Archive for the ‘Management Tools’ Category

Management analysis PEST tools & techniques

There are a number of tools available for business managers when undertaking either
strategic planning or analyzing performance. Tools such as SWOT Analysis, SOFT reports and standard financial reports such as Profit & Loss reports all offer some standard best practice that are easy to deploy and don’t require specialist tools.

Another common tool which can be used as a reporting mechanism is the PEST report. PEST analysis stands for “Political, Economic, Social, and Technological analysis”. When completed the PEST analysis communicates a series of environmental factors which can also be used when strategic planning.

When carrying out any strategic planning its vital to review external factors. For example government policy in the form of tax and
environmental policy could each play a factor in the success of your business.

However, you can also use PEST reports outside of strategic planning as in the guise of a monthly reporting tool it provides a standardized mechanism of regularly reviewing external factors on your business or department.

Breaking down the PEST analysis tool

When constructing your PEST analysis there are various attributes to consider:

Political factors

Political factors can include a range of issues that government can impact. They notably include obvious spheres of influence such as tax and employment law but also include areas such as trade policies (especially international law) including trade restrictions and tariffs.

Governments can also promote trade in certain sectors (consider the recent promotion of environmentally sound products as opposed to those that may be thought of as contributing to global warming.)

Economic factors

There is a range of economic factors to consider in your pest report – these tend to articulate financial constraints or opportunities for the organization and range from Exchange rates, Tax, Economic growth, Interest rates.

Financial issues can impact a number of things from export and import opportunities through to how capital is invested.

Social factors

Social factors can have a big part to play on the market appetite for a product. They can also influence how an organization functions: for example the demographics of the population can influence a range of functions not the least recruitment policy.

Social factors are built up from a variety of elements such as ethnicity, age, social attitudes (from career planning through to thoughts on trends and social causes)

Social factors are important as they reflect the barriers organizations might face into selling and producing their products and these factors often require mitigation strategies.

Project Management Guide An Introduction to Project Management

Whether you know it or not your business will be engaged in projects – from implementing new technology such as deploying a new systems to launching a new product to moving into new premises to launching a new marketing campaign – these are all forms of projects.

In this Project Management Guide we’ll take a look at what projects are, how they’re constructed and what purpose they serve – together the key steps involved in being successful.

Definition of a project?

Projects are varied but have some common characteristics – projects are not permanent fixtures within a business and last for a defined period (they have a start and end dates). Projects also have a deliverable or task to complete which once completed signifies the end of the project.

Project teams and organization

The first rule of Project Management is that Projects are a team sport – Projects are semi permanent and a project team is characteristically bought together to deliver it and then disbanded, moved to another project or in some cases absorbed into a run team (for example in the case of an IT Project). Project teams are usually built up of personnel with key skills/disciplines who undertake specific roles within the project (this maybe on a permanent or part time basis).

Project timescales

Most projects are carried out within a set timescale – this may include various “gate reviews” where progress is formally monitored and deliverables reviewed before progressing to the next stage. Timescales are a intrinsic element of successful Project Management. Projects without deadlines and defined tasks can amble rather than be focused – they can also be susceptible to scope creep as you think you have time to undertake other tasks and as a result be more costly!

Project Management Methodologies: Formal vs informal

There are a variety of “formal” project methodologies that can be applied to projects these range from the likes of Prince 2, PMI/PMP. These methodologies provide a formal route to managing a project and describe a series of set activities and sequences that take place together with a range of controls that should be applied ensuring a project is being managed correctly and has a higher likelihood of being successful.

One of the questions often asked regarding applying formal project management methods such as Prince 2 is the level of bureaucracy that these methodologies are associated with. Mileage may vary on the methodologies dependant on the size and complexity of the project and size of the team involved however it goes without saying that these formal methods have a lot to offer and can provide a proven route to success.

When things go wrong

When it comes to managing projects – don’t expect things to always run smoothly as they rarely do! – issues and constraints may occur which can impact costs and timescales – while these threats are very real there are certain things that Project Managers can do.

Risk Management in Projects

The first step in running projects smoothly is thorough risk planning – Project Risk Management is identifying and mitigating risks that could occur during your project resulting in a detrimental impact.

The method used for managing risk varies but ensure you include a detailed description of the risk coupled with it’s like hood and probable impact coupled with mitigating activity and owner.

The need for Project Assumptions

The second thing that you can do is to start your project with a set of assumptions – for example one assumption you may have is that you have access to certain staff – the reason for having assumptions is they form part of your project costings and timescales but they also allow you to reassess things if any change.

Project Management steps

Projects can really vary in their deliverables so the steps involved will vary from project to project but there are some common elements that can be attributed to any project

1/ The project sponsor (sometimes the projects customer) defines the objective and deliverable of the project and sets out a case for going ahead (sometimes formalized as a project charter).
2/ The sponsor then obtains agreement from decision makers (and more importantly budget holders!) that the project is viable and required before costs are incurred – this will often take the place of a formal review and examine – costs, timescales assumptions and risks.
3/ If required a project steering team is appointed to monitor the project and provide support and assistance when needed – the make up of a steering team varies but often includes representation from major suppliers to and major customers of the project together with key stakeholders and appropriate decision makers..
4/ Assemble a project team (this will again vary from project to project) and arm them with the required tools.
5/ Undertake a stakeholder analysis and consider what methods of communication will be used to keep stakeholders and the project team updated during the project.
6/ Construct a project plan including owners, deliverables and timescales and review the project with the newly assembled team.
7/ Carryout the initial actions within the project plan – hold regular reviews to ensure that your proceeding as planned – regularly review your risks and consider presenting regularly to your steering committee to appraise them of how your doing – this is especially necessary where problems occur which need impact cost or duration of the project – if things go as planned proceed with implementing your project plan.
8/ At completion of the project – ensure that all requirements have been delivered, document and share any lessons learnt
9/ Disband the project team and steering committee.

Benchmarking – searching for enablers in other organizations that boost performance

Benchmarking is the process of measuring activity within your organization to that of a peer (either within the organization, within the market or outside the marketplace). Benchmarking is utilized to facilitate the transfer of best practice into the organization initiating the benchmarking.

The key to successful benchmarking is identifying appropriate processes that can be measured (and compared). A process is a series of steps and activities that turn an input into an output.

Benchmarking requires a level of analysis and is reliant on collecting measurements of the process being benchmarked. Processes will therefore need to generate data that can be collated and deployed as a metric. For example if we look at a manufacturing process it will consist of a series of steps from the printing of a work pack or job list, through to issuing raw material through to the manufacturing process itself. Each activity within the process could be analyzed to form a detailed view of the process and facilitate highly effective benchmarking at a detailed level.

Once data has been collected on the process – benchmarking requires that assess and investigate results that indicate better performance in your selected peer group. Where areas of better performance can be seen the rationale behind these needs to be determined. What are the enablers that result in these efficiencies?

An enabler is something that can influence the outcome or effectiveness of a process. For example in a manufacturing process where a piece of metal is bent into a particular shape enablers could be considered to be:

Condition of the raw material
Condition of the pressing machine
Training and experience of the machine operator
Process and work-instructions on activity

Enablers, or the quality of the enabler, can have a dramatic impact on a process. Benchmarking often highlights the use of these enablers to achieve increased levels of performance – the benchmarking organization can then determine the opportunities to integrate these into existing processes.

Business effeciency

A by product of business efficiency is cost – a highly efficient business generally have less cost than a business that is comparably less efficient.

For that, and other reasons, business efficiency, an indicator of how resources such as labor and raw materials are used and consumed in order to produce a product is an often used business KPI.

Measuring efficiency is therefore an important business activity as it can:

• Highlight areas of waste and cost
• Improve control of business activity
• Aid Benchmarking
• Accurately predict resource requirements

Effeciency can generally be calculated by dividing the output by the resource consumed so for example measuring staff productivity can be calculated by dividing the output (i.e. widgets produced) by the number of staff (check out this article for further examples)

The Five forces model

The five forces model enables the analysis of industry sectors in order to identify opportunities or threats – the five forces model consists of

  • Risk of new competitors/sellers
  • Increased competition and rivalry amoungs existing marketplace
  • Bargaining power of suppliers
  • Bargaining power of buyers
  • Threat of new products

When analyzing the results the stronger each force is the lower the ability for businesses to raise prices.  Further information on the model can be found here : http://en.wikipedia.org/wiki/Porter_5_forces_analysis

Contents of a Competitor Analysis

A competitor analysis is a business tool used for assessing rivals.  This form of analysis is used to examine competitors thier strenghts and oppourtunities and where possible learn from other businesses in your sector.

Traditional competitor analysis focus on:

Strategy
Constraints
Capabilities
Marketing
Financial
Customer perception

SWOT Analysis

A SWOT analysis is a management tool that is used to undertake a rapid examination of a businesses status.

It is often used to help devise business strategy and improvement programs – SWOTS are usefull in that they examine both internal and external influences over the business.  It is also a very effective method of gathering and categorizing business issues and information.

SWOT stands for

  • Strenghts
  • Oppourtunities
  • Threats
  • Weakneses

An example SWOT analysis can be seen here : – http://www.mepss.nl/cases/edf/image005.gif