ACCA SBL Unit of Innovation, Performance Excellence and Change Management 2021

In SBL,
1) Fintech
= financial technology
2) cryptocurrency
i.e. the virtual coins technology that changes the products
introduced to the market are useful the
way the industry, the people works and lives
two additional modals in addition to

1) product with innovation we may achieves balance scorecard will be learn:
2) processes disruptive technology
3) business modals ~ POPIT
~ Boldridge for measuring a company performance.
H. Innovation, performance excellence and

change management , and Project management
1) nature, scope, 2) Contextual features 3) Stages of changes
and type of change i.e. situations within the
company that influence
the success or failure of
the change
way an organization:
~ being set up
~ organization structure
Enabling success: organising
you ought to know the pro and con of the
respective structure in order to be able to
conclude whether a particular structure is most
suitable for the scenario give.
Re-organization of an organization’s structure and
internal relationships to deliver a selected
strategy
Establishing Organisation
• Stages of establishing an organisation

– Set aims and objectives
– Determine systems, policies and procedures
– Division of labour (specialisation)
– Delegation of authority and allocation of roles and responsibilities
– Define formal relationships between sub-systems
Establishing Organisation
1. Objectives
2. Systems, Policies and Procedures
Channels of 4. Delegation of Authority
Communication
6. Accountability
3. Division 5. Establish
of Labour roles and
Marketing Finance Operations Human responsibilities
Resources
Organisation Structures
• Types of Structures
– Functional
– Multidivisional
• Products/Service
• Geographical
– Holding Company
– Matrix
– Transnational
– Team-based
– Project-based
• Functional Structure
CEO
Human
Production Marketing Finance
Resources
– Advantages
head of the respective department
• Specialists at middle management levels
• Reduces/simplifies control mechanisms control is straight forward as they all report
to the CEO via weekly or monthly meeting.
• Clear definition of responsibilities; increases accountability
• Senior management in touch with all operations
corporate parenting role likely to be parental developer
i.e. CEO closely involved in monitoring the functioning of the
respective department.
– Disadvantages day2 running of the department
• Functional managers overburdened with routine matters

• Functional managers neglect strategic issues because they are too
concerned with narrow functional interests
very little interaction between the department
• Coordination between functions is difficult resulting in the creation
of gaps & disconnection.
• Difficult to integrate knowledge no opportunity for personnel from other department
to interact.
• Inward looking focuses more on the department
than on achieving the goals of the company
• Difficult to cope with diversity all the department must exist together before the company can operate
smoothly as such cannot response to changes fast.
• Failure to adapt to environment: Inflexible
• Multidivisional Structure e.g. 99 Speedmart
all the division found in respective location
– Products/Service are not company own their own. But branches / outlet.
– Geographical
CEO
procurement
~ warehouse central Central
~ central marketing Services
Division 1 Division 2 Division 3 Division 4
Functions Functions Functions Function

~ cashier
~ storekeeper
• Multidivisional Structure
– Advantages
because each division is a separate entity
• More flexible (company can add or divest divisions).
• Ownership of strategy is handed down to the business unit
managers. owners empower the division manager to operate the division independently.
the corporate parenting style is likely to be portfolio manager
• Control is normally by monitoring performance (parenting roles).
• Better development or specialisation of competences within each
division. suitable for grooming successor. Division manager who has proven themself will be promoted
to work in corporate office.
• Training for managers at the business level before they move on to
the corporate level
in each division there is duplication of resources i.e. in each of 99 speedmart
• Multidivisional Structure store. the same type of personnel exist due to no sharing of resources as seen
in functional structure.
– Disadvantages in time of economic recession, high cost in maintaining this structure.
• Additional duplication costs either at the centre or division.

if corporate parent,
try to micro manage • Parent may not be able to add value or may destroy value.
the division
• There could be fragmentation and non-cooperation between the
business units, especially when they are unrelated.
too independent
• Divisions may become too autonomous. (reject to follow policy or strategies given
from HQ)
• Strategy of the business level may not be aligned with the
corporate strategy.
Multidivisional structure : suitable for companies that purse the direction of market development
divisions are opened at the targeted market nation-wide or world-wide.
similar to multi-divisional structure except
• Holding Company Structure that the divisional are company on its own i.e. subsidiary
– Extreme of multidivisional organisation

– Parent act as portfolio managers
~ Absence of central services

~ difficult to allocate the cost to respective Holding
subsidiaries. To enable them maintain
separate set of financial statement. Company
SBU 1 SBU 2 SBU 3 SBU 4

Strategy Business Units
Functions Functions Functions Function

• Holding Company Structure = Both advantages and disadvantages are similar to multi-divisional structure.
– Advantages
• Extremely flexible
• Allows the bringing in of outside shareholders as partners.
• The parent may buy or sell subsidiaries as conditions change.
• Subsidiaries can gain access to investment capital and talented
managers from inside the company.
• Parents can add value.
• Holding Company Structure

– Disadvantages
• The autonomous business units are hard to control.
• Knowledge sharing between the business units cannot be
encouraged.
• There is very little scope for synergy.
• Transnational Structures Applicable for multi-national corporation (MNCs)
I.e. corporation that have business in foreign countries.
– International companies have the global-local dilemma

same product being sold in all of the market, can achieves economic of scales
• Global Strategy: To standardise product on a global scale.
• Multi-domestic Strategy: To localise product on the local scale.
differentiated product according to the local culture, preference, etc.
the product appeal to the local people and therefore will be well received by them.
– The transnational structure combines multi-domestic and global
unable to achieves economic of scale due to smaller size of each type of product
strategy
• Local responsiveness of the international subsidiary. Businesses
that are highly locally responsive have the objective of adapting
products and services to specific local needs.
• Coordination advantages found in global product companies.
Businesses that are highly globally integrated have the objective to
reduce costs as much as possible by creating economies of scale
through a more standarized product offering worldwide.
• Transnational Structures
– Together, these two factors generate four types of strategies that
internationally operating businesses can pursue: Multidomestic,
Global, Transnational and International strategies.
emphasizes on creating differences
in different market
emphasizes on selling
similar product
– Multidomestic
• Aims to meet the needs and requirements of the local markets
worldwide by customizing and tailoring their products and services
extensively. In addition, they have little pressure for global
integration.
• Have a very decentralized and loosely coupled structure where
subsidiaries worldwide are operating relatively autonomously and
independent from the headquarter.
• Nestlé is an example of a multidomestic company. It uses a unique
marketing and sales approach for each of the markets it operates
and adapts its products to local tastes by offering different
products in different markets.
– Global
• Offers a standarized product worldwide and have the goal to
maximize efficiencies in order to reduce costs as much as
possible.
• Global companies are highly centralized and subsidiaries are
often very dependent on the HQ.
• Main role is to implement the parent company’s decisions and to
act as pipelines of products and strategies.
• Pharmaceutical companies such as Pfizer can be considered
global companies.
– Transnational achieves the best of both worlds
• Has characteristics of both the global and multidomestic firm

with aim to maximize local responsiveness but also to gain
benefits from global integration.
• Create economies of scale more upstream in the value chain
and be more flexible and locally adaptive in downstream
activities such as marketing and sales.
• Unilever is an example of a transnational company.
in each country the company sell products that match the preferences of the local people so that,
the product will appeal to them.
However, at the group level, they practice bulk purchase of those ingredients that are common in making the differentiated.
So as to reduces the cost.
– International
• Has little need for local adaption and global integration.
• The majority of the value chain activities will be maintained at
the headquarter with products being produced in the company’s
home country and send to customers all over the world.
• Subsidiaries, if any, functioning more like local channels through
which the products are being sold to the end-consumer.
• Large wine producers from countries such as France and Italy
are examples of international companies.
• Transnational Structures market development
– Advantages
• Expanding the company into new countries creates access to
new markets with new customers.
• Benefitting from different regulations that allow manufacturing a
product in another community where compliance costs are lower
and then export it back to the home country or alternatively
selling a product legally in other countries when it is not eligible
for sale in one’s own country.
• Taking advantage of lower cost of labour thereby maintaining
cost-competitive pricing while staying profitable.
cost globalization: establishing business in country where the cost is the lowers
– Advantages
• Saving in taxes by organizing the company so that they earn profits
in a subsidiary located in a foreign country with lower taxes while
shifting expenses back to the home country.
• Avoid trade barrier imposed by different governments such as
quota restriction on import goods, government's policies and so
on.
• Secure supply of raw material by injecting capital in the supply
countries as an exchange transaction.
set up operation in country where the suppliers exist to
minimize the lead time as well as the purchase cost
(the time within ordering and delivery will be shorter)

– Disadvantages: lack of knowledge about the foreign country's culture work practices, law & regulations,
that increase the changes of unsuccessful, or rejection by local stuff & management.
• Lacking of expertise outside of one’s own country which

necessitate significant investment in retraining current staff, add
new staff or partnering with a local company.
• Uncompetitive in respect to established competitors in the
country to which the business is attempting to establish a
enjoy first mover (therefore, brand loyalty)
presence.
internationally
• Operating transnationally open the door to legal and political risks
besides exposing to multiple different tax and accounting regimes
which add cost and complexity to the business.
• Operating across multiple currencies would mean the company
has to deal with currency risk.
exposure to unfavorable movement in exchange rate
• Matrix Structure
Production Marketing HR Finance
Manager A
Manager B
Manager C
the project team members
come from the respective
specialized department
• Matrix Structure horizontally

vertically
– Divides authority both by functional area and by project.

– Each employee answers to two immediate supervisors: a functional
supervisor and a project supervisor.
– The functional supervisor is charged with overseeing employees in a
functional area such as marketing or engineering while Project
supervisors manage a specific and often impermanent project.
– Employees are absorbed from various functional areas to complete
the project teams.
Matric Structure : continuity is assured i.e. when one project is completed, the project team members
will be assigned to another new project. i.e. the team members employment is not terminated following the completion of
the project
– Advantages:
• Placing employees in functional areas allows them to specialize in
a particular field thereby excel at tasks in their field of focus.
• Employees have constant contact with members of other
functional areas via their membership in project teams which
enable them to develop a wider set of skills than they would in a
purely functional structure.
• The collaboration between functional areas allows a project team
to better handle complex challenges and objectives.
• Functional areas maintain a stock of talented employees to meet
projects' requirements which allows for human resources to be
shared flexibly across different projects or products.
especially when a two superior from the functional area and project team
– Disadvantages: do not agree on certain matte. the project team member will find
themself sandwiched in between
• The dual authority and communication problems may cause

~ duplication
division among employees and managers resulting in employee
of resources
each team.
dissatisfaction and low morale.
~ no difference from • Company's overhead cost typically increases because of the need
multi-divisional
structure and holding for double management which can put a strain on its resources.
company structure.
• The sharing of employees may cause unhealthy competition
between managers within a company creating hostility within the
workplace and hinder production.
• The overall cohesion of an organization can be broken if workers
and managers begin to feel more of a commitment to their
department than to the overall company.
the project team will be dispended.
• Project Based Structures i.e. east coast railing (ECRL) project that was awarded to
Chinese Contruction and communication company (CCC) from china
– Teams are created and dissolve after project is completed

– Advantages:
• It is a highly flexible structure
• Good accountability and control as project teams have clear goals
• Encourages effective knowledge sharing
• Ease of getting project members
– Disadvantages:
• Poor project management would lead to poor co-ordination.
• The constant breaking up of teams hinders accumulation of
knowledge over time.
• Project members may not be loyal to the organisation.
Choosing the right structure
Knowledge
Control Change Globalisation
Sharing
Functional High Poor Medium Poor
Multidivisional Medium Medium Poor Medium
Holding Poor High Poor Medium
Matrix Poor High High High
Transnational Medium High High High
Project Medium High Medium Medium

referring to how and organization are being configured or combine together
Configuring an Organisation
• Mintzberg’s Organizational Configuration helps business owners and
managers set up their operation according to what they wanted to
accomplish. According to HENRY Mintzberg, own organization is a combination of 3 components namely :
Structures
i.e. orgnisational structure
Relationships Processes
i.e. internal, external
i.e. value chain activitiy
Configuration
Structure, design, processes and relationships
• Mintzberg's six coordination mechanisms

Mintzberg defined organisational structure as 'the sum total of the ways
in which it divides its labour into distinct tasks and then achieves
coordination among them‘ using the following six coordination
mechanisms:
– Mutual adjustment make changes to each other behavior to avoid conflicting situation.
• Coordination of work is made possible by a process of informal
communication between people conducting interdependent
work.
– Direct supervision involves superior closely monitoring the work of the subordinates to ensure that work
is completed on time and according to the plans.
• Coordination is achieved by one individual taking responsibility

for the work of others.
• Mintzberg's six coordination mechanisms

– Standardization of output through the usage of standard operating procedure
i.e. processes (mass production)
• Coordination is obtained by the communication and clarification
of expected results.
– Standardization of skills and knowledge
• Coordination is reached through specified and standardised
training and education. People are trained to know what to
expect of each other and coordinate in almost automatic fashion.
– Standardisation of norms i.e. value and principles.
especially relevant for not governmental organization, NGO who voluntary in
believes (to reduces animal suffering)
• Norms are standardized, socialization is used to establish
common values and beliefs in order for people work toward
common expectations.
- standard operating procedure
i.e. training and requirements policies.
• Mintzberg's six basic parts of organization
SA: Board of directors

ML: operating management
OC: Employees
SS: support activity

Ideology :
the company non-principle and value
technostructures:
people drafted the SOPs in order to
standardised the processess are well
an those involve in monitoring the
complaince
ie.e internal auditor

– Each configuration contains six components:
• Operating core
– the people directly related to the production of services or
products
• Strategic apex
– the people who play the direct supervision roles ensuring that
the organization executes its mission and are responsible to
the owners, government agencies, unions, communities, etc.
• Middle line
– the managers who connect the strategic apex with the
operating core
– Each configuration contains six components:
• Technostructure
– the analysts who design, plan, change or train the
operating core with the mission of effecting coordination
through standardization. For example, the industrial
engineers standardize work processes; the strategic
planners standardize outputs; and the personnel trainers
and recruiters standardize skills.
• Support staff
– the specialists who provide support to the organisation
outside of the operating core's activities such as a cafeteria,
mailroom, legal counsel, public relations, etc.
• Ideology
– the traditions and beliefs that make the organisation
unique.
by knowing each type of configuration, we then decides the best coordination method to be used

• Mintzberg's Organisational Configuration the way a company can be combine together
– Simple configuration
• A very simple, straightforward design and decision making process
• Characterised by having one owner – or maybe a few owners –
who make all of the decisions.
• Suitable for newly start-up business.
– Machine configuration/bureaucracy involves following a list of procedures
• This business is one that has a long list of well-defined procedures

to be followed each and every day as efficient operation is its top
priority.
• Moving on a new track means redesigning most or all of the
systems that have been created, and that process will take time
and effort.
manufacturing company that produces standardize product will have this type of configuration.
• Mintzberg's Organisational Configuration

– Professional bureaucracy
• A company that is made up of a collection of professionals who
possess expertise in their own fields and are expected to be able
to operate with a certain level of autonomy. = independent
• The decision making process tends to be long, complicated, and
difficult to complete as all of the professionals will want a say in
do not accept strict instruction unlike employees making in organization with
the decisions. simple configuration
• Accounting and law firms will fall into this category

– Divisionalised the organization involved many divisions Lised together.
• Accommodate a company with a variety of product or service

lines that it offers to its customers. with each division selling product or services
• The operations of one part of the business are separated from
another.
• The respective division enjoys a high degree of autonomy to
make their own choices.
• Duplication of functions between divisions which could have
been centralized and streamlined for efficiency sake.

meaning that this organization does not have a fixes structure in order to avoid
– Adhocracy rigidity as they are seen as barriers to creativity. Instead, the organization operates in a
very flexible structure.
suitable for
company in
• For this type of organization, creativity rules the day. Instead of
IT, Advertising, developing any kind of structure or hierarchy for decision
Creative industry
making, it adapts from day to day based on need.
• Having talented people who have the knowledge necessary in
their specific field to help steer the organization as a whole in the
right direction.
• Lack of a clear power structure may lead to struggles for power
over time.

– Missionary used to describe charitable organization NGO, religious bodies, that
are established with a mission to achieves.
• Welded together by ideology or culture.

• Achieve control through standardization of norms
• Work is very clear, focused, inspiring and distinctive
• Works well in a simple and static environment.
Key Building Coordinating

Configuration Environment
Block Mechanism
Simple Simple/dynamic Strategic Apex Direct supervision
Machine Standardisation of
Simple/static Techno-structure
Bureaucracy work SOPs
Professional Standardisation of
Complex/static Operating core
Bureaucracy skills
training
Simple/static Standardisation of
Divisionalised Diverse
Middle line
outputs
Operating core
Adhocracy Complex/dynamic
Support staff
Mutual adjustment
want freedom
performance target
expectation of the
respective division
Relationships
Centralised
Internal
Decentralised
Relationships Outsourcing
Alliances
External Virtuality
Networks
Internal Relationships
High Centralised corporate parenting
style
~ parental
developer
Strategic Planning
synergy
Level of control of manager
involvement of
Corporate Parent Strategic Control corporate
parent is
situational
i.e. not complete
corporate
parent set
financial
targets for the
Financial Control portfolio
manager
organization to
be achieves
Decentralised
• Centralisation vs Decentralisation
• Strategy of corporate centre
– Strategic Planning (most centralized)
• Acts as sole planner of company
• SBUs have low autonomy of decision making
– Strategic Control (a mix of the other two)
• Acts as shaper of business units
• Sets both financial and strategic targets
• Suited for synergy manager and parental developer
– Financial Control (most decentralized)
• Banker for SBUs
• SBUs have autonomy to design strategies
• Portfolio manager
• Strategic Control: Parent adds value by
– Envisioning: Defining and shaping overall strategy
– Portfolio Manager: Deciding the balance of activities
– Synergy Manager: Fostering organisational learning between business
units
– Setting policies and standards
– Assessing performance of SBU
– Does not impose a master plan
– Uses bottom up planning process by agreeing with SBU on central
policies and guidelines
– Problem:
• Corporate may not know strategic intent of SBU
Implications of collaborative working, organization
process outsourcing, shared services and global
business services
External Relationships
• Outsourcing
– External party is hired to provide goods/services that it previously
produced internally
– An outsider may do better so may be good to outsource
– Value for Money? Cost benefit analysis is needed
– Should not outsource core competencies
– Advantages
• Concentration on core services
• Access to expertise
• Reduced overheads and freeing cash
• Economies of scale transferred to clients
• Predictable costs
• Strategic Alliances
– Cooperative agreement between two/more firms pursuing common
objectives
• Joint Ventures
• Consortia
• Licensing
• Franchising
– Issues:
• Trust
• Finding the right partners
• Transaction costs
• Networks
– Set of inter-organisational links and relationships required to create a
product or service
– Examples:
• Teleworking
• Federation of experts
• One-stop Shop
• Service Networks.
– Important factors that can make coordination work in networks:
• A compelling vision for the need for a network
• Unique resources or core competencies that holds the network
together. Something that people want to link with you
• Networking skills to sustain and develop the network.
• Virtual Organisations
– Held together by partnerships, collaboration and networking instead
of formal structure and physical proximity
– In-house resources are minimum
– Almost all resources and activities reside outside the organisation
– Problem: Highly outsourced and core competencies are diminished
Enabling success: disruptive technology
The potential impact of disruptive
technologies such as Fintech, including
cryptocurrencies
Disruptive technology
• Disruptive technology
– Technology that displaces an established technology and shakes up
the industry or a ground-breaking product that creates a completely
new industry.
– Examples of disruptive technologies:
• Email transformed the way we communicating, largely displacing
letter-writing and disrupting the postal and greeting card
industries.
• Smartphones largely replaced cell phones and personal digital
assistant (PDAs) and, because of the available apps, also disrupted:
pocket cameras, MP3 players, calculators and GPS devices, among
many other possibilities.
– Examples of disruptive technologies:
• Cloud computing has been a hugely disruptive technology in the
business world, displacing many resources that would
conventionally have been located in-house or provided as a
traditionally hosted service.
• Social networking has had a major impact on the way we
communicate and -- especially for personal use -- has disrupted
telephone, email, instant messaging and event planning.
– Impacts
• Implications for individuals and societies:
– Changes quality of life, health, and environment
– Changes in patterns of consumption
– Changes in the nature of work
– More accessible, affordable products or services for the
general public such as AirBnB.
• Implications for established businesses and other organizations:
– Creates new products and services
– Calls for good risk management practices, supported by
efficient risk management tools to counter disruptive
innovation.
technology replaced the work of several
– Changes in organizational structures employees resulted in the organization
structures becoming more flat
i.e. lesser segregation of duties.
– Impacts
• Implications for Economies and Governments:
– Drives economic growth or productivity
– Changes comparative advantage for nations
– Poses new regulatory and legal challenges
– Affects employment
• Financial technology (FinTech)

– Definition and Background
• The application or usage of technology in financial services to help
companies manage the financial aspects of their business,
including new software and applications, processes and business
models.
• Evolved from being a back-end, data-centered processing platform
to become the basis for end-to-end processing of transactions
over the Internet via cloud services.
impact of fintech
• Disrupt and reshape commerce, payments, investment, asset
management, insurance, clearance and settlement of securities
and even money itself with cryptocurrencies such as Bitcoin.
– Disruptions created
• The growth of online shopping, leading to the dominance of
online, cashless solutions for transactions.
• Banks are eliminating in-person services and looking to FinTech
and large technology companies for other ways to engage
customers.
• New trading platforms that are collecting data to create an
aggregated market view and using analytics to uncover trends.
• Insurers are driven to collect and analyze additional data about
their clients to tailor insurance products that meet their demand
for coverage for specific locations, uses and timeframes.
• Artificial intelligence (AI), which now plays a role in differentiating
financial services products as it replaces complex human activities.
• Cryptocurrencies virtual coins = blockchain
– Definition and background

• A new electronic cash system with protocol being built on
blockchain.
• Decentralized peer-to-peer payment network that is powered by

its users with no central authority or middlemen.
• No risk of currencies devaluation because the bank collapses or

the country suffers from an unstable government as the system is
protected by heavily peer-reviewed cryptographic algorithms
similar to those used for online banking.
• Venezuela, a country suffering from extensive political instability,

has become one of the world’s biggest cryptocurrencies markets
because of hyperinflation.
• Cryptocurrencies
– Definition and background
• The supply of cryptocurrencies will be finite. There are only 21
million Bitcoins that can be mined in total.
• Once miners have unlocked all the coins, the planet's supply will
essentially be tapped out, unless the particular coin's protocol is
changed to allow for a larger supply.
• Lower supply can mean higher demand, thereby increasing prices.

This sets cryptocurrencies aside from the global financial system,
in which central banks can effectively print more money through a
strategy known as quantitative easing, which can lead to inflation
and mean the dollar in your pocket isn’t worth as much as it used
to be.
– The mechanism
• Participants must first run a program called a “wallet” that consists
of two unique and distinct cryptographic keys: a public key and a
private key.
• The public key appears on the blockchain ledger as the user’s

digital signature that depict the location where transactions are
deposited to and withdrawn from.
• A public key is akin to a school locker and the private key is the
locker combination. Teachers and students can insert letters and
notes through the opening in the locker. However, the only person
who can retrieve the contents of the locker is the one who has the
unique key.
– The mechanism
• No central database that keeps track of a blockchain network’s
private keys. If a user misplaces their private key, they will lose
access to their Bitcoin wallet.
• To address the issue of trust, blockchain networks have

implemented tests for computers that want to join and add blocks
to the chain known as “proof of work”. to proof that a particular transaction has been
verify before the detail are added to the block
• Computers must “prove” that they have done “work” by solving a

complex computational math problem known as “mining” in
cryptocurrency world.
• On average, it will take approximately 10 minutes for the

transaction to be confirmed.
– The mechanism
• When a block is 'solved', the transactions contained are

considered confirmed, and the cryptocurrencies concerned can
be spent.
• Miners receive a reward when they solve the complex

mathematical problem in the form of either new coins or
transaction fees.
• Cryptocurrency can be cashed out through cryptocurrency

exchanges or alternatively using a peer-to-peer selling platform
that involves escrow agreement to keep the currency locked until
the payment has been received from the buyer.
• It is possible to send and receive cryptocurrencies anywhere
in the world at any time. No bank holidays. No borders. No
bureaucracy.
• There is no fee to receive cryptocurrencies, and many wallets

let the owner control how large a fee to pay when spending.
Fees are unrelated to the amount transferred, so it's possible
to send 100,000 coins for the same fee it costs to send 1 coin.
• Payments can be made without personal information being

tied to the transaction and thus offers strong protection
against identity theft.
• Cryptocurrencies transactions are secure, irreversible, and do
not contain customers’ sensitive or personal information which
protects merchants from losses caused by fraud or fraudulent
chargebacks, and avoids the need for compliance.
• All information concerning the cryptocurrencies transactions is

cryptographically secure and readily available on the block
chain for anybody to verify and use in real-time.
meaning that the transaction involving

cryptocurrency are changes to a combination
of Alpa and number that are not understandable
by unauthorize personal.
Impact of new product, process, and service
developments and innovation in supporting
organization strategy
New developments and innovation
have the tech 1, demand trend market,
then use in a manufacturing, company R&D,
sell to public manufactures to sell customer make 1, sell later sell 1, make later
• Innovation strategy: technology-push or market-pull? not the same as push or pull models
touch screen technology Traditional & modern way of
– Technology push marketing
• Research and development in new technology that drives the

development of new products.
• Starts with a company developing an innovative technology and
applying it to a product follows by marketing the product.
• Innovation strategy: technology-push or market-pull?
– Technology push
• Example: Touch Screen technology
– First appeared as published research by E.A. Johnson at the
Royal Radar Establishment UK, in the mid 1960s.
– The technology attracted R & D funding.
– Hewlett Packard introduced a touch screen computer in the
1980s.
– Apple launched the hand writing recognition technology,
Apple’s Newton PDA, in 1993.
– Palm introduced its Pilot Series in 1996.
– Touch screen technology now seen in smart phones.
– Market pull
• Originates from the need/requirement for a new product or a
solution to a problem in the market place.
• May initiate by potential customers asking for improvements to
existing products.
• The need can also be identified by potential customers or market
research.
• A product or a range of products are developed, to solve the
original need.
• Focus groups are often central to this, when testing a concept
design or an existing product.
– Market pull
• Example: Digital camera
– Twenty years ago, market demanded a camera that could take
endless photographs and could be viewed almost
immediately.
– Electronics companies developed digital cameras in response
to the market need.
– Market pull ensured that photo editing software also
developed, in parallel with the development of digital camera
technology.
• Innovation strategy: product or process innovation?
~ result in the creation of new product.
– Product innovation ~ result in enhancement of certain functions in existing product
e.g. shapnass of the camare
• A change in the product in two different forms.

• An improvement in the performance of a product such as an
increase in digital camera resolution OR introduction of new
features in a product such as the dual cameras that made its first
appearance in iPhone 7.
• Suitable for use in the early stages as companies face high market
and technological uncertainty while consumers are not clear on
what they need, want and like.
• Uncertainties are overcome by targeting at product improvement.
• Innovation strategy: product or process innovation?
~ refer to improving the existing process or value chain activities known as business process
redesign options.
– Process innovation
• Involves improvement in the process of producing a product.
• Includes changes across all the value chain activities such as
improved inbound logistics, better media planning, or improved
manufacturing process.
• Example: using instant demand data to plan production run so as
to lower inventory and lower stock outs.
• Focus on efficiency as technological and market uncertainty
reduces which led to cost improvements
Whenever examiner ask you to suggest improvement to existing processes think of following four method:
~ simplification
~ gap & disconnection
~ value added analysis
~ re-engineering
value chain ~ customer primary & supporting

strategies use in selling a company product or services that give
it the competitive advantages
• Business model innovation
– Making changes to a business model when a company is trying to
grow, reach new markets or attack disruption in its industry.
– May not imply changes in the product or even in the production
process, but in the way it does business in order to stay competitive.
– Most challenging of the innovation types as it presents an organization
with major requirements for change to the extent of threatening the
elements of its identity and conflicting with the brand’s expectations
1)
or promises. 2) 3)
7 Ps models Cabtree & Evelyn Hai Di Lao
99 speedmart ~ selling their product online ~ customer services
~ near and saved ~ place
~ required the company to open ~ price
many branches to bring its products 6 Is (e-ordering & e-marketing)
closes to its potential customers ~ individualization
which also allows them to deeper ~ integration
the market & thus able to buy in bulk,
negotiates for lower
price
• Business model innovation
– Example:
• IBM has managed changes in customer offers from mainframes to
personal computers to technology services.
• Amazon found a new channel to the customer through technology
by eliminating the traditional retail distribution channel and
developing direct relationships.
Enabling success: talent management
whenever exam question ask you to suggest improvement to the company existing talent management
programs, you think of the following stages:
!) recruitment ~> create awareness among potential candidates such as by partaking in road shows, career fair, sponsorship event, firms
visiting.
2) deployment ~> refer to assigning the talents to perform tasks that match their competency level, personal character.
3) development ~> refer to grooming the talents to assume higher level responsibilities by providing assistance in the area of career coach,
training, further education, etc.
4) succession planning having in place the next lines of leaders ready to assume the position left behind by existing leader due to accidental,
health issues or personal reason. so that disruption to smooth operation is minimized.
Contribution of talent management to supporting
organization strategy
Talent management
• Meaning
– Involves recruiting, developing and retaining people with the required
skills and aptitude to help an organisation meets current and future
needs.
– Operational objectives of talent management should align closely with
the company’s strategic goals.
• Drivers of talent management
– Correlation between better talent and better business performance.
– Talent is a source of value creation.
– The context in which we do business is more complex and dynamic.
– Workforce demographics are evolving.
– Employee expectations are changing which forces organizations to
place greater emphasis on talent management strategies and
practices.
Talent management
• Talent management cycle
– Recruitment
• Creation of job descriptions for employees to work on achieving
the company’s mission, vision, values and operational strategy.
• Recruiting activities include publishing job openings, participating
in career fairs, providing scholarships to schools and establishing a
presence in the community.
• Talent managers work with other human resources professionals
to match candidates with the right skills to available jobs in the
company.
Talent management
– Development
• Development of the employees’ professional skills typically results
in higher workplace productivity, innovative approaches and
creativity.
• Take the form of rotational assignments, on-the-job training,
coaching, mentoring, leadership development and so on.
• The purpose is to retain and make employees more and more
valuable to the organization which will help reduce waste, fewer
product errors and higher customer satisfaction.
Talent management
– Deployment
• Involves putting the right people in the right roles.
• Projects should be assigned to people who are selected on the
basis of merit i.e. someone who has earned that opportunity and
who is ready, willing and able.
• Sufficient time should be scheduled to coach the person both to
get the job done and fully leverage the learning opportunity.
Talent management
– Succession planning
• Focuses on the broader requirements of a business.
• Identifies and prepares talented employees to step into key
positions and leadership roles by ensuring that they have the skills,
experience and knowledge to meet changing work requirements.
• Provides a guide to external recruitment to fill the gap in the
internal skills base of the business.
one of the 3 models for evaluating a company performance
Value of the POPIT model to the successful

implementation of organization change
people organization Processes information technology

i.e. employees itself i.e. value chain models
i.e. internal environment
(resources, competencies)
similar to balanced scorecard, POPIT model also evaluate a company holistically

Organisation Change
The POPIT Model PPOT
organisation
• A Holistic Approach internal environment
1) culture
2) resources own are they unique ?
3) competency of the management ?
technology 4) organizational structure is it appropriate?
1) does the company take new 5) control
advantage of new technology 6) governance structure
to introduce improvised or
innovated product or services.
Organsiation
2) does the company existing it controls
capable of safeguarding it from any hacking
or leakage of coniendiatial info?
Process
1) efficiency
Technology 2) are the processes well connected so
people that there is not disruption.
1) competency level 3) customer friendly / convenient
2) attitude
3) motivated
4) sufficiency
i.e. is the company understaff
demotivation?
People Process
Organisation Change
The POPIT Model

• The people:
– Are they competent for the job?
– Are they motivated?
– Do they understand the business objectives that they need to
support?
Organisation Change
The POPIT Model

• The organisational context:
– Is there a supportive management approach?
– Are jobs and responsibilities well defined?
– Is there effective cross-functional collaboration?
Organisation Change
The POPIT Model

• The processes:
– Are they well defined and communicated to those affected?
– Is there good IT support, if problems arise?
– Are their alternative processes if the first process fails?
– Is there duplication and redundant work?
Organisation Change
The POPIT Model

• The technology:
– Do the systems support the business as required?
– Do they provide the information needed to run the organisation?
– Do they support collaborative working?
to achieves success, an organisation must embark on performance excellence in
every aspect of an organisation
Enabling success: performance excellence
to do so, we use Baldridge model that is more holistic than the earlier 2 model
The application of Baldridge model for achieving
and maintaining business performance
excellence
Performance excellence
• Baldrige Model
– Background
• A business excellence model that was named after the former US
Secretary of Commerce.
• Internationally recognised as both providing a framework to assist
the adoption of business excellence principles, and for measuring
the extent in which those principles have been incorporated.
• The model is holistic in that it focuses upon all areas and
dimensions of an organisation, and in particular, factors that drive
performance.
• Baldrige Model
– Criteria for performance excellence framework
exam purpose green
criteria use to measure a

company performance
• Baldrige Model
The model consists of practices that are incorporated into six Approach
categories plus a Results category consisting of:
– Categories
~ culture created by senior management
• Leadership ~ control and governance structure put in place by them
~ are mgmt walking the talk i.e. are the actions consistent with what they preach.
– How your senior leaders' personal actions and your

governance system guide and sustain your organisation?
does the company has in place strategic plans such as mission and vision statement
• Strategic Planning that unite the staff in the company allocate the respective resources for achieving the goal
and objectives.
– How your organisation develops strategic objectives and action
plans, implements them, changes them if circumstances
require and measure progress?
• Baldrige Model
– Categories think of Customer Relationship Management:
~ acquisition
• Customer and Market Focus ~ retention
~ extension
– How you engage your customers (or clients,

members, patients etc) for long-term market place success,
including how you listen to the voice of the customer, build
relationships, and use customer information to improve and
to identify opportunities for innovation? customer segmentation
(individualization) in 6Is models
• Measurements, Analysis and Knowledge Management

M: collecting the data – How your organisation selects, gathers, analyses, manages
A: analysis what been

collected to provide
and improves its data, information, and Knowledge Assets,
an insight to the
situation
how it learns; and how it manages information technology?
K: sharing of results
of analysis with – How your organisation uses review findings to improve its
others
performance?
this can transform the organization into one that is data driven
i.e. make decision based on information that are available & analyzed (make informed decision)
• Baldrige Model
– Categories
• Workforce Focus = employees
competency
–overHow your organisation assesses workforce capability and
or under staff
capacity needs and builds a workforce environment conducive
employees welfare & rewards system
to high performance?
– How your organisation engages, manages, and develops your
workforce to utilise its full potential in alignment with your
training / grooming
overall business needs. consult
• Operation Focus = processes
– How your organisation designs, manages, improves, and
innovates its products and work processes and improves
operational effectiveness to deliver customer value and
achieve ongoing organisational success?
focuses on existing processes
~ efficiency
~ customer friendly
~ convenience
• Baldrige Model
– Categories
• Results refer to benchmarking a company performance not only with previous year which is internal,
but also with competitors from external environment.
– What are your organisation's performance and improvement

results in key areas - product/services, customer service,
workforce, leadership and governance and financial and
market?
– What are your levels relative to those competitors and other
organisations with similar product/service offerings?
• Baldrige Model
– Evaluation
• The first six categories are evaluated in relation to four
dimensions:
– ‘Approach’ refers to:
» the methods used to accomplish the process
» the appropriateness of the methods to the item
requirements and the organization’s operating
environment
» the effectiveness of your use of the methods
» the degree to which the approach is repeatable and
based on reliable data and information (i.e., systematic)
• Baldrige Model
– Evaluation
dimensions:
– ‘Deployment’ refers to the extent to which
» your approach is applied in addressing Item requirements
relevant and important to your organization
» your approach is applied consistently
» your approach is used (executed) by all appropriate work
units
• Baldrige Model
– Evaluation
dimensions:
– ‘Learning’ refers to
» refining your approach through cycles of evaluation and
improvement
» encouraging breakthrough change to your approach
through innovation
» sharing refinements and innovations with other relevant
work units and processes in your organization
• Baldrige Model
– Evaluation
dimensions:
– ‘Integration’ refers to the extent to which
» your approach is aligned with your organizational needs
identified in the organizational profile and other process
Items
» your measures, information, and improvement systems
are complementary across processes and work units
» your plans, processes, results, analyses, learning, and
actions are harmonized across processes and work units
to support organization-wide goals
• Baldrige Model
– Evaluation
• The last category, results, is evaluated in relation to also four
dimensions:
– ‘Levels’ refers to:
» your current level of performance
– ‘Trends’ refers to
» the rate of your performance improvements or the
sustainability of good performance
» the breadth (i.e., the extent of deployment) of your
performance results
• Baldrige Model
– Evaluation
dimensions:
– ‘Comparisons’ refers to
» your performance relative to appropriate comparisons,
such as competitors or organizations similar to yours
» your performance relative to benchmarks or industry
leaders
• Baldrige Model
– Evaluation
dimensions:
– ‘Integration’ refers to the extent to which
» your results measures address important customer,
product, market, process, and action plan performance
requirements identified in your organizational profile and
in process items
» your results include valid indicators of future
performance
» your results are harmonized across processes and work
units to support organization-wide goals
~ A demonstration of compilate trust and confidences in their employees
characteries by transferring one own power to them this means that the
individual concerned represent the management & could exercise his decision totally
Empowerment of an organization to reach its

strategic goals, improve its results and be more
competitive
VS Delegation
~ refer to transferring one task or responsibilities to another person who
is usually the subordinates but not the power
~ monitoring is still carried out on the work done
~ a reflection of having trust and confidence on the employees concerned

even though it is not complete trust and confidences.
Empowering organisations
• Empowerment in Leadership
– Meaning
• The process of giving front-line employees the authority to make
decisions once reserved only for managers.
• In line with 21st century’s coaching style management where
companies are less authoritative but instead trying to get
employees actively involved in business processes.
• Empowerment is more about trusting employees to make
decisions whereas delegation is giving subordinates tasks to
complete and timelines in which to complete them.
• More correlated with the "Theory Y" style of management who
have a more optimistic view of the ability to get good work from
employees.
Empowering organisations
• Empowerment in Leadership
– Empowerment Benefits employees will take ownership of the decision made
i.e. will not resent them
• Employees feel a stronger sense of ownership and worth which in

turn will make them more productive in their roles.
• Prompt resolution of a problem. no need to refer to the upper management
• Empowered employees feel more free to question, challenge the

status quo and offer new ideas that led to the avoidance of
stagnancy. these employees have already earned the authority & therefore the right to do so.
• Companies that give employees the freedom to make decisions on
the spur of the moment and as they see fit reported improved
customers service.
important
Managing strategic change = change management
1) Nature, Scope, 2) Contextual features 3) Stages of changes

Type of change i.e. situations within a company
that will determine the success
or failure of change
^ll ^ll
^ll
examiner could create a
scenario where change is for this type of question, examiner relevant for exam question that ask
proposed or had taken place would want you to evaluate the you the actions to be taken by
and ask you to made conclusion information given in the scenario management to ensure the success
regarding its nature, scope & type, regarding the company that is under of the change. Action to be taken require
you ought to know what are they going change and made comment consideration of the stages
on whether the changes should be
delay or go a head.
Types of strategic change and their implications
Change Management
• The only thing that is constant is change

– Albert Einstein
• Key questions
– What to change?
– What to change to?
– How to change?
– How to avoid failure in the change process?
Key Drivers of Change
• External
– PESTEL
– Porter’s Five Forces
• Internal
– Hard Issues
• Strategy, structures, systems, productivity, performance
– Soft Issues
• Culture, leadership style, behaviour, competencies, attitudes,
motivation
• Forces likely to affect the structure of an industry, sector or market

• Four Drivers
– Market Globalisation
– Cost Globalisation
– Government Policy
– Global Competition
• Market Globalisation • Government Policy

– Similar customer needs – Trade Policies
– Global customers – Technical Standards
– Improved ICT and Logistics – Host Government Policies
– Transferable marketing
• Cost Globalisation • Global Competition

– Scale economies – Interdependence
– Experience effect – Competitors global
– Sourcing efficiencies – High exports/imports
– Country-specific cost
advantages
Strategic Change
• Reasons for strategic change

– Maintain competitive pressures
– Adopt to change in regulation
– Take advantage of new product & emerging markets
– Meet demand and ensure supply
– Take advantage of new technology
• Has implication on all stakeholders

Change Types
• Planned
– Process of moving from one fixed state to another through a series of
pre-planned steps
– Assumption: organisation operate in stable environments
• Emergent change
– Change is continuous, unpredictable and constant adjustment to a
dynamic environment
– Flat organisations with bottom up approaches
Change Types
• Incremental
– Continuous progression
– Maintains equilibrium instead of achieving equilibrium
– Affects only one organisation part not the whole
– Effected through the current structure not with new
– Involves improved technology instead of breakthrough
– Involves product improvement rather than new.
Analysis of an organization’s culture using
Balogun and Hope Hailey’s contextual features
Type, Nature, Scope of Change
• Balogun and Hope Hailey
– Nature of Change: How big is the change?
• Incremental: Step-by-step
– Builds on existing skills, routines and beliefs
– More efficient
– Wins commitment
• Big Bang: Significant change
– In times of crisis: may be effective
– Need to respond fast
– Scope of Change: Will the business model change?
• Realignment
• Transformational
important

the extent in which the change
the speed in which Scope of Change has affected the company
the change took place
Realignment Transformation
Nature of Change
making changes to 1 or more department in involves changing the company business

response to the change with no impact on which is consider as more drastic
the business' model
Incremental Adaptation Evolution

gradual
Big Bang Reconstruction Revolution

sudden
(Adaptation) (Reconstruction) (Evolution) (Revolution)

e.g. automate production change is sudden, decision to switch selling the introduction of MCO
process to reduce reliance does not affect business model online (Crabtree) company were given only 24
on labour. i.e. introduction of law and regulation hours to respond to the change
to made the production of a particular i.e. to switch selling online
items no longer legal such as halogen
light bulb.
• Types of change
– Adaptation
• Incremental + Realignment
• No fundamental changes in organisation's thinking
– Evolution
• Incremental + Transformation
• Transformational change over a long period of time
• Types of change
– Reconstruction
• Big Bang + Realignment
• Requires overhauling of an organisation's policies but not
direction
– Revolution
• Big Bang + Transformation
• Fundamental changes to organisation's goals and beliefs
important

situation within the company
• Contextual features that affect the approach to the change:

nature
– Time: How quickly is the change needed?
– Scope: Realignment or Transformation? extent
during period of change it does not mean that
everything's must be turn up, identify from
– Preservation: What aspects need to be preserved? scenario the strength of the company and they
should be retain them.
is there a need for employees to have yes, new employees

– Diversity: Is a diverse workforce needed? new knowledge's & experiences? needed and change
needed
– Capability: What managerial and personal capability is needed to

implement the change? competency does mgmt possess change mgmt experiences ?
INFSHE 6 capital ~ financial
– Capacity: What is the degree of change resource available? ~ human
~ intelecture = known how
– Readiness: Is the workforce ready for change? if they are not ready, they will not
only reseat the change but also sabotage the effect made
by mgmt.
– Power: What is the power possessed by the change leader?

if the change led by a person with the needed power, such as ability to rewards the staff
who adhere to the change and penalize those who are against it
The use of Lewin’s three stage model to manage
change in the organisation
change re-freeze
unfreeze = ice had melted and = turn the ice water
= melting the ice will assume the shape into ice again
of any container
to convinces the employees once the staff accepted the encourage the staff to apply
on the agencies of the changes need for change, introduces the changes in their day to day
by showing them the results that the changes that are needed activities to make them
are negative. into the new ritual and routines
such as: and the changes process is
~ deteriorating financial performance completed
~ entrance of new competitors
~ negative customers feedback
Lewin’s three stage model
• The model
– explained organizational change using the analogy of changing the
shape of a block of ice through Unfreeze – Change – Refreeze.
• Unfreeze
– Preparing the organization to accept that change is necessary.
– Statistics such as declining sales figures, poor financial results,
worrying customer satisfaction surveys, or suchlike may be used to
convince the breaking down of the existing status quo and building up
a new way of operating.
– Its core – the beliefs, values, attitudes, and behaviors would have to be
challenged.
– Without this motivation, the overall buy-in and participation necessary
to effect any meaningful change will not take place.
• Change
– People begin to resolve their uncertainty and look for new ways to do
things.
– People are made to understand how the change will benefit them.
– Time and communication are the two keys to the changes occurring
successfully as people need time to understand the changes, and they
also need to feel highly connected to the organization throughout the
transition period.
• Refreeze
– Occurs when the changes are taking shape and people have embraced
the new ways of working,
– Important that the changes are used all the time, and that they are
incorporated into everyday business so that employees feel confident
and comfortable with the new ways of working and a new sense of
stability would ensue.
Managing innovation and change management
organizational processes
The role of process in the organisation
• What are organisational processes?

– Procedures and practices needed in day-to-day interactions
– Helps conduct daily activities effectively
– Enables the delivery of quality products and services
– Enables the meeting of stakeholder expectations.
• Types of processes
– Management Processes:
• By top management
• Defines objectives
• Making decisions and evaluations of the SWOT
– Supporting Processes (Secondary activities)
• Purchasing
• Accounting
• Inventory management
• Recruitment
• IT Support
• Types of processes
– Operational (Primary activities)
• The process of converting raw materials to finished goods
Firm Infrastructure
Support Human Resource Management

Activities
Technology Development
Procurement
Inbound Outbound Marketing

Operations Service
Logistics Logistics & Sales
Primary Activities
• Why do you need to change or update the processes?

– Environment changes
– To ensure effectiveness is maintained to stay competitive.
• How do we evaluate the relevance of our current processes?
– Based on standards set
– Monitor and control process
– Establishment of an internal audit function
– Are we meeting the organisation objectives.
• Strategic value of a process perspective

– The process perspective contributes to the strategic impact of a
business in four ways:
• Cost control – keeping costs under control by ensuring process
efficiency.
• Revenue – enhancing a business’s ability to generate revenue
through the quality of the products and services it produces.
• Investment – maximising the return on investments by ensuring
that they operate as they are intended to.
• Capabilities – embedding the capabilities that will form the basis
of the business’s ongoing future competitiveness.
Among the changes that can be made
to the existing processes is to consider whether
they should be retained in-house or outsources?
Scope and focus for organization process change

using Harmon’s process-strategy matrix
whenever exam question ask you to comment whether a particular process
is to retain in-house or outsources think of the process-strategy matrix
proccess strategy
ll ll
is the process concerned complex & dynamic? is the process concerned of strategic
important to the company? profit centre
ll ll
As a rules of thumb, process that is both complex As a rules of thumb, process that is of
& dynamic should be outsourced strategic importance should not be outsources
Business Change
• Business Change
– Changing the way businesses work
– Requires
• Understanding of business capabilities (architecture) (SW)
• Understanding of the environmental changes (OT)
• Understanding implications of the options available in the
strategic planning process
– The need to implement the change by Alignment
• Business Change Project
– A project management process dedicated to managing the process of
Business Change.
Business Change
Business
Strategy
Business Business
Environment Architecture
Alignment
Business Process Change
• Paul Harmon (Born 1942)
Business Process Change Initiatives
• Levels of process change
– Process re-engineering
• Strategic level technique
• Rethinking of core processes
• Reconceptualisation of business process
– Process improvement
• Tactical level technique
• Incremental technique to existing processes that has few problems
• Problem solving approach
Business Process Change Initiatives
• Levels of process change
– Process re-design
• Appropriate for middle sized processes that require extensive
improvement or change
• Changed in job descriptions and the introduction of some
automation
• Between the two of the extremes.
Scope and focus for process change
• Harmon’s process-strategy matrix
– Helps in deciding how a process should be managed by considering
its strategic importance and complexity and dynamics.
– Strategic importance
• assessed by asking what would happen if the process is
abandoned.
• Considered as high strategic importance if it impacts the
business objective (Quality, cost control and reputation etc)
materially to the extent of threatening the business’ survival.
• Strategic importance can also be assessed by identifying the
key stakeholders who will be affected by the process.
– Process Complexity and Dynamics
• Process complexity is the difficulty of the process, which requires
more knowledge, skill, licenses and experience required to
carryout the activities.
• The more complex an activity is, the more controls are required as
complexities can lead to errors.
• Dynamics are the frequency of change required in the process.
• Suggest the course of action for a particular process given its
combinations of strategic importance and process complexity and
dynamics.
High Harmon’s Process Strategy Matrix
Complex and Dynamic

Process complexity and dynamics
Complex Processes, Processes

Not Core Competencies High Value
Outsource Process Improvement that
e.g. Advertising focus on people
e.g. Product development
Straightforward, Static,
Straightforward, Static
Commodity
Valuable
Processes
Use automated ERP and/or
Automate to gain efficiency
outsource
e.g. Sales order processing
e.g. Payroll
Low Strategic Importance High

– Low strategic importance, low process complexity
• These activities do not require specialized expertise, are often
repetitive in nature and can distract from core activities.
• They should be outsourced, automated or both.
– Low strategic importance, high process complexity
• These demanding activities require manual intervention and
judgment. They are time consuming and costly to develop in-
house.
• They should be outsourced to specialists.
– High strategic importance, low process complexity
• These important activities are critical to the business and typically
remain in-house.
• The goal is to automate these to reduce costs and improve quality
and efficiency.
– High strategic importance, high process complexity.
• These high-value activities require specialized knowledge and
judgment
• They are kept in-house, and business process management (BPM)
efforts focus on improving the skills of people handling the
process.
if the processes are to remain in-house
how can we improve them?
Redesigned options for improving the processes

of an organisation
whenever exam question test you processes it can either be evaluate or improve the process
evaluate
Ans : think of value chain model the improvement process
primary support Ans: think of redesign option

inbound logistic
outbuoud logistic firms infrastructure 1) simplication
sales & marketing procurement 2) gaps & disconned
after sales services technology development 3) value added analaysis
operation human relation 4) reengineering
Process redesign patterns
• Approaches to process change
– Harmon describes four basic process redesign patterns:
refer to simplifying existing process by identifying area where duplication or
• Simplification redundancy exist.
customer see value • Value-added analysis refer to identifying the activities that customer see value in them. therefore, willing
to pay for such activities. They should be retained as a result.
• Gaps and disconnects refer to removing the disconnection cause by separating the department as
seen in the functional structure which can cause disruption in the flow of
• Re-engineering information. to close the gap of disconnection we combine the departments into
one or include this department in the distribution list for report so that there is not
is similar to transformations disruption occur.
~ most drastic of all the changes have involves

starting from scratch i.e. does not consider what
are done currently. in order to find the best way
of undertaking the process.
Answer more frequent in exam

Value-added Gaps and

analysis disconnects
Simplification Re-engineering
Process
redesign
patterns
• Simplification
– Eliminates redundant process elements
– Improves processes eliminating redundancies and duplicates
– Processes are validated by evaluating need of processes.
• Value-added analysis
– Looks at the value chain and decide which one can be cut or
improved to save cost and add value to the customer
– Eliminates activities that does not add value
– Challenges necessity of elements of cost
– Analyses the cost vs benefit of the process and decides if it should
be cut or added. If there are more costs than benefits, why do we
need it?
– Evaluates value creation
– Involves moderate efforts, time and costs.
• Gaps and disconnects

– Targets problems at departmental boundaries
– Are the various departments communicating effectively?
– Focuses on repeated failure to share accurate information
– Often a result of lack of timely coordination.
• Business Process Re-engineering (BPR)
– Fundamental rethinking and radical redesign of business processes
to achieve dramatic improvements in critical contemporary
measures of performance, such as
• costs,
• quality,
• service and
• speed.
– Two key steps:
• Processes need to be conceptualised as complete,
comprehensive entities
• IT to integrate these comprehensive processes.

– Starts with a clean sheet of paper
– Questions work flow sequences, work, motion and method study best option
– Fundamental and radical: assumes nothing

significant improvement if the method turn out the be successful
– Dramatic: Expects quantum leaps in performance
– Highly disruptive and large scale involves major investment and removing individual from their current
comfort zone. required unlearn and relearn
– Focuses on integration of cross functional processes look for opportunities to combine the
processes to make it more simplify.
– Finds ways to save process time and costs

– Maintains overall organisational processes goals
– High risk, high reward option
– Seven Key Principles for the success of re-engineering
• Process should be market-driven: focus on the customer;

organised around outcomes not tasks
• Personnel using the output should perform the process
• Information processing should be included in the work that
produces the information the information must be process at real time i.e. instantaneously
• Geographically-dispersed resources should be treated as though
they are centralised using databases
sharing the same set of information by everyone

to minimize the chances of using outdated or inaccurate data
– Seven Key Principles activities carried out one another
activities carried out concurrently (same time)
• Parallel activities should be linked rather than integrated
• Workpeople performing the work should have greater autonomy
in making decisions but build controls into the process empowering the employees
• Information should be captured once at source.
for subsequent analytics purpose

– Problems
• Associated with reductions in staff numbers and other cost-cutting
measures.
• Significant disruptive changes involved.
• Proposed change may not be technically and operationally
feasible.
• Emphasis on efficiency but not effectiveness.
• Critical internal control features may be lost.
• In the 90s, 70% of the BPR failed and that’s why most are now
called process improvement and process redesign instead.
Pattern What causes it? Description

Re-engineering Major re-organisation Major redesign from
scratch. High risk/return
doing things that are totally different return and risk
high
Simplification Duplication and Checking each step in the
unnecessary activities process to check they’re
redundant activities needed. Low risk/return
no major change involves, return low, no risk
Value added analysis Non value adding activities Check each activity for what
customer do not see benefits, in this value it adds to the
activities
customer. Moderate returns
the outcome of the change may see an increase in
customer, then high return.
Gaps and Disconnects Information flows not Using process diagrams to
working see what needs to happen.
due to the separation of department, information Moderate returns
given to one department may not be made to
another department.
Feasibility of possible redesign options
Feasibility of process redesign options
• Organisational Feasibility
– Availability of capabilities to manage the redesign options
– E.g managerial talent, no of managers needed, monitoring and control
systems, leadership skills, culture that facilitates change?
• Technical Feasibility
– Hardware, software, support services, technical manpower available?
• Financial Feasibility
– Benefit more than costs?
• Social Feasibility
– Employee attitude towards change
– Preparedness of employees to go for training
– Labour union cooperation?
• Environmental Feasibility
– Carbon emissions
– Waste management
– Energy consumption
• Major considerations
– Estimated time for implementation
– Employee attitude towards redesign project
– Manpower required
– Training needs of existing employees
– Availability of technical services
• Secondary considerations
– Investments required for hardware and software
– Estimated cost of technical services
– Estimated cost of implementation
not important
= approach
Process redesign methodology for an

organisation
Business Process Redesign Methodology
~ which process should undergo the improvement?
~ commencement and completion date
~ financial and human resources required. i.e. budget ?
Planning a process redesign effort
Analysis of existing process ~ where are the weankness?
overcome the weekness
Design a new or improved process

~ setting a side the resources
needed. To effect the change
Development of resources for an improvement

implement the change
Managing the implementation of the new process

• Harmon recommends a five-stage generic business process redesign
methodology:
– Phase 1: Plan
• Goals are set, project scope defined, project team members
identified and overall schedule developed.
– Phase 2: Analysis
• Current workflow documented, problems identified and general
approach to a redesign plan is established.
– Phase 3: Redesign
• Possible solutions are considered and the best chosen; objectives
for the next phase are defined.
• Harmon recommends a five-stage generic business process redesign
methodology:
– Phase 4:Development
• All functional implications are followed through and
improvements on management and information systems.
– Phase 5: Transition
• Implementation of the new process with modification if
required.
• In the exam, you may be asked to evaluate an existing process and make
redesign suggestions - look out for..
• Are there any steps or gaps missing?
• Any duplication of work?
• Any no value added activities?
important
Acceptability
3R payback period (Assumptions)

~ risk sensitivity (how much could a particular variable use in the NPV analysis change before
NVP becoming zero)
gearing
interest cover
~ return profitability
~ reaction NVP i.e. since both NPV are positive, in slighting that both project are equally acceptable.
Step 1 calculate sensitivity analysis of initial investment = NPV / variable x 100%
i.e. PV = 0.65 , variable (initial investment) = 5
0.65/ 5 x 100% = 13% 13.8%
if initial investment were to increase by 13%, NPV would become zero. conclusion: higher NPV is more safe
it can absorb more changes before drop to zero
step 2 payback period year conclusion: faster Payback period the better
Leading and managing projects

Dividend payout
The distinguishing features of projects and the
constraints they operate in
Project Features
• Project Definition
– Temporary endeavor
– Unique set of co-ordinated activities undertaken to
• Create particular product/ service
• Meet specific objectives.
• Five main stages
1. Initiation (Define)
2. Planning (Design)
3. Execution (Delivery)
4. Control
5. Completion (Development)
Project Features
• Features
– Has defined start and end
– Has a unique purpose
– Resources allocated specifically to it
– Temporary in nature (done only once)
– Follows a plan towards a clear intended result
– Developed using progressive elaboration
– Often cuts across organisation functions
– Requires primary customer or sponsor
– Involves uncertainty with respect to scope, time and cost
Project Constraints
• Triple Constraints = limitations
– Project management triangle (any deviation in the scope can result in customer rejecting the completed project. )
+ quality (input) ~ material to be use in the construction
(output) whether the finish product as per advertised or written in the agreement
• Scope specification required by the project i.e. the diminution of the property (number of rooms)
– Quality & volume of project
• Time needed to complete the project ~ deadline
(a) • Cost ~ contract price
– Managing project cost within approved budget

– Dependent on each other
• If one is changed, the other two changes
– Other two constraints need to be adjusted according to primary
constraints
(a) Cost
in a project it is common that a project enter into between the company and the customer
is a fixed price contract i.e. no room for the company to demand higher payment from the customer other
than what had already been agree.
Project Constraints
Cost
Time
Scope
funds are limited in an organitsation
therefore not all the request may
by respective department are entertained
refer to a document that contain justification as to why
priority are be given to those project
a particular project should be given priority over other competing projects.
are of greater importance.
Preparation of business case document and

project initiation document
similar to audit engagement letter where details regarding the project are documented
to avoid any possible expectation gaps i.e. Project initiation documents (PID)
in exam, examiner either ask you to suggest the methods to be included in the PID or alternatively ask you to evaluate
a PID prepared by a junior member in the organisational.
whichever, approach taken by the examiner, you must be familiar with the contents of PID
Project Lifecycle
Project Definition
Project Design
Project Delivery and Control
Project Development
Project Lifecycle
Delivery
Design
Development
Definition
Business Case Business Realisation Plan Execution Project Closure

• Objectives 1. Identify Benefit • Managing
(Quantify Benefits) Benefits Realisation
• TOWS Analysis • Teams Review
• Feasibility Analysis 2. Plan Business • Responsibilities
Realisation (BDF) • Post Project Review
• Stakeholder Analysis • Matrix
Business Dependency • Process
• Cost vs Benefits • Risk
Framework • Post Implementation
• Ward and Daniel Review
• Business Drivers Control/ Monitor
PID • Monitor • Product
• Investment Objectives
• Objectives • Business Benefits • Cost
• Business • Business Change • Scope
• Project • Enabling Changes • Time
• Scope • Risk
3. Execute Benefits Plans
• Time • Manage Slippage
4. Review and Execute
• Cost • Gateways
Results
• Constraints • Milestones
5. Establish potential for
• Responsibilities future benefits
Risk Register
Work Breakdown
Scope Statement Structure
Kick Off Meeting
Project Lifecycle: Definition
• Definition of
– Purpose
– Objectives
– Scope
• Project initiation activities
• Analysis of requirements and methods
• Feasibility studies
• Project selection
Project Lifecycle: Definition
• Answers:
– What opportunities and threats does the project present?
– What are the objectives?
– What are its potential benefits, costs and risks?
– What is the overall implementation difficulty?
– Who are the key stakeholders?
Project Initiation
• Project Initiation Tasks

– Pre-initiation
• By Senior Managers
• Determine project goals and constraints
– (Scope, time, cost)
• Identifying project sponsor
• Selecting project manager
• Reviewing process and expectations of sponsor
• Deciding whether to break project down into smaller parts
Project Initiation
• Project Initiation Tasks

– Initiating tasks
• By Project Sponsor/ Manager
• Identification of project stakeholders
• Preparation of business case
• Drafting of Project Initiation Document (PID)
• Drafting of initial statement of project scope
• Holding a project initiation meeting (Kick off meeting)
Project Initiation
• Stakeholder Analysis
– Names and organisations of stakeholders
– Their roles in the project
– Unique facts about the stakeholders
– Their level of interest in the project
– Their level of power in the project
– Suggestions for managing relationships with them
Project Initiation
• Business Case
– The business case is used to propose a course of action to senior
management for their consideration
– Project is driven by a business case
– Project will maintain focused and prevents mission creep
– It is a document that answers:
• Why the project is needed?
• What will it achieve?
• How will it proceed?
Project Initiation see WhatsApp picture on PID
• The Project Charter/ Project Initiation Document

– Project Title
– Purpose and objective
– Outline of project scope and work sequence
– Start date and end date
– Details of project sponsor and project manager
– Further details of roles and responsibilities
– Authorisation and sign-off from stakeholders
– Outline schedule of work
– Budget Information
Project Initiation
• Scope Statement
– Used to develop and confirm a common understanding of the project
scope
– Prevent scope creep (tendency of the project to expand)
– Usually several version and becomes more detailed as it progresses
– Should include a process for stakeholders to agree
– Contents
• Product or service requirements and characteristics
• Summary of all major deliverables
• The project success criteria
Project Initiation
• Kick-off Meeting
– Beginning of the project
– Stakeholders to meet to discuss future plans
– To clarify roles and responsibilities
– Project Champion to introduce Project Sponsor and Project Manager
– Manage any resistance
Business Case
• The business case is used to propose a course of action to senior
management for their consideration
• Part of project initiation process
• Purpose
– To obtain funding
– To compete resources with other projects
– To improve project management
• Planning
• Monitoring
• Controlling
– To provide information
• On how the project can contribute to the organisation capabilities
• To ensure that the investment is understood
Business Case not important
• Structure of the business case document content
1. Introduction
2. Management summary
3. Description of the current situation Problems encountered that warrant the undertaking of the project
4. Options considered the problems can be overcome using more than 1 approach
5. Analysis of costs and benefits for each of the option that available.
6. Investment appraisals NPV analysis for each & every option / Payback period / Sensitivity Analysis
7. Impact assessment
8. Risk management overcome
9. Recommendations out of the many option, which one should the company pursue?
10. Appendices and supporting information

Business Case
• Structure of the business case document

1. Introduction
– Defines the scope and objectives of the change
– Describes the methods used in developing the business case
2. Management summary
– Summarises the main points
– What the study was about?
– What were discovered?
– Details of each options considered considering the pros and
cons
Business Case
3. Description of current situation
– What is happening?
– Describes the current weaknesses and threats
– Identifies the strengths and opportunities
– SWOT analysis
4. Options considered
– Details of what options were considered
– Full description of the recommendations
5. Analysis of Costs and Benefits
– Benefits first then costs
Business Case

6. Investment appraisal
– Shows if the project will pay, when it will pay for itself
– Analysis: ARR, Payback Period, NPV and IRR
7. Impact assessment
– Description of impacts on organisation such as change of
structure and staffing
– Associated costs need to be calculated as well.
Business Case
8. Risk assessment
– Identify risks and illustrate suitable countermeasures
– Description, Impact assessment, Probability,
Countermeasures. Ownership
9. Recommendations
– Summarises the business case
– Clearly state the decisions of senior management
10. Appendices and supporting information
Project Lifecycle: Design
• Detailed planning for
– Activity
• Needed to start the project and deliver the project
– Cost
• Cost vs Benefit analysis
• Both short term and long term
– Quality
• Fitness for purpose
Project Lifecycle: Design
• Detailed planning for
– Risk Analysis
• Risk Identification
• Probability/Likelihood
• Impact/Severity
• Expected Value
• Ranking
Risk Management
• Project Risks
– Possibility of occurrence which can affect project environment/
objective adversely
– Features
• Has negative impact
• Might be financial, operational or regulatory
• Arises due to uncertainty and interaction with environment
• Can be high/ medium/ low
Risk Management
• Project Risks
– Consequences
• Benefits are delayed or reduced
• Timeframes are extended
• Outlays are advanced or increased
• Output quality decreases
Project Lifecycle: Delivery and Control
• All work required to deliver the project

– Resources are assembled at start up
– Planned project activities are executed
– Completion: success or abandonment
– Ends at handover with project closure
• Documentation
• Quality and accounting activities are complete
• Customer accepts the delivery as satisfactory
Project Lifecycle: Development
• Further stage after handover to improve organisation’s overall ability to

manage projects
– Immediate review
• Staff feedback
• Staff training needs
• Remedial action for failures
• Post project review
– Long-term review
• Examine project outcomes to establish overall degree of success
• Lifetime costs
• Post implementation review
important
the examiner would ask you to suggest the way in which the cost and benefits of a project can be
classified.
The costs and benefits of a project investment

Identifying Costs and Benefits
• Business case should be based on the ability to measure each cost and
benefit and estimate expected improvements.
• Purpose
– Identify the potential costs and benefits
– Understand how benefits can be realised
– Determine ownership of the costs and benefits
– Identify any issues that could delay the project or cause it to fail
– Produce an outline business case.
• Costs and Benefits can be classified as
– Observable an be seen and felt but cannot be quanitfied
• Measured by experience or judgement (staff morale or customer

happier)
– Measureable
• Performance can be measured but cannot quantify how much it
will increase as a result of the change (More customers)
e.g. offering the wheelchair to the elderly visitors to the shopping malls
– Quantifiable
• Level of benefit can be reliably forecast (Increase in the number of
customers by a certain percentage)
• Can be measured before the change is actually made
by comparing the result pre and post the changes
the difference represent the consequences of the changes
• Costs and Benefits can be classified as

– Financial availability of financial formula determine the amount of costs or benefit.
• Quantified benefits that have a financial formula applied to them

to produce a financial value for the benefits (Revenue Increase).
example, a company is currently renting a warehouse with rental of $12,000 per months
and the contracts will last for 5 years.
An opportunity, arose for the company to build its own warehouse. As part of the consideration
for cost and benefits related to the offer. the saving in rental ought to be considered.
saving in rental = number of months remaining in the contracts x rental per months
= 5 years x 12 months x 12,000$
= 720,000$
• Quantifying costs and benefits

– Five approaches
• Evidence: collected before the change
• Modelling and simulation: using computer software to identify
the level of performance
• Benchmarking: Evaluating the changes in relation to best practices
in industry
• Reference Sites: Reference to other organisations where the
technology has been deployed
• Pilot implementation: Test the technology and evaluate potential
benefits from new systems on smaller test groups.
Cost Classifications
• Future Costs: Costs that have yet to be incurred by the business.
• Sunk Costs: Costs of resources that have already been incurred.
• Relevant cost: Future costs that will be changed by the decision.
• Irrelevant costs: Costs that will remain unchanged regardless of decision is
made.
• Avoidable Costs: Costs that may be saved by not adopting a particular
course of action.
• Unavoidable costs: Costs that cannot be saved whether the particular
course of action is taken or not.
Cost Classifications
• Incremental costs/ differential costs: difference in total costs between the
new and existing levels
• Marginal cost: Additional cost of one extra unit of output.
• Opportunity cost: The value of the best alternative course of action that is
not chosen, or the opportunity cost of the resources. What best could
have been done with those resources?
Evaluating Costs and Benefits
• Payback Period
– Length of time it takes for an initial investment to be repaid out of the
net cash inflows from the project
• Accounting Rate of Return (ARR)
– Percentage return expected from an investment
• Net Present Value (NPV)
– The sum of the discounted value of the net cash flows from the
investment
• Internal Rate of Return (IRR)
– The discount rate that, when applied to its future cash flows, will
produce an NPV=O
Payback Period
Length of time it takes for an initial investment to be repaid out of the net
cash inflows from the project
Initial Investment
Payback Period =
Annual Cash flow
• Decision Criteria
– If the project payback is quicker than the company’s maximum return
time
– The quickest of the projects considered
• Payback Period
– Advantages
• Easy to use and understand
• Avoids problems of forecasting into the future where there is
uncertainty
• Offers liquidity insight
• Gives emphasis on early cash flow where greater certainty of its
accuracy
• Payback favours projects with quick returns
– Leads to company growth
– Minimises risks
– Maximises liquidity
• Payback Period
– Disadvantages
• Project returns may be ignored as cash flow after payback period
is not considered
• Project profitability is ignored (project may not pay early but a lot
in future).
• Time value of money is ignored
• Lack of objectivity on what is the minimum desired payback period
Accounting Rate of Return

Percentage return expected from an investment
ARR = Average annual operating profit X 100%

Average investment to earn that profit
– The ARR may be compared with the target return and if ARR is higher,
then the project is accepted.
– Projects that has the highest ARR will be chosen.

• Target return can be
– Return from existing, similar projects
– Return on investment (ROI)
– Return on capital employed (ROCE)
– Past returns from projects
– Company’s cost of capital
• Advantages
– Simplicity (In percentages, easy to use)
– Links with other accounting measures (ROCE, ROI)
• Disadvantages
– Only a percentage and not absolute gain in wealth
– Time value of money not considered
– Fails to take into consideration the project life or the timing of cash
flow
– Profit measurement is subjective depending on accounting policies
adopted
– Ignores working capital requirements (based on profits not cash)
Net Present Value

The sum of the discounted value of the net cash flows from the investment
actual _ cashflow
PV of cash flow =
(1+ r)n
r = opportunity investing rate(in decimal)
n = number of years
Assumption: r is constant
– Any project with positive NPV
– Projects with the highest NPV is chosen

– Advantages
• Considers time value of money
• Absolute measure of return
• Based on cash flows not profits
• Considers the whole life of the project
• Only method that produces a quantifiable amount of wealth
generated for shareholders
– Disadvantages
• Requires knowledge of cost of capital
• Relatively complex and difficult to use by non-accounting
managers

– Why is time value of money important?
• Potential for earning interest
– Cash flow that is obtained earlier can be used to earn more
interest
• Impact of inflation
– Cash is subject to loss of its purchasing power over time
• Risk
– Certainty of earnings when it is received earlier.
Internal Rate of Return
The discount rate that, when applied to its future cash flows, will produce an
NPV=O
é P ù
IRR = A + ê X(B - A)ú%
ëP - N û
NPV $
A = lower rate of return

B = higher rate of return
P Rate of P = NPV at A
Return N = NPV at B
A B
N (%)
• Internal Rate of Return
– Decision Criteria
• If the IRR is greater than the cost of capital then project will be
accepted
• Projects with the highest IRR will be accepted
– Advantages
• Considers time value of money
• Is a percentage so it’s easy to understand
• Uses cash flow which is less subjective compared to profits
• Considers the whole project not just before the payback period
• Projects chosen with IRR > cost of capital will increase shareholder
wealth
• Internal Rate of Return
– Disadvantages
• Not a measure of absolute profitability (10/100 = 10M/100M)
• Interpolation only provides an estimate and if there are small
margins of errors, this can mean a wrong decision
• Cash flows may not be linear
important
oversee the smooth running of the project by ensuring that the triple constraints are met
therefore, responsible for the project goals or objectives.
Role and responsibilities of the project manager

and the project sponsor
owner of the project as they provides the needed financial support that the project required.
responsible for ensuring that those objectives as detailed in the business case documents
to justify the undertaking of the project i.e. business objectives achivable
Project Sponsor
• Project Sponsor Responsibilities

– Provides and is accountable for the resources invested and
responsible for the achievement of the project’s business objectives
– Establish project management framework
– Prioritise projects and select projects with strategic importance
– Prepare project initiation document
– Coordinate and direct regarding required inputs
– Mentor and assist Project Manager
– Guide project manager on KPIs
– Review project manager's work
Project Manager
• Project Manager Responsibilities
– Key role: Manage the trade-offs between performance, timelines
and cost ensuring that objectives are met
– Provide direction to project team
– Monitor project work
– Document project plan
– Meet project requirements
– Understand acceptance criteria
– Implement strategy
– Plan to mitigate risks
– Manage change in project's execution
Project Manager
• Project Manager Duties

– Outline planning
– Detailed planning
– Obtain necessary resources
– Teambuilding
– Communicating
– Co-ordinating project activities
– Monitoring and control
– Problem-resolution
– Quality control
Project Manager
• Project Manager Skills

– Leadership
– Teambuilding
– Personal qualities
• Flexible, Persistence, Creative, Patience
– Organisational
– Communication and negotiation
– Technical
– Problem solving
– Change control and management
Importance of developing a project plan and its
key elements
Project Plan
• Contents
– An overview of the project
– Project resources
– The detailed plan
– The evaluation plan
– The quality plan
– The dissemination plan
– The exit and sustainability plan
Project Plan
• Contents
– An overview of the project
• Aims and Objectives
• Overall approach
• Project outputs
• Project outcomes
• Stakeholder analysis
• Risk analysis
• Standards
• Intellectual property rights
Project Plan
• Contents
– Project Resources Plan
• Project management framework
– Organisation
– Reporting relationships
– Decision processes
– The role of the local committee
– Detailed Plan
• Project deliverable and reports
• When they are due
• The phasing of the work and any discrepancies
• Gantt Charts, Flowcharts etc
Project Plan
• Contents
– Evaluation Plan
• Listing of factors to evaluate
• Methods used to evaluate
• How success will be measured?
– Quality Plan
• Quality assurance procedures
– Dissemination Plan
• How the project will share outcomes and learning with
stakeholders with indications of
– Purpose
– Target audience
– Timing
– Key message
Project Plan
• Contents
– Exit and Sustainability Plan
• Explains what will happen to the project outputs at the end of the
project
– Knowledge
– Learning
• Responsibilities for closure
– Preservation
– Maintenance
– Documentation
Project Plan
• Work Breakdown Structure

– Deliverable-oriented grouping of the work
– Defines the total scope of the project
– Breaks project into detailed tasks, groups the tasks into a logical
hierarchy
– Basis for planning and managing project schedules, costs, resources
and changes.
– Usually a graphical representation like an organisation chart
is a control in project management where the project

~ detailed
~ stages
~ activities
along side with their respective with deadlines for ease & primitives in
monitoring using work breakdown structures the project managers will be able to monitor the
progress of the project more closely. instead of on an overall basis. it can be too late before their
problem are known.
Work Breakdown Structure
Improve Customer project goals

Satisfaction
3.0 Improve
1.0 Improve 2.0 Improve
Customers
products Customer Service
Communication
3.1 Set up
1.1 Understand
2.1 Staff Training customer relations
Customer Needs
department
1.2 Research and 2.2 Improve CRM

Development System
Work Breakdown Structure
Activity budget Department Responsibility Deadline
1.0 Improve Products Production, Rand D Henry 31-Dec
1.1 Understand Customer Needs Marketing 30-Jun
1.2 Research and Development R and D and Marketing
2.0 Improve Customer Service Marketing and Sales James 30-Oct

2.1 Staff Training HR and Marketing
2.2 Improve CRM System Marketing and IT
3.0 Improve Customer Communications Marketing and PR James 30-Oct

3.1 Set up customer relations department HR and Marketing
3.1.1 Define Roles and Responsibilities of Division HR and Marketing
3.1.1.1 Define Roles and Responsibilities of Head of Division HR and Marketing
3.1.2 Produce Budget for Department Finance, HR and Marketing
3.1.2.1 Determine cost or recruitment and selection Finance, HR and Marketing
3.1.2.2 Determine cost or salary Finance, HR and Marketing
3.1.2.2.1 Determine cost of salary of head of department Finance, HR and Marketing
3.1.2.2.2 Determine cost of salary of executives Finance, HR and Marketing
3.1.2.2.3 Determine cost of salary of operations staff Finance, HR and Marketing
in exam, if question asks you to suggest measures to tracks the progression of a project,
you must think of triple constraints first. only when constraints exist, we have to monitor or track.
subsequently, think of the ways in which the time, cost and scope could be monitors.
Monitor and formulate responses for dealing with

project risks, issues, slippage and changes
(Deviation which can be in the area of cost)
i.e cost over-run, delay time, project in progress not in accordance to the required
specification or quality.
Monitoring of projects
• Monitoring involves
– Comparing work done with
• Pre-established standards of performance
• Fixed milestones
• Quality attributes of project objectives
– Measuring performance
– Analysing the problems or deviations from planned
• Performance measurements include

– Cost: expenditure
– Time: schedule
– Scope: product and project
– Functional Quality: correctness of the project
– Technical Quality: system availability, downtime etc.
– Issue Management: communications, HR, contracts etc.
– Client Satisfaction
• Cost monitoring
– Refers to comparison costs incurred with budgeted costs
(1)
– Any variances should be reported to project sponsor/ senior
management
– Tool for implementing cost control
• Earned value management
– Slippage should be compensated for by
(2) • taking cost cutting measures tendering / using substitutes that cost lesser
(3) • obtaining additional funding from senior management
applicable only if the additional cost incurred was
the result of customer making changes to the original scope
i.e. bill the project sponsor for the additional work done
(4) work-break down structures.
• Time monitoring
budgeted time
– Refers to completion of work according to project schedule (1)
– Any variances which have an impact on timely delivery of project

objectives should be calculated
– For any slippage, corrective actions involve
Assign additional human or manufacture capital to the
• Deploying additional resources project to catch up the delay.
• Revising previous planning consider running certain activities paralled.
concurrently instead of one after another.
• Introducing incentives to staff overtime payment

• Rescheduling activities activities that are of lesser importance carry it up later.
• Changing method of working and seeking other options
relaying on advanced machinery instead of main power.
• Scope monitoring
– Requires verification of scope by (Site Visit)
(1)
• Project sponsor
• Project stakeholder
– Refers to quality of work done
– Quality measured by setting tolerance limits (2)
Having the project specification clearly to return & (3)

agree by both the project sponsor and managers.
i.e. recovered of any expectation gap.
• Scope monitoring
– Slippage
• Can be reduced by
– Employing additional resources to improve quality
– Reducing scope of project
– Using quality material
having in place quality
control over the input,
operation and output
– Taking immediate action at inception of problem
– Setting up procedures to reduce occurrence of problems
• Which cannot be corrected
– Must be brought to attention of project sponsors and
stakeholders
• Satisfaction of project's stakeholders

– Project manager has to understand the views of project
stakeholders
• Their satisfaction with the way the project is progressing
– If project stakeholders are not satisfied
• Identify reasons and take corrective actions to fill gap between
desired output and current predicted output
Project risks, issues, slippage, changes
• Risk management
– Listing possible risks
– Rating risks based on severity and probability of occurrence
– Deciding countermeasures to reduce risk to acceptable level
• Specifying performance measurement standards
• Putting intellectual property rights clauses in outsourcing contracts
• Fixing
– Gates: Tests, reviews, performance measures
– Milestones: Check points, interim goals of project
• Identifying Issues
– Poor management
– Poor planning
– Lack of control mechanisms
– Unrealistic deadlines
– Insufficient budgets
– Moving targets: project specification keeps changing
• Reasons for change in project execution

– Adoption of new better technology
– Changes in composition of teams
– Differences in perception of scope & project objective
– Introduction of new legislations
– Changed in business environment
Project Controls
• Controlling the project means

– Taking early corrective actions when needed
– Balancing project efforts
– Looking for where effort can be reduced
– Making changes early rather than late
Project Controls
• Dealing with Slippage

– Do nothing
– Add resources
– Work Smarter
– Re-plan
– Reschedule
– Introduce incentives
– Briefings and motivation
– Change the specification
Project Controls
• Dealing with Slippage

– Fast Tracking
• Taking activities that are normally done in sequence, and doing
them in parallel
• It may increase costs
– Crashing
• Assigning additional resources to the critical path
• However the new person may not be as efficient as the first
• Will increase cost as well
Project Controls
• Techniques to solve problems
– Gateways
• Project review point at which certain criteria must be met
before for the project proceeds to the next stage
• Helpful in identifying scope creep which is the uncontrolled
changes in the scope of the project
– Milestone
• A significant event in the life of the project, usually completion
of a major deliverable.
• A milestone slip chart is used in the progress report to
compare actual and planned results
Project Controls
• Techniques to solve problems
– Progress reports
• Shows the current status of the project, in relation to the planned
status
– Fishbone Analysis
• Root cause analysis
• Has one cause and many effects
– Gap Analysis
• Measures differences between desired future strategic
performance & likely future performance
– From-to Analysis
• Used to measure current state of project
important
Benefits of post-implementation and post-project

review 1) undertaken by the project sponsor 1) undertaken by the project managers who
2) the review too place several months 2) the review took place immediately
after the completion of the projects. after the completion of the project when
3) the objectives is to determine whether 3) the objective is to identify any slippage what
the desired business objectives as stated in that had occurred in order to find solution
the business case documents have been for them so that they wont recur in other
fulfilled. project.
Concluding a project
• Mechanisms for successfully concluding a project

• Meaning and benefits of a post-implementation and a post-project
review
• Meaning and value of benefits realization
• Project management software in planning and monitoring of a project
• Apply lessons learned to future business case validation and to capital
allocation decisions
Project Completion
• Project Closure
– Step-by-step process for closing projects
– Defines the approval process for all project deliverables and how
records will be retained.
– To formalise the end of the project regardless of results obtained
– May be done after a provisional report to gather feedback before
Project closure report
Project Completion
• Project Closure
– Summary of outcomes
• Project objectives
• Summary of project results
• Original and actual schedule
• Original and actual budget
• Project assessment
• Continuing issues
Project Review
• Benefits of realisation review

– To ensure that the predicted benefits from project are actually realised
and their timing are justifiable
– To identify any unmet or unexpected benefits
– Reasons for results
– For future improvements of benefits management
– If there is delay in the realisation of benefits:
• Reasons for delay should be analysed
• Corrective actions should be taken
Project Review
• Post Project Review (PPR)
– Acceptance by clients
• In accordance to dissemination plan
– Review of outputs against goals
• In accordance to evaluation plan
– Disbanding
• In accordance to exit and sustainability plan
– Performance reviews
• In accordance to quality plan
Project Review
• Post Project Review (PPR)
– Determination of lessons learnt
– Formal closure by steering committee
– A one-off exercise at the end of the project
– Focuses on the performance of the project not product of the project
Project Review
• Post Implementation review (PIR)

– Assessment of the completed working solutions
– Benefits set in business case has been achieved?
– Demonstrates that the project is worthwhile
– An on-going element done usually after 2 to 12 months after the
project
– Focuses on the performance of the product of the project and not the
project
Project Review
• Post Implementation review (PIR)
– Analysis involves
• The achievement of business case objectives
• Costs and benefits to date against forecasts
• Other benefits realised and expected
• Areas of further development
• Effectiveness of revised business operations
• Ways of maximising benefits and minimising costs and risks
• The sensitivity of the business product/service to expected
business change
• Stakeholder satisfaction (both internal/external)

ACCA SBL Unit of Innovation, Performance Excellence and Change Management 2021

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ACCA SBL Unit of Innovation, Performance Excellence and Change Management 2021

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In SBL,

two additional modals in addition to

H. Innovation, performance excellence and

• Stages of establishing an organisation

• Functional managers overburdened with routine matters

Division 1 Division 2 Division 3 Division 4

Functions Functions Functions Function

– Disadvantages in time of economic recession, high cost in maintaining this structure.

• Additional duplication costs either at the centre or division.

– Extreme of multidivisional organisation

~ Absence of central services

SBU 1 SBU 2 SBU 3 SBU 4

Functions Functions Functions Function

• Holding Company Structure

– International companies have the global-local dilemma

• Has characteristics of both the global and multidomestic firm

• Transnational Structures market development

(the time within ordering and delivery will be shorter)

• Lacking of expertise outside of one’s own country which

Production Marketing HR Finance

• Matrix Structure horizontally

– Divides authority both by functional area and by project.

• The dual authority and communication problems may cause

– Teams are created and dissolve after project is completed

Functional High Poor Medium Poor

Multidivisional Medium Medium Poor Medium

Holding Poor High Poor Medium

Matrix Poor High High High

Transnational Medium High High High

Project Medium High Medium Medium

i.e. value chain activitiy

• Mintzberg's six coordination mechanisms

• Coordination is achieved by one individual taking responsibility

• Mintzberg's six coordination mechanisms

SA: Board of directors

SS: support activity

• Mintzberg's six basic parts of organization

Structure, design, processes and relationships

• This business is one that has a long list of well-defined procedures

• Mintzberg's Organisational Configuration

• Mintzberg's Organisational Configuration

• Accommodate a company with a variety of product or service

• Mintzberg's Organisational Configuration

• Mintzberg's Organisational Configuration

• Welded together by ideology or culture.

Key Building Coordinating

• Financial technology (FinTech)

– Definition and background

• Decentralized peer-to-peer payment network that is powered by

• No risk of currencies devaluation because the bank collapses or

• Venezuela, a country suffering from extensive political instability,

• Lower supply can mean higher demand, thereby increasing prices.

• The public key appears on the blockchain ledger as the user’s

• To address the issue of trust, blockchain networks have

• Computers must “prove” that they have done “work” by solving a

• On average, it will take approximately 10 minutes for the

• When a block is 'solved', the transactions contained are

• Miners receive a reward when they solve the complex

• Cryptocurrency can be cashed out through cryptocurrency

• There is no fee to receive cryptocurrencies, and many wallets

• Payments can be made without personal information being

• All information concerning the cryptocurrencies transactions is