1

MODULE 2

Strategic and Operational Management in Public Sector

Chief Information Officers Chief Information Officers (CIO) (CIO)

2

MODULE 2

Strategic and Operation Management

3

OBJECTIVES OF MODULE 2

To impart basic training to CIOs in the concepts and techniques of Strategic and Operational Management as applicable to public sector.

Scope of Module 2

This will cover basic management concepts and techniques useful to CIOs in the areas of

•Systems and management processes•Strategic Management•MBO/ Managing for Results•Finance, Budgeting and Investment•Procurement•Marketing and Customer Relations

4

5

Processes and

Activities

RESOURCES Outputs RESOURCES

GOALS

Keys factors in Management Process

6

Processes and Activities

RESOURCES Outputs RESOURCES

GOALS

Monitoring Evaluation and Control

External Environment

An Open Management System

7

OUTPUTS

Max

INPUTS

AA

B

CCC

Systems Optimization

8

STRATEGIC

TACTICAL

OPERATIONAL

DECISION MAKING

PROCESS

Senior Management

Middle Management

Junior/ Supervisory

Management Processes and Organizational Levels

9

•Goal Setting and Planning•Setting up systems, procedures, policies and rules and regulations• Setting up business processes• Setting up the institution and organization• Monitoring, Evaluating and Controlling

Main Management Processes

10

Long Term Organizational Goals

Organizational Objectives

Objective Department 1 Objective Department 2 Objective Department 3

Objective Section 1a

Objective Section 1b

Objective Section 2a

Objective Section 2b

Objective Section 3a

Objective Section 3b

Management by Objectives: Hierarchy of Objectives

11

STRATEGIC PLANNING PROCESSVISION

MISSIONGOALS and OBJECTIVES

Evaluation the EnvironmentEvaluate Strengths and Weaknesses

Assess OpportunitiesAssess Threats

Identify and Evaluate Strategic OptionsDesign Strategy and policies

Implementation Plan

12

Smart Objectives

13

Budgeting and Investment Concepts

Return on Investment ( ROI) Net Present Value (NPV):

Compounded valve

Budgeting and Budgetary Control

:-*

Investment Cost

Composed ofPre investment Expenses: 1 mil ( example)Capital Cost 10 milLand 3 milEquipment 4 milServices 3 milWorking Capital 5 milTotal 16 mil

14

Working CapitalWorking Capital

Money locked up for running the enterprise(working capital cycle)

• Staff salaries• Rent• Utilities• Other expenses

15

Estimating Profits and returns on investment for each period (Life of project and Assets)

Income for each period 1000Fixed costs 300 Salaries, rent etc 200 Depreciation 100Variable Costs 200 Cost of materials etc 200Income before tax 500Profit after tax 400

16

Income Vs Profits

17

Cost and Income

Level of Activity

Fixed Costs

Total CostBreak Even Point

Variable Cost

BudgetBudget Lines

• Manpower Costs• Salaries• Professional Fee• Equipment Costs• Running Costs

• Travel• Supplies

• TOTAL BUDGET ( Sum total of all)• Standard costs and Forecasts

18

Budgetary Control

Assigned Budget on each line AActual Expenditure on each line BVariance ( A-B)Budget Delivery

19

20

•Marketing Concept•Market Orientation•Marketing Strategy•Target Market•Marketing Mix• How and where CIOs can apply scientific marketing concepts and techniques.

Marketing & Customer Relationship Management

21

MARKETING MIX_ THE 4Ps

22

Procurement Management• Procurement Processes• CIOs Role in Procurement• Tendering, Vendor Development, RFP• Organization for Procurement• Project Procurement• Stocking and Inventory Control

A = Estimated demand for the item during the yearCp = Cost of placing a single orderCh = Cost of holding one single item in inventory for a year

QTY

TIME

SS

EOQ

ROL

STOCK CONTROL SYSTEM