Manage an information or knowledge system BSBIMN501A

QUEENSLAND INTERNATIONAL BUSINESS ACADEMY

Manage use of information of knowledge management system 3.3 Review business and operational plan and determine how effectively the

system is contributing to intended outcomes.

What is a business plan?

A business plan is a formal document that describes an organisation's management team, its current status, its expectations for the future and how it plans to fulfil those expectations.

Business plans typically include operational plans and financial statements.

The majority of business plans are written for potential investors and lenders.

What is a business plan? These business plans particularly

need to focus on the organisation's place in the market and its potential to increase profits in the future.

Their primary aim is to persuade the reader to hand over the necessary funds to accomplish the organisation's goals.

What is a business plan? Business plans can also be written

for customers and suppliers to communicate an organisation's marketing strategy and its vision for the future.

Unlike a business plan written for investors, these types of plans should not include detailed financial information.

What are operational plans? Operational plans for an organisation detail its

physical location, facilities and equipment, as well as its structure and the functions of each department.

These operational aspects of the organisation are used to explain the rationale for plans to increase capital and expenditure.

You can review the contribution of the information or knowledge management system in terms of the role it plays in operational plans.

What are operational plans? Make sure the new system helps to:

automate and streamline some of the functions in one or more departments

monitor quality control for processes and products

support new directions in operations.

What are financial statements? The financial statements presented in a business

plan provide a quantitative analysis of the organisation.

They state the current financial position of the organisation and how it intends to fund its future strategies.

An information or knowledge management system needs to tally with the organisation's financial budgets and projections.

What are financial statements? There are different ways of

projecting future income and expenditure, and the financial section of a business plan will include one or more of the methods below.

Cash flow projections

Cash flow projections describe an organisation's expected month-by-month actual cash transactions usually over a twelve-month period.

They are calculated using the following sum: cash on hand + cash receipts - cash

payments = available cash

Short-term budgets and plans Like cash flow projections, short-term budgets and

plans usually refer to a twelve-month period and are broken down by month.

The difference with short-term budgets and plans is that, as well as detailing cash transactions, they will also account for non-cash incomes and expenditures.

Non-cash income relates to the appreciation of assets such as real estate.

Non-cash expenditures encompass the depreciation of assets such as motor vehicles and equipment.

Long-term budgets and plans

Long-term budgets and plans look further into the future-usually three years, but sometimes up to five years.

These budgets give a year-by-year account of how financial resources will be obtained and allocated.

Spreadsheet-based financial projections Computerised spreadsheets are useful tools

for projecting financial revenues and outgoings.

They offer flexibility, allowing the user to easily make changes to get an immediate view on the impact of modifying variables.

They also let you create different types of financial statements without the need to retype numbers.

Spreadsheet-based financial projections A comprehensive financial projection can

therefore be produced-one that gives a breakdown of an organisation's assets, liabilities and equity as well as its cash flow projection.

It should also indicate how much capital an organisation plans to borrow in the future and the expected repayments on those loans.

Spreadsheet-based financial projections

Another advantage of using a spreadsheet for financial projections is that you can easily generate various types of graphs and charts to clearly illustrate your plans for the future.

Locating other intended outcomes in the business plan As well as being expressed in the financial

statements of the business plan, intended business outcomes can also be located in more general terms in other sections.

When you are reviewing a business plan for intended outcomes, look out for sections that express an organisation's vision and strategies for the future such as in:

Vision statements

Vision statements vividly express how an organisation sees itself in the future.

They are aspirational in their tone and should evoke a strong sense of what an organisation wants to accomplish.

Vision statements should be kept short-one sentence is fine.

Sometimes vision statements are combined with mission statements.

Mission statements

Mission statements are a little different to vision statements in that they represent, in a succinct and clear manner, the reason for an organisation's existence.

Mission statements will usually also declare an organisation's moral or ethical position, its values and its public image.

Mission statements

They should also state the organisation's business and financial objectives, its target market and its geographical domain.

Like vision statements, mission statements must be brief-one sentence or a short paragraph

Goals and objectives

In order to realise its vision, an organisation establishes goals and sets objectives.

Goals are established to align with the vision for the future.

They are conveyed using words that describe the organisation's broad aims.

Goals and objectives

Objectives are more specific and shorter term.

They are characterised by particular tasks that need to be completed on the way to reaching the goal.

Objectives are commonly expressed in terms of dates and numbers-they specify when and how much

Strategies

Without firm strategies in place to guide an organisation towards its goals and objectives, it risks wandering aimlessly along a road with no long-term plans to describe how to reach its destination

Strategies

Therefore an organisation needs strategies to: realise goals and objectives guide decisions about allocating human

and financial resources carve out a sustainable position in the

marketplace keep personal and social values on

track.

Tactics

Tactics explain the small details in the plans to realise the strategies, to achieve the goals, and to fulfil the objectives.

Tactics are essential to processes and procedures-success is in the details.

Users of the information or knowledge system will carry out many of these tactical details

Determining the system's contribution to intended outcomes

Once you have established what the intended outcomes in the business plan are, you are ready to determine what contribution the information or knowledge management system makes towards those outcomes

Determining the system's contribution to intended outcomes

Some of the outcomes will be easier to directly attribute to the system.

For example, a customer information management system should contribute substantially towards increasing sales, and a project management system helps to keep projects on track and to budget.

Determining the system's contribution to intended outcomes

Other contributions to outcomes provided by the system may not appear as obvious because they are less direct.

For instance, a system can contribute to an organisation's vision for the future.

Determining the system's contribution to intended outcomes

But uncovering its contribution to vision requires takings a few steps backwards and looking at how it helps processes become more streamlined, which in turn increases production rates and an organisation's capacity to deliver 'just on time'

Determining the system's contribution to intended outcomes

Another method of establishing a system's contribution is to look at the financial and performance data contained in the business plan.

Some of that data is maintained or created by the system, other data comes from external sources.

Not all of the results from performance and financial data can be attributed to the system, but if you look at the big picture, you may be able to see that it plays a role in ways that are not immediately apparent.

Organisational performance data For an organisation to stay ahead of

its game, it needs to continually assess its performance in terms of the quality, efficiency and reliability of its processes, products and services.

Performance can be assessed and the results may be included in the business plan.

Organisational performance data Internal

completing internal audits collecting and reviewing product

samples asking for feedback and suggestions

from workers tracking complaints

carrying out trend analyses conducting worker performance reviews.

Organisational performance data External

undertaking surveys organising focus groups asking for feedback and suggestions

from customers

Financial data

Internal details of revenue from services and products

breakdowns of operating costs recordings of surpluses retained from the

previous financial year calculations of profits and losses.

Financial data is also often accompanied by a discussion and an analysis of significant events that have had an impact on performance

Financial data

External It is available from many sources. It can

provide information about matters such as:

national and international stock markets financial performances of public organisations

economic data of different countries interest rates

real estate values.