MG934 Professional Management Practice

Chollada Tontanasutthivong 201663549 MFM

Nithila Thomas 201667343 MBM
Mohammed Elbadawi Eltigani Elbadawi 201667676 MBM
Stylianos Krasanakis 201650988 MFM
Varalee Kittichitvarangkul 201692833 MFM
Abdulmajeed Abdullah A Alahmari 201664961 MFM
Khaled BaderKhaled Mubarak Algherair 201688213 MFM

Words count: 1934

EXECUTIVE SUMMARY

This report was commissioned to analyse the problematic situations in Orbis Protect Ltd. and
to choose the best business improvement proposal for its advancement and improvement
over the following months. The report also explains the behavioural changes that are to take
place after the implementation of the proposal.
Assessment
Most of the current issues in Orbis are due to the reasons that follow. The company seems to
have no thorough records of the qualifications of employees, and also lacks rules and
regulations regarding the requirements of skills and qualifications for promotions and
recruitment. Hence, employees who dont have the necessary skills are being promoted to
the managerial position, and this results in a variety of operative problems. The right people
are not assigned to do the right jobs and proper training is not provided to the employees.
Another problem is that the communication between departments and the employees and
managers is poor, which results in a lack of knowledge and uncertainty over who did what
job. Moreover, the managers fail to take the responsibility for what they do when a problem
occurs and create misunderstandings. Orbis lacks proper leadership, and confidence within
the company.
Thus, the implementation of the Knowledge Management Proposal will provide solutions for
majority of the issues that the company faces. It will result in appropriate behavioural changes
by providing necessary training to management level staff and other employees, making the
sharing of data and information easier, improving communication, reducing
misunderstandings, and decreasing errors. Furthermore, Knowledge Management Proposal
is the second cheapest business improvement proposal in terms of costs.
Relevant and Chosen Proposal
The analysis undertaken in this situation looks at four proposals including the Knowledge
Management proposal, the Business Analytics proposal, the Customer Relationship System
proposal, and the Accounting Control System proposal. The business improvement proposal
that best fits Orbis Protect Ltd. is the Knowledge Management proposal, and is hence the
chosen proposal here.
Resources
Within a period of five weeks, resources used to aid this analysis were based on information
gathered from e-mails, financial reports, and assumptions based on observations.
Contents

1. Introduction ___________________________________________________________________ 1
2. Analysis of Situation _____________________________________________________________ 2
Business Operation ______________________________________________________________ 2
Business Environment____________________________________________________________ 3
Finance _______________________________________________________________________ 3
3. Justification ____________________________________________________________________ 4
Proposal improvement ___________________________________________________________ 6
Payback period _________________________________________________________________ 7
4. Behavioural Changes _____________________________________________________________ 8
5. Conclusion _____________________________________________________________________ 9
Appendix _______________________________________________________________________ 10
1. Introduction

The purpose of this report is to introduce the best proposal that can help Orbis Protect Ltd.
to find solutions for the main concerns that have been observed through five weeks of
contacting, analysing, and evaluating all possible information that have been received from
the companys departments. It can be clearly seen that, currently, there is a huge
misunderstanding in responsibilities among managers and employees in many departments
across the organization.

A key issue found is the lack of communication between employees amongst leading
positions, which affects the morale of staff, and operatives in the company. Likewise, it was
found that most operations suffer from incorrect expertise and technicians that have affected
the work efficiency. There is no doubt that the human resource department in the company
was deeply involved in the lack of employees' knowledge.

Moreover, delaying financial information issued from several divisions has significantly
affected the financial aspects of Orbis, leading to long term negative impacts. This analysis,
finally, concludes with the process of behavioural changes.

1
2. Analysis of Situation

Within a duration of 5 weeks, using the contacts provided, an analysis of the current situation
in the organisation was made through meetings, emails, observations, and financial
evaluation. Through this analysis, it was found that throughout the company, many problems
occur in almost every sector of the company, including divisions of management and business
operation to name a few. Hence, from all the information taken into account, a Fishbone
Analysis1 has been developed that shows the organisation's internal problems, a Rich Picture2
is included that visualises the organisation's current situation, a Force Field Analysis3 that
demonstrates the force drivers for change, and finally a Stakeholder Analysis4.
Business Operation

Recruitment of depot staff and operatives in Orbis is done by depot managers (DM) who have
had no actual relevant skills. Operatives are sent to positions without training, and hence do
not do the right jobs they are meant to do. Due to the ineffectiveness of the current system
for recording employee qualifications and development, problems occur regularly as
operatives the people who work closely with clients, and are vital and solely meant to be at
the heart of the organisation. One such problem is one that has been picked up lately by the
North British Echo newspaper, January 2017. The article notes that as a result of the
operations in Orbis and poor customer service, the cancellation of the companys contract
with its latest customer, West Grimston Council, happened. It lost its contract because Orbis
left the councils depots insecure and uninhabitable. The councils spokesman mentioned that
Orbis staff started doing their job perfectly at the depot, but couldnt complete it due to
communication problems.
Pat Hartley, Compliance Director, mentioned that there was a confusion among the depot
staff about who did what job and DM may or may not have known about what the staff were
going through. Leigh Bodworth, Customer Service (CS) Manager, stated that they reported
completion of the job to the customer after getting the permission from DM, which makes
the CS not responsible for that issue. Meanwhile, Operations Director Bryn Campbell,
Compliance Director Pat Hartley, and Information Technology Manager Saul Doherty blame
the CS system for an error caused by the CS staff and berate their lack of customer focus.

1 Appendix 1 - Fish Bone Analysis

2 Appendix 2 - Rich Picture
3 Appendix 3 - Force Field Analysis
4 Appendix 4 - Stakeholder Analysis

2
Business Environment

After this incident, Clive Thompson, Regional Managing Director, allocated Ehjaz Taneja - DM
to oversee a programme of site inspections in order to check the compliance of recent work.
Ehjaz indicated that, generally, it is possible to schedule work in a depot and solve in-site
problems immediately because DM are able to move their team around to ensure that they
got issues solved. But, when the service centre, Aura, handles everything it is ineffectively
controlled and miscommunication appears because a computer tells everybody what to do
and where to go. Sometimes, it sends people to jobs and makes them sit for hours waiting for
authorisation which causes administration delays and customer dissatisfaction. John
Keynsham, General Manager, mentioned that when he was a DM, Aura was his biggest
obstacle because it was still not fit for purpose.
Aura has a remarkable foot print in creating more problems, specially after applying the multi-
skilling strategy, i.e. sending cleaners to alarm installations jobs, fitters to clean-up-jobs etc.
because it ignores the skills of different trades, a problem that a DM can simply handle.
Although the performance figures for January show that the service centre is doing good and
customers are happiest at every point, Orbis doesnt need customer or employee satisfaction
measures to tell the effects of wrong usage of Aura. That being said, the Customer
Relationship System proposal by Mira Wadekar, Business Development Director, will not be
a good option because Auras issues will still occur and depot managers will keep recruiting
staff/operatives with wrong qualifications.
Finance

There is no direct relationship between the accounting and sales systems which makes it
difficult and time consuming to trace transactions and write financial reports, a job that
should normally take fraction of seconds to be automatically done, as mentioned by Saul.
Although Steven Cramm, Financial Controller, proposed that these problems could be solved
by an Accounting Control System (ACS), this proposal will not offer the best solution because
the other systems that should be linked to ACS will still have their weaknesses unsolved.
Although the implication of the Business Analytics proposal by Saul will revise issues between
the accounting system and other systems, it will offer more management control over the
company. Even then, depot managers will continue recruiting inappropriate employees for
jobs and Aura will still be misused, which make this proposal not the best solution.

3
 3. Justification

Table 1: The comparison between four proposals

Knowledge Customer
Business Analysis Accounting System
Management Relationship System
Benefit - It allows managers - It will allow the - It allows the - The Interface
recognize skill company to improve company know between the AURA
shortages and management through customer system and the
competencies of improved information information. existing accounting
employees in their quality. - It can build and package is less than
own departments and - It can improve report maintain the perfect.
identify training quality by replacing relationship - It allows owners of
requirements. existing reporting with between the business know if
- It offers the alternative frameworks customers and the the control system is
opportunity to and approaches. company. suitable for purpose.
employees to express - It can improve - The system can - The company can
knowledge and operational efficiency. improve sales easily obtain loans
experience in order to - It will reduce analysis forecasting. and overdrafts from
help plan the time and improve - It can increase banks.
personnel accrual information. customer loyalty - It helps the company
development process. and satisfaction. manage money due
- The system is able to from customers.
record training and accurately.
qualification of local - It is flexible and
staffs. quick in creating
- Practice group accounting reports.
workshops will
establish a culture of
continuous
improvement.
Cost 616,9241 275,0002 509,7003 401,8404
User All employees All departments Sales and marketing, Accounting, customer
and customer service service and IT
Required Human Resource IT Senior management, Finance, Customer
staff Sales and marketing, service, and IT
and customer service
team

1 Appendix 6.1 Knowledge Management Proposal

2 Appendix 6.2 Business Analytics Proposal
3 Appendix 6.3 Customer Relationship Management Proposal
4
4 Appendix 6.4 Accounting System Proposal
Considering the previous analysis and comparing between four proposals in Table 1, the
Knowledge Management proposal by Leslie Bond, Human Resource Manager, will best fit
Orbis situation because it will offer a computer-based record of peoples qualifications and
certifications which will allow the company to record the training of each individual.
Therefore, it will be continuously updated with the training requirements of each job in the
companys structure, which will directly help in assigning the right people to do the right jobs.
This system also provides workshop group allowing employees to share their knowledge and
experience with other employees. It would be the best way for managers and colleagues to
access such information and deploy skills effectively.
In terms of miscommunication within the company, the Human Resource team can provide
communication training to all employee levels in order to reduce misunderstandings and
conflicts between different level jobs, which will directly reduce the time assigned for the
completion of each job.

Figure 1: The Knowledge Management process

5
Proposal improvement
Based on the information given, the table below demonstrates five parts that need to be
improved in the Knowledge Management proposal.
Table 2: Costs of the proposal improvement

Price Quantity Cost

1. PCs 500 9 PCs 4,500
2. Internal bandwidth 20,000 20,000
3. Set-up Sever 19,000 19,000
4. Connect with Aura 40,000 40,000
5. Annual Training 60,000 5 years 300,000
course
Total Cost 383,500

Firstly, the supply of computers is necessary for staff members because computers are
needed for gathering information that include work responsibilities and for accessing E-
learning and E-training software. The company currently has three depots. Three computers
should, hence, be added per depot. As such, equipment costs would be 4,500. Secondly,
when adding more computers, internal networks might not be able to support additional
bandwidth, and servers must be upgraded for capacity. The internal bandwidth and set-up
server would hence cost 20,000 and 19,000 respectively. Furthermore, the KM system will
not automatically interface with Aura, so 40,000 should be included for connecting Aura.
Lastly, in order to bring employees up to standard with their certifications, the company
needs to provide training budgets of 60,000 per annum. Therefore, the total costs of the
project improvement would be 383,500.

By implementing this proposal, should it succeed, non-productive time1 (e.g. time wasted
awaiting Orbis specialists, tradesmen and rectification) would be decreased and labour costs2
would decrease as through providing training courses and personnel development systems
to staffs, efficiency and expertise would be enhanced. That means error in working process
and conflicts across Orbis would be minimised. Employees understanding their duties lead to
positive working environments, as a result increasing productivity thus increasing
profitability.

1 Appendix 7.1 Non-productive time

2 Appendix 7.2 Saved labour costs

6
Payback period
The payback period1 would be shown below:

Payback period
Net benefit / (costs) Balance carried forward
Year 0 (575,424) (575,424)
Year 1 415,445 (159,979)
Year 2 437,311 277,332
Year 3 460,271 737,603
Year 4 484,378 1,221,982
Year 5 509,691 1,731,673

The company will recover from cash inflows generated by the investment in the second year.

1 Appendix 8 Cost benefit analysis

7
4. Behavioural Changes

The implementation of the knowledge management proposal will result in many positive
behavioural changes within Orbis. As mentioned earlier in the report, one of the main issues
in Orbis, at the moment, is the lack of proper communication. The communication between
its departments is very poor, and due to this there is a lack of knowledge and also uncertainty
over who did what job. This can be solved with the implementation of the knowledge
management proposal as this will result in a proper communication flow between the
departments, thus making the sharing of information and data much easier and clearer. In
Orbis, employees are promoted to the managerial position often without the necessary
training and qualifications. This can be avoided in the future as knowledge management will
put forth a set of rules and regulations regarding the training, required skills and
qualifications, and promotion of employees. Another matter of concern in Orbis is that there
are often misunderstandings between the managers and employees, and that the managers
are unwilling to take the responsibility for what they do whenever there is a complication.
Now as the communication between the departments and employees improve, the
misunderstanding between managers and employees will eventually decrease. Also, more
importantly, as the personnel development programme focuses on differentiating between
management and leadership and the management level staff are given proper training, the
managers will be able to acquire specific skills that they currently lack. With the development
of these skills, they will be able to bridge the communication gap between themselves and
the employees, develop a mutual understanding, and create a better work atmosphere
overall. Yet another issue is that the operatives do not do their jobs properly, or in other
words, the right people are not assigned to do the right jobs. There is a lack of confidence
among the employees due to this, and most of them do not know how to handle the tasks
assigned to them. The knowledge management proposal will focus on the necessary
competencies to complete a job and provide training to the employees. Hence, over time, this
issue will be solved as the employees gain more knowledge about their jobs and acquire the
necessary skills to do them.

8
Implementation Process

1. Establish a clean database of the employees qualifications and certifications.

2. Form a set of rules and regulations for employees promotions.
3. Determine training requirements along with depot managers and regional managing
directors to improve employees skills and knowledge.
4. Training of management level staff.
5. Conduct practice group workshops for continual development.

5. Conclusion

In summary, it can be seen clearly that the Knowledge Management System is a worthwhile
investment for the company. The companys internal problems should be solved as the first
priority. This system will allow the company improve the potential of its employees through the
collaboration between managers and employees and between departments. Only in the second year,
the company can recover their costs and result in the increased profitability, improved customer
services and response times, and reduced conflicts within the organisation. It will provide the benefit
for the company in the long term and lead to the companys success in the future.

9
Appendix

Appendix 1 - Fish Bone Analysis

10
Appendix 2 - Rich Picture

11
Appendix 3 - Force Field Analysis

12
Appendix 4 - Stakeholder Analysis

13
Appendix 5 Statement of comprehensive income

14
Appendix 6 - Costs of four proposals

6.1 Knowledge Management Proposal

Category Project Calculation Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Requirements details for
year 0
License cost 120,000 for 120,000 0 0 0 0 0
one time
(based on 40
users)
Additional license 2,500 per 2,500*115 287,500
cost user users =
287,500
Annual 25,000 0 25,000 25,000 25,000 25,000 25,000
maintenance cost
Implementation 1,250 per 30 days 37,500 0 0 0 0 0
work consultancy day consultancy
cost =
37,500
(1,250*30)
Recording of 1 HRs Salary - HRs cost for 22,200 0 0 0 0 0
training data (two 3,700 per three
HR staffs for three month (HR months =
months) are required 22,200
for three (3,700*3*2)
months)
Training costs 400 hours Training 19,724 0 0 0 0 0
costs =
19,724 (400
* 49.31)
Miscellaneous cost Assume 5,000 0 0
miscellaneous
cost 2,000
only year 1
491,924 25,000 25,000 25,000 25,000 25,000
Total cost 616,924

1 HRs Salary is calculated from total HRs salary is 581,200 per year. There are 13 HR staffs. Thus, the HRs salary pee month is equal to
approximately 3,700 (581,200/(13*12)). Salary and wages are taken from Management Accounts report for January 2017.

15
 6.2 Business Analytics Proposal

Category Project Calculation Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Requirements details for
year 0

License cost 33,000 per 33,000 33,000 33,000 33,000 33,000 33,000
annum (based
on 30 users)

Training run by 350 per day 45 days 15,750 0 0 0 0 0

consultancy training
cost =
15,750
(350*45)

Implementation 1,250 per 45 days 56,250 0 0 0 0 0

work day consultancy
consultancy cost =
56,250
(1,250*45)

Miscellaneous Assume 5,000 0 0 0 0 0

cost miscellaneous
cost 2,000
only year 1

110,000 33,000 33,000 33,000 33,000 33,000

Total cost 275,000

16
 6.3 Customer Relationship System Proposal

Category Project Calculation Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Requirements details for
year 1
Initial cost 3 days for one 1 senior 700 0 0 0 0 0
senior management
management salary per 3
days = 700
(235.27*3)
License cost 80,000 (based Number of 185,000 0 0 0 0 0
on 15 users) users = 45
extra 30 user
licenses
(@3500 per
extra user) =
185,000
Annual software 25,000 per 0 25,000 25,000 25,000 25,000 25,000
support cost annum
Implementation 79,000 for 79,000 0 0 0 0 0
work consultancy one time cost
Annual Software 14,000 per 0 14,000 14,000 14,000 14,000 14,000
Maintenance annum
Culture Change 750 per day Number of 7,500 7,500 7,500 7,500 7,500 7,500
Workshops workshop = 10
days. Culture
Change
Workshops
cost for 10
days = 7,500
per year
Miscellaneous Assume 5,000 0 0 0 0 0
cost miscellaneous
cost 2,000
only year 1
277,200 46,500 46,500 46,500 46,500 46,500
Total cost 509,700

1
Senior managements salary is calculated from total senior managements salary is 388,800 per year. There
are 6 management staffs. Thus, the senior managements salary per day is equal to approximately 235.27
(338,800/(12*20*6)). 20 days for working day. Salary and wages are taken from Management Accounts

report for January 2017.

17
 6.4 Accounting System Proposal
Category Project Calculation Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Requirements details for year 1

License Cost 80,000 (based Number of users 110,000 0 0 0 0 0

on 20 users) = 40 users

20 user license +
extra 20 user
licenses (@1,500
per extra user) =
110,000

Annual support 22,000 per 0 22,000 32,000 22,000 32,000 22,000

cost annum
Provision every
second year
10,000

Implementation 1,500 per day Implementation 45,000 0 0 0 0 0

work consultancy (required 30 cost = 45,000
days) (1,500*30)

Training run by 250 pay day Training cost = 7,500 0 0 0 0 0

consultancy (required 30 7,500 (250*30)
days)
Cost of one staff The salary of IT For 6 months 17,100 0 0 0 0 0
from IT for 6 = 2850 per Cost of IT staff =
months months 17,100
(required 6 (2850*6)
months)

Cost of one staff The salary of For 6 months 10,680 0 0 0 0 0

from Service Service Centre Cost of Service
Centre for 6 = 1780 per Centre staff =
months months 10,680
(required 6 (1780*6)
months)

Cost of one staff The salary of For 12 months 76,560 0 0 0 0 0

from Finance for Service Centre Cost of 2 Finance
12 months = 3190 per staffs = 76,560
months (3,190*12*2)
(required 12
months)

Miscellaneous Assume 5,000 0 0 0 0 0

cost miscellaneous
cost 2,000
only year 1
271,840 22,000 32,000 22,000 32,000 22,000
Total cost 401,840

18
Appendix 7 - Managerial Account

7.1 Non-productive time

Decrease
Physical Property Response Non-productive
Security Services Alarm Install. Centre Company Total time
Total available hours 19,649 12,780 10,137 5,346 47,912

Unrecorded time 743.9 467.1 275.8 11.5 1,498

Sickness 1,999.1 1,325.7 461.9 240.0 4,027
Unpaid leave 200.1 248.0 67.0 - 515
Retrieving materials 548.9 125.2 356.0 - 1,030
Retrieving equipment 243.2 113.0 112.0 - 468
Awaiting Orbis specialists 854.9 226.9 135.6 - 1,217 60.87
Awaiting tradesmen 526.8 477.4 400.5 - 1,405 56.19
Awaiting client
instructions 125.6 355.3 347.6 14.3 843 25.28
Rectification 962.2 489.9 374.0 - 1,826
Administration 336.2 280.8 217.3 55.3 890
Training 360.0 120.3 168.4 53.6 702

Total Non-productive
time 6,901 4,230 2,916 375 14,421 142.34

19
 7.2 Saved labour costs

Physical Clean & Alarm

Monitor
Security Repair Install.
Labour costs 2,315,700.00 1,321,100.00 1,294,300.00 576,100.00
Headcount 136.00 82.00 71.00 35.00
Hours per week 35.00 38.00 35.00 38.00
Working weeks per year 45.60 45.60 45.60 45.60
Possible hours 217,056.00 135,158.40 108,528.00 64,113.60
Calculation
Rate per hour 10.67 9.77 11.93 8.99
Save 1% hours per week 0.35 0.38 0.35 0.38
Hour save per year (per
person) 15.96 17.33 15.96 17.33
Hour save per year (total
headcount) 2,170.56 1,420.90 1,133.16 606.48
Amount saved 23,157.00 13,888.49 13,514.01 5,449.59
Total 56,009.10

7.3 Peak time license user

Peak time license user

Peak time
Class Weight User
Users
Class 1 - Online constantly 90% 28 25.2
Class 2 - Regularly access 60% 133 79.8
Class 3 - Rarely use 15% 317 47.55
Total Peak time users 152.55
Approximately users 155
License based on 40 users 40
Additional licenses 115
From total employee = 478 (161 Indirect staffs + 317 Direct
staffs)
* Class 1 users = 28 (13 HR + 15 Managers)
* Class 2 users = 133 (161 - 128 = Remaining Indirect staffs)
* Class 3 users = 317 (Direct Staffs)

20
Appendix 8 - Cost benefit analysis

8.1 Summary

Payback calculation template

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Balance brought forward (575,424) (159,979) 277,332 737,603 1,221,982

Costs
Capital costs 4,500 - - - - -
Licenses 407,500 25,000 25,000 25,000 25,000 25,000
Consultancy costs 37,500 - - - - -
Training costs 19,724 60,000 60,000 60,000 60,000 60,000
Other revenue costs 106,200 - - - - -
Total costs in period 575,424 85,000 85,000 85,000 85,000 85,000

Benefits
Incremental revenue - 437,325 459,191 482,151 506,258 531,571
Productivity improvements - 63,120 63,120 63,120 63,120 63,120
Direct cost savings - - - - - -
Sales and admin cost savings - - - - - -
Total benefits in period - 500,445 522,311 545,271 569,378 594,691

Net benefits / (costs) (575,424) 415,445 437,311 460,271 484,378 509,691

Balance carried forward (575,424) (159,979) 277,332 737,603 1,221,982 1,731,673

21
 8.2 Costs
Costs summary
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
PCs (9 PCs - 3 PCs per
4,500.00
depot) 500

Total Capital costs 4,500 - - - - -

License cost (based on

120,000
40 users)
Additional License (115
287,500
users) 2500
Annual Maintenance 25,000 25,000 25,000 25,000 25,000
Total License costs 407,500 25,000 25,000 25,000 25,000 25,000

Consultancy costs 37,500

Total Consultancy
37,500
costs - - - - -

Cost per chargeable

49.31
(AVG)
Training costs (400
19724
hours) 400
Training costs per year 60,000 60,000 60,000 60,000 60,000
Total Training costs 19,724 60,000 60,000 60,000 60,000 60,000

Miscellaneous 5,000
Connect with Aura 40,000
Set-Up Server 19,000
Internal bandwidth 20,000
Recording data costs (2 22,200
HR dedicated)
Other costs 106,200 - - - - -

22
 8.3 Benefits

Benefits summary Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Additional sales
Extra sales achieved (growth
5%) 1,190,000 1,249,500 1,311,975 1,377,574 1,446,452 1,518,775
gross margin percentage
achieved 35% 35% 35% 35% 35%
Cash benefit on additional
sales - 437,325 459,191 482,151 506,258 531,571

Productivity savings (detail

category,hours and hourly
rate)
Total amount saved from
labour costs 56,009 56,009 56,009 56,009 56,009
Saved non-productive time
(1%) 7111 7111 7111 7111 7111

Productivity improvements - 63,120 63,120 63,120 63,120 63,120

23