Corporate Learnings

What is a Project ?
A project is a problem scheduled for solution. - J. M. Juran
A project is a temporary endeavour undertaken to create a unique product, service or result.
Project management is the process of:
Planning,
Organizing,
Managing task and resources
To accomplish a defined objective, within constraints on:
• Time,
• Resources
• Cost.
What is the Project Triangle?
Time
Money
Scope
Scope
• Most projects have a specific finish date( time), budget (money), and Scope.
• Trio of time, money and scope is called as the Project Triangle.
• If we adjust any one of these elements, the other two are affected. While all three elements are important, typically one will have the most influence on our project.

Quality in project triangle
• What does quality have to do with the project triangle
• Any changes we make to any of the three sides of the triangle is likely to affect quality. Quality is not a factor of the triangle; it is a result of what we do with time, money, and scope

Project Quality Standards- Objectives
• Achieving all project goals
• Prevent costly mistakes,
• Provide the resources needed to complete the project successfully,
• Meet project schedule objectives,
• Improve productivity and meet customer requirements.
• Failure to set and meet quality standards can result in a loss of customers, money, and trust

CIP Quality Standard
• Wartsila O&M CIP Project Quality standard applied are :
• 3E (Values)
• Energy
• Excitement
• Excellence
• Project deliverables which satisfy customer needs.

Benefit/Cost Analysis
• Compares financial benefit to the company with costs of implementing the project
• Cost Elements for analysis:
• Cost to produce the product/service
• Cost of marketing
• Cost of operational support
• Demand Projections/ projected Revenue:
• Over chosen period (as per Co. norms)

Scoring Models
• Weighted Scoring Model:
• A Benefit Measurement Technique.
• Criteria on the scoring model to be decided by Project Selection Committee
• Profit potential
• Marketability
• Ease to produce/ support
• Each criteria assigned a weightage depending on the importance of the criteria to the project sponsor/Entrepreneur.
• More important criteria carry a higher weight.

Cash Flow Analysis Techniques
• Payback Period
• Discounted Cash flows
• Net Present Value
• Internal Rate of Return

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Creating Entrepreneurial Venture
Business Planning Process
Environmental Analysis - Search and Scanning
Identifying problems and opportunities
Defining Business Idea

The Entrepreneurial Process

Involves finding, evaluating and developing an opportunity by overcoming the forces that resist creating some thing new.

• Phases in venture creation:
• Identification and evaluation of opportunity
• Development of business plan
• Determination of required resources
• Management of the enterprise

Identification and evaluation of opportunity phase:
o The process by which an entrepreneur comes up with an opportunity for business venture.
o Requires skill, foresight and ingenuity
o Keeping in view competencies, capabilities and resources while identifying the idea.
Identification and evaluation of opportunity phase:
o Opportunity Assessment
o Creation and length of opportunity
o Real and perceived value of opportunity
o Risk and returns of opportunity
o Opportunity versus personal skills and goals
o Competitive environment

Sources of identification of an opportunity:
• Observation
• Market Characteristics
• Conversion of waste in to wealth
• Adoption of technology
• Socio-economic changes
• Trade fairs
• Trade and professional journals
• Publications of government departments

Observation
Ø Most important sources of getting a business idea
Ø Non availability of particular articles may develop an industrial unit
Ø Market Characteristics
Ø Unfulfilled demands
Ø Demand for fast food etc.. growing every day
Ø Demand of festival gifts both social and corporate on the rise

Ø Socio-economic changes:
Ø Changes in socio economic status of people
Ø Preferences for branded products, beauty parlors, cell phones etc.
Ø Trade fairs:
Ø Visiting industrial and trade fairs
Ø Trade and professional journals
Ø Publications of government departments
Ø Technological survey reports

Evaluation of a business opportunity:
Major Criteria for Evaluation
Ø Compatibility with promoter
Ø Compatibility with Availability of financial and human resources with the entrepreneur.
Ø Government Regulations
Ø Project to follow government norms (rules and regulations)
Ø Market
Ø Assured market for product and services
Ø Raw Material
Ø Risk:
Factors to be evaluated
Ø Market stability in economic cycle
Ø Technological risk
Ø Competition from imports
Ø Legislation and controls
Ø Seasonal demands
Ø Predictability of demand

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Definition:
“A clear and definite plan that the retailer outlines to tap the market and build a long-term relationship with the customer”

A retail strategy is the fundamental to the existence to the existence of the retail organization. It helps definite the organization, its purpose and how the retailer will face various challenges in the environment and market place.

The definition of retail strategy enables other areas with in the organization to determine their strategies. Primary among these are:

Ø STORE LOCATION
Ø MERCHANDISING
Ø PRICING
Ø MARKETING


Steps in retailing strategy:

Ø Establish mission
Ø Analyze situation
Ø Identify options
Ø Set objective
Ø Obtain and allocate resources
Ø Develop implementation plan
Ø Monitor progress and control

Steps 1: Defining the mission or the purpose of the organization

The mission statement is a statement of the long term purpose of the organization. It describes what retailer wishes to accomplish in the markets in which it chooses to complete. Mission statement normally includes:

v Product and services that will be offered
v Customers who will be served
v Geographic areas that the organization chooses to operate in
v Manner in which the firm intends to compete in its chosen market

Example:
Wal-mart- “To give ordinary folk the chance to buy the same thing as rich people”
McDonald- “Quality, service, convenience and value”


Step 2: Conduct a situation analysis

The retail strategy needs to look inwards and understand what its strengths and weaknesses are and look outwards and analyze the opportunites and threats, which may arise in the environment. Over the years, many management experts have developed various models for conducting a situation analysis. These include PEST analysis, SWOT analysis and the BCG matrix.

Step 3: Identifying options/ strategic alternatives:
The retailer needs to consider the various alternatives available the various to him for tapping a particular market.

The alternatives available to the retailer are:
v Market penetration
v Market development
v Retail form development
v Diversification

Step 4: Set Objectives:

The purpose of setting objectives is to give direction and set standards for the measurement of measurement of performance.
Objectives may set keeping these two areas in mind. Examples include:
Set volume targets
Market share targets
Retail expansion targets
Profitability to be achieved
Liquidity
Return on Investment

Step 5: Obtain and allocate the resources needed to compete

The resources that a retailer needs are human are human as well as financial. Financial resources take care of the monetary aspects of the business like shop rent, salaries and payments of merchandise. Human resources are just as vital to the success of a retail operation are as financial resources and physical facilities. The human resources paln must be consistent with the overall strategy of the retail organization.

Step 6: Develop the strategic plan:
Here, retailer determines the strategy by which he will achieve the objectives set forth.
The target market is defined and the retail mix that will serve the audience finalized.
The target market is that segment of the consumer market that the retail organization decides to serve. There is no definite or best way for deciding upon and selecting the target market in which to compete.

In order to be successful in segmenting the market, the retailer must ensure that it is:
v Measurable: is the segment measurable and identifiable?
v Accessible- will focusing marketing efforts on a particular market segment have a positive impact on eliciting the desired responses?
v Economically viable
v Stable

Step 7: Implementing the strategy, Evaluate and Control
The Key to success of any strategy lies in its implementation. To implement a firm’s desired positioning effectively, every aspect of the store must be focused on the target market. Merchandising must have empathy for it; and customer service must be designed with the target customer in mind.
Once a strategy is implemented, managers need feed back on the performance of the new strategy. The effectiveness of the long- term competitive strategy of the firm must be evaluated periodically. Such and evaluation covers all elements of the plan. This type of evaluation guarantees with overall competitive strategy of the business.

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McDonald's Restaurants
Streamlined Salary System
Sopra Group's award winning work with McDonald's UK MIS team and the Payroll department to support and enhance the existing payroll solution has provided a more time-efficient and cost-effective system.With an average of 45,000 staff being paid every fortnight, it is essential to maintain a robust and flexible payroll system that continues to ensure payment in a correct and timely fashion. The enhanced payroll system has transformed a previously labour intensive process into a highly efficient and robust key business system saving the payroll department two days each fortnight.

Background

Since the first restaurant was opened in 1955 in the United States, McDonald's has grown to become a household name, with a total of 30,000 restaurants worldwide serving an estimated 46 million customers every day. In the UK alone the company now has 1250 restaurants nationwide, employing around 45,000 hourly-paid staff.A further 3500 staff are involved in restaurant management and Head Office duties, and approximately 25,000 more are employed by one of the 450 franchisees around the country. Despite its massive penetration in the UK fast food market, McDonald's continues to grow at a rapid rate and around 60 new restaurants.

Situation

As the business continues to grow rapidly, so too does the role for IT. Staffed by 17 permanent employees, the MIS team must juggle priorities to ensure that it continues to meet the demands of the business and to deliver an optimum service to its customers.Faced with the challenge of limited resource and an increasing workload, McDonald's has chosen to focus the in-house team on essential areas such as business analysis and project management.McDonald's has long since adopted the approach of establishing business relationships with specialist organisations that can provide quality based, complementary and cost effective services.With in excess of 20 different supplier relationships however, it was recognised that there was a need to consolidate and focus on two or three partnerships with organisations that could develop an in-depth understanding of the business and deliver real value.Sopra Group was chosen to partner with McDonald's to identify areas where Applications Management could deliver the greatest benefits in terms of cost, efficiency and effectiveness. Initially, the top priority was identified as the AS/400 payroll application "Payplan".

Solution

Taking over the development and support of Payplan required a partner with experience and the ability to learn quickly. Based on recommendations and track record, McDonald's invited three companies to tender, including Sopra Group.Steve Tiley, Head of MIS at McDonald's, said: "Our primary objective was to migrate all Payplan support issues away from key staff within MIS and instead encourage customers to deal directly with our chosen partner. Part of our review process, therefore, involved a thorough assessment of the support desk facilities provided by the three organisations. We also took a close look at the development teams of each and approached several reference sites before finally choosing Sopra Group."After the in-depth evaluation, Sopra Group was selected – a choice that continues to pay dividends for McDonald's and the MIS department in particular. Having successfully enhanced and supported Payplan since 1998, Sopra Group was invited to provide support and development services for a number of other applications at McDonald's.Jon Clayton, Senior Account Manager at Sopra Group, spoke about the implementation of the support service: "It was clear from the outset that the McDonald's team had a strong picture of what they required and we worked closely with them to ensure that their needs were met. We spent time gaining an understanding of their business and technical requirements and worked as a unit to help develop a workable solution."Tracey Bolden, Project Manager at McDonald's commented: "Our current internal resources are limited. It was therefore essential that we worked with a team that understood our business requirements and could work with us to provide a robust service and ongoing support. Sopra Group consultants have been invaluable in providing expertise and support and as a result they have truly become part of our team.

Key Benefits

McDonald's now receives a quality service, clearly defined in a service level agreement, which offers a number of significant benefits, including:
A quantifiable value for money service.
Significant system and process enhancements. For example, previously all payslips were printed in-house on a fortnightly basis, collated manually and distributed to all employees. System enhancements have enabled data to be sent directly to an external agency for printing and distribution, transforming a previously labour intensive job into a manageable task saving the payroll department two days each fortnight. A scalable, flexible resource-pool with a greater breadth and depth of skills.
An ability for the MIS team to focus on core business areas whilst delivering more benefits to the business.

The Future

Based on the success of the work to date, it is anticipated that a number of other areas will be identified where Application Management services will deliver considerable benefits to the McDonald's business. The Sopra Group team will continue to work collaboratively with the McDonald's MIS Team and their customers, providing a consistency of approach and common working practices, regardless of the project, to ensure MIS continues to meet and exceed its customers' expectations.

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Seven Perils of Entrepreneurship
If you’ve been out of work for a while, or are just plain tired of the work you’ve been doing for years, you may be thinking of starting a business. If so, get ready to embark on an exciting, rarely dull, often nerve wracking journey.To call it “perilous” may be stretching things since perilous is defined as “dangerous”. However, peril means “exposure to risk or harm,” and starting a business can certainly be risky and is definitely challenging.
Since writing challenges down seems to make them easier, let’s look at the obstacles you’re about to face.
1. Time Mis-Management—This is one of those issues that create problems for many of us who start new business ventures. Either you spend all of your time working, or you can’t quite keep yourself on a schedule.
Many businesses fail within the first year because the owner couldn’t get a handle on work time vs. “the rest of life” time. Rule number one: you can’t spend every waking minute on your business. You still need to have a life. Otherwise you’ll burn out.
2. Organizational Skills—If you’ve got them, you’ve just passed a major hurdle. Beingdisorganized not only means wasting time as you dig around trying to find something, but it also makes focus difficult. Which leads to peril number 3.
3. Focus (or Rather “Lack Of”)—One of my friends decided to close his business and focus on consulting. Seemed like a good idea. He knew his field and had a lot of hands-on experience. He also had a fully equipped home office and no kids or spouses around for distraction.Unfortunately, the idea was better than the venture. Why? He couldn’t focus without the structure of an office environment. Working at home seemed like some sort of part-time job. Instead of being at his desk every morning at a certain time, he’d find other things to do. Lunch hours often turned into taking the afternoon off. It was a “sort of” business—not a serious one.4. 4. Fear of Failure—Failure and entrepreneurship go hand-in-hand. If you’re not fully aware that your business could fail—or if you’re terrified of failure—go to work for someone else. Because if you’re not willing to take risks, you shouldn’tbe in business for yourself.
Risk means stretching, taking chances, trying new tactics, making mistakes and learning how to work through them.Do some reading about successful entrepreneurs. You’ll find that most have had failures along the way—either companies that didn’t succeed or ideas that failed. Didn’t stop them from starting again. Call it gumption.
5. Lack of Marketing—Most new businesses simply don’t have large marketing budgets. However, that’s no excuse for not marketing. Because if you’re not getting your name out there, someone else will…only it will be their name, not yours.There are a host of inexpensive marketing tools. Networking is my number one favorite for new businesses (and old). The cost is minimal. Your investment is in time. Find some.
Join networking groups, chambers of commerce, or industry organizations. Attend events where you’ll meet new people. Craft a thirty second “elevator speech” about your company (benefit-focused). Carry your business cards—always! Talk to people when you’re out. I’ve picked up business by chatting with people at social events. You never know who might be a potential customer…or who might know someone who might be.
Other cost-effective marketing tools include direct mail (very targeted), direct email, e-newsletters, a Web site (takes the place of a printed brochure) and public relations. It’s not necessary to have an advertising campaign. It is necessary to do something!
6. Not Staying on Top of Your Game—Technology has radically changed the way we do business. Information is disseminated immediately via the Internet. You need to be able to make decisions quickly. The same technology that makes our lives easier also requires that we work harder.Stay current on what’s going on in your particular industry. Find some industry leaders and read their newsletters and books.7. Forgetting to Have Fun—Perils aside, as an entrepreneur, you control your destiny. You’re not at the mercy of a company downsizing and eliminating your job. And if you lose an account here or there (it happens), you can go out and get more. You can be as busy as you choose to be.So enjoy what you’re doing. Get up in the morning knowing that you’re (hopefully) doing what makes you happy. And, have fun.

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To understand the direction of movement of the economy it is must for an analyst to forecast the economy.
The fortunes of specific industry and the firm depends on the how the economic outlook looks like in the future.
short term- intermediate term and long term.
The forecasting will be more relevant if it is done in:
o Short term- upto one year
o Intermediate term- one to three year.
o Long term- above three years.
The central theme of forecasting is to forecast national income, because it summarizes the receipts and expenditures of all segments of the economy, be the Government, business or the households.

Some of the techniques of short term forecasting are:

Anticipatory Surveys
This is very simple method through which investors form their opinions about the future state of the economy.
This is a survey of expert opinions of those prominent in Government, business, trade and industry or academia.

Barometric or indicator approach
In this approach , various types of indicators are studied to find out how the economy is likely perform in the near future.
These indicators are classified as :
o Leading indicator
o Roughly coincidental indicator
o Lagging indicator.

Leading indicator:
These are the indicators which leads economic activity in terms of their outcome.
These are those variables that reach their highpoints as well as low points in advance of the economic activity.
Some of leading indicators are:
o Average weekly hours of manufacturing production workers.
o Contracts and orders for plant and machinery.
o Money Supply
o Average weekly unemployment claims.
o Index of stock prices.
o Change in sensitive material prices
o Change in manufacturer’s unfilled orders (durable goods)


Roughly coincidental indicator:
These are the indicators that reach their peaks and troughs at approximately the same time as the economy.
Some of them are:
o Index of industrial production
o Manufacturing and trade sales.
o Employees on non- agricultural payrolls.
o Personal incomes.

Lagging Indicators:
These are the variables that lag behind in their consequences vis-à-vis the economy. These reach their turning points after economy has already reached its own.
Some of these are:
o Ratio of manufacturing and trade inventories to sales.
o Commercial and industrial loans outstanding.
o Change in consumer price index etc.

Indicator approach is quite useful in suggesting the direction of a change in the aggregate economic activity.
However it tells nothing about the magnitude of the change.

Money and stock prices
It is widely recognized that money supply in the economy plays an important and crucial part in the investment decision making .

The rate of change in the money supply in the economy affects the corporate profits, GNP, interest rates and stock prices.

Accordingly it argued that total money supply and its rate of change play an important in influencing the stock prices.

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