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Business Finance

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Assessment 1 – Written or Oral Questions

  1. Determine your organisation’s views on the advantages and disadvantages
    of the purchasing methods using examples provided or adding your own additional examples. (8 marks)
  2. Describe how you might consult with relevant stakeholders. (6 marks)
  3. Explain how you would analyse information to determine the nature and level of resources required to achieve business objectives. (6 marks)
  4. Create an action plan to acquire and allocate the resources, incorporating strategies to maximise efficiency and manage risk. (16 marks)
  5. Show how you will implement this plan so that systems: (8 marks)
    • incorporate efficient use of resources into work practices
    • monitor resource use against budgets and business objectives
  6. Clearly indicate, as part of your plan, the expected level of performance achieved and any adjustments that may be needed to achieve service and

product delivery standards.

Notes:

(6 marks

Assessment 2 – Written Assessment

Develop procedures to review resource allocation against business unit objectives. Make sure you include the following: (10 marks each)

  1. Cost-effectiveness
  2. The process for resource planning.
  3. What model you will use to evaluate and measure the resultant resource planning. You will need to include tolerances that will trigger the implementation of strategies for dealing with expenditure over budget.
  4. A process for comparing the forecasted budget to actual resource costs according to organisational requirements, including strategies for dealing with expenditure over budget.
  5. The result of the measurement be it unfavourable or favourable will need to be predetermined in your set of parameters for the model chosen.

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BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT Resource Management Advanced Resource Management BSBMGT622 Manage Resources ii This workbook has been designed for use in conjunction with information and materials provided at lecture and tutorial sessions. Students should attend all timetabled sessions so they can obtain all subject information. Students should read and understand all materials provided. Information that is available in digital form is not included in this workbook in the interest of the environment. Publisher: Young Rabbit Pty Ltd (A.C.N. 003 381 182) trading as Australian Pacific College Ground Floor, 189 Kent Street Sydney NSW 2000 Australia Tel: (02) 9251 7000 Edition: 1st Edition Release date: February 2018 License agreement with international copyright available upon request. Lower Ground, 189 Kent Street Kent St Campus (CBD) Sydney NSW 2000 P (61 2) 9251 7000 F (61 2) 9251 7575 Web: www.apc.edu.au CRICOS Provider: Young Rabbit Pty Ltd – 01331F ABN: 28 003 381 182 RTO PROVIDER: 90396 Front cover image sourced from: www.rightsonsite.org.au WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 iii Contents Unit of Competency........................................................................................... iv BSBMGT622 Manage Resources......................................................................... iv Grading System................................................................................................ iv Assessment 1.................................................................................................... v Assessment 2................................................................................................... vi Legend............................................................................................................. vii 1. Analyse Resource Requirements................................................................... 1 Activity 1.1............................................................................................................10 Activity 1.2............................................................................................................13 Activity 1.3............................................................................................................15 2. Develop Resource Plans to Support Achievement of Business Unit Objectives........................................................................................................ 16 Activity 2.1............................................................................................................19 Activity 2.2............................................................................................................21 Activity 2.3............................................................................................................36 Activity 2.4............................................................................................................39 3. Allocate Resources to Achieve Stated Business Objectives......................... 40 Activity 3.1............................................................................................................44 4. Review and Report on Resource Usage........................................................ 49 Activity 4.1............................................................................................................53 Activity 4.2............................................................................................................62 WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 iv UNIT OF COMPETENCY BSBMGT622 Manage Resources Elements 1. Analyse resource requirements 2. Develop resource plans to support achievement of business unit objectives 3. Allocate resources to achieve stated business objectives 4. Review and report on resource usage For further information on the Units of Competency, please visit www.training.gov.au, or refer to your Course Outline booklet. GRADING SYSTEM High Distinction (HD) 85% and above Distinction (D) 75-84% Credit (Cr) 65-74% Pass (P) 50-64% Not yet competent (NYC) Below 50% WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 v ASSESSMENT 1 Course Name BSB61015 Advanced Diploma of Leadership and Management Subject/module Advanced Resource Management Assessment method Written or Oral Questions Weighting 50% Units of Competency BSBMGT622 Manage Resources Instructions 1. Assessments should be completed as per your trainer’s instructions. 2. Assessments must be submitted by the due date to avoid a late submission penalty. 3. Plagiarism is copying someone else’s work and submitting it as your own. You must write your answers in your own words and include a reference list. A mark of zero will be given for any assessment or part of an assessment that has been plagiarised. 4. You may discuss your assessments with other students, but submitting identical answers to other students will result in a failing grade. Your answers must be yours alone. 5. Your trainer will advise whether the assessment should be digitally uploaded or submitted in hard copy. Assessments that are digitally uploaded should be saved in pdf format. 6. You must pass both assessments in the subject to pass the subject. 7. All assessments are to be completed in accordance with WHS regulatory requirements. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 vi ASSESSMENT 2 Course Name BSB61015 Advanced Diploma of Leadership and Management Subject/module Advanced Resource Management Assessment method Written Assessment Weighting 50% Units of Competency BSBMGT622 Manage Resources Instructions 1. Assessments should be completed as per your trainer’s instructions. 2. Assessments must be submitted by the due date to avoid a late submission penalty. 3. Plagiarism is copying someone else’s work and submitting it as your own. You must write your answers in your own words and include a reference list. A mark of zero will be given for any assessment or part of an assessment that has been plagiarised. 4. You may discuss your assessments with other students, but submitting identical answers to other students will result in a failing grade. Your answers must be yours alone. 5. Your trainer will advise whether the assessment should be digitally uploaded or submitted in hard copy. Assessments that are digitally uploaded should be saved in pdf format. 6. You must pass both assessments in the subject to pass the subject. 7. All assessments are to be completed in accordance with WHS regulatory requirements. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 vii LEGEND Not all ICONS are used in this workbook Research/Investigate This tells you to go and find out some information Activity/Provide notes This indicates that you need to take notes and/or complete an exercise/activity in this workbook Reference material/manuals This means you should look to sample of organisations’ policies and procedures or to some other learning material, resources to complete this exercise/activity. Think Take some time to think about the information and record your own ideas Talk Talk to your peers, colleagues – swap ideas. Reading Selected extra reading requirements. You Sydney Ferries Tube Youtube Selected Youtube requirements. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 1 1. ANALYSE RESOURCE REQUIREMENTS 1.1 Develop resource bids in line with outputs specified in business plans Resource requirements may include: Organisational requirements may include: ff ff ff ff ff ff ff ff ff ff ff Access and equity principles and practices ff Business and performance plans ff Defined resource parameters ff Ethical standards ff Goals, objectives, plans, systems and processes ff Legal and organisational policies, guidelines and requirements ff Management and accountability channels ff Manufacturers’ and operational specifications ff OHS / WHS policies, procedures and programs ff Environmental sustainability business practices and standards ff Quality and continuous improvement processes and standards ff Quality assurance and/or procedures manuals ff Reporting requirements ff Security and confidentiality requirements Human resources Location/premises OHS / WHS resources Plant/machinery Raw materials Refurbishment Staff amenities Stock and supplies Storage space Technological equipment/ software ff Training materials Determine resource requirements To determine resource requirement analysis effectively, if this hasn’t already been carried out, do this exercise as part of the assessment by: ff gathering accurate information ff understanding the stakeholder need ff articulate requirements clearly WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 2 Resource requirement analysis Determine your WORKPLACE requirements in accordance with your business and operational plans Examine the highest levels required of each resource to determine if each area is: ff Clearly understood ff Complete as much as possible ff Free of any contradictions ff Complies with the business plan strategy Business plan resource requirements specifications Where possible, the determined action should involve communication with users, stakeholders, and other experts to avoid issues such as conflicting requirements before the business plan is undertaken. Resource requirements EXAMPLES included: Human Resources The heart of the issue with business resource needs is Human Resources are: ff Human resources are the skills-base of the business. ff What skills does the business already possess? ff Are they sufficient to meet the needs of the chosen strategy? ff Could the skills-base be flexed / stretched to meet the new requirements? An audit of human resources would include assessment of the following factors: Existing staffing resources ff Numbers of staff by function, location, grade, experience, qualification, remuneration ff Existing rate of staff loss (“natural wastage”) ff Overall standard of training and specific training standards in key roles ff Assessment of key “intangibles” – e.g. morale, business culture Changes required to these resources ff What changes to the organisation of the business are included in the strategy (e.g. change of location, new locations, new products)? ff What incremental human resources are required? ff How should they be sourced? ff Alternatives could include employment, outsourcing, joint ventures etc. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 3 ff What are the costs to your business of employing someone? ff How much time will need to be spent adhering to record keeping, payroll and other administrative tasks related to employing staff? ff How much time will need to be spent supervising staff or outsourced work? ff Prepare an estimate on the costs of employing staff as well as the direct expenses of their wages and other relevant costs (e.g. superannuation requirements) ff You will need to consider all these (and more) of employing staff Others include: Physical Resources The category of physical resources covers a wide range of operational resources concerned with the capability to deliver your goods, services and meeting your business plan. Production facilities ff Location of existing production facilities; capacity; investment and maintenance requirements ff Current production processes – quality; method & organisation ff Extent to which production requirements of the strategy can be delivered by existing facilities Raw materials ff Materials required for the manufacture or production of finished goods Marketing facilities ff Marketing management process ff Distribution channels Information technology ff It systems ff Hardware, software etc. ff Integration with customers and suppliers Facilities ff Buildings, rooms with specific purposes Stock and supplies ff Trading stock, consumables, fixed assets such as machinery or vehicles WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 4 Determine resource requirements in accordance with business and operational plans ff Check your WORKPLACE business and operational plan against these suggested EXAMPLES Suggested examples Your workplace resources requirements The physical plant Equipment Assets Special requirements Materials Production Inventory Cost Organisational requirements The examples provided suggest several areas that would need to be addressed as part of: 1. Determine resource requirements 2. Are they in accordance with business and operational plans For example: Access and equity principles and practices What does that include? 1. Equal employment opportunity NO discrimination against staff or clients on the basis of race, gender, sex or sexual preference, religious or political belief, pregnancy or marital status, union activity or age. 2. Disabilities Making any necessary and reasonable adjustment for staff and clients with disabilities 3. Staff policies All staff to be issued with their individual copy of the HR Policy Manual WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 5 For example: Business and performance plans ff A business performance plan identifies what is expected of you in your role and how you contribute to the achievement of your goals or set objectives using these approved resources. ff Acknowledge the types of support available to help you in delivering work priorities ff A guide for the employee on how to work towards and achieve goals and build job satisfaction. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 6 1.2 Consult with key stakeholders to determine the nature and level of resources required Resource examples include: ff Human resources ff location/premises ff WHS resources ff Plant/machinery ff Raw materials ff Refurbishment ff Staff amenities ff Stock and supplies ff Storage space ff Technological equipment/software ff Training materials How could individuals and workgroups contribute to the identification of resource requirements? A workgroup is considered to be: ff Two or more individuals who routinely function like a team ff Work groups are much more numerous than teams ff Workgroups operate on three levels, dependent level, independent level and interdependent level ff All are designed to achieve a common goal and may or may not work next to one another or in the same department Dependent-level work groups are: ff Dependent-level work groups are the traditional work unit or department groups with a supervisor who plays a strong role as the boss. ff Almost everyone has had some experience with this work setup, especially in a first job. ff Each person in a dependent-level work group has their own job and works under the close supervision of the boss. ff The boss is in charge and tells the employees the do’s and don’ts in their jobs. Contribute constructively to a dependent-level workgroup involves: ff Helping each other and covering for one another do not occur often and do so mostly under the direction of the supervisor. ff Most problem solving, work assignments, and other decisions affecting the group come from the supervisor, this is a known fact. ff A dependent-level work group can perform well in the short term. But for the long run, because group members operate separately and mostly at the direction of the supervisor, such work groups don’t seem to go anywhere. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 7 ff Maintaining the status quo and keeping operations under control are what they do best. ff Creating improvements, increasing productivity, and leveraging resources to support one another are quite uncommon with dependent-level work groups. Independent-level work groups are: ff Independent-level work groups are the most common form of work groups on the business scene. ff Like a dependent-level work group, each person is responsible for his or her own main area. ff But unlike the dependent level, the supervisor or manager tends not to function like the controlling boss. ff Instead, staff members work on their own assignments with general direction and minimal supervision. Contribute constructively to an independent-level workgroup If members of an independent-level work group receive the managerial guidance and support they need on the job, such a work group can perform quite well. ff Sales representatives, research scientists, accountants, lawyers, police officers, librarians, and teachers are among the professionals who tend to work in this fashion. ff People in those occupations come together in one department because they serve a common overall function, but almost everyone in the group works fairly independently. Interdependent-level work groups involves: ff Members of an interdependent-level work group rely on each other to get the work done. ff Sometimes members have their own roles and at other times they share responsibilities. ff In either case, they coordinate with one another to produce an overall product or set of outcomes. ff When this interdependence exists, you have a team. ff By capitalising on interdependence, the team demonstrates the truth of the old saying: The whole is greater than the sum of its parts. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 8 Contribute constructively to an interdependent-level workgroup involves: ff An independent work group can often be brought up to speed faster than an interdependent group. It simply takes more time to get a group of individuals to work as a team than to set a group of individuals off on their independent assignments. ff Yet when teams move into a high-functioning and high-producing state, where they capitalize on interdependence, they can outperform all other types of work groups. ff So, if you want a quick fix, don’t look to teams: but if you want to see strong results for the long term, do look to teams. To call a group a team does not make them a team ff Work groups have a strong individual focus and teams have a strong collective focus. ff The individual is not lost on a team, but that person’s work is coordinated to fit in with the greater good. ff Team concerns are much more focused on the outcomes of the overall unit rather than an individual’s accomplishments. Help staff feel comfortable about sharing information relevant to work with workgroups ff Many organisations simply encourage sharing of information for selfish reasons as many groups or supervisors may not have all the answers and sharing those answers to relevant questions gives groups what they need to know before they need to know it! When to provide information relevant to the workgroup ff Sharing information isn’t enough. You should try to provide workgroups with the RIGHT information that they need (not too little, not too much) when they need it. Collaboration ff Improves focus on the designated goals ff Encouraging colleagues to communicate the problem to be solved or a suggested strategy for the solution ff Team members need to know what they are supposed to share with open communication channels and what constitutes success ff Are there any constraints on how they do it ff Does the communication need to be shared effectively to the entire team or just to a colleague ff will the shared information ensure designated goals are met and any other obstacles are clearly in focus WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 9 Sharing information relevant to work with workgroup will increase productivity ff Workgroups will get more done if they can easily find the information that they need because it was clearly outlined from the start. ff However, if not, then good information relevant to the work in hand can prevent duplication of effort, which impacts on schedules, budgets, and team morale Sharing information assists in fewer errors 1. Correct information relevant to workgroups produces fewer mistakes and if problems do arise, informed workgroups can quickly identify them and ‘collaborate’ to fix them 2. Clarifying the organisation’s preferred task completion methods, for example, will make for better decisions along the way 3. Good communication is critical if you want the people in your workgroup to all focus in the same direction WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 10 Activity 1.1 1. Contributing constructively to a dependent-level workgroup involves 2. Sharing information relevant to work with workgroup will increase productivity in what way? WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 11 1.3 Analyse resource requirements to identify proposed costs and benefits What is realistic to you or your organisation? ff Why would it differ to another similar company? ff What if it’s unrealistic? ff What are the rules? Be realistic Resource expenditure budgets are no different to any other kind of budget. ff Resources are part of the business function, so requirements should be considered and analysed the way all other business projects are. ff Management will make assessments to resource expenditure in a similar way to any other expenditure. What is a business resource? ff Business resource encompasses a wide range of human, hardware, software and services that keep organisations running and ‘optimally’ enhance those organisational operations. ff Resources will range over almost every function of a business from accounting to customer communications to product design and development. ff Many options are available to organisations and the range varies dramatically in the functionality, range, capacity and scope, depending on the needs of the organisation. ff Better performance of business resource comes with more requirements to maintain performance of the business. ff Ultimately, the performance of a resource is also valued in most organisations in keeping them ahead in a competitive marketplace. ff Resources are generally linked to all of the performance measures and output expectations of an organisation. Link budget development to corporate strategy ff Because the budget expresses how resources will be allocated and what measures will be used to evaluate progress, budget development is more effective when linked to overall corporate strategy. ff Linking the two gives all managers and employees a clearer understanding of strategic goals. ff This understanding, in turn, leads to greater support for goals, better coordination of tactics, and, ultimately, to stronger companywide performance. Design procedures that allocate resources strategically ff Within any company, competition for resources is inevitable. ff Every function and business unit needs funding for both capital and operating expenses – usually in excess of the actual resources available. ff This makes it critically important for companies to design procedures so that resources are allocated to support key strategies. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 12 Reduce budget complexity and cycle time ff Your organisation should strive to reduce budget complexity and streamline budgeting procedures. ff Such streamlining allows management to collect budget information, make allocation decisions, and communicate final targets in less time, at lower cost, and with less disruption to the company’s core activities. Reduce budget complexity Examples: ff Controlling the number of budgets that are needed ff Standardise budgeting method ff Minimise the amount of detail included in the reports used to develop budgets ff Use information technology to automate budgeting and facilitate workflow WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 13 Activity 1.2 1. What is a business resource? 2. Why should you Link budget development to corporate strategy? WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 14 1.4 Identify opportunities to share resources across business units within the organisation Business equipment and technology may include: ff ff ff ff ff ff ff ff Answering machine Binder Computer Fax machine Photocopier Printer Shredder Telephone How you present your argument or recommendation to expend budget on resources, will vary both on circumstances and organisational policy. From there it may involve a procedure or justification process depending on the size of the budget and the type of organisation. Note: Present your recommendations to management on resource requirements in the required format WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 15 Activity 1.3 Business equipment and technology may include: WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 16 2. DEVELOP RESOURCE PLANS TO SUPPORT ACHIEVEMENT OF BUSINESS UNIT OBJECTIVES 2.1 Develop resource plans that detail the acquisition and allocation of resources, timelines and the relationship to business strategies, contingencies, plans, programs and processes Related reading: http://bit.ly/2AFKPmk Use a business plan to allocate resources effectively The business plan plays a key role in allocating resources throughout a business so that you can meet objectives. Once you have reviewed your progress to date and identified your strategy for growth, you should update your existing business plan. You can use your business plan as a roadmap for growth. See benefits of ongoing business planning. When you are reviewing your business plan to cover the next stages, it’s important to be clear on how you will allocate your resources to make your strategy work. For example, if a particular department has been given a target, the business plan should allocate enough resources to achieve it. These resources may already be available or may be generated by future activity. This could mean: ff recruiting more office staff ff spending more on marketing ff buying more supplies or equipment Changes in the market could mean that there are increased opportunities for a certain division. Maximise on this by making sure they have enough resources to increase their activities Budgeting for resource allocation You may want to provide funds through current cashflow, generating more profit or seeking external funding. It’s always better to fund future growth through revenue generation. You should do some precise budgeting to decide on the right level of resourcing for each department. It’s important that resources are prioritised. Make sure key business areas get enough funding to achieve overall goals. If funding isn’t available this may involve making cutbacks in other areas. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 17 The benefits of ongoing business planning Most potential investors or lenders will want to see a business plan before they consider funding your business. Although many businesses are tempted to use their business plans solely for this purpose, a good plan should set the course of a business over its lifespan. A business plan plays a key role in allocating resources throughout a business. It is a tool that can help you attract new funds or that you can use as a strategy document. A good business plan shows how you would use the bank loan or investment you are asking for. See use your business plan to get funding. Ongoing assessment Ongoing business planning means that you can monitor whether you are achieving your business objectives. A business plan can be used as a tool to identify where you are now and in which direction you wish your business to grow. A business plan will also ensure that you meet certain key targets and manage business priorities. You can maximise your chances of success by adopting a continuous and regular business planning cycle that keeps the plan up to date. This should include regular business planning meetings which involve key people from the business. To find out more, see measure performance and set targets and assess your options for growth. If you regularly assess your performance against the plans and targets you have set, you are more likely to meet your objectives. Doing this can also signpost where and why you’re going astray. Many businesses choose to assess progress every three or six months. The assessment will also help you in discussions with banks, investors and even potential buyers of your business. Regular review is a good vehicle for showing direction and commitment to employees, customers and suppliers. Defining your business’ purpose in your business plan keeps you focused, inspires your employees and attracts customers. See prepare a business plan. What your ongoing business plan should include Your ongoing business plan should include a summary of what your business does, how it has developed and where you want it to go. In particular, it should cover your strategy for improving your existing sales and processes to achieve the growth you want. You also need to make it clear what period the business plan covers – generally the next 12 months to two years. The plan should include: ff Your marketing aims and objectives, for example how many new customers you want to gain and the anticipated size of your customer base at the end of the period. To find out about marketing strategy, see create your marketing strategy. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 18 ff Operational information such as where your business is based, who your suppliers are, and the premises and equipment needed. ff Financial information, including profit and loss forecasts, cashflow forecasts, sales forecasts and audited accounts. See cashflow management: the basics. ff A summary of the business objectives, including targets and dates. ff If yours is an owner-managed business, you may wish to include an exit plan. This includes planning the timing of your departure and the circumstances, eg family succession, sale of the business, floating your business or closing it down. See consider your exit strategy when starting up. If you intend to present your business plan to an external audience such as investors or banks, you will also need to include: 1. your aims and objectives for each area of the business 2. details of the history of the business, including financial records from the last three years – if this isn’t possible, provide details about trading to date 3. management’s skills and qualifications 4. information about the product or service, its distinctiveness and where it fits into the marketplace WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 19 Activity 2.1 1. How do you use a business plan to allocate resources effectively? 2. The benefits of ongoing business planning WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 20 2.2 Determine internal resourcing capabilities and external resourcing requirements Business plans for each department If your business has grown to contain a series of departments, each with its own targets and objectives, you may need to draw up a more complex business plan. Each department will need its own plan. The individual business plans of the departments will need to be combined into a single strategy document for the whole organisation. This can be complex, but it’s vital if each department is going to work towards the overall goals of the business. This is not just an issue for large businesses. Many small businesses consist of separate departments working towards different strategies. See organisational structure. Drawing up a business plan that unites all the departments requires coordination. Make sure all departments are using the same planning template. Objectives for individual departments It’s important for each department to feel that they are a stakeholder in the plan. Usually, each department head will draft their own business plan and then agree how it will fit with other departments. The final document should be edited and approved by senior management. Each department’s budgets and priorities must be set so that they fit in with those of the entire organisation. Department plans will need to be more specific and precisely defined than the overall business plan. It’s important that the objectives set for departments are realistic and achievable. Each department plan needs to be easily understood by the people whose job it is to make it work. They also need to be clear on how their plan fits in with that of the wider organisation. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 21 Activity 2.2 1. Why do we need Business plans for each department? 2. What are the objectives for individual departments? WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 22 2.3 Develop procedures for the evaluation of resource allocation and incorporate them in resource plans Use a business plan to allocate resources effectively The business plan plays a key role in allocating resources throughout a business so that you can meet objectives. Once you have reviewed your progress to date and identified your strategy for growth, you should update your existing business plan. You can use your business plan as a roadmap for growth. See benefits of ongoing business planning. When you are reviewing your business plan to cover the next stages, it’s important to be clear on how you will allocate your resources to make your strategy work. For example, if a particular department has been given a target, the business plan should allocate enough resources to achieve it. These resources may already be available or may be generated by future activity. This could mean: ff recruiting more office staff ff spending more on marketing ff buying more supplies or equipment Changes in the market could mean that there are increased opportunities for a certain division. Maximise on this by making sure they have enough resources to increase their activities Budgeting for resource allocation You may want to provide funds through current cashflow, generating more profit or seeking external funding. It’s always better to fund future growth through revenue generation. You should do some precise budgeting to decide on the right level of resourcing for each department. It’s important that resources are prioritised. Make sure key business areas get enough funding to achieve overall goals. If funding isn’t available this may involve making cutbacks in other areas. Use targets to implement your business plan A successful business plan should incorporate a set of targets and objectives. See measure performance and set targets. SMART objectives or targets can help achieve the strategic goals of your overall plan. SMART objectives are: ff Specific ff Measurable ff Achievable ff Realistic ff Timely WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 23 Targets help everyone within a business understand what they need to achieve and when. Key performance indicators You can monitor the performance of employees, teams or a new product or service by using appropriate performance indicators. These can be: ff sales or profit figures over a given period ff milestones in new product development ff productivity benchmarks for individual team members ff market-share statistics See deciding which key performance indicators to measure. Employee performance Targets make it clearer for employees to see where they fit within an organisation and how they can help the business meet its objectives. Setting and communicating clear objectives and targets and closely monitoring them can help your business develop. Targets and objectives should also form a key part of employee performance reviews or appraisals. Targets help to objectively address individuals’ progress. See managing the performance of your staff. A successful business plan should incorporate a set of targets and objectives. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 24 2.4 Identify risks and establish risk management processes Identifying your stakeholders 1. As part of your risk management process, you will need to initially identify all the internal and external stakeholders and whatever risk issues are associated with them. Once you’ve identified the personnel who need to be involved in your risk management process, you should establish clear lines of communication and encourage them to participate to help manage an event’s risk factors. “Mega events are large-scale sporting, cultural and leisure events, with complex logistical operations that are heavily reliant upon advanced planning. It is clear that risk managers have an increasing role to play in the staging of mega events that will receive worldwide exposure. Using its general definition risk management is the identification, assessment and prioritisation of risk. The Ryder Cup, Rugby World Cup and Cricket World Cup are good examples of incredible sporting occasions that will be remembered by millions of people around the world. Sporting heroics aside, the competitions are high profile and as such attract higher levels of risk. Applying risk management successfully to a mega event is as integral to its success as it is challenging… “…using the Rugby World Cup (RCW) 2011 as an example, in a post tournament article published by KPMG titled “The main event – managing the risk of RWC 2011”, it was concluded that “Without effective communication between security forces, event organisers and private security providers all may be focusing their efforts in different directions. Parties must communicate if there is to be an effective division of effort.” Indeed, there are similar considerations when considering stakeholders who have invested interest in mega events, such as sponsors who provide the necessary capital to run a tournament successfully in return for exclusive rights and the expectation that their brand is given the positive exposure that a successful tournament will bring. The challenge for the risk managers then lies in protecting the contracted rights of these sponsors without neglecting other areas of risk including spectator safety or tournament experience.” Establish the context Before starting the process of identifying risks, the critical success factors of an event need to be identified. Critical success factors are those factors that must be completed for the event’s objectives to be realised. The identification of critical success factors will help later on to identify risks, as risks will be those events that prevent the critical success factors from being met. For example, the critical success factors for organising a wedding might be that the ceremony must be held outdoors, the venue must accommodate 80 guests and the invitations must be delivered by a certain date. In this example, a risk could be that if it rains, the area must be tented. Another risk could be that the invitations are not delivered in time due to a postal strike. What is context? When examining and establishing your event risk context, the political, economic, social, legal, technological and policy contexts all must be taken WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 25 into account. Context can be approached or viewed in two different ways; overall context and the more specific context of variations within areas of your operations team. Overall context When defining the context for an event risk assessment, you need to step back and take a look at the ‘big picture.’ What elements or factors of the event project might have an impact on risk levels? Some aspects, like location, will not change over the course of the event project. Others aspects such as the weather are predictions based on existing data that are subject to change at any time. If you take the time to ascertain the specific circumstances existing for the event in question, this will provide a foundation upon which all risk assessments can be built from. “For example, when you are conducting a risk assessment for a festival, the types of things that will be recognised in setting the context will include: ff the exact location of the event – whether it is in an urban or rural setting ff the area that surrounds the event locations – such as whether there is grassland, bushes, rivers etc. ff the kind of weather that is expected – such as whether it will be hot, dry or wet ff the number of people expected to attend ff how power is to be supplied, for example generators or mains power. 1. If it is an outdoor setting, consider the infrastructure that already exists, such as: • football ovals • designated camping areas • parking areas • toilet blocks • playgrounds. 2. Temporary infrastructure also needs to be considered. For example, in a festival some of the temporary infrastructure may include: • stalls • animal farm enclosures • stages • assembly areas rides.” (http://bit.ly/2hrQF38) Identify risks 1. There are risks associated with every event. Not all risks can be eliminated, however they can be managed effectively through the development of policies, procedures and processes that reduce the likelihood of negative risks from damaging event objectives or increase the likelihood of positive risks. Risk is usually seen in a negative light, but some risks are positive and can be seen as an opportunity to enhance event objectives. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 26 2. For example, a corporate promotional event was unable to use a particular venue and the event had to be moved at the last minute to a local sports arena. Local artists were asked to decorate the arena and produced a temporary mural. Because of the change in circumstances, an opportunity emerged to raise money for a local charity. The mural was auctioned at the event for a large sum of money. In this circumstance, a risk was turned into an opportunity. 3. How do you find out what risks are associated with an event? The worst action you could take is to ask only yourself. It is important that you take and assess the advice of people who go to events all the time. This means your suppliers, the event committee, subcontractors and event staff. The steps in risk identification include: 1. Find out as much as possible about potential event problems. 2. Organise a risk assessment meeting with people who have an interest in the event. 3. Ask for the assistance of various public services (e.g. Emergency Services). 4. Make sure that the event team is aware of the importance of identifying and reporting any possible problems. There are a number of methods that you can use to identify risks, including: Documentation review Identify potential areas of risk by reviewing documents in the planning and preparation period preceding the event. Documents could include minutes of meetings, action sheets, communication strategies, programmes, guest lists, contracts, insurance policies, permits and licences. For example: ff By reviewing incident reports from previous events you may anticipate likely risks. ff By reviewing insurance policies you may discover that a planned event is only partially covered by the existing policy. Risk assessment meetings To provide insight into areas of risk, meet with emergency personnel, suppliers, contractors and staff who will have knowledge and experience from previous events. Meetings are a very useful method for minimising misunderstandings and to be sure that sponsors are adequately involved, and that their expectations are being met. Although good communication may be time consuming, and difficult to organise, in regard to good risk identification and management the advantages far outweigh the disadvantages. Make it a formal meeting with notes kept as to what risks are identified and who will look after them. The meeting may simply start with a brainstorming session – ‘What could go wrong?’ For larger events, the meeting could be split into subgroups so that everyone has a say. Finish the meeting with the question ‘Have we overlooked anything?’ WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 27 Work Breakdown Structure (WBS) Preparing a visual scheme of the tasks involved in creating an event can greatly assist in the identification of risk. It should give a clear picture of the possible problems, and the specific skills and resources required. E.g. you may find that the catering marquee will require a lot of electricity at the same time as the lights are used for the main stage resulting in a potential blackout. Be aware that this process may not reveal problems associated with a combination of risks. E.g. the business failure of a catering contractor may be manageable on its own, but in conjunction with extreme weather conditions, event cancellation might result. 1. Risk takes into account scale, consequences, frequency, duration, extent, probability of occurrence and time range. Risk should be considered at the macro level (whole event), the micro level (a single activity) and at the stakeholder level (how does it potentially affect people?). 2. The risk factors listed in the table below/overleaf represent many of the risks associated with events. The list is by no means comprehensive. It does not illustrate all the risks that may occur at events, and not all of these risk factors will be pertinent to all events. In addition, the relative severity of the risks will depend on the type of event. Event Risk Factors Hazardous activities and attractions Activities Food safety and alcohol service Programme, performers, participants Audience demographics, history, conflicting segments Audience Crowd size and density Crowd behaviour Untried or insufficient communications Communications Lack of command centre and control Insufficient equipment and signage Regulatory permits, licenses, approvals Compliance Unauthorised, unsanctioned, illegal activity Inadequate cooperation with authorities Inadequate crisis management plans Emergency planning Lack of emergency response coordination Deficient disaster contingency plans Atmospheric conditions, weather dependency Environment Terrain, flora, fauna Vicinity and proximity to hazards WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 28 Event planning Inexperienced, inadequate or incompetent management Oblivious to external conditions Lack of policies and procedures Event type and purpose First-time, one-time or controversial events Lack of admittance controls and credentials Misrepresentative promotion Insufficient funding, insufficient insurance Finances Improper procurement practices Vulnerable cash handling procedures / areas Insufficient staffing Human resources Untrained / inexperienced personnel Incorrect deployment of personnel Event Risk Factors Inadequate power, technology, utilities Infrastructure Improper sanitation and waste management Insufficient traffic and parking management Work Health and Safety Operations Installation, operation, close-down logistics Equipment, décor, special effects Unclear structure of authority Organisation Unsanctioned leadership and decision-making Insufficient / incorrect security personnel Untried or temporary venues Site Inappropriate layout, insufficient lighting Temporary structures and staging Specialist, skilled, union requirements Suppliers Lack of suppler contact and control Quality control, compliance and insurance Inadequate planning and decision time Time Event start and ending times, duration Arrival and departure modes You can also consider the range of risks in terms of low-, medium – and highrisk activities: WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 29 Low-risk event are regular, routine events, often indoors and with no unusual activities. Similar events have been organised before and considerable expertise exists amongst the staff, managers and suppliers. Medium-risk event might be large indoor events, possibly in more unusual locations, but where the activities are more complicated than usual. Conversely, the event may take place outdoors, but involves less complex activities. High-risk event are those events that involve larger numbers of people who come with little experience of the event, and where the Event Managers also have little experience of the activities. Similarly, the activities themselves may constitute a danger, e.g. high-speed motor racing, challenging outdoor corporate teambuilding events, and events where there is a greater interaction with customers, possibly including young children. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 30 Risk management process The management of risks is an ongoing process; it is continual across the life cycle of an event. Some risks may come to light only as the event planning moves into implementation. Risks that have a low priority may quickly become more important over the course of the development of the event. Recognising and understanding these changes and developments are important. The figure below shows the typical risk management process. This diagram illustrates that risk management is about applying various techniques to systematically identify opportunities or threats to business objectives, to develop ways to respond to those risks, review the effectiveness of risk management strategies used and learn lessons, which can be used in the future. When applying risk management to events, you must be aware of the services of professional Risk Managers. For example, if an event will take place in public, the local council may require an official such as a fire marshal to undertake a risk analysis. This is only one small part of an event risk analysis, as the local council will not be concerned with risks such as the star performer becoming ill or a lack of attendance. Therefore, you must be aware of the scope of the expertise of the risk management professional. Experts in several areas may be needed to cover the full scope of the event. The diagram below shows the inputs, processes and outputs of event risk management. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 31 Determining risk management scope When talking about ‘risk management scope’ this means what area of an event’s risk management you are concentrating on. Possible areas could be: ff An event project ff A specific area of operations, e.g. catering ff Finances ff WHS ff The external or internal environment ff Your company as a whole Determine Risk Control Strategies 1. Once you know the risks and their possible effects on the event, your next step is to decide on how to control them. The table below/overleaf shows the actions you can take to control risks. Risk Control Strategies Actions Example: strong possibility of rain at an outdoor event Minimise the effect of the risk. Make umbrellas and sheltered areas available. Change aspects of the event. Have an undercover back-up location available. Transfer some of the risk to others. Take out insurance against event cancellation. There are two types of risk control strategies, including: WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 32 Pre-planned risk control strategies Preventative strategies adopted early in the event management process. An example of such a strategy is related to the area of cash handling. This is an area that is vulnerable to theft. Using two employees for all transactions that involve cash handling or banking can control risk. Record keeping, especially for petty cash, is a practical control strategy. Inventory is another area where control strategies can reduce risk. Again, by using two employees for storage and disbursement, for example, of sound equipment, risks are reduced. Checking food deliveries for a dinner function ensures that the correct amounts are delivered and quality standards are met. Regular checking processes reduce opportunity for pilfering. Situational risk control strategies Responsive strategies based on feedback during the event. Examples of situational control strategies include crowd monitoring (for deployment of security personnel), incident reporting (slips or falls in wet areas) and merchandising sales tracking for price reductions to increase turnover volume. The other area of situational risk control is the way procedures are implemented. From a customer’s point of view, control systems can be seen as very frustrating and may impinge on the enjoyment of the event. Employees with the responsibility for implementing control procedures need to be flexible with their discretionary powers. Obviously, if customer safety is involved, for example, on a Ferris wheel, then it is paramount, however, sitting in the aisles at a concert with an otherwise well-behaved crowd – might be reasonable. Establish reporting procedures 1. An integral part of the risk assessment process is to establish reporting procedures. Who reports to whom? You need to work out the chain of command in order for the reporting procedure to be effective. The chain of command shows the reporting relationships that result from (re) delegating authority and responsibility to successively lower levels within an organisation. 2. Organisational charts show the structure of an organisation, which generally demonstrates reporting relationships. In event management, the principles of reporting relationships are generally the same as in an office, but it is often a much more dynamic operating context and usually involves a shorter chain of command than the standard reporting arrangements commonly illustrated in organisational charts. The graphic below shows a sample reporting hierarchy in an event company. The key points to remember are: ff Communication about incidents or emergencies must be very clear. ff Communication must follow a short and specific chain of command. ff All staff must be trained in emergency reporting. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 Sample reporting hierarchy 33 WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 34 Evaluation and monitoring and review risks 1. Although monitoring and reviewing might generally be understood to be one of the last steps in the risk management process, in reality, it is a constant task even before any analysis or assessment is made. In some cases, an Event Manager may be presented with existing risk management arrangements or a partly completed risk analysis. Nevertheless, the Event Manager must take responsibility for the risk management process. 2. It is a necessity to monitor and review risk because circumstances can change. Weather conditions, venue maintenance, personnel etc. are all subject to change. Random factors produce unpredictable effects that have an impact on an event. Furthermore, risk management activities can change the nature of risk, reducing or removing some altogether, but occasionally creating new ones. 3. In the current climate, security is an area demanding more attention than in previous years. For example, the employment of security personnel can reduce some risks, however there are known cases where serious injuries have been inflicted by security officers, resulting in other risks arising. Case Study: The Easter Rock and Comedy Fundraising Festival Facts: ff About 100,000 general public to be accommodated in the area in front of the building ff 600 VIPs, media and celebrities ff Live TV broadcast nationally ff Over 50 technical and production crew ff Over 75 performers Problem: Thirty seconds before the start of the event the communications system went off air. Solution: The technician swapped base stations and had the system back on air ready for the commencement of the event. The case study shows that quick thinking by a technician, supported by good contingency planning; helps prevent ‘disasters’. Always have back-ups for the critical equipment and capable staff available to fix it. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 35 Communicate and consult with staff As noted earlier, communication with stakeholders and employees is critical. This is the case at every step in the risk management process. The communication and consultation process involves establishing expectations, roles and responsibilities, and systems for managing multiple information flows. The latter is particularly important in crisis management situations arising during the event. A dramatic example is the command and control systems for managing bush fire responses. Confused command and control arrangements have contributed to the cause of several bush fire disasters. At an event, effective communication systems can make the difference between a managed crisis and a disaster. The consequences of communication failure can include financial loss, damage to reputation, legal exposure and loss of business. Consultation gives the broadest possible access to collective knowledge about risk identification and management. Furthermore, regarding risks associated with the unmet expectations of stakeholders, consultation provides an avenue for reducing the likelihood of this type of result. Documentation of the risk management process is a key responsibility area for Event Managers. Documentation not only provides a record of actions planned and taken to prevent risk, it also provides a medium for communicating this information to stakeholders. Training is a key method for communicating with staff and volunteers about risk management. They can be given all the information they need to work safely, and how to respond in a crisis situation. An induction program should include an induction sheet explaining their responsibilities with regard to reporting risks, and responding in a crisis situation. For example, who to contact in the first instance if something unexpected happens. Importantly, the induction program should include the risk management plan. All staff and volunteers need to be aware of their legal responsibilities (Duty of Care) and what to do if something goes wrong. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 36 Activity 2.3 1. How can targets be used to implement your business plan? 2. What are Key performance indicators? 3. Why do you need to Identify your stakeholders as part of the risk management process? 4. When starting the process of identifying risks, there are critical success factors that need to be identified. What are they and give a brief explanation. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 37 2.5 Apply organisation’s procedures to obtain approvals from senior management Review your ongoing business plan Once you have drawn up your ongoing business plan and receive approval from senior management and put it into practice, you should continually monitor it to make sure the objectives are being achieved. First assess your progress to date and then analyse the most promising ways to develop your business. See measure performance and set targets and assess your options for growth. When to review The process of reviewing and analysing is called the business plan cycle. The cycle could be a continuous process with the plan being regularly updated and monitored. For most businesses will use an annual plan broken down into four quarterly operating plans. Businesses that are heavily sales driven can use a monthly operating plan, and weekly targets and reviews if needed. Major events in your business’ target marketplace (eg changes to competitors or customers) or in the broader environment (eg new legislation) should trigger a review of your strategic objectives. Regardless of whether or not there are fixed time intervals in your business plan, it must be part of a rolling process. Regularly assess performance against the plan and agree a revised forecast if necessary. Here’s how I managed rapid growth Established in 2003 near Sleaford, Lincolnshire, Anwick Forge produces decorative ironwork using traditional techniques combined with modern technology. A key challenge for owners Fran and Tim Mackereth has been to keep control of the business as growth accelerates. Fran explains how this has been achieved. What I did Review progress “A good business plan is a must for any new or growing business since it gives targets to measure against. We had clear goals for our first year’s trading, plus an ongoing strategy for steady growth in the first three years. “However, after three months our sales were 200 per cent higher than we’d forecast. We also found that we were attracting more complex – and profitable – commissions than we’d expected. While this was obviously good news, it also raised questions about how we would cope in terms of staffing, production capacity and order scheduling.” WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 38 Update the plan “Thankfully, our original business plan was well researched and put together so we only needed time to review and update our original assumptions. The new profit and cash forecasts provided all the information we needed to help us manage our unexpected growth. “For example, we brought forward the employment of another blacksmith as well as investment in new equipment. Originally we’d also planned for me to join Tim in the business part time after three years. Our rapid growth meant I joined after 16 months. “These changes to our plan created a chain reaction. Doubling our capacity and freeing up Tim’s time for business development soon led to even bigger and more lucrative contracts.” Control finances “As we’ve grown, we’ve stuck to some basic financial principles and processes, such as proper cashflow forecasting, to prevent overtrading. “We’re very rigorous in our estimates, costing every last step of a job so we don’t quote too low. We also have a policy of not offering reductions – we price a job fairly, and that’s it. There’s no point cutting prices to attract business if you can’t cover your costs. “Other methods we use to control cash are ‘just in time’ raw material ordering to save on storage costs, insisting on deposits from customers and making sure we get paid in full on time.” What I’d do differently Target our marketing more carefully “While we did some successful marketing early on, we should have refined it earlier to reach specific customers and sectors. It’s all too tempting to stick with what you’ve got when you’re growing quickly and time is at a premium.” Address work-life balance “A new business can be all consuming, especially if it’s growing quickly, and that’s not healthy in the longer run. We should have included work-life balance issues, such as taking holidays, in the business plan. We do now!” WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 39 Activity 2.4 1. Why should you review your ongoing business plan? 2. When should you review your Business Plan? 3. What questions should you consider when allocating resources? WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 40 3. ALLOCATE RESOURCES TO ACHIEVE STATED BUSINESS OBJECTIVES 3.1 Allocate resources in accordance with relevant legislation, organisational policy and practices Determine your organisations views on the advantages and disadvantages of the purchasing methods using examples provided or ADDING your own additional examples Acquire physical resources and services in accordance with organisational requirements Purchasing options Advantage Disadvantage Direct negotiations Direct purchases using supply agreements Electronic trading (ONLINE) Invitation of open or select tenders Your views Written quotations Other Other Questions to consider when allocating resources: ff What influences would the following examples play in the acquisition of resources? ff Would your organisation have special supply arrangements for resources? ff Would your organisation have documented procedures, guidelines and strategies formatted for these types of examples? Your views Local and distant suppliers Other entities owned by the organisation Partners Alliance members Other WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 41 3.2 Manage resource allocation to enable achievement of business unit objectives Assuming you have acquired the particular resource according to organisational requirements, the correct checking process should be used to ensure the two most important aspects of: 1. quality 2. quantity compliance with purchasing orders or ‘service agreements’ is also a mechanical checklist process. EXAMPLES Quality Resource Meets requirements Complies to service agreements Does not comply Meets order Complies to service agreements Does not comply A B C Quantity Resource A B C Service Agreement Review these to identify areas where future improvements could be made. There may be issues such as: ff A breakdown in the supply process ff An overrun of a budget allocation ff The purchase of unsatisfactory goods ff The discovery of an alternate supplier ff A review of supply practices Other review strategies could include feedback and discussion with relevant staff, recording problems with specific suppliers and maintaining records of any difficulties in the procurement process. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 42 EXAMPLE Heading Content Description/purpose Basically the service or the product description Parties Supplier and client – including addresses Compliance Date Definitions Frequently occurring items in the document Pricing If appropriate, attach a schedule Pricing adjustment Example includes annual increases linked to an index Responsibilities of provider Include or append details of services payment terms Responsibilities of customer confidentiality Dispute process Termination / force majeure renewal Renegotiation /prevailing laws Signatures and witnesses WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 43 3.3 Negotiate and obtain resources within required timeframe to enable achievement of business unit objectives ff In strategic planning, resource allocation is a plan for using available resources, for example human resources, especially in the near term, to achieve goals for the future. It is the process of allocating resources among the various projects or business units. ff In any organisation, the prompt allocation of resources, presumably in these examples, recently acquired, would be fundamental to the efficient use of those resources given they were purchased for a specific set of reasons? Achievement of workgroup objectives ff The achievement of various workgroup objectives would have been fundamental to the justification of the purchasing of the resource! ff The allocation of the resource thus completes that cycle! Why not create a plan to achieve this? The issues: ff What is the particular resource management? ff Think about capacity/demand management as well as the number of and skillset/experiences for the actual resource. ff Look for optimum utilisation of resources. ff The right people on the right tasks at the right time. The challenge of resource allocation ff It’s not just the resources! ff Think planning techniques used, experience of usage, accuracy in scope and the ability to estimate/plan/define the required activities for the resources. ff It can almost be a daily resourcing challenge! ff The problem may not be ‘resource management’ but what is required and how to drive your plan that is important. Tools that can help 1. Project Server, Clarity, Primavera etc. are helpful resource allocation tools. 2. Consider an Excel spreadsheet? 3. Do research – how many companies derive a benefit or not from them? 4. The trick is leadership and management vision and technique. 5. Think about how you allocate resources. 6. Think about how you sequence and pace delivery. 7. Spot busy times and understand priorities and actions. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 44 Activity 3.1 1. Complete the following sentences: a. In strategic planning, b. In any organisation, 2. What are the achievements of workgroup objectives? 3. Explain briefly the following: a. Linking the allocation of resources 4. Appropriate interpersonal skills may include: WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 45 3.4 Develop and implement systems to enable timely and accurate monitoring and review of resource usage If a format does not exist, you will need to ‘develop’ what you or your organisation considers these resources to be? There are many variables, but a general guide would likely include some or all of the following headings. Human resources People ff direct and sub-contract labour, management and supervision ff health safety and risk management issues ff labour management techniques Financial resources Money/time ff finance budgets, banking, investments, creditors, payment, receipts ff hire, lease or purchase Physical resources Equipment /material /infrastructure ff plant and machinery, scheduling of material requirements, purchasing/procurement, receiving and checking, materials handling ff storage and security issues ff energy usage ff water usage ff waste generation ff consumables usage Information resources Technology/knowledge ff documentation ff control systems ff networks ff schedules ff computers, programs WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 46 Business and operational plans Human resources What are they? Financial resources Physical resources Information resources Dealing with variances Causes ff Insufficient detail and targets in the business plan ff Weak business planning ff Inadequate operational planning Monitoring results You may have found ff insufficient resources that will be needed by staff or the availability of employees in particular programs or projects ff updating business or operational planning to reflect unforeseen changes that occur during the year, such as the chance of funding for new initiatives Human resources Dealing with variances Monitoring results What are they? What are they? Financial resources Physical resources Information resources Techniques ff Develop and implement an annual or more frequent method of monitoring resource use ff Link it to the operating expense budget ff Explain the relationship between the business and operational plans and the service demand and resource allocation ff Consider your business continuity planning and other implementation guidelines ff Describe strategies to address any imbalance between resource allocation and the business and operational plans WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 47 3.5 Develop or revise work practices to incorporate efficient use of resources The most obvious way to ensure consultation with individuals and teams is by setting up a project schedule that is participative and is conducted using appropriate interpersonal skills. ff Avoid pushing resources onto employees through an unreasonable schedule as a defence, but rather engage in consultation processes such as meetings, team building, and regular feedback and open door policies. ff Schedule the consultation in a realistic way as part of effective planning. Consider using tools to help the consultative process or use a software program such as Microsoft Project to detail allocation of resources that everyone can access at their desk or device. ff Use the consultation process to help you recognise areas for concern before they become issues. ff Use the consultation process to agree on prioritising the allocation of resources. ff By prioritising resource allocation, you can avoid when a task conflict exists and it can be resolved without putting pressure on the individual or team. Linking the allocation of resources When discussing resource allocation with individuals and teams, linking tasks that require similar resources is a logistical solution. ff If the resource/s has been assigned to cover, e.g., project A and project B, these tasks could be linked. ff In this manner, if it appears that a resource will be over-allocated for just one area or project and if another task is similar enough the two may count as one by linking these tasks and the resource problem resolved. ff It is equally important not to under-allocate resources as this could lead to a loss of budget allocation meaning resource allocations problems could then appear in future planning. ff A balance must be achieved between recognising allocations of resources and not moving forward quickly enough. Appropriate interpersonal skills may include: ff ff ff ff ff Clarity of language Consultation methods, techniques and protocols Seeking feedback from group members to confirm understanding Summarising and paraphrasing Using appropriate body language To be effective, consultation needs to take place at a stage that offers employees a chance to prepare a response and offer meaningful dialogue. ff Interpersonal skills include not only how we communicate with others, but also our confidence and our ability to listen and understand. ff Problem solving, decision making and personal stress management are also considered interpersonal skills. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 48 Participation and the allocation of resources ff ff ff ff ff ff Listen to what others tell you and ensure that you understand Be helpful and offer to learn all points of view Be honest if you agree or disagree Be friendly, open and approachable Admit and rectify mistakes if they have occurred in the past Seek advice from others when needed WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 49 4. REVIEW AND REPORT ON RESOURCE USAGE 4.1 Develop and implement procedures to review resource allocation against business unit objectives ff Cost-effectiveness is a measure of how well an organisation uses its resources to achieve its desired outcomes. ff A first step in defining the measurement system is establishing a process for resource planning. (Addressed elsewhere) ff Evaluating and measuring the resultant resource planning would need a model that can be used in defining your selected variables. ff Measuring the actual resource cost compared to the standard budget for a given resource can be considered according to your organisational requirements, including cost and resource scheduling which may exceed the standard budget. ff The result of the measurement be it unfavourable or favourable will need to be predetermined in your set of parameters for the model chosen. EXAMPLE ONLY A B C Resource Measure effectiveness Measurement Assess against 1. Actual costs 2. Identified shortfalls 3. Surpluses Results 1. Favourable 2. Unfavourable Additional Comments WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 50 Measure effectiveness Monitoring is also keeping a close eye on how resources are being used and comparing this with your planning. EXAMPLE of key words or actions ff Corrective action altering activities, modifying the use of resources ff Renegotiating the allocation of particular resources in response to measurement ff Consistency in product and service delivery ff Products and services you are responsible for are meeting standards set in the planning ff Impact on the environment both organisational, planning and costs ff Improvements needed from this assessment ff Legal requirements are being met relevant to physical resources, for example health and safety and environmental legislation, industry specific legislation Measure effectiveness ff A measurable unit or set of units assigned to each evaluation objective, e.g., a planned resource ff The data collected in your ‘measured units’ profile will allow for a determination of the degree of achievement for that objective. ff Suggesting new methods of using available resources to improve the team’s effectiveness and efficiency Things affecting effectiveness ff Resource not suitable ff Cost of poor quality from suppliers ff Defective material or damaged material during delivery WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 51 4.2 Monitor compliance with program and project budgets and take corrective action where necessary Feedback sources may include: ff Customer/client response data ff employee data ff Equipment meter readings ff Financial forecasts ff Sales orders ff Suppliers’ invoices Identify improvements in resource planning ff Resource planning is a “master plan” that includes all of the resources of an organisation. ff Resource planning is meant to address both your operation planning in units, and financial planning in dollars. ff Elements of a resource plan include a variety of relevant factors of operation and production, as well as things like future capacity planning. ff It will also address finances down to details such as general ledger, accounts receivable and accounts payable, cost reporting, purchasing management, and more. To identify improvements you need to identify areas where there is no immediate need of change. ff Maybe consider using a SWOT analysis? ff Be familiar with your business processes ff As stated, identifying improvement starts with having a sound understanding of all parts of the company, so you fully understanding what makes the organisation work. ff If you are addressing this from outside the company, consultation and feedback interviews with as many employees as possible, on all levels, is necessary to form a sound and accurate view. ff Addressing the needs for improvements from inside can be conducted in a similar manner using the examples provided: ff customer/client response data ff employee data ff equipment meter readings ff financial forecasts ff sales orders ff suppliers’ invoices ff Identify measurable processes in the core business functions. ff Gather data measurements of the business processes such as inventory levels, costs, sales, demand, labour hours, lead times and space allocations. ff You can identify opportunities for improvement when determining what prevents a process from adequately meeting its objectives. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 52 Example Models Resource sector Strengths within the organisation structure Weaknesseswithin the organisation structure Positive feedback Negative feedback Implementation strategy Organisational comments Recommendations Resource sector Recommendations Resource sector Recommendations WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 53 Activity 4.1 1. Feedback sources may include: 2. Identify improvements in resource planning 3. How would you identify improvements for areas where there is no immediate need of change? WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 54 4.3 Prepare reports that clearly indicate the level of performance achieved and any action taken to adjust or rectify procedures in meeting service and product delivery standards Records may include: ff Computerised or manual ff financial statements ff Invoices ff Maintenance schedules ff Order forms ff Petty cash forms ff Purchase orders ff Stock list and inventory control Resource purchases Assets ff Asset management has sometimes been confused with inventory management, fixed asset management, project management, and managing business assets, but today nearly everyone agrees that asset management is a combination of all of these. Resources register Date % Used Description of Resource Placed Cost of For Recovery Purchased in Service Asset Business Period Equipment XYZ 2014 $3,200 90% 3 Plant / Property XYZ 2014 $15,000 100% 3 Equipment and resource purchases Asset Name Asset Class Description Physical Location WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 55 Asset No Serial Acquisition No Date Acquisition Cost Estimated Useful Life (Years) Estimated Salvage Value Estimated Straight-Line Depreciation Value Online or software based asset management systems ff You can implement propriety software or online programs ff Take inventory ff Find out what you already have ff Get organised with recording all your software licenses and documentation ff Create policies and procedures ff Establish new standards and guidelines for all phases of the asset management re life cycle. Other benefits with software asset management programs: ff Preventive maintenance ff Scheduling ff Tracking WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 56 Most recording systems are based on a series of functional modules which assist the asset manager in effectively and efficiently managing their assets. The modules are usually based on the following headings: ff Asset Register Module – This is basically the database which captures items such as building elements, plant, equipment, FF&E and the like. All these items are bar-coded, preferably at fit out stage, and transposed in to the main module database through a bar code reader. ff Budget – This module allows the manager to run cost budget reports for a particular financial year to indicate the budget amount allocated to a given budget code. It can also provide a monthly budget comparison against actual expenditure for each budget codes. ff Contracts – This database allows the manager to input essential information on contractors, contacts, performance, etc. and also allows pop ups to be called for any essential Contract flag dates. ff Work Orders – This allows the interfacing of any related maintenance, repair or building expenditure in to the software system. The process simply relates all costing, scope, programme, and asset accounting information, through the use of the asset management database. ff Property – This module recognizes the relative locations of the facilities and assets in the building. It can be linked to say AutoCad where graphic representations can be made for locating a certain item. ff Requests – This enables all individuals in your organization to call in to the Pinnacle system to request a work order. Again this needs to be managed expeditiously to ensure you are not replacing paperclips. ff Schedule – This provides the manager with the facility to link certain tasks with a schedule. ff Stock – An inventory of items which are generally consumables such as light bulbs, this module allows an up to date check of stock numbers. ff Security – Provides a user access hierarchy to ensure protection or confidentiality of selected information. ff Barcode maker also make Stocktaking a much simpler process ff There are many types of common source documentation which will also vary in description from organisation to organisation. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 57 The source document is essential to the accurate accounting process of the organisation. ff It is the evidence that a financial transaction actually occurred ff A record for company audits ff Essential for documents back up ff Used in other links to accounting journals and the general ledger Keeping a source document for a business is applicable to every financial transaction. A source document will provide a description of all the facts surrounding the financial transaction including any on-going details during a particular point in time, including: ff Date ff Company details ff Item details ff Purpose of the transaction ff Amount Errors in documentation may include: ff Purchase credit notes ff Purchase invoices ff Sales credit notes ff Sales invoices Referring these errors and discrepancies may include: ff Bank ff Line management ff Organisation’s authorisations department ff Statutory body ff Supervisor There could be different times and circumstances when you discover errors and discrepancies i.e. ff During a reconciliation processes ff This could result in a possible imbalance in the debits and credits recorded ff entry in the general ledger may be incorrect ff Incorrect payment to a creditor ff Error in your liabilities WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 58 Prepare Reports that clearly indicate the level of performance Accurate reviewing and reporting of resource usage to senior management clearly demonstrates the level of performance achieved and any actions taken by the employees / management to adjust / rectify the procedure to assist them with meeting compliance, service and product delivery standards. Reports may contain the following: ff Capacity: total hours a resource is available to work on tasks, as shown on the user’s calendar. Capacity is availability plus allocation, in hours. ff Allocation: total resource hours assigned to a specific plan, schedule, or allocation by month. Resource hours are based on task work, personal tasks, time off, operational work, and administrative work. Allocation is capacity minus availability. ff Availability: total time resources are available, by month, after allocations. Availability is capacity minus allocation. ff Actual: total hours a resource worked. ff Utilization: percentage of resource time utilized, by month. Utilization is allocation divided by capacity. ff Sales and revenue: figures of sales achieved and revenue collected. ff Return on investment: profits achieved due to the sales. How to design and implement a management reporting system Knowing what information to produce and how to interpret that information is the cornerstone of managing any successful retail business. The steps required in order to create an effective management reporting system are: ff Review the information you need to extract from your retail business and gain an understanding of how that information can assist you in building a stronger and more profitable business. ff stock on hand, inventory performance, open to buy, sales performance, wages, outgoings, average selling price, multiple sales, customer visitation, profitability, operating expenses, cash flow, the effectiveness of promotions etc, There These are reports that produce the greatest value for the small to medium size retail operator. When the retail operator is using a manual system to record their sales activity or not fully exploiting the full potential of their current point of sale software their reporting of figures may not be accurate. Stock is often the single largest asset of most retail businesses, it is important to establish an effective management reporting system to best manage that stock. The exact nature of the reports that can be produced will vary depending on the retailer’s point of sale software. However, most small to medium size retailers will have similar needs. Prior to extracting any reports, the first and often most important step is to divide your inventory into various categories and sub-categories. This is otherwise WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 59 known as establishing a ‘reporting structure’. For retailers who specialise in a particular product category, this will be relatively straight forward exercise. For multi-purpose retailers with a wide variety of product lines this could be a larger task. In either case, the goal should be to divide your inventory into the categories that will best provide you with useful and informative reports. Example: A boutique which has the three major categories of women’s wear, shoes and accessories could set up a series of sub-categories beneath each of these major categories. By establishing sub categories such as women’s knits, skirts, dresses, jackets, tops, shirts and pants, it will enable the retailer to produce more detailed reports regarding the performance of the various subcategories within the women’s wear category. Once suitable categories and sub-categories have been established, additional ‘fields’ need to be identified to enable even more detailed reporting. Examples of fields include suppliers, labels, size and colour. Taking the time to plan your reporting requirements process is the most important step in moving towards creating and implementing a retail management reporting system. The quality of your reports is entirely dependent on the logic behind the structure of your reporting structure. Depending on what point of sale software you choose, qualified support staff will be able to help you design a reporting structure that matches your requirements. Writing and receiving orders Once you have successfully established your product reporting requirements process, you now have a defined structure in which to establish product files, allocate stock, raise order numbers, create bar codes and create and receive orders. The bar code that you attach to the swing ticket contains all of the information regarding that item’s supplier, cost price, retail price, margin, gross profit and date of delivery. It is also identifies the category and sub-category to which that stock item belongs. This information forms the basis of the retail reports which you will produce. However, it is always best to first undertake a comprehensive stock-take and ensure that your existing stock on hand is categorised into the various categories and sub-categories in your reporting structure. Stock-takes should be undertaken at least every six months. Retail Reporting basics The first step in producing a meaningful report is to decide on the date range of the report. Most retail businesses produce weekly reports starting on Monday morning and ending on Sunday night, to be reviewed on the Monday. It is then simply a matter of selecting the variables which will make up the content of each report. Based on our prior example, the weekly report should cover the sales, margin and gross profit performance of each of the women’s wear, footwear and accessories major categories. This report would typically show sales $ for each of those categories, the number of units sold, the cost of goods sold (COGS), gross profit %, gross profit $ and totals. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 60 The report also enables us to look at our stock on hand for each of our three major categories. By studying sales activity in relation to current stock on hand, we can gain some valuable insights into how quickly we are turning over our stock. These concepts are known as ‘weeks cover’ or ‘annual stock turn’. Now that we have looked at the performance of our major categories for the previous week, we then want to use the reporting structure to study some additional information. If the women’s wear category performed particularly well last week, we need to determine which sub-categories within that department contributed toward the good result, and which sub-categories which did not. The structure of our reporting process and the reports which we produce, also allow us to study the sales, margin and gross profit performance of our various brands and labels. These reports will assist us make more informed decisions about which labels expand our support, contract our support or discontinue with altogether. This information is also of particular value when it comes to attending to markdowns and writing repeat and indent orders. Interpreting the reports Once you have set up your reporting structure and are comfortable with the processes involved in creating orders, receiving orders, stock takes and producing various reports, it is time to turn your attention to the interpretation of those reports. This is where the pay-off is for you, your business and your profits. In my experience, in any fashion business, the most relevant trends are the most current trends. Fashion is a fast-paced business and studying sales trends from twelve months ago may not pay great dividends. As we all know, as far as fashion is concerned, the past does not necessarily equal the future. That’s certainly true for the short term. By experimenting with the date range on your various reports, you can produce reports for today, yesterday, last week, last month and last season. The information in these reports may prompt you to write a repeat order on last week’s best selling item, assist you plan your stock for the remainder of this season or determine the amount of open to buy (OTB) that you will allocate to each label for next season. The most common mistake is to focus exclusively on the sales activity. High sales volume coupled with low margins may not produce sufficient gross profit to meet the store’s operating expenses. The goal should be to take a balanced approach toward both sales and margin planning. In an effort to maintain high sales volumes, many retailers believe they need to maintain high stock levels at all times. This strategy can place downward pressure on margins and tie up valuable cash resources. Once again, the goal should always be to adopt a more balanced approached toward sales planning and stock on hand. The primary goal of any retail management reporting system should be assist you maximise sales, minimise stock on hand, maximise margins, free up cash and deliver profits. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ADVANCED RESOURCE MANAGEMENT_V1.5 61 Other applications We have now e...
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