Monthly Archives

November 2019

Operational Risk Management
BusinessManagementMarketing

How to Manage Operational Risks | ORM

by Shamsul

 

Operational risks form an intricate part of the work in all organizations. Operational risks are the kind of risks that involve loss as a result of a human error or system failure. There are also so many other things that can lead to operational risks. Due to the very fact that operational risks have severe effects, it is very essential that they are managed.

The management of operational risks which is also termed ORM is one device that assists in ascertaining possible operational risks, in addition to their effects. Furthermore, this tool helps people make a sequential process or system to tackle the risks associated with operations in whatsoever situation may come up.

The management of operational risk is developed while operational use is ongoing and not at the stage of development.  This process is a continuous one that is made up of several stages. These steps are the assessment of risks, decision making on risks, as well as the carrying out of the various methods of risk control. With the assistance of the procedure, operational risks could be reduced, come to terms with or totally avoided.

Stages of Managing Operational Risks

First things first, the move towards managing operational risks is intended for coming to terms with the intricacies of a business, as well as to find out all the likely risks that are connected to it. Take for instance; the risks that are linked to the banking sector are very distinct from the risks that are connected to the hotel and hospitality industry.

You have to study the risks that are connected with the business you want to delve in and do not spend the time bothering about what risks are known to be associated with some other industries. There are 3 stages of the management of operational risk which you can embark on and can deploy as a system of managing operational risks.

1- The In-depth Method

The in-depth method is a kind of system of managing risks that is beneficial in the perfect world. In the theoretical sense, it is renowned for giving optimum positive results as well as reducing the effects of risks, although to an extent and not wholly. This method of in-depth management of risks is used prior to beginning work on any task. The managers will have so much time to organize and get ready for the management of potential risks.

Several preventive measures could be set in place, those working on the project could be trained, directions could be written out, procedures and policies could be drawn up and protective kits could be procured in order to protect workers on the project.

2- Deliberate Method

This style of managing risks (ORM) is better suited for our world as it is. Deliberate management of risks does not sit around waiting for an extremely unpleasant circumstance to come up in order for something to be done. This method is carried out at a number of stages during the cycle of the task. Furthermore, it could as well be used to carry out scheduled safety checks, as well as performance measures.   For instance, a number of actions like job training, quality assurance, safety briefs, performance reviews, and safety checks could be added to deliberate risk management.

3- Time-Critical Method

Just like the name indicates, this method of managing risks is carried out during critical circumstances. Such operational management of risks is carried out in the midst of other operations as well as during the execution of an exercise.

The time-critical method of operational management of risks is carried out at a time when all the company has limited time, prior to a time when the process will be halted or impeded as a result of unknown risks.

The majority of establishments abide by this procedure of operational management of risks. For them, this is one method in which they can analyze the circumstance, as well as arrange their resources in accordance, conduct background studies about such risks, relate their plans to other members of the team and finally act and debrief.

Stages of Managing Operational Risks

In the segment above, we have discussed the 3 various processes of operational management of risks, plus the fact that their being put into practice is fixed for specific times. In the following segment, we will discuss the stages that have to do with a typical process of operational management of risks, in order to prevent potential risks.

1- Detection of Operational Risks

Detection of risks happens to be the very first and principal step which would open up the way to taking the edge off its effects. Various risks are linked with various types of ventures. All the same, there are yet a few kinds of risks that are linked to business as a whole, its kind notwithstanding.

So, in order to detect risks, form a team of members of your staff with diverse backgrounds. Through this, you have the ability to bring in employees that have garnered a different degree of experience.

Employees who have different experiences would provide diverse insights into a venture, as well as to detect the possible risks which could occur at various levels of a venture.

2- Evaluate the Operational Risks (ORM)

In this following stage, you have to evaluate every one of the risks which you have pinpointed. Prioritize the operational risks according to their occurrence, as well as the damage which they could cause. In addition, the risk which has the topmost priority ought to be dealt with first. Evaluation of these risks ought to be carried out both qualitatively as well as quantitatively.

3- Search for the Way Out to Appraise, Tone Down or Get Rid of the Operational Risks

As soon as you have discovered and evaluated the risks that could occur, you ought to search for the remedy to gauge the effects of these risks, as well as solutions to tone down or get rid of them.

It is very essential that you control the effects of the risks, in order that the mess would be reduced to the barest minimum with effects that could be fixed and that could lead to far less loss to the enterprise.

4- Monitor and Review

Your assignment is not over as soon as you have found out every one of the possible operational risks. In addition to ascertaining the ways in which you could handle them.  This is due to the fact that the business world keeps changing now and again, therefore with the variations in the world of business; the kind of risks connected to that kind of business continues changing as well.

For this reason, you ought to continue keeping an eye on the system, as well as continuously searching for possible risks and tackling them in advance so that they do not cause irreversible destruction to your business.

Added to these, you could as well find out the efficiency of this method used to tackle the damage, as well as fix the dodges which you discover in the process.

Read More: The Status of Commissioning and the Technology Evolution

Advantages of the Concept of Operational Management of Risks

In this segment, we will discuss the advantages of operational management of risks to a business, as well as the reasons it is vital to carry this procedure out.

  1. Operational management of risks (ORM) assists you in building more dependable and efficient business operations.
  2. You have the ability to prevent big losses by recognizing negative activities early on in their lifespan.
  3. Continuous observation and appraisal procedure of operational management of risks enables you to create efficient operations of risk management.
  4. The forfeiture of investment could be reduced by utilizing the tools of operational management of risks that are brought about by not identifying risks properly.
  5. The process of reaching a decision concerning a task which has major risks becomes very successful when you use the operational management of risks.
  6. This method brings to a minimum the overall cost of compliance.      
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Direct Cost and Indirect Cost
BusinessManagementMarketing

Direct Costs | Definition, Illustrations | Estimate Direct Cost

by Shamsul

 

Direct costs could be defined as the costs that are exclusively budgeted for specific services or goods. This kind of cost is not split between various activities which are going on in the organization, such as costs which are indirect.  Direct costs are the bulk of the larger part of a budget mapped out for a project.

Such costs are taken to be the most crucial outlay in the process of production. In this write-up, I will tell you the meaning of the term Direct Cost, will give different illustrations, as well as give you a formula for working out direct cost.

A cost that is direct is an expenditure that is directly connected to a particular cost item, for instance, a commercial project, a production department or process and so on. A direct cost, by and large, is a set cost; all the same, it adjusts to the modification in the quantity of output produced.

Definition of the term Direct Costs

Majorly, there are two foremost broad classifications of costs that have to do with any business. These are indirect costs and direct costs.   An indirect cost is a cost that is not directly linked to a certain project.

In a cost sheet, direct costs are placed at the uppermost position. In addition, they account for eighty percent of the entire budget designated for a task. For instance, costs needed to purchase natural resources are good examples of direct costs.

The natural resources could be used only to carry out the production activities. They cannot be channeled to be utilized in some other way. As a result, the cost for natural resources cannot be split among various activities that are going on in the organization, such as indirect costs.

 

Illustration

Natural   Resources Natural Resources also taken as raw materials are placed in the category of direct cost because it is a necessity for the process of production. The expenditure on natural resources is directly connected to the process of production.
Cost of labor The wages paid to those who provide labor which speed along the process of production serve as an example of a direct cost that is linked to the manufacture of a specific good. It is the most prevalent cost acquired by the majority of industries.
Cost for machinery Tools in addition to machinery are important in any given industry, as well as all industries. If there is no machinery, there will be no work done in virtually every industry. For this reason, the expenses of the two are directly linked up to the process of production. While this stands true in situations of industries that manufacture goods, the cost of machinery could as well be linked to the service industry. In the setting of a service industry, even though the key costs are salaries and wages of employees, some chunk of that cost is further expended on machinery. For instance, coffee machines and microwaves are made use of in restaurants.
Commission for sales A commission is paid to a sales representative so as to build up the sales. The expense of that commission paid to the salesperson over the trade of a given good is directly linked to the good and as a result, it is a good example of a direct cost.
Consignment in or out The cost takes to deliver materials to the factory, as well as to send out finished goods is a direct cost connected to the process of production.

 

Read More: History of Amazon.com for Online Shopping

 

Dissimilarities between Indirect Cost and Direct Cost

Just like we have said earlier, a direct cost is directly related to the process. These include the expense of raw materials, consumable supplies, and labor. Such items are used simply for the manufacturing of a specific product but are neither here nor there for some other activities in that organization.

On the other hand, an indirect cost is associated with supplies that are utilized for two or more processes, such as office supplies, rent of the building, salaries of office assistants and accountants, internet expenses, electricity and a host of others.

Expenses like this could also be alluded to as overhead costs. Such expenses are not linked to only one process.

The Steps to Estimate Direct Costs

Direct costs take up the major part of a budget. As a result, it is essential, to come to know and evaluate direct costs, in order to diminish these costs and maximize your profits.

The process of evaluating indirect expenses is easy and far less complicated than the process of evaluating direct costs.

Since a direct cost is straight away linked to a singular activity and cannot get used for some other activity. A direct cost earmarked for a project could be evaluated simply by adding up every direct cost associated with the activity.

Right below, I will show you the process of how to evaluate some direct costs, well illustrated with the aid of an instance.

1- Write out every one of the direct expenses that have to do with the process:

In the production process, various direct expenses are involved. It is recommended that you write out an inventory of every likely direct cost, prior to your drawing up a budget. Let us use as an example a company called ABC that is about to commence the process of producing a product called DEF.

There has to be a budget earmarked for the process of production. This budget could be organized by working out every possible kind of direct expense, for instance, the cost of labor, raw materials, cost of consumable provisions,  machinery, packaging as well as a sales commission.

2- List out the direct expense for every item:

In this following stage, you have to apportion the prices of the direct cost towards each item. You should not just make up the prices randomly. Each price should be worked out, following the necessity of output from production. Let us give value to expenditure associated with the manufacture of this product DEF, as made up by us.

The natural resources are the most essential aspects of the process of production. It is impossible for the process of production to even commence when natural resources are unavailable. Let us take it that the natural materials needed to produce the good called DEF have a value of $20,000. Let us give each production cost a value.

In this illustration, we are making up the figures. In other respects, these prices would be got after taking a look at past projects, in addition to comparing provisions from various retailers. The total amount earmarked for labor cones to $10,000. The expenditure for the necessary machinery is $50,000. The price of consumable supplies is $8000. The packaging is put at $3000 and a sales commission comes to $10,000.

3- Put together all these direct costs that are related to the process of production.

The total sum of these direct expenses for the process of production would reach by summing up every one of the direct expenses of the process of production.

Prices of natural materials – $20,000

Price of labour -$10,000

Cost for machinery – $50,000

Cost for consumable supplies -$8000

Expense for packaging – $3000

Expenses for sales commission – $10,000

GROSS DIRECT COST = $101,000

 

The gross direct expenses for carrying out the process of producing product DEF comes to $101,000, plus the entire cost of making product DEF would as well have the indirect expenses. The addition of the indirect costs to the direct costs will help you arrive at the complete amount for production.

This project can yield profit only if the profits generated are more than the entire expense for production.

 

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Secrets of Airtel Marketing Strategy

 

 

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Project Commissioning
ManagementMarketing

The Status of Commissioning and the Technology Evolution

by Shamsul

 

Commissioning has always been a crucial part of most projects. The managers involved in these activities have the task of ensuring that all the standards are met before they hand over the project as part of their commissioning roles. Technology has been integrated deeply to make commissioning management systems better and easier to conduct.

The managers, therefore, have a lot to learn and to teach those below them. It is evolving continuously and most of these changes cannot be avoided. Otherwise, they will be left many steps behind.

This article looks at the evolution of commissioning and the surrounding technology. It will also examine the future of commissioning.

 

Past Commissioning Technology

In the past, commissioning managers had to cope with a lot of paperwork. All the checklists prepared on hard copy files, which were cumbersome to carry around the work sites.

During the evaluation processes, the devices were not adequate either. The level of accuracy was relatively low compared to what we have now. Also, inspecting a project and preparing a report would take significantly more time than today.

With time, technology has changed this sector at a fast pace. Managers with many years of experience can attest that things are significantly better today. The building and construction industry is now totally a different sector. The commissioning managers have all the reasons to thank technology.

 

Read More: Importance of Commissioning in Technology

Current Commissioning Technology

Young managers who are just graduating from schools are having knowledge and skills to embrace technology in making their work easier and better. Those who have been in the field for a long time have no option other than to change with time.

The uses of apps and software that plan and organize work have dominated the sector today. Managers can now move around with smartphones that carry all the information they need. This information includes checklists, reminders, work timelines and reports. They can easily make a presentation using a phone and a projector. If not, they will use their laptops to do this.

Technology has indeed closed a large gap in the commissioning sector. People now require innovative projects that involve a lot of details. With technology, checking the standards is easier. Also, technology has reduced the timeline to deliver results without compromising quality.

Some of the activities are synchronized to report directly to various groups once the project is complete. It is indeed a great transformation and evolution.

 

Read More: Commissioning and Evolution of Technology

Future Commissioning Technology

People in project management and the innovators of technology are working closely to come up with even better ways of doing things.

Better apps that are even more intuitive to use and connected with all parties are near to release. Smart cameras that will detect faults and areas that need corrections are also on the way. All these are good to assist people in making rational decisions.

Commissioning remains a paramount stage in any project, and evolution in technology is serving it very well. It is a good thing that this sector is not behind even by one step. This way, we can only expect a brighter future.

 

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Awards & Rewards
MarketingWriting

All about Rewards and Awards

by Shamsul

 

It is prevalent for individuals to become muddled up over two words that sound alike. English is one language that has many of those kinds of words. The two words Rewards and Awards are two of such words that are usually mixed up by some people while they are being used.

Even though these 2 terms sound very much alike, and they could be used in almost the same context, they still cannot be juxtaposed one for the other.

An award could be given to or conferred on someone in the presence of a number of people after he has attained something special or achieved something. On the contrary, the word ‘Reward’ is used when talking about a remuneration given to an individual over a great job or some hard work which he or she has carried out.

It is not really compulsory that a reward is given to an individual in public. This writes up would teach you all that has to do with the terms Rewards and Awards, as well as illustrate with examples the major dissimilarities between the two of them.

What Could An Award Be?

In contrast to a reward, an award is handed to an individual or an establishment that has attained or accomplished something which is awesome. It is also given out to someone who has accomplished one unique performance or feat or broken a record.  Awards are also conferred when individuals or groups contribute immensely to a particular field. More often than not, such awards are bestowed on people during ceremonies which are witnessed by the public.

Conferring an award on someone is an official way of acknowledging the accomplishments which that a person or establishment has made. The awards which are conferred usually come in the manner of certificates, medals, cash, gifts, trophies, prizes, accolades and so on.

Those who are selected to be given awards are chosen through an official process in which a committee made up of experts makes the decisions. A nomination is carried out and only those that have met the established criteria are chosen.  After that, the best-qualified person who made the list of nominees is selected and awarded.

Awards & Rewards

US President Donald Trump presents the Medal of Freedom to former New York Yankees pitcher Mariano Rivera in the East Room of the White House on September 16, 2019, in Washington, DC. (Photo by MANDEL NGAN / AFP)MANDEL NGAN/AFP/Getty Images

Rewards and Awards:

We will throw more light on the idea of an award, using an easy example with a school. In this school, about thirty to forty students are studying in one classroom. Every one of the students is given lessons that are alike and is treated the same as others in that class. At the closure of that academic year, every one of the students writes the final examination. The ranking of the pupils is determined in relation to the marks which the students score.

The pupil that gets the topmost score would be given a first position as well as a trophy. This would be his award for accomplishing such achievement.

In the same vein, awards are conferred on people in different fields. For instance, the Filmfare and Oscar awards are given in the film industry. Grammy awards are given in the music sector. The awards of Miss Universe and Miss World are bestowed in the sector of beauty, while the award of People’s Choice is yet another award in the entertainment sector.

People who do exceptionally well are conferred with awards in their particular fields. For this reason, an award is much more prestigious than a reward.

What could a Reward be?

A reward could be something given to someone for a service rendered, an ongoing work, and honesty while doing a job or simply for being loyal. The reward could come in the shape of financial rewards. It could as well be in the form of words of commendation,

No committee made up of experts is set up to assess the achievements of a person. In addition, the individual is not chosen following a rigorous official process. It is very unnecessary for an individual to be rewarded for meeting certain requirements.

A reward is handed to an individual, in order to spur him on to keep on doing the work, as well as to motivate others on the job.

A reward is more often than not given to people in a private setting or in public sometimes. Rewards which are given in public assist in advancing the work which has been done by that individual who is being rewarded.

Up next, we will exemplify the idea of rewards using the aid of a number of illustrations.

In some establishments, the salespersons are asked to get monthly targets. They are given yearly targets as well. Getting their sales targets forms a portion of their duties. More often than not, such targets are difficult to attain. In addition, it takes a whole load of back-breaking work added to motivation for one to achieve such a target.

Any time an employee is able to accomplish his given target, he gets rewarded by the head of his team, in spite of the fact that achieving that target forms an aspect of his assignment. All the same, it would motivate as well as inspire other members of staff to continue to aim higher.

Let us draw up yet one more illustration from the school mentioned earlier. In schools, pupils are given assignments that have to be done both in class and at home. The majority of the pupils do all they can to avoid the assignments, more often than not. Therefore, in order to inspire and prompt the students, rewards are given to those pupils who do their assignments neatly and on a regular basis.

Yet another instance of rewards is a notice for some missing people. It is certain that you have come across such notices about someone who is missing, in public locations. Such announcements indicate that there would be some money offered as a reward for anyone who has useful information concerning the person who is missing.

Rewards and Awards

The Primary Dissimilarities between Reward and Award

AWARD
REWARD
An award more often than not conferred on someone, in the presence of members of the public. In addition, award ceremonies held for presenting awards to people who deserve it. Usually, a reward’s given to people in private, in addition, there is no ceremony conducted to give some person an award.
A panel of experts has to come together to make selections, in order to choose someone who gets an award. Just one individual usually has to decide who the recipient of a reward would be. It is not the responsibility of a panel of experts.
An award could be more prestigious as a result of the fact that it presented in public. A reward is seen as less prestigious, for the fact that it is given out in private.
The recipient selection of any award set by a defined system which sometimes mapped out especially for such selection. The recipient of any reward is usually not picked out from the crowd, following a given system.
The conferment of an award is one official procedure of acknowledgment. The giving out of a reward is an unofficial procedure of acknowledgment.
In order to choose someone who deserves an award, recommendations made and duly considered. There are no nominations or recommendations to be put into consideration before someone is given a reward.
An instance of an award is when a pupil has conferred an award because he has the topmost score in his class. An instance of a reward is when an individual is rewarded because he planted one thousand trees in a suburban community.

 

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Ellen DeGeneres – Prominent American Comedian

The Conclusion

Rewards and Awards:

So, to wrap up, it is possible that we conclude that rewards and awards given at times when good or positive things achieved. Rewards and awards both are aiming towards spurring on, as well as inspiring people to do well.

Added to these, an individual that gets a reward or an award becomes a model of superlative work. This feat calls for devotion, consistency, as well as continued endeavor to accomplish an extraordinary thing.

 

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Leader
BusinessManagementMarketing

Are You a Good Leader – 4 Steps to Bring Teammates into Your Vision

by Shamsul

 

Winning as a team requires conscious efforts. No team leader can achieve victory by just relying on its natural course of action. Victorious teams must have a solid, long-lasting commitment to each other, as well as to their goal. This allegiance would motivate them to press on despite setbacks and make necessary sacrifices to succeed.

Allegiance to a Shared Cause   

Dedication to a mutual cause results from a chain of steps. Only after the accomplishment of the last stage can someone completely believe in a leader’s vision. These are the steps:

1- Comprehension

Numerous leaders wrongly suppose their teammates have keyed into their vision because they comprehend and agree with the idea. However, being persuaded is not being invested in a cause. Being convinced about an idea is just the first step.

2- Support

People are more invested in visions to which they give their money or time. However, people could give their resources to support a vision and still not be fully committed to the project.

 3- Possession

When individuals feel like owners, they also feel accountable for the outcome of the idea and are devoted to it. These people have given their all and have a claim in the success or failure of the venture. They are emotionally linked to the concept. Yet, at this point, people may still not be fully devoted to the vision.

4- Crusade

If a person keeps talking about a vision, such a person is finally completely committed to the cause. It is easy to notice the enthusiasm. The zeal burns bright and lasts long. Then, the vision has become a substantial aspect of his life. He tells people about the vision because he has faith in it.

 

Before a leader can conclude that his teammates believe in and are working towards making his vision a reality, these four stages have to be taken by the individuals in the team.

 

Read More:

The right set of HRM Activities Allow Organizations to Achieve Goals

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