By the end of this learning outcome you will have been introduced to the tools used in the analysis of management information.

Transcription

1 By the end of this learning outcome you will have been introduced to the tools used in the analysis of management information.

2 Contents Introduction 3 Who is this workbook for 3 Aims 3 Time needed 3 What next? 3 How to use the workbook 3 Section One: Why and what is management information analysis? 4 Objectives 4 What is data 4 What is management information? 4 Why is MI analysed? 4 How can analysed MI be presented? 4 Activity 5 Summary 5 Self Check 5 Section Two: Tools to analyse MI 6 Objectives 6 Useful tools in management information analysis 6 PESTLE analysis 7 SWOT analysis 8 Activity 9 Summary 9 Self Check 9 Section Three: Application of management information analysis 10 Applying management information analysis in your daily role 10 Section Four: Further Development and Action Planning 11 Action Planning 11 Test Information 11 Example Activity Answers 12 Self Check Answers Self Test Questions Self Test Answers Appendix One PESTLE template 16 Appendix Two SWOT template 20 Aviva Financial Adviser Academy 2

3 Introduction Management Information is available in various forms to support better business decision making by individuals and managers. Through the analysis of relevant and accurate information, appropriate actions can be considered for implementation to improve or develop results. This workbook will discuss the basics surrounding management information by explaining in detail what management information is and the tools that can be used in its analysis. It will give those with little or no experience of management information an insight into what it s all about. The workbook will cover areas ranging from collecting data to analyse right through to presenting your findings. Who is this workbook for? This workbook is for anyone that requires an introduction to management information. Once completed you will be able to find and analyse management information for your business area. Aims The aim of this workbook is to introduce the learner to tools used in the analysis of management information. It will also provide an introduction to the basics of management information s what, why and how to s. You will also gain a further understanding of what the what next stage. Objectives By the end of this workbook you will be able to: Explain what management information is Describe why management information is analysed Show an understanding of how management information can be presented Display your knowledge of both the quantitative & qualitative aspects of management information Display your knowledge of the tools available for management information analysis Demonstrate your understanding of PESTLE analysis Show an understanding of SWOT analysis Time needed The workbook and test should take approximately 2 hours to complete, including completion of activities. What next? To validate the learning from this workbook there is a test. The test should take no more than 10 minutes to complete. More information about this can be found on page 11. How to use the workbook This workbook contains reading material as well as activities which are designed to help cement the learning and apply knowledge and skills. It is recommended that you complete the activities as you work through the book. Aviva Financial Adviser Academy 3

4 Section One: Why and What is Management Information analysis? Objectives Explain what management information is Describe why management information is analysed Show an understanding of how management information can be presented Display your knowledge of both the quantitative & qualitative aspects of management information What is management information? Management information is collected during a period of business activity. It may be about customers, staff, calls, visits, meetings, sales, opinions, parts of a process, predictions etc. Management information can be split into 2 categories, qualitative and quantitative. Qualitative information is described in terms of quality. This is the opposite of quantitative, which more precisely describes information in terms of quantity and often using a numerical figure to represent something in a statement. Quantitative information is measured or identified on a numerical scale. Numerical information can be analysed using statistical methods, and results can be displayed using tables, charts, histograms and graphs. Any information relevant to your business area, from whatever source, can be described as management information. Why is management information analysed Management information gives a clear overall picture of business activity. It doesn t tell you how you arrived at that point, what that point means or how to move forward. In order to do that management information has to be analysed. There are a number of tools, some of which we will cover in section 2, that are used in the analysis process. Analysing management information is important & the reason we do it is To understand current state and do something about it It will help you to get to the root cause i.e. sales are down not because of poor performance but due to reduced calls How can analysed management information be presented? Management information can be presented in many different formats. Such as: Tables Charts Graphs Microsoft Power point presentations Microsoft Word documents Microsoft Excel Aviva Financial Adviser Academy 4

5 Activity Activity 1-5 minutes 1. Name 3 of the 9 examples of what management information may be about 2. Fill in the blanks Data is, specifically and figures, that is collected in order to be reviewed and examined to help in the _ making process. Data is used to quantify management information in order to give a clear picture of the business as it operates. Data is taken and used to define what management information is in order to be _ and reviewed 3. Under each heading provide as many examples as possible for your own business area Quantitative Qualitative Summary In summary we can say that management information is information that is collected during a period of business activity which will benefit business development and planning. Data is the information required to provide management information. Self Check Self Check Activity 1 5 minutes 1. True or false (circle as appropriate) Management information can only be presented in a Microsoft Excel spreadsheet 2. True or false (circle as appropriate) Management information can help in the development of business plans 3. True or false (circle as appropriate) Management information is for team managers only Aviva Financial Adviser Academy 5

6 Section Two: Tools to analyse management information Objectives Display your knowledge of the tools available for management information analysis Demonstrate your understanding of PESTLE analysis Show an understanding of SWOT analysis Useful tools in management information analysis Once we have collated all our management information we then have to analyse it to make sure we get the best out of it. In order to do these we would use an analysis tool. This will provide a proven way of giving us the information we require in order to move forward. There are several tools available to do this. These are: Porters 5 forces - Porter's 5 Forces model provides suggested points under each main heading, by which you can develop a broad and sophisticated analysis of competitive position, as might be used when creating strategy, plans, or making investment decisions about a business or organization Microsoft Excel Excel can be used in many different ways to analyse management information. It can be used to calculate percentages, give a running total for sales figures for example on a week on week basis or even a month on month basis and it also provides a great foundation for the presentation of your management information. PESTLE - The PESTLE analysis is a useful tool for understanding market growth or decline, and as such the position, potential and direction for a business. A PEST analysis is a business measurement tool SWOT - The SWOT analysis is an extremely useful tool for understanding and decision-making for all sorts of situations in business and organizations The 2 most commonly used tools are PESTLE & SWOT, we will now look at these in more detail. Aviva Financial Adviser Academy 6

7 PESTLE analysis PESTLE analysis is a tool to help understand market risks and market growth or decline. PESTLE allows you to go in depth into current status and weaknesses. It helps you to understand areas of development which will follow nicely onto a SWOT analysis, which we will look at next. PESTLE is broken down letter by letter, each one has its own meaning & use. They are: P E S T L E Political factors, or how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an ageing population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers). Technological factors include ecological and environmental aspects, such as automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation. Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products. Environmental factors include weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness to climate change is affecting how companies operate and the products they offer--it is both creating new markets and diminishing or destroying existing ones. An example of the PESTLE form is attached as appendix 1 Aviva Financial Adviser Academy 7

8 SWOT analysis The SWOT analysis is a useful tool for understanding and decision-making for different situations in business and organizations. SWOT is an acronym for Strengths, Weaknesses, Opportunities and threats. The SWOT analysis headings provide a good framework for reviewing strategy, position and direction of a company or business proposition, or any other idea. Completing a SWOT analysis is very simple. So once you know what it is you are analysing you would consider the strengths of it, the weaknesses of it, the opportunities it can raise & also the threats that it can produce. Having all this information in front of you will allow you to then put a plan in place as to what you are going to do next. S The Strengths can be considered as anything that is favourable towards the business for example: Currently in a good financial position (few debts, etc) Skilled workforce (little training required) Company name recognized on a National/Regional/Local level Latest machinery installed Own premises (no additional costs for renting) Excellent transport links (ease of access to/from the Company) Little/non-threatening competition W Recognising the Weaknesses will require you being honest and realistic. Don t leave anything out as this is an important part as to realise what needs to be done to minimise this list in the future. Here are a few examples: Currently in a poor financial position (large debts, etc) Un-Skilled workforce (training required) Company name not recognized on a National/Regional/Local level Machinery not up to date (Inefficient) Rented premises (Adding to costs) Poor location for business needs (Lack of transport links etc) Stock problems (currently holding too much/too little) Too much waste O Keeping in mind what you have listed as your Company Strengths, SWOT Analysis can now influence the Opportunities for the business. These can be seen as targets to achieve and exploit in the future for example: Good financial position creating a good reputation for future bank loans and borrowings Skilled workforce means that they can be moved and trained into other areas of the business Competitor going bankrupt (Takeover opportunity?) Broadband technology has been installed in the area (useful for Internet users) Increased spending power in the Local/National economy Moving a product into a new market sector T The final part of the analysis will also be seen as the most feared- the Threats. It has to be done and therefore taking into account what you have listed as your weaknesses, the threats will now all seem too clear. Examples Large and increasing competition Rising cost of Wages (Basic wage, etc) Possible relocation costs due to poor location currently held Local authority refusing plans for future building expansion Increasing interest rates (increases borrowing repayments, etc) End of season approaching (if you depend on hot weather, etc) Existing product becoming unfashionable or unpopular Aviva Financial Adviser Academy 8

9 Activity Activity 2 5 minutes 1. Name the 6 components of PESTLE P - E - S - T - L - E - 2. Name the 4 components of SWOT S - W - O - T - Summary A PESTLE analysis and SWOT analysis are the best tools in order to highlight any development areas within your business unit. Carrying out these tasks will give a clear picture of business activity that can be shared easily with others. Self Check Self Check Activity 2 5 minutes 1. True or false (circle as appropriate) A SWOT is best done before a PESTLE? 2. True or false (circle as appropriate) A SWOT analysis will highlight opportunities for growth 3. True or false (circle as appropriate) A PESTLE analysis will help understand market risks? Aviva Financial Adviser Academy 9

10 Section Three: Application of Management Information analysis Objectives Explain where you can introduce the use of MI in your daily role Demonstrate an understanding of how to utilise the above mentioned analysis tools in your daily role Applying management information in your daily role In the activity below list as many situations as you can where you would be able to use the management information that you have analysed to improve the sales performance of yourself or your team, for example a monthly review Activity Activity 3 15 minutes Aviva Financial Adviser Academy 10

11 Section Four: Further Development and Action Planning Action Planning You have now reached the end of the learning material. The next step is to practise what you have learned and to develop an action plan to ensure your development continues Action Planning 30 minutes Carry out a PESTLE & SWOT analysis on your business area. Templates for this can be found at the end of the workbook as appendixes 1 and 2 Test Activity Workbook Test You have now completed the workbook, to validate your learning please take the test The test should take you no more than 10 minutes to complete, so please allow yourself enough time. You need to score 60% to demonstrate your knowledge and understanding of this subject. Aviva Financial Adviser Academy 11

12 Example Activity Answers Activity 1-5 minutes 1. Name 3 of the 9 examples of what management information may be about Customers Staff Calls Visits Meetings Sales Opinions Parts of a process Predictions 2. Fill in the blanks Data is information, specifically facts & figures, that is collected in order to be reviewed & examined to help in the decision making process. Data is used to quantify management information in order to give a clear picture of the business as it operates. Data is taken and used to define what management information is in order to be analysed & reviewed Activity 2 5 minutes 1. Name the 6 components of PESTLE Political Economic Social Technological Legal Environmental 2. Name the 4 components of SWOT Strengths Weaknesses Opportunities Threats Activity 3 15 minutes Monthly review Mid/end year appraisal Disciplinary meeting Business strategy planning Weekly/monthly/annual sales figures Aviva Financial Adviser Academy 12

13 Self Check Answers Self Check Activity 1 5 minutes 1. True or false Management information can only be presented in a Microsoft Excel spreadsheet 2. True or false Management information can help in the development of business plans 3. True or false Management information is for team managers only Self Check Activity 2 5 minutes 1. True or false A SWOT is best done before a PESTLE? 2. True or false A SWOT analysis will highlight opportunities for growth 3. True or false A PESTLE analysis will help understand market risks? Aviva Financial Adviser Academy 13

14 Analysing Management Information Self Assessment Test Multiple Choice Questions Question 1 - Which of these options are the two correct definitions of Analysis given in the workbook? Select all that apply. Answer A. Examination of data and facts B. The process of breaking down a complex topic in order to gain a better understanding of the topic C. Examination of data and facts to uncover and understand the cause D. Examination of data and facts to uncover and understand the relationship between cause and effect 2 - Which of these sources may management information come from? Select all that apply. A. Sales figures B. Behaviours C. Profitability D. Turnover 3 - When you come to analyse the data, what does it tell you? Select all that apply? A. Performance B. Trends over a period of time C. Experience of individuals D. Training and development previously undertaken 4 - When reviewing the areas for improvement, what are the performance aspects to consider? Make your selection A. Capability, clarity, competence and commitment B. Capability, constraint, competence and commitment C. Capability, constraint, clarity and commitment D. Capability, clarity, constraint and commitment 5 - What does analysing management information give you? Select all that apply. A. A starting point B. The answers C. Questions to ask D. Reasons - End of Questions - Aviva Financial Adviser Academy 14

15 Answers Question 1 - Which of these options are the two correct definitions of Analysis given in the workbook? Select all that apply. 2 - Which of these sources may management information come from? Select all that apply. 3 - When you come to analyse the data, what does it tell you? Select all that apply? 4 - When reviewing the areas for improvement, what are the performance aspects to consider? Make your selection 5 - What does analysing management information give you? Select all that apply. Answer B,D The process of breaking down a complex topic in order to gain a better understanding of the topic Examination of data and facts to uncover and understand the relationship between cause and effect A,B,C,D Sales figures Behaviours Profitability Turnover A,B Performance Trends over a period of time B Capability, constraint, competence and commitment A,C A starting point Questions to ask Aviva Financial Adviser Academy 15

16 Appendix One PESTLE template PESTLE Analysis factors Your notes Potential impact Implication and Importance The list below is just to get you started. Remember to put these, and others that you add in the context of your organisation or business. For example if you are a small private company the behaviours of a BP / Tesco or a large international player may well impact on you. If you are a local authority, government changes will change your priorities. In the NHS changes to treatments and public attitudes will also impact etc. About your organisation. How might the factors listed on the left impact your business or part of the organisation? H High M Medium L Low U - Undetermined Time Frame: 0-6 months 6-12 months months 24 + months Type: Positive + Negative - Unknown Impact: Increasing > Unchanged = Decreasing < Unknown Relative Importance: Critical Important Un-important Unknown Aviva Financial Adviser Academy 16

17 PESTLE Analysis factors Your notes Potential impact Implication and Importance Time Frame Type Impact Relative Importance Political Trading policies Funding, grants and initiatives Home market lobbying/pressure groups Local authority rules/ local bylaws etc International pressure groups Wars and conflict Government policies Government term and change Elections Inter-country relationships/attitudes Terrorism Political trends Governmental leadership Government structures Internal political issues Shareholder/ stakeholder needs/ demands Aviva Financial Adviser Academy 15

18 PESTLE Analysis factors Your notes Potential impact Implication and Importance Time Frame Type Impact Relative Importance Economic Home economy situation Home economy trends Overseas economies and trends General taxation issues Taxation changes specific to product/services Seasonality/weather issues Market and trade cycles Specific industry factors Market routes and distribution trends Customer/end-user drivers International trade/monetary issues Disposable income Job growth/unemployment Exchange rates Tariffs Inflation Interest and exchange rates Consumer confidence index Import/export ratios Production level Internal finance Internal cash flow Aviva Financial Adviser Academy 16

19 PESTLE Analysis factors Your notes Potential impact Implication and Importance Time Frame Type Impact Relative Importance Social Consumer attitudes and opinions Media views Law changes affecting social factors Brand, company, technology image Consumer buying patterns Major events and influences Buying access and trends Ethnic/religious factors Advertising and publicity Ethical issues Demographics (age, gender, race, family size,) Lifestyle changes Population shifts Education Trends Fads Diversity Immigration/emigration Health Living standards Housing trends Fashion & role models Attitudes to work Attitudes to people doing certain types of work Leisure activities Occupations Earning capacity Staff attitudes Management style organisational culture Changes to education system Aviva Financial Adviser Academy 17

20 PESTLE Analysis factors Your notes Potential impact Implication and Importance Time Frame Type Impact Relative Importance Technological Competing technology development Research funding Associated/dependent technologies Replacement technology/solutions Maturity of technology Manufacturing maturity and capacity Information and communications Consumer buying mechanisms/technology Technology legislation Innovation potential Technology access, licensing, patents Intellectual property issues Global communications Inventions Innovations New discoveries Research Energy uses/sources/fuels Communications Rate of obsolescence Health (pharmaceutical, equipment, etc.) Manufacturing advances Information technology Internet Transportation Bio-tech Genetics Waste removal/recycling M-learning E-learning Aviva Financial Adviser Academy 18

21 PESTLE Analysis factors Your notes Potential impact Implication and Importance Time Frame Type Impact Relative Importance Legal Current legislation home market Future legislation European/international legislation Regulatory bodies and processes Environmental regulations Employment law Consumer protection Industry-specific regulations competitive regulations Environmental/ Ecological Environmental issues International National Local Environmental regulations Customer values Market values Stakeholder/ investor values Staff attitudes Management style Organisational culture Staff morale Staff engagement Global factors EU based factors Aviva Financial Adviser Academy 19

22 Appendix two SWOT template SWOT Analysis Template State what you are assessing here Strengths Weaknesses Opportunities Threats Aviva Financial Adviser Academy 20