Key output from I.T. department is software, either directly written or by third party. Difficult measuring & monitoring software development productivity – no industry standard approach. Approaches include: Algorithmic Model based on historical data e.g. Constructive Cost Model (COCOMO). Comparison Compare to a similiar sized past project. Bottom Up Work Continue Reading
Learning
Learning and development resources and notes.
Contract Management
Sources for human resources can be varied, not just directly employed employees. In such cases there will be contracts. Contracts will also exists for other areas such as: software development software maintenance network provision hardware software licences Contract costs can vary greatly and require managing with help from KPIs and Continue Reading
Key Performance Indicators
Key Performance Indicators (KPIs) – valuable tool in monitoring plans. Relate to critical areas of plan that need to be monitored and managed. Specific measurements usually quantitative. Commonly displayed as a Traffic Light report, results shown in red, amber and green. Green – progressing to plan. Amber – variance to Continue Reading
Behavioural Issues Relating to Budgeting
Problems with budgeting usually fall into following groups: Figures in budget are not actual figures, they are plans based on historical data, forecasts or human judgement. Accuracy of data could be responsibility of another business function. Preparation is managerial process requiring great deal of co-ordination. Information comes from different parts Continue Reading
The Need for Prompt and Relevant Corrective Action
Variance analysis attempts to identify discrepancy between actual and planned results. Adverse/unfavourable variance should be investigated – determine cause i.e. inefficiency or external factor, Inefficiency could be caused by lack of motivation or inappropriate training. Steps should be taken to rectify issues. External factors, such as a downturn in market, Continue Reading
Accounting Variance
Variance – difference between budgeted figure and actual figure. Usually at end of budget period. Can be favourable (F) or adverse (A). Favourable variances – actual figure is better than budgeted figure. Adverse variances – actual figures are worse than budgeted figures. Managers examine variances to determine how improvements can Continue Reading
Budgeted and Actual Figures
Budgets set out in financial terms the responsibilities of executives in relation to requirements of organisations policy. Comparing actual results against budgeted results allows managers to meet the objectives of the policy or to determine necessary revisions of the policy. Budgetary controls assist managers with planning, coordinating and controlling of individuals Continue Reading
Monitoring Process
Budgetary control – business looks to future & states what it wants to happen and to achieve, then decides how to get there. How does a department know that it’s performance is satisfactory. Targets set to allow business to know if objectives have been met. Results achieved compared to targets Continue Reading
Budget Types
Budget Types Fixed budget Can be divided into different categories. Different planning approach to flexible budget. Based on fixed period of time & finding best way to achieve particular objective. e.g. Sales budget shows how sales targets will be met. Flexible budget Can change as business changes. Changing business conditions Continue Reading
Preparing a Budget
Starting point – identify key factor restricting organisations growth such as sales, human resources, physical space. All other activities determined by constraining factor.