BOLLYWOOD SURKHIYAN

How to Start an Oil Extraction Factory for Edible Oil

The concept of extracting edible oil from seeds such as olives, soya beans and groundnuts is on the rise globally. For instance, in the United States of America alone, there is an annual production averaging more than 16 billion pounds. This huge production can be attributed to the increasing demand for edible oils. As the living standards or people continue to improve, so does the consumption of edible oils. It is used for various purposes such as cooking. Therefore, the extraction of edible oil is a profitable venture that in most cases rewards manufacturers with profitable returns. Although it is not difficult to start an oil extraction factory, the below steps will help to simplify the process further. They are the primary steps that have to be followed for one to start a successful oil extraction factory.

The first step to starting any successful business venture lies in the ability to have enough knowledge about the business. Thus, the first step would be to know more about the edible oil industry, its trends, and the factors influencing it. The edible oil industry information or data can be sourced from the internet, government agencies or from the already established edible oil manufacturing industries. An investor can seek the opinion and view of an expert in the edible oil industry to get a more informed opinion about the market trends. Also, this will give you an opportunity to know more about the different firm in the market that you will come to compete with.

Second, create a business plan for the manufacturing venture. A business plan will act as the guide or central reference point for the business. The importance of planning is best captured in the popular cliché’ failing to plan is planning to fail’. Without a business plan, the oil extraction factory set up venture will fail. In fact, it might not even takeoff. When coming up with the business plan, it is advisable to engage the services of an expert in the field. He/she will help you to create a comprehensive business plan that covers all aspects of the manufacturing process. A business plan is basically a formal statement that highlights the goals of the business, and plans of achieving these goals. Also, the business plan will contain sections that cover the financial needs of starting the manufacturing plant. Without enough funds or capital, the business might stall on the way. Hence, a business plan will help you to know the cost of the venture (cost such as equipment costs, transport costs, capital for running the plant, and wage costs), and the subsequent sources of capital needed to start it. A business plan will clarify the target market for the product and how to gain a competitive edge or advantage in the market.

Third, figure out where you will get your raw materials. Raw materials are the backbone of the manufacturing plant. Without the raw materials, the plant will not. Also, during this step, it is vital to know the type of materials that will be used for the oil extraction since edible oil can be processed from many sources. Availability of the relevant raw materials is also a major factor. The raw materials should be adequate enough for the business to run. A small source will be depleted quickly. Since edible oil is extracted from arable grains, the investor can decide to plant his or her own raw materials or buy them from another party.

Location has a significant effect on the success of the manufacturing business. The plant should be located near the source of raw materials. This will help reduce the transportation costs incurred when moving the raw materials from the field to the factory.

Fifth, apply for the relevant licensees and certification from the state or federal authorities. This will make you to run a legal and licensed edible oil extraction business. You can be arrested and charged if you run a business without a license.

Lastly, get the funding of the project and subsequently purchase the plant equipment, hire employees, and advertise the business.

These steps if followed strictly will make the process of starting an oil extraction factory for edible oil easy and simple.

Understanding SWOT Weaknesses

A little about SWOT

SWOT…. Strengths, Weaknesses, Opportunities and Threats. The SWOT analysis technique is typically used during strategic planning to provide a concise summary of a strategic analysis. Generally your strategic analysis will include an analysis of your three strategic environments, which are your

Internal Environment,
Industry Environment, and your
Macro Environment

In this article you will learn all about how to identify weaknesses and to help you to get started we have also provided you with a list of common weakness. We will also show you how to avoid the common mistakes that are often made when categorising weaknesses.

Now let’s start by defining the term weakness as it relates to your SWOT analysis.

Definition of a Weakness

Corporate Level Weakness Defined:A weakness is a core capability of your business where your competitor(s) have an advantage over your business, which your customers value i.e. you failed the better than your competitors test.

During your SWOT analysis you will consider a variety of weaknesses from within your business. It is important to note that these weaknesses will all be internal to your business and they are all found during your internal analysis.

The SWOT technique can also be used at divisional, departmental and team level. When completing a team level analysis, you should identify strengths and weaknesses from the eyes of your internal customers.

Understanding SWOT Weaknesses

Some Possible Weaknesses

There are two categories of weaknesses that you may identify in your business, both are equally valid and should have receive equal consideration, these two categories are

Tangible Weaknesses, these describe characteristics of your business that can be precisely identified, measured or realized. (Normally you can touch them)
Intangible Weaknesses, these describe characteristics of your business that can not be physically touched or physically measured (You can not touch them)

Now, that we have identified two categories of weaknesses let’s take a look at some common tangible and intangible weaknesses that maybe found in your business

Some possible tangible weaknesses that you may find in your business

Old or outdated plant and equipment. Old plant or equipment is generally supported by equipment reliability issues or a lack of general competitiveness.
Narrow product line
Insufficient financial resources to fund changes
High costs (Not high price, high costs specifically refers to the cost of brining your product or service to market)
Inferior technology or technology that does has not kept pace with customer or supplier preferred transaction methods.
Low volume or restricted in your ability to scale up

Some possible intangible weaknessesthat you may find in your business

Weak or unrecognizable brand
Weak or unrecognizable image
Poor relationships with your customers
Poor relationships with your suppliers
Poor relationships with your employees
Marketing failing to meet objectives
Manager inexperience
Low investment in research and development
Low industry knowledge
Low innovative skills

Where People often go wrong

The most frequent error we see in a SWOT analysis with the categorisation of environmental observations. This is particularly prevalent when identifying weaknesses.

It is common for weaknesses to be identified as an opportunity to resolve the weakness rather than as a weakness, and some times as a threat of the harm the weakness may cause.

For example

A weakness of poor relationship with your employee’s, could be written up as an opportunity to improve labour relations or as a threat of industrial action by militant employees. It is important to categorise it as a weakness. Why?

It is important to categorise your weaknesses correctly as later you will look to find opportunities that capitalise on your strengths as these are your greatest strategic opportunities and threats that are exacerbated by your weaknesses as these are your greatest strategic risks.

If you have worded a weakness as an opportunity there is a risk that you will not identify your strategic risks and appropriately prioritise action to mitigate these risks.

Another common issue with identifying a SWOT weakness is to allow personal preferences to come into play. For example, if you are a big fan of apple computers but the company who you work does not use them, it is not valid to claim the organisation has a weakness that they use inferior technology. It is only a weakness if the choice of technology platform is restricting your business from competing with your competitors.

And the final item is that managers are often reluctant to be open and honest about the weaknesses of the business that they are running. They see it as a failure on their part. It is best to encourage leaders to be open and transparent about the weaknesses in their business, only by be open can you ask for help.

SWOT Tip

By the virtue of its name the SWOT analysis technique is an analysis technique NOT a solution technique. It is hard to remain focused on analysis, but important to do so. A thorough analysis is the perfect foundation for making strategic decisions.

Once the SWOT analysis is complete the next stage of strategic planning is to develop alternative possible courses of action.

How to Implement a Business Strategy in Your Organization

Ask any successful business owner and they will tell you their success was not based on luck. The success – and failure – of a business is dependent upon the strength of their business strategy. A successful strategic plan employs cost reduction, development, and sustainability techniques to ensure a bright future. You need to know your business inside and out in order to create a comprehensive and realistic plan.

Your strategy should help you achieve the objectives of your business. A business strategy is the driving force behind any organization, and takes the form of an official report. Businesses are self-sustainable systems, when you change one thing in the system; it has a positive or negative chain reaction. Like an organism, businesses learn how to adapt to the change if it is positive, and rectify the situation if it is negative.

Organizations have several phases of development, including creativity, direction, delegation, and consolidation. A company may start out with lenient rules and regulations, but as time progresses management adopts more efficient policies that hinder creative thinking. Companies mature and lose sight of their goals and mission statements, with more of an emphasis placed on individual projects or initiatives. As a business enters maturity processes, departments, and policies are refined to reunite the organization.

Ways to Conduct Business Strategy

Historically there are two ways to develop a business strategy, using the “bottom up” and “top down” models. The bottom up method is when employees generate ideas on the floor and the best results are passed onto management. The top down strategy is when business owners create the strategy and implement the changes without seeking employee feedback. Unfortunately, both models fail to include all of the employee feedback.

The new method of developing a business strategy uses a collaborative process, which is when managers and employees exchange information and work together to create a sustainable solution. It is a team-oriented process that bridges the gap that exists between managers and workers. Before you create a business strategy ensure you have the additional resources to carry out the task without interfering with normal operation. Assign tasks and delegate responsibilities while keeping to a defined chain of command.

Functional versus Operational Business Strategies

There are two types of business strategies: functional and operational. The functional strategy focuses on general ideas and a variety of tasks for different departments. The generality is a major disadvantage, however; areas of concentration include marketing, new product launches, human resources, financial assets, and legal issues. Functional strategies provide a nice overview of the business but do not tackle the important issues employees encounter day-to-day.

Operational strategies are ideal for businesses that want to reduce costs and streamline processes because it is much narrower in scope and requires accountability on all levels. The detail oriented plan encompasses everyone and everything, from the number of cashiers on duty to how much inventory is carried at a given time. A strategy is unique to each business and reflects the needs and requirements of the company’s management.

Implementing a Business Plan

A business plan is the textual version of a strategy, as it includes pertinent information regarding the company, including: vision and mission statements, measurable objectives supporting the vision, actionable tactics meeting the objective, resources, milestones and timeframes, accountability and role designations, as well as internal and external risks. The business strategy is not evergreen and should be evaluated routinely to ensure the company still has the competitive edge.

A business plan includes the primary and secondary objectives of your organization, an analysis of current policies and procedures, and the development of new policies or procedures to correct weaknesses within the organization. Before beginning a strategy, it is helpful to conduct a SWOT analysis, which helps identify weaknesses and loopholes within the organization. Your competition capitalizes on your weaknesses, thus it is essential to continuously evaluate your business.

Developing a Competitive Strategy

Brainstorming and collaboration are essential to the development of a successful business strategy. Begin the process by identifying the strengths and weaknesses of the organization. Without erasing responses, continue to identify current opportunities that help your business succeed. Finish the SWOT analysis by identifying threats or risks that place your business in danger. Identify how your company beats the competition, outlining the various strategies already in place.

Identify your current target audience and list potential audiences in the form of demographics. Assess current market conditions and how your company can defeat the competition. Reevaluate how you are reaching current and potential customers and consider your overall marketing plan. Think positively and develop solutions to overcome any weaknesses that you have discovered thus far. Admitting your weaknesses is the hardest part of drafting a business plan, as most companies want to appear strong and mighty. Research why you have these weaknesses and find realistic solutions to the problems.

Business owners often become so caught up with their work that they fail to concentrate on their business strategy, which is a significant source of cost reduction. Achieve your goals by dedicating time each month or week to address issues surrounding the operation of your business. Make the process a tradition, ensuring operations are aligned with current goals and future forecasts. Make your business stand out from the competition by utilizing different techniques to attract the most people.

A successful strategy overcomes organizational hurdles by understanding customer needs and predicting the unpredictable. The formation of a business strategy is a science that combines current circumstances with a variety of internal and external variables, addressing immediate and long-term goals of the organization. The implementation of the strategy is rolled out slowly, starting with management. The plan encompasses everyone; however, customers are indicative of the final result.

The CEO’s Guide To Succession Planning – Managing Risk & Ensuring Business Continuity

Introduction

Once reserved for the upper echelons of senior management, and often viewed as replacement planning should catastrophe strike, today’s succession planning is being redefined. The discipline has broadened in both breadth and scope to become a central component of board-level strategy.

Succession planning focuses on managing risk and ensuring continuity across all levels of the organization – risk of untimely departures of critical personnel, risk of retirees taking their skills and knowledge with them and leaving nothing behind, and risk of losing high value employees to competitors. It does so by helping your business leaders to identify top performers within the organization, create dynamic “talent pools” of this critical talent that other leaders can leverage, and prepare and develop these high performing employees for future roles.

If this was easy, everyone would be doing it. The problem that exists today is that succession planning is barely automated, let alone optimized. This CEO guide provides five key tips for jump starting your succession planning efforts.

1. Automate and Reduce Costs

Today’s succession planning efforts are characterized by fragmented, inconsistent, paper-based processes. Indeed, 67% of companies are still primarily paper-based, according to a global survey conducted by SumTotal.

Conventionally, business and HR leaders will spend weeks or even months manually scouring different parts of the organization for information needed to build lists and pools of nominees and successors for specific job families or positions. The information required to generate the lists often includes self assessments, past performance appraisals (often paper-based), and 360 feedback. After a lengthy period of information gathering and aggregation followed by manual analysis (e.g., nine-box, gap analysis), the results are printed and collated into large three-ring binders for use in executive planning meetings. This time-consuming, inefficient, and costly process is still commonplace today.

To effectively transform succession planning from a manual, paper-based process to one that is systematic and technology-enabled, CEOs must focus on laying a solid foundation supported by strong executive leadership.

Program & Process Foundation

Establish dedicated management function (e.g., program management office) with CEO-sponsored executive leader or council (with senior representation from line-of-business, geography, and corporate HR)
Define core succession process along with key constituents and tasks at each step of the process; Clearly articulate touch points to other business processes (e.g., performance management, career development)
Understand implications of change with emphasis on managers & employees
Align program with broader business strategy
Determine initial scope (e.g., enterprise-wide, divisional)
Define processes independent of technology

Technology Foundation

Must support and enable key processes
Must integrate learning and development
Must link seamlessly to other business processes, especially performance management
Must be flexible and configurable to meet unique needs
Must centralize and consolidate key information and data
Must be easy for managers and employees to use

2. Drive Succession Planning Deeper into Your Organization

Many CEOs still view succession planning as replacement planning to designate successors in the event of a catastrophe befalling senior company leaders. Indeed, succession planning penetrates only the highest levels of the organizational hierarchy, according to survey data. Only 35% of companies currently focus their succession planning efforts on most critical roles within the organization.

Yet a most dramatic transformation is underway: 65% of the organizations surveyed plan to extend succession planning to all critical positions within the two years. Applying succession planning beyond the top layers of management is critical to retaining high performers across all levels of the organization and mitigating the risk of untimely departures of personnel in high-value positions.

The key to extending succession planning into the organization is to provide career development planning to employees. Indeed, fully 97% of business and HR leaders believe that a systematic career development process positively impacts employee retention and engagement. These leaders also believe that providing career advancement opportunities as well as dedicated development planning to employees are the two most important mechanisms for retaining high performers.

Retaining existing employees not only has the potential to minimize the effects of talent shortages, it also provides significant and tangible cost savings (since replacement costs range from 100%-150% of the salary for a departing employee).

3. Establish Dynamic Talent Pools to Improve Pipeline Visibility

Centralized talent pools provide CEOs with global visibility into their talent pipeline and overall organization bench strength. They provide a mechanism for ensuring that the organization’s future staffing plans are adequate, thereby reducing risk and ensuring continuity. To be truly effective, talent pools need to be dynamic in nature. For instance, if an employee is terminated, that person should be automatically removed from existing successor pools. Alternatively, if an employee closes a key skill or certification gap that had previously kept her from being considered as a successor, the pool should be updated appropriately. Talent pools that are inaccessible or not up-to-date are of little use to decision makers.

A key element of making talent pools accessible is in-depth searching for talent exploration. A talent pool is not much good if managers cannot easily view, track, update, and search for potential successors. Dynamic talent pools should take the guess work out of succession planning by aligning employee assessments, competencies, development plans, and learning programs. Proactive system monitoring ensures that as employees learn and grow, talent pools are dynamically updated to reflect the changes. It is this element in particular – supported by robust reporting and analytic capabilities – that helps CEOs make more objective staffing decisions and better plan for future staffing needs.

4. Promote Talent Mobility to Retain High Performers

Industry analyst firm Bersin & Associates defines talent mobility as “a dynamic internal process for moving talent from role to role – at the leadership, professional and operational levels.” The company further states that “the ability to move talent to where it is needed and by when it is needed will be essential for building an adaptable and enduring organization.”[1]

Talent mobility is:

A business strategy that facilitates organizational agility and flexibility
A mechanism for acquiring and retaining high performing and potential talent
A recruiting philosophy that favors internal sourcing over costly external hiring
A method for aligning organizational and individual needs through development
A proactive and ongoing approach to succession planning rather than a reactive approach

A systematic talent mobility strategy enables business leaders to more effectively acquire, align, develop, engage, and retain high performing talent by implementing a consistent, repeatable, and global process for talent rotation. Without a cohesive talent mobility strategy, CEOs face several risks:

Focus on costly external recruiting vs. internal sourcing
Wrong hires (cost can be 3-5x person’s salary)
Increased high performer churn
Reduced employee engagement
Reduced flexibility as business conditions change

CEOs should consider the following integrated processes – and a complete technology platform to support them – to promote and enable talent mobility:

Current workforce analysis:Includes detailed talent profiles, employee summaries, organization charts, competencies, and job profiles.
Talent needs assessment: Assess employees on key areas of leadership potential, job performance, and risk of leaving.
Future needs analysis:Development-centric succession planning to create and manage dynamic, fully-populated talent pools.

5. Integrate Succession Planning to Broader Business Processes

Succession planning is not a silo. It implicitly relies on other talent processes and data, especially assessments that provide a performance and competency baseline. Yet unlike a performance management process, which can be executed in a relatively self-contained fashion (assuming it has access to core employee data), the same is not true for succession planning.

Succession planning requires foundational data (e.g., competencies, job profiles, talent profiles, and employee records) and inputs (e.g., appraisals, feedback). Outputs include nominee pools, successor pools, development/learning plans, and reports. To facilitate the level of integration required to get succession planning right, a single, natively-integrated technology platform that centralizes key talent processes and information is required. With this single platform, the time to develop succession plans can easily be reduced from weeks or months to mere hours. The benefits can be significant: reduce costs, reallocate personnel from tactical activities to more strategic endeavors, and mitigate the risk of untimely departures of essential personnel.

Additionally, a single technology platform promotes the linkage of learning and career development to succession planning. By bridging these processes, nominees who are not ready for advancement can be assigned detailed development plans that guide them to improve the competencies and skills required for new job positions. Learning paths and specific courses can be established for employees to facilitate their career growth. By providing learning opportunities and development plans to employees, CEOs can take a more active role in promoting employee growth, retention, and engagement.

Finally, with a single system of record, reporting and analysis is vastly improved, since all relevant talent data resides within a single data structure. Strategic cross-functional metrics can be readily established (e.g., measure the impact of learning and development programs on performance). Reporting and analysis are key to the CEO’s success in managing employee resources and implementing strategies that support corporate objectives and initiatives.

Conclusion

Organizations can realize significant efficiency gains and cost savings by moving from a manual, paper-based succession process to one that is fully technology-enabled. The shift to a single technology platform facilitates extending succession planning deeper into the organization, since a well-architected solution seamlessly links succession to career development and learning. A complete platform improves senior management’s global visibility into the talent pipeline and bench strength, and promoting talent mobility to retain high performers becomes a viable engagement strategy. Succession planning, done correctly, is all about process and supporting technology integration. Without integration, succession planning becomes just another organizational silo.

Endnotes

[1]Lamoureux, Kim. “Talent Mobility: A New Standard of Endurance.” Bersin & Associates, November 30, 2009.

Business Process Management 101: BPM Defined

Lean enterprise and business process improvement, business optimization, cost cutting TQM, quality, Six Sigma, business re-engineering and other such-like initiatives, falls within the cadre of business process management.

It forms the cradle, feeding ground and impetus for making sense of, improving and capitalizing on the intricacies, dynamic elements and events that occur in our planning, conducting, practice and execution of modern business in the new economy and digital age.

It is about objectively, stepping back, diagnosing, base-lining and analyzing, then streamlining and making things more effective, changing for the better, improving, sustaining, and optimizing the processes and desired results! It attempts to objectively study, assess, measure, adapt, refine, sustain and improve business processes, defying the over-reliance on at times pure speculation, past knowledge, intuition or other ‘expert’ opinion or interpretations. It gives business wings and freedom to pursue a higher calling and standard.

Core business processes like budgeting and even capital expenditures, manufacturing, operations and even transactional, administrative processes from part of this coordinated undertaking and endeavor, introducing it into all areas of the business, conquering new frontiers, moving boundaries and bars, pursuing the gold-standard of business practice (OK, or at least get a better handle on things to start with!) Measurement tools, metrics, assessments, diagnostics, performance statistics all become critical inputs for the successful execution of the business enterprise.

At its truest core and in its purest form, BPM is a philosophy and practical method utilized in business practice today, to bring, enable, plan and structure for and into success. A deliberate attempt and approach or business management strategy, taking proactive, co-creative, data-driven, statistical and scientific method, troubleshooting and problem-solving into the business arena, optimizing efficiencies, minimizing waste and the organizations who choose to pursue it, to new heights of performance excellence and positive business results, growing profit and world-class breakthrough!

Business process management is often seen as all organizational activities that deal with optimizing or adapting these processes, as changing situations and business needs dictate. Continuity, process design, execution and monitoring, results over time, with a forward-looking eye always on the future and opportunity, human-driven processes and even workflow systems, relational data and enterprise content management strategies and solutions all find a home under this encompassing umbrella as does a lot of the quality and continuous improvement methodologies businesses choose to pursue.

The Principles of Business Process Management (BPM) and Business Process Improvement (BPI), is well known. Here is a brief synopsis of the premise, rationale, as well as the key elements of the strategy and approach with their implications for business:

o Changing the status quo, by placing your focus in the right places, at the right time, all the time! Outcomes-based and focused, results-driven and oriented, BPI proposes synergizing and optimizing all steps and elements within and through processes, by focusing on the outcome itself and not as much the routine, accepted specific tasks required to get you there and getting rid of inefficiencies.

o Customer-centric, focused and driven in all activity and endeavor, regardless.

o Efficient, systems and process above all – not automation for example, for the sake of using technology or getting on the band wagon of another ‘fad’ or initiative.

o The value of frequent benchmarking and measuring,,taking the pulse, testing the waters, direction and health of your business. Gold-standards and points of reference that are quantifiable, attainable, and realistic are at the order of the day.

o Roles and responsibilities, ownership and accountability for processes and outcomes.

o Process controls and regular progress checks built in, planned, executed well and responded to, including halting the process if it gets of track or it looks like failure is imminent.

o Pursuit of deliberate planning, process-standardization and commonalities and having no mere ad hoc approach to business processes anymore – it simply is NOT accepted practice, considered good enough any more to thrive, saving money and effort as a new economy business!

o Immediate and consistently implementing as well as executing with success over time, sustaining the efforts

o Utility and purpose of accurate metrics and measurements and implementing action based on them.

A final word in closing: In our customer-driven and empowered economy, these approaches, strategies and tools, provides us the context and means whereby we can enable enterprise capabilities and capacities, to unfold into and through business processes across applications and organizational boundaries – pro-active, co-creative and dynamically-organic way, while doing so in planned and disciplined, data-driven, monitoring and objective fashion. Which inevitably leads to us proposing to an extent, yet another refined or even new perspective on things!

Marketing Planning – Don’t Do SWOT

SWOT (Strengths, Weaknesses, Opportunities, Threats) is a popular framework for developing a marketing strategy. A Google search for “SWOT” and “planning” turned up almost 93,000 hits (August 2004), most all of which laud the use of SWOT. Some students have said that it is the most important thing they learned at the Wharton School.

Although SWOT is promoted as a useful technique in numerous marketing texts, it is not universally praised: One expert said that he preferred to think of SWOT as a “Significant Waste of Time.”

The problem with SWOT is more serious than the fact that it wastes time. Because it mixes idea generation with evaluation, it is likely to reduce the range of strategies that are considered. In addition, people who use SWOT might conclude that they have done an adequate job of planning and ignore such sensible things as defining the firm’s objectives or calculating ROI for alternate strategies. I have observed this when business school students use SWOT on cases.

What does the evidence say? Perhaps the most notable indication is that I have been unable to find any evidence to support the use of SWOT.

Two studies have examined SWOT. Menon et al. (1999) asked 212 managers from Fortune 1000 companies about recent marketing strategies implemented in their firms. The findings showed that SWOT harmed performance. When Hill and Westbrook (1997) examined the use of SWOT by 20 companies in the UK in 1993-94, they concluded that the process was so flawed that it was time for a “product recall.”

One advocate of SWOT asked: if not SWOT, then what? Borrowing from corporate strategic planning literature, a better option for planners is to follow a formal written process to:

Set objectives
Generate alternative strategies
Evaluate alternative strategies
Monitor results
Gain commitment among the stakeholders during each step of this process.

I describe this 5-step procedure in Armstrong (1982). Evidence on the value of this planning process, obtained from 28 validation studies (summarized in Armstrong 1990), showed that it led to better corporate performance:

20 studies found higher performance with formal planning
5 found no difference
3 found formal planning to be detrimental

This support was obtained even though the formal planning in the studies typically used only some of the steps. Furthermore, the steps were often poorly implemented and the conditions were not always ideal for formal planning.

Given the evidence, SWOT is not justified under any circumstances. Instead, use the comprehensive 5-step planning procedure.

References

Armstrong, J. S. (1982) “The Value of Formal Planning for Strategic Decisions,” Strategic Management Journal, 3, 197-211.

Armstrong, J. S. (1990), “Review of Corporate Strategic Planning,” Journal of Marketing, 54, 114-119.

Hill, T. & R. Westbrook (1997), “SWOT Analysis: It’s Time for a Product Recall,” Long Range Planning, 30, No. 1, 46-52.

Menon, A. et al. (1999), “Antecedents and Consequences of Marketing Strategy Making,” Journal of Marketing, 63, 18-40.

Does Your Business Need To Hire An IT Consultant?

Whatever your type of business you own, you need to make sure that you’re using the latest technologies and software to provide quality solutions to your clients. Not only does using only the latest technology help you achieve your goals faster, doing so also ensures that you’re ahead of the competition. However, with the fast paced change in technology, keeping up with technological advances can be an uphill battle. Most businesses are not knowledgeable regarding technology so most of them are stuck with whatever their system is, for better or for worse.

For newer businesses, adaptation of technological advances should be embedded into their business plan. Newer businesses should make use of technology unlike older businesses. Businesses nowadays should even have their own IT department to sort out systems for the entire business. Financially speaking, hiring an IT department makes sense, wise even. Working with an IT consulting services company will provide the following benefits.

Assistance to business

Hiring an IT consulting firm is like hiring hundreds of people to do a business analysis on your company. IT consultants have experience in implementing projects for numerous companies and they know the best ways to go about it. Having learned from all their previous dealings with other companies, IT companies are experts in this field.

Your company will surely benefit from the collective experiences of IT companies. Their collective effort, expertise, and experience will make management planning and business transition a lot smoother than normal.

Streamline the process of business

IT companies will streamline your process once they are able to evaluate your entire business process. They will identify the important resources for your company and improve them. They will use proven business templates to ensure that your company will remain successful for years to come.

After an overhaul and careful study of your business model, they will be able to shorten the process quite extensively. Knowing how valuable time is to a company, it will lead to increased profit and efficiency.

Independent point of view

An external consultant will bring an outsider’s perspective to a company. The result will be an objective outlook of a company without any bias. An external company overlooking the process of another company can identify processes that need improvement.

An external IT company will help sort out many problems that exist within a company. New technologies will be implemented making work that much easier.

Utilization of proper tools

IT consultants are familiar with different tools and methods for different kinds of businesses. Depending on their expertise, they may favor using one method over the other. IT professionals will use a tool depending on the need of a company. Their experience will make them capable of giving the best advice out there.

The best IT companies will often partner up with many technology industry leaders giving them access to the best tools available. While many companies are only concerned with short-term solutions, IT companies are more concerned over long-term solutions for your company. After all, your continued success is detrimental to their business so expect something more permanent when you hire an IT consulting firm.

Added savings

Let’s face it, with the way the technology is advancing, a lot of work will become automated within the next decade. We’re already automating some of the most menial jobs out there. This is true for any company, big or small. Hiring an IT consulting company, you are able to identify which processes you can do without. You can also choose to automate some jobs to free some work load of your employees. While it may seem that you will spend more by hiring an IT company, you will actually save more in the long run.

Choosing to hire an IT consulting firm will boost the overall efficiency of any business. Use it in conjunction with a more efficient business planning and you’ll save a lot on unnecessary expenses. Clearly, there are many advantages in working with an IT company, yet not many businesses are willing to hire one. How would you know if you need an IT consultancy service?

The answer is simple.

Every company needs one. Big or small, every business needs someone who is able to work using the latest technology. By enabling a business to utilize technology, it will open up new opportunities in terms of expansion. If a business is able to function without IT architecture, imagine the possibility once the IT processes are implemented. Truly, the advantages of using an IT Consultation Company make it truly worth it.

Business Opportunities – Which Business Idea Is Right For You?

Many entrepreneurs decide to go into business and then cast about for the ideal business concept. There is nothing wrong in this approach, but it does beg the question as to how you determine which business opportunity is right for you and whether the business idea is worth pursuing. The formal business planning process provides for this type of analysis. It is a process that helps the small business owner remove their ‘rose coloured glasses’ and to investigate the business idea based on hard facts and realistic analysis. The planning tool used to determine the viability of a business opportunity is called a feasibility study.

The goal of the feasibility study is to minimise the degree of risk that a business owner is about to undertake. At the completion of a feasibility study you should be able to conclude if the opportunity has potential for profit and is therefore worth the investment of your time, effort and finance. If the study proves that the business idea is financially viable, much of the information collated can be used in the formal business planning documents.

A word of warning, curb your enthusiasm for a business idea until after the feasibility study has been concluded. Don’t spend a cent, don’t sign anything, don’t get anything underway. Heeding this single warning could save you much money, time and grief.

A detailed feasibility study should include:

The Business Opportunity

Start with a description of the business opportunity in as much detail as possible.

Legal Constraints

You need to investigate whether there are any legal constraints to conducting this type of business. This could include regulatory requirements for specific qualifications or licenses. Home based businesses usually require permission from the local council to operate from the home. There is no point launching into a business which requires qualifications or licenses you do not have.

Market and Customers

You need to undertake market research to determine the size of the market for your products and services and to profile the characteristics of both the market, your competitors and potential customers. You should also assess whether you can offer something unique, better or different to the offers being made by your competitors and determine likely purchase quantities and price points of your products. Your market research should also include identify any issues which are likely to impact the market or the industry in the near future.

Operational Issues

Operational issues such as business location and the type of facilities required need to be investigated and addressed. It examines the space required immediately and assesses whether that will be adequate given your projected business growth at various timeframes. It asks how you will identify the most suitable location and type of space.

It should also examine how you will finance the required space. Will your purchase, rent or take out a long-term lease?

It examines the logistical aspects of operating the business such as how will you handle, transport and store goods into and out of your business? What distribution channels will you use? Do you need transport such as a car, van, truck or forklift? What other plant and equipment are needed to commence operations and what is needed over the life of the business?

Management Skills

This examines the management aspects of the business. It asks what types and level of skills are required to run this particular business? Who will manage the business? What roles are required and who will fulfill those roles? This includes marketing, finances, sales, managing information technology etc.

Critically, you need to examine the skills required by this business opportunity and compare them to your own skills. Do you have the skills required to undertake this business? If not, can they be acquired readily? Are you even interested in acquiring these skills?

Organisational Skills

This examines the skills required by the business. It asks how many additional staff will be required to operate this business idea. Will you need to recruit new workers? If so, what skills and competency levels will be required. Do you know how to recruit these staff members and are you able to effectively induct and train these new recruits?

Do you have sufficient knowledge as to the legal aspects of employing staff? Are you aware of regulations relating to salaries and wages, taxation, workers compensation, workplace safety and equal opportunity? Do you know where to go to obtain this information?

Financial Issues

This takes a detailed look at the financial issues relating to the business idea. This includes the all important questions of what capital is required to start the business and how will you raise the required capital. What is your estimate of profitability after all costs, including tax, have been deducted? How much do you require to live on per annum? How long will it take to breakeven.

You also need to examine your own skills in relation to managing the finances. Are you able to do your own bookkeeping? Can you manage cashflows? Do you know where to go for expert financial advice?

Sales and Marketing

This looks at what you expect your sales and marketing strategy to be. It takes a look at how much time and money will be allocated to the sales and marketing function and determines what the most cost-effective promotional methods should be. It also asks who will be responsible for this function.

Conclusions

The above is not an exhaustive list of questions that should be asked when conducting a feasibility study but it gives you the flavour of what it should be. When you have done your research and found answers to the key questions you will be in a position to undertake a SWOT analysis. SWOT stands for strengths, weaknesses, opportunities and threats. It allows you to take all the information you have gathered and to make an overall assessment of the viability of the business.

Undertaking a feasibility study sounds like a lot of work, especially when you are eager to get started, but if you want to save yourself a lot of time, money, energy and grief, take the time to assess whether the business idea really is worth your investment. A feasibility study can help you sift through a raft of business ideas and allow you to discard those that are not worth pursuing and help you to identify the one that is most likely to be successful.

Process Rigidity Leads to Entropy

Process rigidity can be catastrophic for businesses, especially considering the rapid pace at which the business environment is changing in the 21st century. Organizations need processes that can be flexible, that can adapt with the times, that can be molded to fit with advancing technologies, and that can readily handle a growth or reduction in staff or the outsourcing of business components for competitive advantage. Companies need to innovate on an ongoing basis in order to keep or outpace competitors. This is as true of business processes as it is for other elements of the firm, such as IT, or business development. Everything needs to be aligned for the business to succeed. If the organization’s processes are not aligned with its initiatives, then the business will suffer.

The term ‘entropy’ is originally derived from the second law of thermodynamics, a branch of physical science dealing with the transference of heat within a closed system. It is loosely associated with the amount of disorder or chaos in a thermodynamic system. Entropy, as it relates to processes, is the breakdown of the process due to rigidity or failure to adapt to keep pace with its changing environment. In other words, it is the measure of the level of disorder in a closed process. If a process is not taking input from its changing environment, then it is considered a closed system.

Any good process can suffer from entropy and go bad if the process is not flexible enough to keep up with change. As an analogy, suppose you buy a brand new sports car that runs extremely well and sounds great when you drive it. You then decide that the sports car is too nice to drive around because it might get damaged. So, you make the decision to put the sports car in a storage garage, cover it up to protect its nice paint job, and don’t drive it for the next ten years. After ten years, you uncover the car and try to start it, but to your surprise, the car does not start. You finally get it started and as soon as you try to drive it, the engine blows out completely.

What happened? The car was in immaculate condition when you stored it away ten years earlier. Like the human body, cars need to be exercised (or in this case started and driven) from time to time to keep them in good shape. Since the car was not driven, or even started for ten years, entropy set in and the car failed when it was finally started. Likewise, if processes never change or are too rigid, then they, too, will fall prey to entropy.

This analogy clearly demonstrates the need for keeping processes in good shape. If processes are never reviewed to ensure they are still working to support the business, chances are they are not. Just because a process was great two years ago does not mean it still is today. For that matter, in some business circumstances, even if a business process was excellent three months ago, that does not mean that it is still right for the business today. Just because a process was good once does not mean it will always be good.

This is true in all companies, but it is especially true in rapid-growth markets. For example, in a groundbreaking new technological organization launching new services during the dot-com boom, processes were being developed and changing every week. This was not because the company was disorganized or because the people were inept. It was because the business model was developing in a number of different directions very rapidly, and the rate of process change had to keep up with the company. The company was recognized for its ability to continually adapt, change, and move forward. It was later acquired by a major blue-chip organization, within which it continues to thrive today, still continuing to keep pace with its changing environment.

In some instances, managers and leaders make their processes overly bureaucratic for the sake of bureaucracy, rather than thinking through why something is being done in a certain way. Processes that are overly bureaucratic are most likely not as flexible as they could be in terms of meeting business needs. Processes should be regularly analyzed to ensure that this is not the case. Processes can be streamlined to ensure that things are being done for a reason rather than being done simply for the sake of being done. Reviewing processes on a regular basis to ensure that they have not become rigid will help to identify and implement the changes needed to ensure sustained business growth.

Fat and Slow Verses Slim and Agile Business Structure – Who Will Win? You Will Be Surprised

For years companies are trying to create the right balance between a fat and agile organization. During the 1970’s, companies multiplied their own infrastructure whenever they expanded into the international markets, yet left the strategy decision making to the headquarters’ management only. This organizational structure made the company a fat one and not that agile. Today a company’s structure is built on local management teams that are subordinate to a regional management, which in turns is managed by the headquarters. This structure simplifies the decision making process and lessen the bureaucracy, all the while providing the headquarters at the mother country with full control.

Today it is important for a company to be agile, because it gives it the ability to compete in the global market. In the near future the headquarters of companies or parent companies will no longer have total control over their own branches or subsidiaries, and will become much smaller and more independent. However, this structure has yet to develop into its final stage where the opposite situation will happen…

The global market is acting in two parallel directions:

A. A very competitive direction that forces companies to be on top of their game, i.e. to be innovative, price attractive and service oriented. All this is because that in order to cope, a company has to have a quick way of thinking and an excellent executing process.

B. The latter direction is the process of a widening gap between large companies and small ones. This is created because big companies are swallowing middle size ones to avoid competitive forces. As part of this process big companies will buy or merge with middle size companies that fit their own long term strategic needs. As a result, the big companies will become bigger and the number of middle size will shrink down. In addition, the number of small size companies will rise, because more people are looking to become independent. In this global market expansion it will be hard to maintain a middle size company for long.

Ten years ago top managers said that if you are not number one or two or even three in your own country then you must change direction of business strategy, because it is simply not working. Today, if you’re not one, two or three in the Global market, then you should strategically do something different. Big companies have already started initiating this new way of thinking process, by using and implementing a subsidiary structure that allows them to control more than one market segment at a time, from foods to plastics, or minerals and cosmetics.

This market trend will create 5 to 10 big empire companies that will control most of the global market. Therefore, strategic and operational flexibility will not be as important as today.