Tag: System

  • What is the Concept of Corporate Planning?

    Learn and Explain, What is the Concept of Corporate Planning?

    A plan is a predetermined course of action to be taken in the future. It is a document containing the details of how the action will be executed and it is made on a timescale. The goals and the objective that a plan is supposed to achieve are the prerequisites of a plan. The setting of the goals and the objective is the primary task of the Management without which planning cannot begin. Also learned, Management As a Control System! What is the Concept of Corporate Planning?

    Planning means taking a deep look into the future and assessing the likely events in the total business environment and taking a suitable action to meet any eventuality. It further means generating the courses of action to meet the most likely eventuality. Planning is a dynamic process. As the future becomes the present reality, the course of action decided earlier may require a change. Planning, therefore, calls for a continuous assessment of the predetermined course of action versus the current requirements of the environment. The essence of planning is to see the opportunities and the threats in the future and predetermine the course of action to convert the opportunity into a business gain and to meet the threat to avoid any business loss.

    Planning involves a chain of decisions, one dependent on the other since it deals with a long-term period. A successful implementation of a plan means the execution of these decisions in a right manner one after another.

    Planning, in terms of future, can be long-range or short-range. Long-range planning is for a period of five years or more, while short-range planning is for one year at the most. The long-range planning is more concerned about the business as a whole and deals with the subject like the growth and the rate of growth, the direction of the business, establishing some position in the business world by way of a corporate image, a business share and so on. On the other hand, short-range planning is more concerned with the attainment of the business results of the year. It could also be in terms of action by certain business tasks, such as the launching of a new product, starting a manufacturing facility, completing the project, achieving intermediate milestones on the way to the attainment of goals. The goals relate to long-term planning and the objective related to the short-term planning. There is a hierarchy of objectives which together take the company to the attainment of goals. The plans, therefore, relate to the objectives when they are short-range and to goals when they are the long-range.

    Long-range planning deals with resource selection, its acquisition, and allocation. It deals with the technology and not with the methods or the procedures. It talks about the strategy of achieving the goals. The right strategy improves the chance of success tremendously. At the same time, a wrong strategy means a failure in achieving the goals.

    Corporate business planning deals with the corporate business goals and objectives. The business may be a manufacturing or a service; it may deal with the industry or trade; may operate in a public or a private sector; may be a national or an international business. Corporate business planning is a necessity in all cases. Though the corporate business planning deals with a company, its universe is beyond the company. The corporate business plan considers the world trends in the business, the industry, the technology, the international markets, the national priorities, the competitors, the business plans, the corporate strengths and the weaknesses for preparing a corporate plan. Planning, therefore, is a complex exercise of steering the company through the complexities, the difficulties, the inhibitions and the uncertainties towards the attainment of goals and objective.

    #Dimensions of Planning:

    The corporate business plan has five dimensions. These are time, entity, organization, elements and characteristics.

    #Time:

    The plan may either be long-range or short-range, but the execution of the plan is, year after year. The plan is made on a rolling basis where every year it is extended by one year, keeping the plan period for the next five years. The rolling plan provides an opportunity to correct or revise the plan in the light of any new information the planner may receive.

    #Entity:

    The planning entity is the thing on which the plan is focused. The entity could be the production in terms of quantity or it could be a new product. It could be about the finance, the marketing, the capacity, the manpower or the research and development. The goals and the objectives would be stated in terms of these entities. A corporate plan may have several entities.

    #Organization:

    The corporate plan would deal with the company as a whole, but it has to be broken down for its subsidiaries, if any, such as the functional groups, the divisions, the product groups and the projects. The breaking of the corporate business plan into smaller organizational units helps to fix the responsibility for execution. The corporate plan, therefore, would be a master plan and it would comprise several subsidiary plans.

    #Elements:

    The plan is made out of several elements. The plan begins with the mission and goal which the organization would like to achieve. It may provide a vision statement for all to understand as also the purpose, focus, and direction the organization would like to move towards. It would at the outset, place certain policy statements emerging out of management s business philosophy, culture and style of functioning followed by policy statements. Next, it would declare the strategies in various business functions, which would enable the organization to achieve the business objectives and targets. It would spell out a program of execution of plan and achievements. It provides support for rules, procedures, and methods of plan implementation, wherever necessary. One important element of the plan is a budget stipulated for achieving certain goals and business targets. The budgets are provided for sales, production, stocks, resources, expenses which are monitored for the time in execution period. The budgets and performance provide meaningful measure about success and failure of the plan designed to achieve certain goals.

    #Characteristics:

    There are no definite characteristics of a corporate plan. The choice of characteristics is a matter of convenience helping to communicate to everybody concerned in the organization and for an easy understanding in execution. The features of a plan could be several and could have several parts. The plan is a confidential written document subject to the charge and known to a limited few in the organization. It is described in the quantitative and qualitative terms. The long-term plan is normally flexible while the short-term one is generally not. The plan is based on the rational assumptions about the future and gives weight age to the past achievements and corporate strength and weal messes. The typical characteristics of a corporate plan are the goals, the resources, the important milestones, the investment details and a variety of schedules.

    #Concepts of Corporate Planning:

    Corporate planning is the process of creating a path to profitability for the enterprise, including determining how and where to market the company’s products and services. When preparing a business plan the small business owner also forecasts financial results for the upcoming year — revenues, expenses and the resulting profit. Planning has its own terminology, concepts, and techniques that must be understood in order for the business owner to be able to create a realistic plan that can be implemented successfully.

    • Mission Statement: In defining his mission statement, the small business owner states the value he wants to provide his customers, employees or society as a whole. He articulates why he decided to go into business — what he wants to accomplish through building the company.
    • Business Model: The concept of a business model has two components: how the company is going to generate sales and why the company will be profitable. The business may have several revenue streams, such as selling products, offering service contracts for the products and selling subscriptions to premium content on the company’s website. The company also has factors related to its operations that will cause it to be able to earn a profit. Lower production costs, relative to other companies in its industry, is a positive factor for the company.
    • Goals: Goals, or objectives as they are also called, describe the end result the business owner seeks to achieve. During the planning process, the business owner and his management team set numerous goals — major goals, such as revenues and profit margin percentage, as well as goals for each department and sometimes each individual — to ensure that all members of the organization put forth their best efforts and work as a cohesive team.
    • Strategies and Tactics: Strategies describe how the company’s resources will be directed to accomplish the goals. A strategy could be, for example, to sell the company’s products through independent sales reps and in-house salespeople. Tactics are specific steps taken to implement each of the strategies, showing who is responsible for implementing them and when each step needs to be completed.
    • Competitive Advantage: Companies succeed over the long term because they create and maintain competitive advantages — aspects of their products or service levels that deliver greater value to customers than those of competitors. The customers perceive this greater value and continue to do business with the company becoming loyal, repeat customers.
    • Financial Forecast: The forecast is created using spreadsheet software. The business owner builds revenue models that calculate the expected sales — units and dollars. He then estimates what the expenses for the company will be — what will it cost to create products or services, market them and fund the company’s operations including facilities costs and staff salaries.
    • Risk Factors: All businesses, including small ones, face risks — environmental factors that may cause the company to not perform as well financially as anticipated. It is important for the small business owner to recognize these risks and plan ways to change his business strategy if necessary in response to the risks. These planned responses are called contingency plans.
    • Exit Strategy: A business owner may have a long-term goal of selling the company someday. How he intends to divest the business is termed his exit strategy. Although larger companies’ shareholders sometimes exit through selling their shares to the public through an initial public offering — IPO — a small business owner commonly exits the business through selling it to another individual who wants to operate it, or to a larger company.

  • Explain Management As a Control System!

    Learn and Study, Explain Management As a Control System!

    Planning, organizing, staffing, coordinating, directing and controlling are various! Steps in a management process. All the steps prior to a control are necessary but are not necessarily self-assuring the results unless it is followed by a strong control mechanism. The management experts have viewed these steps as Management Control System. They postulate the hypothesis that unless a control is exercised on the process, the goals will not be achieved. They advocate a system of effective control to ensure the achievement of the business objectives. Also learn, Management as, What? As an Art…As a Process! Explain Management As a Control System!

    A definition of control is the process through which managers assure that actual activities conform to the planned activities, leading to the achievement of the stated common goals. The control process measures a progress towards those goals and enables the manager to detect the deviations from the original plan in time to take corrective actions before it is too late. Robert J Mockler defines and points out the essential elements of the control process.

    The management is a systematic effort to set the performance standards in line with the performance objectives, to design the information feedback systems, to compare the actual performance with these predetermined standards, to identify the deviations from the standards, to measure its significance and to take corrective actions in case of significant deviations. This systematic effort is undertaken through the management control system.

    The control system is essential to meet the environmental changes discussed earlier, to meet the complexity of today s business, to correct the mistakes made by the people, and to effectively monitor the delegation process. A reliable and effective control system has the following features.

    Early Warning Mechanism:

    This is a mechanism for predicting the possibility of achieving the goals and the standards before it is too late and allowing the manager to take corrective actions.

    Performance Standard:

    The performance standard must be measurable and acceptable to all the organization. The system should have meaningful standards relating to the work areas, responsibility, and managerial functions and so on. For example, the management would have standards relating to the business performance, such as production, sales, inventory, quality, etc.  The operational management would have standards relating to the shift production, rejections, downtime, utilization of resources, sale in a typical market segment and so. On. The chain of standards, when achieved, will ensure an achievement of the goals of the organization.

    Strategic Controls: 

    In every business there are strategic areas of control knows the critical success factors. The system should recognize them and have controls instituted on them.

    Feedback: 

    The control system would be effective; it continuously monitors the performance and sends the information to the control center for action. It should not only highlight the progress but also the deviations.

    Accurate and Timely: 

    The feedback should be accurate in terms of results and should be communicated in time for corrective action.

    Realistic: 

    The system should be realistic so that the cost of control is far less than the benefits. The standers are realistic and are believed as achievable. Sufficient incentive and rewards are to be provided to motivate the people.

    The Information Flow:

    The system should have the information flow aligned with the organization structure and the decision makers should ensure that the right people get the right information for action and decision making.

    Exception Principle:

    The system should selectively approve some significant deviations from the performance standards on the principle of management by exception.

    A standard is control system has a set of objectives, standards to measure, a feedback mechanism and an action center as elements of the system. They need to be properly evolved and instituted in the organization with due recognition to the internal and the external environment. The system as a whole should be flexible to change with ease so that the impact of changed environment is handled effectively.

  • Characteristics of MIS Management Information Systems

    Characteristics of MIS Management Information Systems

    Characteristics of MIS (Management information systems). It is a set of systems that helps management at different levels to take better decisions by providing the necessary information to managers, for long-term planning. The management information system is not a monolithic entity but a collection of systems that provide the user with a monolithic feel as far as relevant information delivery, transmission and storage are concerned. Also learned, the Role of The MIS, and its Characteristics!

    Learn, Explain the Characteristics of Management Information Systems (MIS)! 

    The different subsystems working in the background have different objectives but work in concert with each other to satisfy the overall requirement of managers for good quality information. Management information systems can install by either procuring off the self-systems or by commissioning a completely customized solution.

    A management information system has the following characteristics:

    System approach:

    The information system follows a System approach. The system’s approach implies a holistic approach to the study of the system and its performance to achieve the objective for which it has stood formed.

    Management-oriented:

    For designing MIS top-down approach should follow. The top-down approach suggests that system development starts from the determination of the management needs and overall business objectives. Management-oriented characteristic of MIS also implies that the management actively directs the system development efforts.

    Need-based:

    MIS design and development should be as per the information needs of managers at different levels that are strategic planning level, management control level, and operational control level.

    Exception-based:

    MIS should develop with the exception-based reporting principle. This means an abnormal situation, that is the maximum, minimum or expected values vary beyond the limits. In such cases, there should be exceptions reporting to the decision-maker at the required level.

    Future-oriented:

    Besides exception-based reporting, MIS should also look at the future. In other words, MIS should not merely provide past or historical information. Rather it should provide information based on projections based on which actions may initiate.

    Integrated:

    Integration is significant because of its ability to produce more meaningful information. For example, to develop an effective production scheduling system, it is necessary to balance such factors as set-up costs, workforce, overtime rates, production capacity, inventory level, capital requirements, and customer services. Integration means taking a comprehensive view of the subsystems that operate within the company.

    Common data flows:

    Because of the integration concept of MIS, there is an opportunity to avoid duplication and redundancy in data gathering, storage, and dissemination. System designers are aware that a few key source documents account for much of the information flow. For example, customer’s orders are the basis for billing the customer for the goods ordered, setting up accounts receivables, initiating production activity, sales analysis, sales forecasting, etc.

    The Following Characteristics of Good Management Information Systems Explained!

    For information to be useful to the decision maker, it must have certain characteristics and meet certain criteria.

    Some of the characteristics of good information discuss as follows:

    Understandable:

    Since information is already in a summarized form, it must understand by the receiver so that he will interpret it correctly. He must be able to decode any abbreviations, shorthand notations, or any other acronyms contained in the information.

    Relevant:

    Information is good only if it is relevant. This means that it should be pertinent and meaningful to the decision maker and should be in his area of responsibility.

    Complete:

    It should contain all the facts that are necessary for the decision maker to satisfactorily solve the problem at hand using such information. Nothing important should stand left out. Although information cannot always be complete, every reasonable effort should make to obtain it.

    Available:

    Information may be useless if it is not readily accessible ‘ in the desired form when it needs. Advances in technology have made information more accessible today than ever before.

    Reliable:

    The information should count on being trustworthy. It should be accurate, consistent with facts, and verifiable. Inadequate or incorrect information generally leads to decisions of poor quality. For example, sales figures that have not stood adjusted for returns and refunds are not reliable.

    Concise:

    Too much information is a big burden on management and cannot process in time and accurately due to “bounded rationality”. Bounded rationality determines the limits of the thinking process which cannot sort out and process large amounts of information. Accordingly, information should be to the point and just enough – no more, no less.

    Timely:

    The information must deliver at the right time and in the right place to the right person. Premature information can become obsolete or forgotten by the time it stands needed.

    Similarly, some crucial decisions can delay because proper and necessary information is not available in time, resulting in missed opportunities. Accordingly, the time gap between the collection of the central database and the presentation of the proper information to the decision maker must reduce as much as possible.

    Cost-effective:

    The information is not desirable if the solution is more costly than the problem. The cost of gathering data and processing it into information must weigh against the benefits derived from using such information.

    The Characteristics of Management Information Systems (MIS) - ilearnlot
    Characteristics of MIS Management Information Systems
  • Role of the Management Information System (MIS)!

    Role of the Management Information System (MIS)!

    Learn and Understand, Role of the Management Information System (MIS)! 

    The role of the MIS in an organization can be compared to the role of the heart in the body. The information is the blood and MIS is the heart. In the body, the heart plays the role of supplying pure blood to all the elements of the body including the brain. The heart works faster and supplies more blood when needed. It regulates and controls the incoming impure blood, processes it and sends it to the destination in the quantity needed. Also learned, What is MIS? Role of the Management Information System (MIS)!

    It fulfills the needs of blood supply to the human body in the normal course and also in crisis. The MIS plays exactly the same role in the organization. The system ensures that an appropriate data is collected from the various sources, processed, and sent further to all the needy destinations. The system is expected to fulfill the information needs of an individual, a group of individuals, the management functionaries: the managers and the top management.

    The MIS satisfies the diverse needs through a variety of systems such as Query Systems, Analysis Systems, Modelling Systems and Decision Support Systems the MIS helps in Strategic Planning, Management Control, Operational Control and Transaction Processing.

    The MIS helps the clerical personnel in the transaction processing and answers their queries on the data pertaining to the transaction, the status of a particular record and references on a variety of documents. The MIS helps the junior management personnel by providing the operational data for planning, scheduling, and control, and helps them further in decision making at the operations level to correct an out of control situation.

    If the gathered information is irrelevant than decision will also incorrect and Organization may face big loss & lots of Difficulties in Surviving as well.

    Helps in Decision making:

    Management Information System (MIS) plays a significant Role in Decision making Process of any Organization. Because in Any organization decision is made on the basis of relevant Information and relevant information can only be Retrieving from the MSI.

    Helps in Coordination among the Department:

    Management Information System also helps in establishing a sound Relationship among every person of the department to the department through proper exchanging of Informations.

    Helps in Finding out Problems:

    As we know that MIS provides relevant information about every aspect of activities. Hence, If any mistake is made by the management then Management Information Systems (MIS) Information helps in Finding out the Solution of that Problem.

    Helps in Comparison of Business Performance:

    MIS store all Past Data and information in its Database. That why management information system is very useful to compare Business organization Performance. With the help of Management information system (MIS) Organization can analyze his Performance means whatever they do last year or Previous Years and whatever business performance in this year and also measures organization Development and Growth.

    The MIS helps the middle management, in short, them planning, target setting and controlling the business functions. It is supported by the use of the management tools of planning and control. The MIS helps the top management in goal setting, strategic planning and evolving the business plans and their implementation.

    The MIS plays the role of information generation, communication, problem identification and helps in the process of decision making. The MIS, therefore, plays a vital role in the management, administration, and operations of an organization.

    Role of the Management Information System (MIS) - ilearnlot

  • What is Management Information System (MIS)?

    What is Management Information System (MIS)?

    Learn and Study, What is Management Information System (MIS)?

    Management information system, or MIS, broadly refers to a computer-based system that provides managers with the tools to organize, evaluate and efficiently manage departments within an organization. In order to provide past, present and prediction information, a management information system can include software that helps in decision making, data resources such as databases, the hardware resources of a system, decision support systems, people management and project management applications, and any computerized processes that enable the department to run efficiently. Also learn, Concept of Investment, What is Management Information System (MIS)?

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    What is MIS? MIS is the use of information technology, people, and business processes to record, store and process data to produce information that decision makers can use to make day to day decisions. MIS is the acronym for Management Information Systems. In a nutshell, MIS is a collection of systems, hardware, procedures and people that all work together to process, store, and produce information that is useful to the organization.

    #Management Information System Definition:

    The Management Information System (MIS) is a concept of the last decade or two. It has been understood and described in a number of ways. It is also known as the Information System, the Information and Decision System, the Computer-based information System.

    A management information system (MIS) is a broadly used and applied term for a three-resource system required for effective organization management. The resources are people, information, and technology, from inside and outside an organization, with top priority given to people. The system is a collection of information management methods involving computer automation (software and hardware) or otherwise supporting and improving the quality and efficiency of business operations and human decision making.

    As an area of study, MIS is sometimes referred to as information technology management (IT management) or information services (IS). Neither should be confused with computer science.

    The MIS has more than one definition, some of which are given below.
    1. The MIS is defined as a system which provides information support for decision making in the organization.
    2. The MIS is defined as an integrated system of man and machine for providing the information to support the operations, the management and the decision-making functions in the organization.
    3. The MIS is defined as a system based on the database of the organization evolved for the purpose of providing information to the people in the organization.
    4. The MIS is defined as a Computer-based Information System.

    Though there are a number of definitions, all of them converge on one single point, i.e., the MIS is a system to support the decision-making function in the organization. The difference lies in defining the elements of the MIS. However, in today s world MIS a computerized .business processing system generating information for the people in the organization to meet the information needs decision making to achieve the corporate objective of the organization.

    In any organization, small or big, a major portion of the time goes in data collection, processing, documenting it to the people. Hence, a major portion of the overheads goes into this kind of unproductive work in the organization. Every individual in an organization is continuously looking for some information which is needed to perform his/her task. Hence, the information is people-oriented and it varies with the nature of the people in the organization.

    The difficulty in handling these multiple requirements of the people is due to a couple of reasons. The information is a processed product to fulfill an imprecise need of the people. It takes time to search the data and may require a difficult processing path. It has a time value and unless processed on time and communicated, it has no value. The scope and the quantum of information are individual-dependent and it is difficult to conceive the information as a well-defined product for the entire organization. Since the people are instrumental in any business transaction, a human error is possible in conducting the same. Since a human error is difficult to control, the difficulty arises in ensuring a hundred percent quality assurance of information in terms of completeness, accuracy, validity, timeliness and meeting the decision making needs.

    In order to get a better grip on the activity of information processing, it is necessary to have a formal system which should take care of the following points:

    • Handling of a voluminous data.
    • Confirmation of the validity of data and transaction.
    • Complex processing of data and multidimensional analysis.
    • Quick search and retrieval.
    • Mass storage.
    • Communication of the information system to the user on time.
    • Fulfilling the changing needs of the information.

    The management information system uses computers and communication technology to deal with these points of supreme importance.

    Why the Need for MIS?

    The following are some of the justifications for having an MIS system:

    Decision makers need information to make effective decisions. Management Information Systems (MIS) make this possible.

    MIS systems facilitate communication within and outside the organization: Employees within the organization are able to easily access the required information for the day to day operations. Facilitates such as Short Message Service (SMS) & Email make it possible to communicate with customers and suppliers from within the MIS system that an organization is using.

    Record keeping: Management information systems record all business transactions of an organization and provide a reference point for the transactions.

    What is Management Information System (MIS) - ilearnlot

  • Revenue Management: Scope, Future, and Benefits

    Revenue Management: Scope, Future, and Benefits

    The phenomena of revenue management gained importance in recent years due to the variable and discriminatory pricing schemes offered by various companies to their customers. They apply the orderly analytics that predicts the behavior of the consumer at the micro-level and augments the prices and availability of products to the customers thus enhancing the overall revenue for the company. This article explains the system of Revenue Management: with their concepts – scope, future, and benefits. The aim of devising revenue management techniques is to deliver the fine product or service to the appropriate customer at the precise price.

    Here explains; Revenue Management: Meaning, Definition, Scope, Future, and Benefits.

    The revenue management system is based on analyzing the customer’s perception of the value that the product would provide and make straight the availability, placement, and price according to that perception.

    This discipline became the need of every business rapidly. There could be many reasons for this. Even a kid who is out for selling orange juice will have to analyze and predict the appropriate weather and time for selling his product. When we talk about giant businesses, the need for assessing customer demand and subsequently managing that demand is enormous and critical. A revenue management system is an answer to the question of such demand.

    History of Revenue Management:

    The concept of revenue management is not new to the business world. Every business that is selling some fragile product needs to flex the price of that commodity due to some uncertain environmental change or response to some competitor’s action or customer’s demand. Seats in airplanes, clothes (i.e. for summer and winter), rooms in hotels, etc., all require their strategies to be sold in a manner that maximizes the overall wealth of the company. This field properly originated in the U.S. airline industry at the start of the 1970s. Bob Crandall of American Airline (AA) who put restrictions on discounted fairs.

    After that yield management came into practice which is the foundation of revenue management. American Airline, with the help of other airlines, further extended the yield management system by offering low fares to the cost-sensitive passengers and high priced fares to the time-sensitive passengers, giving maximum value to both types of travelers. The impact of practicing yield management was come into knowledge by the year 1985. American Airline reported about 48 percent profit growth. This huge success attracted other industries to develop into the field of yield management.

    Definition of Revenue-management:

    It is the application of disciplined analytics that predicts consumer behavior at the micro-market level and optimizes product availability and price to maximize revenue growth. The primary aim of revenue management is selling the right product to the right customer at the right time for the right price and with the right pack. The essence of this discipline is in understanding customers’ perception of product value and accurately aligning product prices, placement and availability with each customer segment.

    Overview: Businesses face important decisions regarding what to sell when to sell, to whom to sell, and for how much. They use data-driven tactics and strategy to answer these questions to increase revenue. The discipline of revenue management combines data mining and operations research with strategy, understanding of customer behavior, and partnering with the sales force. Today, the revenue management practitioner must be analytical and detail-oriented, yet capable of thinking strategically and managing the relationship with sales.

    The Scope of the revenue management system:

    There is a wide range of options available to increase revenue through a revenue management system, the following scope below are;

    Pricing strategy:

    The pricing strategy is related to envisaging the customer’s perceptions about the value of the product and then setting prices to catch that value. Pricing strategy which a company adopts dictates its objectives i.e. what it wants to accomplish. Company then chooses pricing tactics that can respond to the customer’s expectations. Customer price sensitivity analysis, price ratios and price optimizations are examples of such tactics. The carefully selected pricing strategy can increase the total revenue and ultimately the profitability of the firm. Therefore, they can redefine pricing strategy and can build enhanced pricing tactics.

    Distribution channels:

    A company can deliver its products with various channels like online or in shops. Different type of cost and revenue are linked to these channels. The customer of a particular nature selects the specific channel for buying. The product for example customers who opt for purchasing online is more price sensitive. Their tools can help to analyze the channels and deciding the appropriate discount. The offers to distribute and retailing channels then to consumers without losing the customers’ perception of the value of the product.

    Marketing:

    Revenue management tools can help determine the response rate of customers to a particular level of promotional activities. By efficiently promoting the products, a firm can increase its revenues and subsequently the profitability.

    The process of Managing Revenues:

    The revenue management process begins with collecting data on inventory, Consumer perceptions, and behaviors, product prices, etc. The system employed collects and then store the information mentioned before and uses it to optimize prices, channel selection and amount of price promotional activities required. After the collection of data, segmentation is done by the system to categorize consumers into various groups. After segmentation, the system forecasts the demand by the implementation of quantitative analysis of data like the time-series model and cross-price elasticity.

    When the forecast phase is complete, their system comes into the position of giving different options to the company about it. How many different ways can it sell its product to what type of customers? Optimization provides the answer to two questions. First of all, it guides the company about which factor should optimize for price or sales. Secondly, t tells that what optimization technique is relevant and should be opted. For instance, regression analysis for finding out relationships between variables. Discrete choice models for envisaging customer behavior and linear programming. Techniques for setting optimum prices to maximize the total revenue.

    Future and Challenges in Revenue Management:

    Implementing revenue management in an organization is not an easy task. There can be a lot of obstacles to cultural, organizational and reliability. Issues in information systems already developed like supply chain, customer relationship, and intelligence. Nowadays, it is moving towards more ASP(Application service provider) platforms.

    In the future, they will focus on subscription and rent through ASPs rather than developing application systems inside the organization. Future challenges of RM can its placement inside the organization i.e. whether in marketing or finance department. Or, the organization or maybe it will need a whole new department to carry out its activities.

    Purpose and Benefits Revenue Management Implementation:

    We are discussing above that yield management evolve into revenue management. As it became the standardized practice for the companies, its definition progress. Revenue management is defined as the field which is the concern with answering. The demand questions related to consumer behavior and system and set of methodologies require to make them. Revenue can compare with supply chain management because it aims at lowering. The cost of producing and delivering the products hence increasing the profit, so as the goal of revenue management. There need to be certain business conditions that are essential to successfully implement a revenue management system.

    These conditions include customer heterogeneity, production inflexibility, variable and uncertain demand. Management culture, the infrastructure of data and information an so on. Employing a revenue management system benefits the company by unleashing. The hidden demand which can lead to great revenue opportunity. Helps to understand the customer’s choices between price and product characteristics. Increases revenue, suggests discounts on the product when required to build up. The market share and helps in developing a sales-driven organization whose sole focus is profit maximization. Also, read it: Role of Price Perception in Consumer Buying Process.

    What is Revenue Management Meaning Definition Scope Future and Benefits - ilearnlot
    Revenue Management: Meaning, Definition, Scope, Future, and Benefits.

  • Performance Management Systems (PMS)

    Performance Management Systems (PMS)

    A Performance Management System (PMS) is a structured approach designed to enhance organizational performance by aligning employee goals with company objectives, fostering continuous feedback, and promoting accountability. Discover its types, stages, key components, benefits, and challenges to implement an effective PMS that drives growth and employee satisfaction.

    What are the Performance Management Systems?

    A Performance Management System (PMS) is a strategic framework designed to enhance organizational performance by managing employee productivity. It aligns individual goals with company objectives, encourages continuous feedback, fosters employee development, and establishes accountability, ultimately driving growth and satisfaction within the organization.

    Definition

    A Performance Management System (PMS) is a systematic and strategic approach aimed at improving organizational performance through effectively managing employee performance.

    This expansive framework provides structure and methodology by which organizations can align their objectives with employee goals, ensuring that everyone is working towards a common purpose.

    PMS not only focuses on evaluating employee productivity but also encompasses continuous development and support to achieve optimal performance.

    Purpose

    The primary purpose of a performance management system is multifaceted. It serves to ensure that the activities of employees and teams are aligned with the strategic objectives of the organization. By promoting consistency in performance expectations, PMS helps to enhance communication between managers and employees.

    This alignment encourages employee growth and development, ultimately leading to improved job satisfaction and motivation. additionally, a well-structured PMS fosters a culture of accountability, where individuals take ownership of their roles and contributions to the organization’s success, while also providing a clear avenue for feedback and performance correction.

    Types

    1. Traditional Performance Management: This type often centers around annual reviews, where managers assess employee performance based on preset criteria or past performance. These reviews may be infrequent and retrospective, offering limited opportunities for timely feedback and adjustment.
    2. Continuous Performance Management: In contrast to the traditional model, continuous performance management emphasizes ongoing feedback, frequent check-ins, and real-time discussions regarding performance. This approach allows for immediate identification of areas needing improvement and fosters a proactive performance culture.
    3. 360-Degree Feedback: This comprehensive type of PMS involves collecting performance feedback from multiple sources, including peers, direct reports, managers, and sometimes even customers. This holistic view provides a broader perspective on the employee’s performance and behaviors, encouraging a more rounded approach to development.
    4. Management by Objectives (MBO): This method consists of setting specific, quantifiable objectives for employees to achieve within a designated timeframe. Progress towards these objectives is typically monitored through regular meetings, allowing for adjustments as needed and ensuring employees stay on track toward achieving their goals.

    Stages

    1. Planning: The first stage involves setting clear performance expectations and establishing measurable goals. This stage is critical because it lays the foundation for what is expected and helps employees understand their contributions to the overall business strategy.
    2. Monitoring: In this stage, performance is regularly observed and assessed against the established goals. Continuous monitoring aids in identifying trends and addressing any issues proactively, rather than waiting until a formal review.
    3. Reviewing: This stage includes formal evaluations where both managers and employees discuss performance outcomes. These discussions should be constructive and aimed at identifying successes, areas for improvement, and potential development opportunities.
    4. Developing: The final stage focuses on personal and professional growth. Based on feedback and review discussions, development plans are created, highlighting training needs or resources that can help employees enhance their skills or overcome challenges.

    Implementation

    Implementing a Performance Management System requires careful planning and execution. Key steps can include:

    • Defining Clear Objectives: Establishing performance metrics that are closely aligned with the broader business goals ensures that all employees are focused on contributing to the organization’s success.
    • Training and Development: Equipping managers and employees with the skills needed to engage in effective performance management is vital. Training programs should cover communication techniques, feedback methods, and how to set SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals.
    • Communication: Establishing transparent communication channels is essential for discussing performance expectations. Employees should feel comfortable approaching their managers with questions or concerns regarding their performance.
    • Technology Integration: Utilizing software tools for performance tracking and evaluation can streamline the process and make it easier to collect data, conduct assessments, and monitor progress over time.

    Components

    A functional Performance Management System typically includes several key components:

    1. Goal Setting: Effective goal-setting practices ensure that employees have clarity on their objectives. Combining individual, team, and company-level goals creates a cohesive focus.
    2. Performance Appraisals: Regular assessments enable managers to evaluate employee performance formally. These should be constructive and objective to ensure fairness and accuracy in evaluations.
    3. Feedback Mechanisms: Structured feedback processes encourage managers to provide timely and specific feedback to employees. This can include both positive reinforcement and constructive criticism aimed at fostering improvement.
    4. Development Programs: Initiatives aimed at skill enhancement are integral to a PMS. These programs can include mentorship opportunities, training sessions, and professional development workshops tailored to employee needs.

    Benefits

    A well-implemented performance management system offers numerous benefits:

    • Enhanced Clarity: By providing clear performance expectations, employees can better understand their responsibilities and how their work fits into the organization’s goals.
    • Improved Employee Engagement: Involving employees in their performance discussions boosts their commitment to their roles, fostering a more motivated workforce.
    • Increased Accountability: With defined performance metrics, employees are more likely to take responsibility for their contributions, enhancing overall organizational accountability.
    • Data-Driven Decisions: An effective PMS enables the collection and analysis of performance data, facilitating informed decision-making regarding promotions, training needs, and strategic adjustments.

    Disadvantages

    Despite the advantages, there are also notable disadvantages in implementing a performance management system:

    • Time-Consuming: Managing and maintaining an effective PMS can require significant time and resources, potentially diverting attention from other critical operational tasks.
    • Possible Bias: Evaluation processes may inadvertently introduce bias, whether from personal relationships, subjective evaluations, or unclear performance criteria, leading to perceived or real unfairness.
    • Stressful for Employees: Formal evaluations can create anxiety, making employees feel under pressure during review periods. This stress may negatively impact performance rather than enhance it.
    • Resistance to Change: Employees may resist new systems or methods, particularly if they are accustomed to traditional evaluation processes. This reluctance can hinder the successful implementation of a PMS, making buy-in from all levels of the organization crucial.

    Frequently Asked Questions (FAQs)

    1. What is a Performance Management System (PMS)?

    A Performance Management System (PMS) is a structured approach that organizations use to improve employee performance and align individual goals with the overall objectives of the company. It encompasses goal setting, monitoring, feedback, and development.

    2. Why is Performance Management important?

    Performance management is crucial because it helps ensure that employees are meeting organizational goals, encourages communication, fosters accountability, and supports employee development, which can lead to increased job satisfaction and productivity.

    3. What are the different types of Performance Management Systems?

    1. Traditional Performance Management: Focuses on annual reviews based on preset criteria and past performance.
    2. Continuous Performance Management: Emphasizes ongoing feedback and real-time performance discussions.
    3. 360-Degree Feedback: Collects input from multiple sources, providing a comprehensive view of an employee’s performance.
    4. Management by Objectives (MBO): Involves setting specific, measurable objectives for employees.

    4. What are the stages of Performance Management?

    1. Planning: Setting clear expectations and measurable goals.
    2. Monitoring: Regularly assessing performance against goals.
    3. Reviewing: Conducting formal evaluations and discussions about performance.
    4. Developing: Creating development plans based on feedback and reviews.

    5. What are the key components of a Performance Management System?

    1. Goal Setting: Establishing clear objectives for employees.
    2. Performance Appraisals: Regular evaluations of employee performance.
    3. Feedback Mechanisms: Structured processes for providing timely feedback.
    4. Development Programs: Opportunities for skill enhancement and professional growth.

    6. What are the benefits of implementing a PMS?

    • Enhanced Clarity: Clear expectations help employees understand their roles.
    • Improved Employee Engagement: Involving employees in performance discussions motivates them.
    • Increased Accountability: Defined metrics encourage responsibility for contributions.
    • Data-Driven Decisions: Enables informed choices regarding promotions and training needs.

    7. What are the disadvantages of Performance Management Systems?

    • Time-Consuming: Maintaining an effective PMS can require significant resources.
    • Possible Bias: Evaluations may introduce subjective bias leading to perceived unfairness.
    • Stressful for Employees: Formal reviews can create anxiety and pressure.
    • Resistance to Change: Employees may resist new systems, impacting implementation success.

    8. How can organizations successfully implement a PMS?

    Organizations can ensure successful implementation by defining clear objectives, providing training, maintaining transparent communication, and integrating technology for performance tracking.

  • What is Distributed Data Processing (DDP)?

    What is Distributed Data Processing (DDP)?

    What is Distributed Data Processing (DDP)?

    An arrangement of networked computers in which data processing capabilities are spread across the network. In DDP, specific jobs are performed by specialized computers which may be far removed from the user and/or from other such computers. This arrangement is in contrast to ‘centralized’ computing in which several client computers share the same server (usually a mini or mainframe computer) or a cluster of servers. DDP provides greater scalability, but also requires more network administration resources.

    Understanding of Distributed Data Processing (DDP)

    Distributed database system technology is the union of what appear to be two diametrically opposed approaches to data processing: database system and computer network technologies. The database system has taken us from a paradigm of data processing in which each application defined and maintained its own data to one in which the data is defined and administered centrally. This new orientation results in data independence, whereby the application programs are immune to changes in the logical or physical organization of the data. One of the major motivations behind the use of database systems is the desire to integrate the operation data of an enterprise and to provide centralized, thus controlled access to that data. The technology of computer networks, on the other hand, promotes a mode of that work that goes against all centralization efforts. At first glance, it might be difficult to understand how these two contrasting approaches can possibly be synthesized to produce a technology that is more powerful and more promising than either one alone. The key to this understanding is the realization that the most important objective of the database technology is integration, not centralization. It is important to realize that either one of these terms does not necessarily imply the other. It is possible to achieve integration with centralization and that is exactly what at distributed database technology attempts to achieve.

    The term distributed processing is probably the most used term in computer science for the last couple of years. It has been used to refer to such diverse system as multiprocessing systems, distributed data processing, and computer networks. Here are some of the other term that has been synonymous with distributed processing distributed/multi-computers, satellite processing /satellite computers, back-end processing, dedicated/special-purpose computers, time-shared systems and functionally modular system.

    Obviously, some degree of the distributed processing goes on in any computer system, ever on single-processor computers, starting with the second-generation computers, the central processing. However, it should be quite clear that what we would like to refer to as distributed processing, or distributed computing has nothing to do with this form of distribution of the function of function in a single-processor computer system. Web Developer’s Workflow Become Much Easier with this Innovative Gadgets.

     

    A term that has caused so much confusion is obviously quite difficult to define precisely. The working definition we use for a distributed computing systems states that it is a number of autonomous processing elements that are interconnected by a computer network and that cooperate in performing their assigned tasks. The processing elements referred to in this definition is a computing device that can execute a program on its own.

    One fundamental question that needs to be asked is: Distributed is one thing that might be distributed is that processing logic. In fact, the definition of a distributed computing computer system give above implicitly assumes that the processing logic or processing elements are distributed. Another possible distribution is according to function. Various functions of a computer system could be delegated to various pieces of hardware sites. Finally, control can be distributed. The control of execution of various task might be distributed instead of being performed by one computer systems, from the view of distributed instead of being the system, these modes of distribution are all necessary and important. Strategic Role of e-HR (Electronic Human Resource).

     

    A distributed computing system can be classified with respect to a number of criteria. Some of these criteria are as follows: degree of coupling, an interconnection structure, the interdependence of components, and synchronization between components. The degree of coupling refers to a measure that determines closely the processing elements are connected together. This can be measured as the ratio of the amount of data exchanged to the amount of local processing performed in executing a task. If the communication is done a computer network, there exits weak coupling among the processing elements. However, if components are shared we talk about strong coupling. Shared components can be both primary memory or secondary storage devices. As for the interconnection structure, one can talk about those case that has a point to point interconnection channel. The processing elements might depend on each other quite strongly in the execution of a task, or this interdependence might be as minimal as passing message at the beginning of execution and reporting results at the end. Synchronization between processing elements might be maintained by synchronous or by asynchronous means. Note that some of these criteria are not entirely independent of the processing elements to be strongly interdependent and possibly to work in a strongly coupled fashion.

    What-is-Distributed-Data-Processing-DDP

  • What is Agile Methodology?

    What is Agile Methodology?

    What do you Mean about Agile Methodology?

    First, know about What is Agile? Agile has been the buzzword in project management for about a decade, and with good reason. Agile is actually an umbrella term over several project management approaches that are characterized by their ability to allow project teams to respond to changing requirements and priorities by using incremental work packages. While all agile methods have common characteristics, each agile method has unique processes that set it apart. Let’s look at how each method is used with Charlie’s team, who is developing a new software game. What is Agile Methodology? 

    Agile software development methodology is a process for developing software (like other software development methodologies Waterfall model, V-Model, Iterative model etc.) However, Agile methodology differs significantly from other methodologies. In English, Agile means ‘ability to move quickly and easily’ and responding swiftly to change – this is a key aspect of Agile software development as well.

    Agile-Methodology-process

    “Agile Development” is an umbrella term for several iterative and incremental software development methodologies. The most popular agile methodologies include Extreme Programming (XP), Scrum, Crystal, Dynamic Systems Development Method (DSDM), Lean Development, and Feature-Driven Development (FDD). Learning Development and Exercise of Self-Efficacy Over the Lifespan!

    Engineering methodologies required a lot of documentation thereby causing the pace of development to slow down considerably. Agile Methodologies evolved in the 1990s to significantly eliminate this bureaucratic nature of engineering methodology. It was part of developer’s reaction against “heavyweight” methods, who desired to drift away from traditional structured, bureaucratic approaches to software development and move towards more flexible development styles. They were called the ‘Agile’ or ‘Light Weight’ methods and were defined in 1974 by Edmonds in a research paper.

    An agile methodology is an approach to project management, typically used in software development. It refers to a group of software development methodologies based on iterative development. Requirements and solutions evolve through cooperation between self-organizing cross-functional teams, without concern for any hierarchy or team member roles. It promotes teamwork, collaboration, and process adaptability throughout the project life-cycle with increased face-to-face communication and a reduced amount of written documentation.

    Agile methods break tasks into small increments with no direct long-term planning. Every aspect of development is continually revisited throughout the lifecycle of a project by way of iterations (also called sprints). Iterations are short time frames (“timeboxes”) that normally last 1-4 weeks. This “inspect-and-adapt” approach significantly reduces both development costs and time to market. Each iteration involves working through a complete software development cycle characterized by planning, requirements analysis, design, coding, unit testing, and acceptance testing. This helps minimize overall risk and quicker project adaptability. While iteration may not have enough functionality necessary for a market release, the aim is to be ready for a release (with minimal bugs) at the end of each iteration.

    Typically, the team size is small (5-9 people) to enable easier communication and collaboration. Multiple teams may be required for larger developmental efforts which may also require a coordination of priorities across teams. Agile methods emphasize more face-to-face communication than written documents when the team is in the same location. However, when a team works at different locations, daily contact is maintained through video conferencing, e-mail, etc. The progress made in terms of the work done today, work scheduled for tomorrow and the possible roadblocks are discussed among the team members in brief sessions at the end of each working day. Besides, agile developmental efforts are supervised by a customer representative to ensure alignment between customer needs and company goals. New Roles of Human Resource Management in Business Development.

    Software Development was initially based on coding and fixing. That worked well for smaller software, but as the size and complexities of software grew a need for a proper process was felt because the debugging and testing of such software became extremely difficult. This gave birth to the Engineering Methodologies. The methodologies became highly successful since it structured the software development process. One of the most popular models that emerged was the Software Development Life Cycle (SDLC) that developed information systems in a very methodical manner.Waterfall method is one of the most popular examples of Engineering or the SDLC methodology. A paper published by Winston Royce in 1970 introduced it as an idea. It was derived from the hardware manufacture and construction strategies that were in practice during the 1970s. The relationship of each stage to the others can be roughly described as a waterfall, where the outputs from a specific stage serve as the initial inputs for the following stage. During each stage, additional information is gathered or developed, combined with the inputs, and used to produce the stage deliverables. It is important to note that the additional information is restricted in scope; “new ideas” that would take the project in directions not anticipated by the initial set of high-level requirements are not incorporated into the project. Rather, ideas for new capabilities or features that are out-of-scope are preserved for later consideration.

    What-is-Agile-Methodology

  • Costs and Benefits in KMS

    Costs and Benefits in KMS

    What are Costs and Benefits in KMS?

    First, understand what is KMS (Knowledge Management Systems)? after Learn Costs and Benefits in KMS: KMS is a method for the improvement of business process performance. A knowledge management system is most often used in business in applications such as information systems, business administration, computer science, public policy and general management. Common company departments for knowledge management systems include human resources, business strategy, and information technology.

    Knowledge Management Systems (KMS) like any other information systems have its benefits as well as costs, weighing the benefits in the relationship with the costs will probably provide a basis for deciding whether to invest in it or not. What is Market-Based Management?

    Costs of KMS

    Although knowledge management system is beneficial and important to the organization, it also involves some cost. These costs vary quite a bit, depending on the size of the organization, the current level of infrastructure and the scope of knowledge management initiative. Also, the cost depends on whether or not there is an existing infrastructure.

    According to Marks, the first step in determining the return on invest­ment for a knowledge management project is to deter­mine the costs. On the surface, this may seem deceptively simple, but there are costs involved in a knowledge man­agement project that may not be readily obvious to the manager who is not experienced in estimating such proj­ects. Costs here include, but are not limited to the costs of hardware, software, and training. 

    1. Software: Obviously, the project will incur the cost of whatever software is chosen to be used. This can range from free, to nearly free, to several thousand dollars for an enterprise-wide knowledge management (KM) system. In addition, any technical infrastructure for the software that is need­ed will also have to be counted in the costs. The cost of software depends on whether the organization wants to use the bare-bones knowledge management systems, which may use e-mail, Web servers, corporate intranets, newsgroups, shared file sys­tems, or centralized databases and other software the company likely already has and uses, or can obtain for little or no cost. Or wishes to institute a level of knowledge integration and manage knowledge transfer which will involve investment in a commercially available product designed spe­cifically for the tasks that the company wishes to be able to accomplish with the knowledge management project.

    2. Hardware: This involves the costs of infrastructure that will be needed to support the system. There might also be the need for internet and network connections. Any upgrades to the com­pany’s network that will be needed in order to handle in­creased traffic attributable to the knowledge management system might also need to be considered. Using current systems and equipment will lead to heavier loads than in the past, and this will need to be considered too.

    3. Labour: It involves the cost that will need to be considered is the cost of employing a member of the IT staff to install the KM hardware and software on all needed servers and client machines as well as configuring the application to meet the need of the business. There will also be the need for maintenance. Knowledge will need to be input into the system in order for it to be useful, the costs for doing this might be heavy early on, but will steady out in the future, and will be based on the use of the system. The cost of training should also be considered as a labor cost due to the time sacrificed for it.

    Other, not so obvious costs that will be incurred include employee training, incentives to entice employees to use the KM system, and the labor costs of employees choosing to use the knowledge management system instead of working on other aspects of the job. Most of these labor costs will become benefits fairly readily, but they are an investment made by the company and must be counted in the costs of the knowledge management project in order to accurately measure or predict the cost of the project. 

    Implementation costs are usually moderate to acquire the hardware, develop internal software or license software from 3rdparty suppliers, and to train employees to utilize the system effectively.  However, the potential savings and increased efficiencies are enormous.  The payback period for most companies is estimated to be six months or less. The payback period will decrease as the size of the organization increases, and with the number of global locations that the company operates. McDonald and Shand ‘reported that a typical consultant-assisted knowledge management system costs between $1.5 million to develop’.

    Benefits of KMS

    Before any organization can invest their funds in anything, there must have been some expected or anticipated benefits or returns, there is need to highlight the benefits and cost of knowledge management systems. This system just like any other information systems is meant to add value to the organization, but knowledge management system, deal particularly with the intellectual asset of the organization. Although the major reason why most organizations invest in Knowledge Management Systems (KMS) is to gain competitive advantage, other derivable benefits are:

    1. Efficiency and Problem Solving: Knowledge management systems when done right will help in ensuring faster response time to key issues, make service delivery faster and also enhance problem-solving. This is because when best practices are well codified, stored, and made available, and when methods for problem-solving can be maintained, and made available instantaneously, employees won’t have to spend time looking for answers. Problem-solving will be eased as it will be possible to solve problems anytime and anywhere which will make the organization more productive, efficient and effective. Due to the nature of this organization, (consulting firm), the application of knowledge management systems will help in carrying out the needed services efficiently. For example, expert and dependable advice will be given to clients based on the availability of experiences and knowledge for comparison and justification.

    2. Better Decision Making: Knowledge management systems will help in making better decisions. When knowledge and experiences are pooled together, there is an avenue for critical considerations and judgment before decisions will be made. This is particularly important when there is need to compare and contrast before arriving at a decision or conclusion. The availability of needed idea, information and knowledge will help in making sure that the right decision is taken after the critical and intense examination which will also make the decision more concrete, justifiable and dependable. This will make this firm able to make necessary decisions on the needed improvements that will make our services more competitive and acceptable (preferable to a client). 

    3. Quality Service Delivery: One benefit that will be obtained will be the increased quality of services after using the KM systems. An employee who uses the knowledge manage­ment system may be able to obtain knowledge that will reduce the number of defective services that employees deliver or will increase the effectiveness and quality of the services being delivered. Higher quality services mean fewer dissatisfied clients, which mean fewer complaints from clients. Fewer complaints improve the company’s revenues and profit and are a benefit that can be attributed to a knowledge management system. If a company can notice a decrease in clients’ dissatisfaction since the knowledge management system was launched, at least a significant portion of this increase can be attributed to the KM system and marked as a benefit for it. This means that this organization will be able to come up with better and more competitive services due to the possibility of sharing valuable organizational information, knowledge, intelligence, and experiences among employees. This serves as a good way of avoiding or reducing redundancy and client satisfaction will be secured due to the improvements that will be introduced.

    4. Reduced Cost: Cost reduction is also a benefit that can be realized through the use of a knowledge management system. ‘Cost reduction represents approximately one-quarter of benefits from KM projects’. Besides la­bour costs, knowl­edge management systems may also yield savings in material costs. This can be as simple as savings on paper that were previously needed to disseminate memoranda that are now being replaced with entries in the knowledge management program, but the true benefit of cost reduc­tion through knowledge management is realized when employees discover and share methods for reducing costs on final products. Management will likely notice these savings but will need to speak with employees to understand that the source of the savings is indeed from the knowledge management system. This means that this organization will be able to reduce the cost of inviting or seeking professionals, due to the availability of needed knowledge and experiences.

    5. Speed and Service Delivery: Knowledge management systems help in compressing time and space for efficiency, reducing time wastage, which means the increase in workers’ productivity. Employees who use the knowledge management system will be able to work faster, because they will find information on the knowl­edge management environment that will allow them to avoid repeating the work of others, such as a snippet of computer code, or allow them to forgo extensive research that would ordinarily be needed to address a situation, or simply enlighten them to practices others have found that allow the job to be done more quickly. The only way to measure this labor cost savings will be through interviews with the employee. The employee’s estimate and confidence in it will be calculated as a benefit for the knowledge management system. This means that clients will be attended to as fast as possible, which will give the firm an advantage, especially by reducing delay.

    6. Reduced Training Time: An investment in these systems will help to reduce training time for new employees. Due to the availability of the needed knowledge and experiences, employees will be able to constantly apply them which will improve their ability. This training time for employees will be reduced as a result of the knowledge they are able to acquire. This means that employees are being trained indirectly through the application of knowledge management systems which reduces direct pieces of training. This will lead to a kind of strategic movement through well-coordinated efforts among peers. Thus the organisation will be able save time and money.

    7. Retention of Intellectual Properties: Knowledge management system helps in retaining intellectual properties after the employee leaves if such knowledge is codified. This is because when knowledge is codified, it is added to the organisation’s knowledge repository (a collection of internal and external knowledge), thus when knowledge is captured from an employee, such knowledge will remain even after he/she leaves. This means that it will be possible for the organisation to have a large knowledge base of several knowledge and experiences as a result of the historic knowledge contribution process. This will also help in building employees to become professionals as a result of the availability of previous experiences and knowledge for acquisition. 

    8. Increased Revenue and Development of New Business Ventures: Knowledge Management Systems helps in providing the personal capacity for revenue generation. It allows employees to work together and share ideas about certain plans especially in a global firm. Due to the cross-pollination of ideas among employees, there is a possibility that new business ventures will be developed and this will lead to an increase in revenue for the organisation. Due to the availability of ideas and experiences, this organisation will be able to manage the available knowledge for productivity and profitability.

    9. Sharing Business Resources over Long Distances: Through the use of knowledge management systems, the sharing of business resources is made possible. This is because when ideas and knowledge are pooled together, a knowledge-base is created from which each employee can access required information over long distances. If used effectively, these systems will be able to foster the company’s culture across geographic boundaries.  All employees will become part of an overall network, each with simple access to the intellectual capital of every member within the network. As a result employees will be able to perform better and jobs would be done faster. This is very important for a global consultation firm like this where relevant information is needed for service delivery. There will be no need to depend solely on the headquarters before needed information are gotten.

    Costs and Benefits in KMS