include creditor (how much Apple owes) as well as debtor (how much Apple is owed) information, tax payable, value of land owned, vehicles, equipment and buildings. This information is fed into company defined balance sheet account templates to generate the necessary balance sheet account for a particular financial year. The accounting information system at Apple Company has reliability as one of its features and therefore will effectively generate the balance sheet for the company at the end of every financial period. Projections from this output can be made even before the year ends to enable timely decision making by the management. The profit and loss account as another output of the accounting information system covers the revenue, expenses and cost of goods sold accounts. The management is able to quickly evaluate from the output how much the company is spending and how much they are getting from sales. Annual profit margins can be derived to establish if the company is growing or not. Based on such findings the management at Apple Company can go ahead and make the necessary adjustments to increase profitability.

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The role of AIS in Apple Company strategy

Apple Company formerly began as a personal computer manufacturing company. However to capture the growing market for consumer electronics, they redefined their strategy to cover consumer electronic products. This was in line with their philosophy on comprehensive aesthetic design aimed at capturing a consumer base. The AIS at Apple Company has been able to help the management establish the growth in sales as they have ventured into consumer electronics enabling them to spend more in this area as well as on innovation and research.

Currently Apple company remains a leader in consumer electronics having curved a niche in this market based on innovative products that have attracted a devote consumer base. Profit statements derived from the AIS output have helped the management to make the necessary decisions to ensure their competitiveness.

Transaction cycles at Apple Company

Apple Company as a manufacturing company has three main transaction cycles. The revenue cycle that typically covers their sale of computers as well as consumer electronics; the production cycle that handles the manufacturing of the products and their storage and the buying cycle that covers the purchase made by Apple company the payables and payments.

Apple company revenue cycle

The major transactions included in this cycle would include

Sales process which relates to the personal computers and consumer electronics. Once a consumer logs onto the company’s website or comes at any Apple company affiliated outlets and chose a product, they have the option of paying for the product upfront in case of overseas consumers buying online. Such consumers will be required to pay through credit card transactions via approved ecommerce systems over the internet. The system will generate the necessary paper work and the sales order will be sealed on completion of payment. The consumer can proceed with the documents to any Apple company approved outlet locally or internationally and collect their product on proof of purchase. Other processes relating to this revenue cycle have been integrated into the accounting information system (AIS) to ensure that all input is consolidated. The order form available on the internet enables the consumer to indicate their location and this helps Apple Company to contact the respective regional dealers to check whether the ordered product is available. If the product is not available, shipping is initiated through consumer request and additional freight charges are calculated by the system which is billed to the consumer. EBay and Amazon have collaborated with Apple Company on this platform to process receivables and collections on behalf of Apple Company.

The accounting information system generates the necessary order form and all related documentation during every transaction ensuring that audit trails can be carried out without much effort (Romney, 2008; Gelinas & Dull, 2011). A database for all transactions, progress of transactions, receivables and collections is maintained by the system.

Apple Company buying cycle

The major transactions included in this cycle are

Purchase process which relates to all the purchases Apple Company makes from their suppliers. Once a purchase has been effected after a prompt from the company’s inventory system for a reorder, the purchase form is accessed and filled in by the respective personnel. The supplier details are derived from the database and the order is forwarded to the supplier. The system keeps the necessary documentation in softcopy format from which hard copy printouts can be obtained. The system also handles the payables whereby all invoices by the suppliers are accessed and processed through online funds transfer.

A quarterly revenue report is generated by the AIS at Apple Company. The management can use this report to make adjustments on sales or change their sales strategy if the company is not performing as expected in comparison to the same at the same time during the past year.

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A payables report can also be generated from the system to enable the management at Apple Company to prioritize payment based on purchases. Most of these reports can be generated on demand; however a quarterly period is the standard for Apple Company.

Apple Company being one of the leading companies in US has a well-defined financial and accounting structure that reflects their repute. The company has a chart of accounts available to the public on their website as well as in print from their physical offices whose headquarter is in California (Google Finance, 2010). This means that all stakeholders can be able to make decisions based on this information. Since Apple Company is a multinational corporation, the most appropriate avenue of posting their financial statements of accounts is their website. This makes these documents available to as many people as possible.

Looking at the sales order processing business cycle we note that the sales team is directly involved in this process. Our assumption in this case is that consumers have access to the Apple Company website where they can make online ordering and eventual purchase of the products they desire. The data flow diagrams shown below are depicting this online process.

Apple Company has a CEO at its helm with various departmental heads under him. The order processing system comes under the sales and marketing team headed by a sales manager.

The diagram below indicates Apple company partial organizational chart. It should be noted that Apple Company is one of those leading companies that has adopted a corporate culture an approach that knocks down the hierarchical approach to management.

Apple company partial organizational chart

Apple Company as a consumer electronics company carries on the sales and order process. The assumption for this explanation is that the order process is online. The consumer access, Apple website, they go through a catalogue of the products available. The consumer goes ahead and selects the product they what to add to cart, the control is transferred to the billing system, the consumer submits the necessary details to seal the transaction, the details are transferred to the consumer file in the database. The viability of the details is checked using the internet online funds transfer modules. This requires a credit card number as input. If the details are approved the system picks the location of consumer from the details filled in.

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This is necessary to facilitate any need for shipping which would require additional freight charges.

The data flow diagrams below illustrate this process

Zero Level Data Flow Diagram for the Apple Company
Zero Level Data Flow Diagram for the Apple Company
1 – Level Data Flow Diagram for Apple Company Sales Order Processing
1 – Level Data Flow Diagram for Apple Company Sales Order Processing
2- Level Data Flow for Apple Company Sales Order Processing
2- Level Data Flow for Apple Company Sales Order Processing

Documents used within the system include the following:

  • Sales order document showing the consumer order details
  • Credit worth status document for example the consumer credit card
  • Receipt to the consumer indicating successful payment for the product purchased

The flowchart below shows the documents used within the sales order processing system at Apple Company.

the documents used within the sales order processing system at Apple Company

The table below shows the files used within the Apple Company accounting information system.

File name Update
Order After every sales order transaction
Consumer details Yearly
Supplier Yearly
Purchases After every purchase transaction
Inventory After every purchase transaction
Employee Yearly

A System flowchart showing inputs, process and outputs from the sales order processing system at Apple Company.

System flowchart

Other tools used to create and document the system include the following:

  1. Report generators, which are fourth generation tools for generating reports.
  2. Test data generators used to generate relevant test data to test the system during development.
  3. Documentation tools used to document the system during development
  4. Application generators used to generate applications based on certain parameters.

In order to collaborate well with contributors in the computer and IT industry, Apple Company has considered combining innovation in order to come up with appealing products. Object oriented application development is increasingly becoming one of the most innovative platforms in software development today. Database development is becoming object oriented. In order to provide seamless integration with other applications developed using object oriented approach. The type of logical model used by the database management system is an object oriented based one. The Oracle database remains among the most reputed database management systems at present. Oracle 12i remains the most current object oriented relational database management system used by many enterprises. Oracle supports the most recent in application development using object-oriented approach. This is among the most reliable and sufficient database management system capable of providing backend database support to busy web applications as well as dynamic website transaction. These features have made Apple company to enter into partnership with Oracle in creating and supporting applications on their products with Oracle as one of the backend and database support options.

The data was migrated in phases using a pilot approach that covered a department at a time. The advantages the company has gained from using a DBMS include:

  • Increased capacity since a true DBMS is capable of supporting very large volume of data.
  • The DBMS is able to support a number of users while supporting concurrent processing
  • The DBMS has more elaborate security enforcement procedures ensuring that data is kept from unauthorized access as well as alteration.
  • The DBMS is able to support more complex database transactions.

The implementation process was not lacking in a number of setbacks. User resistance due to mistrust was one of such a problem. It was resolved by adequate user training highlighting the importance and benefit that the implementation would bring to the corporation.

Incompatibility of the various subsystems because of diverse vendor products. This was solved by streamlining the vendor selection policy and establishing standards during selection.

Accountants were closely involved when the turn for implementing the system came to the financial and accounting department. This was because the implementation was done in phases.

References

Apple Incorporation. (2010). iphone4. Web.

Gelinas, U.J., & Dull, R.B. (2011). Accounting information systems. Boston, MA: South Western College Publishers.

Google Finance. (2010). Financial statements for Apple Inc. Web.

Laudon, K., & Laudon, J. (2009). Management information systems (11th ed.). Upper Saddle River, NJ: Prentice Hall.

Romney, M.B. (2008). Accounting information systems (11th ed.). Upper Saddle River, NJ: Prentice Hall.

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