Enterprise Operations September 2012 1

Operational Level Paper

E1 - Enterprise Operations
September 2012 Examination
The Examiner's Answers

Note: Some of the answers that follow are fuller and more comprehensive than would be expected
from a well-prepared candidate. They have been written in this way to aid teaching, study and
revision for tutors and candidates alike.
These Examiner's answers should be reviewed alongside the question paper for this examination
which is now available on the CIMA website at www.cimaglobal.com/e1papers
The Post Exam Guide for this examination, which includes the marking guide for each question, will
be published on the CIMA website by early October at www.cimaglobal.com/e1PEGS



SECTION A

Answer to Question One
Rationale
Sub-questions 1.1. to 1.10 test candidates' knowledge of a wide variety of topics within sections A, D
and E of the syllabus through the use of objective test questions (OTQs) in a conventional multiple
choice format.

1.1 B
1.2 D
1.3 B
1.4 A
1.5 A
1.6 A
1.7 C
1.8 C
1.9 A
1.10 D
September 2012 Enterprise Operations 2

SECTION B


The answers that follow in Sections B and C are fuller and more comprehensive than would have
been expected from a well-prepared candidate. They have been written in this way to aid teaching,
study and revision for tutors and candidates alike.

Answer to Question Two
Requirement (a)
Rationale
This question examines learning outcome B2(b) 'discuss ways of organising and managing
information system activities in the context of the wider organisation'.
Suggested approach
Identify the main advantages
Briefly elaborate on each in turn

There are several significant advantages of maintaining an in-house IS function, five are listed below.

HR flexibi lity
If the service is kept in-house there will be potential to use the posts within the function as part of
human resource management policies such as career development across different business areas
and job rotation.

Sharing of overheads If the service is kept in-house there will be sharing of central overheads by the
IS function. If the service is contracted out then other services such as payroll and headquarters
functions would be relatively more expensive to service users.

Local knowledge
As part of the same organisation, the function should possess unique local knowledge; meaning that it
understands local difficulties and needs better and is well placed to tailor the service to those
requirements.

Commitment to the organisation
As part of the organisation the in-house provision should be mindful of the organisational culture and
ethos and have a greater affinity for and commitment to the organisation.

Avoids compl ex SLAs and transaction costs
Potentially there should be less difficulty in agreeing and managing a service level agreement (SLA)
between the IS function and service users than if an outside contractor were involved. Normally small
variations to service levels are likely to meet with a flexible response rather than a need to re-
negotiate terms and conditions. In addition expensive transaction costs and on-going monitoring
associated with using an outside provider will be avoided.

(Note: Mention could also be made of issues such as service continuity and potential to develop the
service as a source of strategic advantage, etc.)


Enterprise Operations September 2012 3
Requirement (b)
Rationale
This question examines learning outcome B2(b) 'discuss ways of organising and managing
information system activities in the context of the wider organisation'.
Suggested approach
Explain both CAD and CAM
Explain the benefits of each

Reduced materi al wastage
Through precise design and pattern making CAD can reduce the amount of raw materials used and
the incidence of off-cuts e.g. timber, metal, etc. This obviously also has beneficial effects
environmentally and is particularly important where materials are sourced from non-renewable
sources.

Simplified processes
In addition to savings on materials, CAD can, through improved design, potentially simplify the
processes involved in assembling products from manufactured parts. CAD and CAM are the keys to
flexible manufacturing as they enable computerised machines to perform a variety of functions quickly
and easily. This makes the organisation more customer-orientated.

Reduce errors
CAD and CAM can eliminate human error in design and machining, so reducing costs of waste
associated with traditional design and manufacturing processes.

Increased speed and labour cost savings
By automating previously manual operations CAM can reduce the number of human labour hours
involved in assembly, manufacture and packing, resulting in speedier operations and lowering labour
costs.

Help meet customer requirements
CAD and CAM provide flexibility to meet customer requirements more fully and eliminate mistakes
and the need to return faulty goods; so improving customer relations and customer loyalty.

Requirement (c)
Rationale
This question examines learning outcome B2(b) 'discuss ways of organising and managing
information system activities in the context of the wider organisation'.
Suggested approach
Describe MRP
Explain how it might improve operations

Material Requirements Planning (MRP) is a planning and control system designed for organisations
engaged in mass production.

Basis of technology driven approach
MRP is a push-based system, pushing work through the system. Once in place, MRP can enable the
computer system Manufacturing Resource Planning II to be adopted so enabling inventory control to
match supply and demand.



September 2012 Enterprise Operations 4
Reduced stock holding
MRP can simplify inventory control and levels of stock holding might be reduced, thanks to precise
planning so potentially improving both cash flow and company liquidity.

Help meet customer requirements
MRP can contribute to increased customer service as there will be fewer delays through materials
shortage. Similarly MRP can give a base for providing swift, reliable quotations where delivery times
are important.

Enhance planning of operations
The systemised planning that MRP brings means that there will be improved facilities utilisation and
less time spent on hurrying emergency orders through (possibility of displacing other activities or
incurring overtime payments, etc.).

Enhance supplier relationships
Organisational relationships with suppliers should be enhanced through improved information sharing
by identifying clear lead times and by fewer panic orders.

(Note: Mention could also be made of issues such as improved administrative efficiency, improved
financial control and enhanced management decision making information, etc.)

Requirement (d)
Rationale
This question examines learning outcome D1(e) 'describe theories of consumer behaviour'.
Suggested approach
Identify the five stages
Briefly describe each in turn

Problem/Need recognition
The purchasing process is a problem solving process of how to satisfy a need or want. Crucially
consumers do not so much buy goods or services as satisfy a demand or need through the purchase.
The first stage is that the consumer identifies that need or problem.

Information searching
The second stage involves the consumer performing a search of various options to satisfy the
identified need. This might be done informally through remembering past experience, talking to others
or more formally by consulting directories, 'window shopping' alternatives or internet search engines.

Evaluation of alternatives
This stage involves the consumer in comparing various brands and products in order that a choice
might be made between the viable alternatives.

Purchasing decision
Next the customer actually makes a purchase choice. The choice is only normally altered if (for
instance) there is a temporary 'stock-out' or further information emerges about the alternatives which
were rejected initially.

Post purchase evaluation
Once the product or service has been purchased, the consumer assesses whether he/she is satisfied
with the purchase decision. Consumers might relate these opinions to others or make product rating
entries on the internet. This reflective process will help shape future purchasing behaviour.




Enterprise Operations September 2012 5
Requirement (e)
Rationale
This question examines learning outcome C1(c) 'explain the particular issues surrounding operations
management in services'.
Suggested approach
Explain queuing theory
Provide purposeful examples
Queuing theory is the study of waiting times through mathematical analysis of related processes. The
theory enables a series of relevant performance measures to be calculated that can guide operations.
These measures might be converted into ratios.

Service organisations such as hospitals can benefit from the generation of these ratios in the following
ways:
The calculated average waiting times for a service once calculated can keep patients better
informed. One example might be how long a particular patient may have to wait for a
particular operation.
The expected number of patients waiting at a point in time can be determined. This can help
hospital managers determine staffing levels and opening times e.g. for accident and
emergency, drop in clinics, etc.
The probability of encountering the system that is either empty or full can be calculated, for
instance arriving at a hospital department at either a busy or 'slack' time. Using this
information demand can be smoothed by actively using appointment systems and
recommending times of attendance.
It is possible, through the ratios generated through queuing theory, to undertake inter-hospital
and intra-hospital benchmarking and ratio comparison so acting as a stimulus to improved
processes, greater productivity and organisational improvement. In the same way information
could be generated to aid policy decision making.

Requirement (f)
Rationale
This question examines learning outcome B2(a) 'discuss ways for overcoming problems in information
system implementation'.
Suggested approach
Identify five potential difficulties

Inefficient operations
Systems operations may initially be slower and less efficient due to a lack of user confidence and/or
unfamiliarity with the new system. This could impact negatively on customer service and hence
damage external relations and impact negatively on sales, etc.

Mistakes
This lack of confidence and unfamiliarity with the new system may lead to accidental errors in
processing leading to information generated by the system being incorrect or misleading.

Staff anxiety and loss of morale
Without knowledge and information there may be a fear of the new systems effect on jobs. This could
lead to anxiety and stress and a lowering of motivation. This could be costly to the organisation in
terms of staff turnover or absence from the workplace (as a way of avoiding the new system).

September 2012 Enterprise Operations 6
Disruptive behaviour
If support and training are inadequate, staff may feel inadequate and be reluctant to use the new
system, possibly continuing with old ways of operating or being uncooperative or confrontational with
management. Conceivably deliberate errors in processing may occur and would represent the
equivalent of an employees 'cry for help'.

A failure to realise the benefits of the new system
Most systems are purchased or introduced only after some appraisal of the costs and the benefits
weighed against one another. If support and training is inadequate then the benefits of the system
may never be realised.








Enterprise Operations September 2012 7

SECTION C


Answer to Question Three
Rationale
Requirement (a) examines learning outcome D2(a) 'explain the relationship between market research,
market segmentation, targeting and positioning'. Requirement (b) examines learning outcome C2(d)
'illustrate a plan for the implementation of a quality programme'. Requirement (c) examines learning
outcome C2(a) 'apply contemporary thinking in quality management'.
Suggested approach
(a)
Identify the potential advantages of market segmentation
Relate to the scenario
Discuss each advantage in turn
(b)
Define quality standard ISO 9000
Describe the benefits of quality standard ISO 9000 certification
Relate to the scenario
Discuss the associated issues

(c)
Briefly discuss how the Production Manager's suggestion could benefit BC4 as part of an
alternative Quality Control (QC) system
Explain QC and the role of QC inspectors
Identify the benefits that may be of relevance, given the scenario
Briefly discuss each in turn
Requirement (a)
Market segmentation allows an organisation to focus on the subset of a market that has the greatest
potential. There are clear advantages associated with the practice for BC4.

Develop appropri ate marketing mix
The idea of dividing a market into segments is to identify groups of potential consumers who have
similar needs and will respond to a particular marketing mix in broadly similar ways. Unsurprisingly,
the management consultant has identified this approach. Segmentation will allow BC4 to concentrate
on the right blend of the elements of the marketing mix that best meets the particular needs of its
segment. The overall aim is to deliver the right products to the right customers using the right delivery
channel at the right price and segmentation can assist this aspiration. A clear focus on a segment can
lead Bc4 to improve the suitability of the product in terms of design. It can also improve
communication to the target segment(s) using advertising and other promotional activities that are
most relevant.

More focused promotion of BC4s products
BC4 currently uses an undifferentiated (mass) marketing approach whereby it makes a product
offering to the market as a whole. This approach is inefficient in many ways because much of the
marketing effort is wasted on consumers who have no interest in purchasing the product and are
unlikely to do so whatever the efforts put into promoting it. Instead the company can develop more
efficient and effective methods of promoting existing products.

Easi er anal ysis of customers
Segmentation allows a company to gain a better understanding of customer needs, wants and other
characteristics. A sharper focus allows the personal, situational and behavioural factors that
September 2012 Enterprise Operations 8
characterise customers in a particular market segment to be better understood. This detailed
knowledge will, in future, allow BC4 to respond quickly to any changes in what the target customers
want and need.

Simplified operations
BC4 currently tries to sell its product range to all potential customers, even though it is geographically
difficult to fulfil obligations to customers in the north of the country. It may be that serving these
customers is unprofitable and runs the risk of failing to meet customer requirements so damaging its
reputation. Effective segmentation should lead BC4 to improve its operating efficiency, simplify what it
does and avoid possibly unprofitable markets.

More effective use of resources
Market segmentation offers the opportunity to an organisation to concentrate its limited resources on
meeting the needs of consumers. The greatest return will be achieved by concentrating effort and
resources in this way. By segmenting the market BC4 can focus on specific customer needs in the
most efficient and effective way. Activities can be redirected to better serve its most likely customers.
The targeting of particular customer segments of the market should produce more sales and lower
costs (as it may be possible to reduce overall expenditure on promotion and advertising). If properly
managed, BC4 will be able to achieve a higher return for an unchanged or reduced marketing and
sales budget.

Improved product design
Segmentation offers the opportunity to design new products or redesign existing ones and work with
customers within the chosen segment to reflect the design features they are looking for. In this way it
may be possible to make product improvements, increase brand loyalty and decrease brand
switching.

Better understanding of the competition
By building a detailed knowledge of a single market segment BC4 will also develop an improved
understanding of its competitors which serves this same segment group.

Better understanding of market
Market segmentation means that sales potential can be more clearly understood and market potential
more accurately estimated. Finding, understanding and focusing on the needs of customers can
mean that BC4 has the opportunity to become a market leader within a carefully chosen segment.

More effective market planning
Knowledge of market segments assists with marketing planning. The needs of the segment can be
better understood and anticipated, leading to improved planning processes and more realistic plans
being developed.

Requirement (b)
The Managing Director feels that significant benefits to BC4 might arise through gaining the quality
standard ISO 9000 certification. The International Standards Organisation (ISO) issues standards that
are globally recognised, and that include the ISO 9000 series. ISO 9000 provides a systematic
approach to managing business processes to produce products that conform to customer
expectations.

Improved efficiency through standardised practices
The management consultant has identified differing operating efficiencies both within and between
BC4s factories. By gaining ISO 9000 certification, BC4 will develop a system that should lead to
standardised practices, greater productivity and the maintenance of consistently dependable
processes. A consistent approach to policy documentation is a requirement including systems for
control of products that do not conform to the agreed standard. The standardisation that BC4 will gain
through certification will improve the efficiency of business processes and should reduce expenditure.

Elimination of inefficienci es
The need to agree upon common modes of operating and standards to be achieved will allow BC4 to
identify the most efficient processes so driving out bad practice and inefficient operations.
Enterprise Operations September 2012 9
Mechanisms for Quality Control
The need for control of quality records (according to the standard 'at all locations where operations
essential to the effective functioning of the quality systems are performed') means that once a
recognised mechanism is in place an effective Quality Control (QC) mechanism can be established.
Compliance can readily be assessed by conformance of a particular operation to the agreed standard.

Improved management information
As part of QC the standard allows a company flexibility to use those statistical techniques that would
be most appropriate for its industry. This would force BC4 to adopt such techniques routinely in order
to both correct that which does not comply to standard and to prevent poor quality occurring. These
techniques and systems will improve business processes by improving decision making as managers
can now base decisions on reliable information rather than rely on instinct.

A stimulus to continual i mprovement
By seeking the international standard, BC4 will be constantly forced to focus on how it does business.
Unlike a training programme, this initiative is more than a one-off exercise or event. Periodic audits
conducted by external independent auditors are a requirement of certification. This will keep the issue
of quality permanently 'on the agenda'. The need to document every procedure and work instruction
will make the way in which BC4 operates visible and in future enhanced if an improved method is
identified. In this way, the system might stimulate continuous quality improvement leading to improved
business processes, reductions in waste, improved product quality and cost savings.

Customer satisfaction
The management consultant has identified a trend of increasing returned goods which require
replacement or reworking and significant numbers of products returned as part of extended guarantee
arrangements. This means that customers are not currently receiving products of the quality they
expect. The standardised practices guaranteed by a company complying with ISO 9000 will mean that
consistently dependable processes and products will help reverse this situation. Fewer returns and
claims under guarantee should result in improved customer satisfaction.

Enhanced company reputation: loyalty and new sal es
If BC4s customers are not currently receiving products of the quality they expect, this can be very
damaging to the companys reputation. Although customers are not demanding ISO 9000 certification,
the outcomes arising from the process will improve customer satisfaction and customer loyalty,
leading to repeat purchasing and improved sales. As the reputation of the company grows, new
customers should be attracted through the recommendation of existing customers. Similarly, large
organisations may have approved supplier lists that include only companies with ISO accreditation.
New sources of business might arise for BC4 once it has this accreditation.

Improved employee morale
As BC4s external reputation grows employees will be proud to be associated with the company. The
fact that the standard implies a need for the workforce to take control of its processes and document
its work processes will mean that it will feel valued. A key message for BC4 to emphasise is that
quality is not the responsibility of one person; it is everyones responsibility. This shared responsibility
should provoke a positive attitude throughout the organisation. Such an attitude should lead to an
increase in employee morale and a positive organisational culture.

Enhanced company reputation: improved employer branding
In addition, in a battle for talented workers, BC4 will be a more attractive organisation to join. So the
accreditation could effectively improve employer branding.

Requirement (c)
The MD appears to favour ISO 9000 accreditation but his production manager has advised him to
employ dedicated Quality Control (QC) staff. The use of Quality Control (QC) inspectors in itself would
only be effective as part of a full Quality Control (QC) system.

Potential for QC and subsequent ISO accreditation
The use of dedicated QC inspectors is an example of a QC mechanism traditionally found in technical
production processes. The QC inspectors task would be to compare the actual quality of the products
September 2012 Enterprise Operations 10
produced with the expected or previously planned quality standard. Such QC mechanisms could form
the basis of a later adoption of ISO 9000.

Sufficient for BC4s needs
ISO accreditation (like Total Quality Management and The European Quality Foundation model) is a
Quality Assurance (QA) system. it should, however, be acknowledged that QA systems are in certain
ways superior to quality control systems in that they attempt to create rather than control quality.
However, the use of QC inspectors and QC systems generally may suit BC4s immediate needs more
readily.

Speed and cost
Obtaining certification under international quality standard ISO 9000 may benefit BC4 but it could take
a great deal of time, effort and expense to introduce and then maintain it across the whole
organisation. In many ways QC would be a quicker and potentially cheaper approach for BC4 to
adopt. The significant trend of increasing returned goods would be readily picked up by the inspectors
and savings made could conceivable pay the inspectors salaries.

Critical consideration of appropriate quality standards for BC4s products
Introducing QC inspectors would necessitate a critical consideration of appropriate quality standards
for BC4s products which is healthy. It would also involve identifying an aspect of the production
process that is critical to the quality of production, then establishing warning limits and tolerances.
There would then be ongoing review and adjustment of the standard originally set.

Direct address of an organisational weakness
The management consultant has confirmed that no systematic QC exists and differing operating
efficiencies exist both within and between BC4s factories. This should be seen as a strategic
weakness of the organisation. The Production Managers suggestion might be seen as a directly
addressing this matter.

Reduce external failure costs
Taking remedial action where quality does not meet standard followed by immediate action to remedy
any breach of the tolerance would reduce BC4's external failure costs.

A source of learning
In addition to the other benefits valuable data would also be produced as part of the QC system which
could act as a guide to preventing production errors in the future.




Enterprise Operations September 2012 11
Answer to Question Four
Rationale
Requirement (a) examines learning outcome A1(b) 'explain the emergence and importance of
outsourcing and offshoring'. Requirement (b) examines learning outcome E2(a) 'explain the HR
activities associated with developing the ability of employees'. Requirement (c) examines learning
outcome E2(c) 'describe the HR activities associated with improving the opportunities for employees
to contribute to the firm'.
Suggested approach
(a)
Identify the issues that T42 should take account of as part of its considerations
Describe each issue in turn
(b)
Identify some benefits of introducing job rotation
Relate these to the scenario

(c)
Explain the factors
Discuss each in turn
Requirement (a)
For her next scheduled meeting with the Chief Executive, the Chief Operations Officer has agreed to
investigate the potential for offshoring part of T42s operations. Offshoring involves transferring some
part of the organisations activities to another country.

Likel y savings
T42s staffing costs as a proportion of turnover is higher than its competitors some of which are
offshoring part of their activities. Generally, the main driver behind the trend in offshoring is in order to
exploit differentials in wage rates. Such differentials in wage rates can be significant (often in the
order of one tenth the level of the home country). Even if the opportunity is offered, it is unlikely that
all T42s existing staff would wish to relocate to another country. This would therefore lead to the
employment of new employees from another country. Offshoring could therefore be cost effective to
T42 in terms of reduced wages. In addition, there may be potential to exploit low tax rates and other
benefits in the host country.

Exchange rate effects
Exchange rates between the home country and host country can be notoriously difficult to predict and
could make financial projections of potential savings difficult. If the decision to offshore goes ahead
there is a risk of exchange rates impacting adversely on costs of operations eroding likely savings.

Impact on workforce
If the Chief Operations Officers investigation of the potential for offshoring part of T42s operations
were known by the workforce it could have a devastating effect on morale, motivation, goodwill and
industrial relations. Given that no choice has been made over which services will be considered for
offshoring, then damaging rumour and gossip would also occur. T42 needs to consider at what stage
(if any) it communicates with staff in a way that minimises possible damaging consequences.

Choice of function to outsource
What is known from the scenario is that T42 employs 'many' technicians who each have detailed
specialist knowledge of different systems. In Charles Handys terms these workers would represent
the 'operational core' of the organisation. This core is supported by sales personnel and call centre
staff. The least risky part of T42s operations to offshore would be its call centre operations as a non-
core activity and also because many call centres are already offshored in other industries.


September 2012 Enterprise Operations 12
Level of training
T42 employs highly trained staff to ensure customers always receive the highest levels of reliability
and technology. This seems to be the basis of T42s competitive advantage and the company would
not want this to be compromised as a result of offshoring. Any new employees required, as a result of
offshoring (or outsourced offshore staff), would need to exhibit the same attributes.

Reliabil ity
A distinctive feature of T42s operation is that its own technicians are available 24 hours a day, 7 days
a week under existing arrangements. Again this aspect should not be compromised as a result of
offshoring. (Time differences between the home and offshore partner countries in this case are not a
difficulty).

Choice of host country: Language barriers
T42s choice of country to offshore to is important as language may be an important consideration.
Several of the BRIC economies invest heavily in educating their workforce in different languages to
ensure that their workers have high levels of linguistic skills. If language becomes a barrier then
customer service could be compromised.

Choice of host country: Political risk
The likelihood of operations being disrupted by a change of foreign government or terrorist activity (for
instance) needs to be factored into the decision making. Reference has also been made earlier to the
volatile nature of some exchange rates. It is likely that these issues will help guide the choice of
country to offshore activities to.

Choice of host country: Potential for new trade
By establishing a base in another country, T42 will have a better understanding of local conditions
and contacts and may lead to potentially new business from the host country.

Cultural differences
Geert Hofstede, amongst others, researched the role of national culture within the organisation and
identified five dimensions which he argued largely accounted for cross-cultural differences in peoples
belief systems and values. Irrespective of the country chosen by T42 to offshore to, there will be
cultural differences. These differences present a number of challenges for T42 including a need to
understand and respect other cultures, and act accordingly. Thus cross-cultural management involves
recognising behaviour which exists within both countries and cultures and understanding and
improvement of the interaction between T42 and partners from different countries and cultures.

A need to establish servi ce level agreements, etc.
There will be a need to establish service levels, performance targets and ratios in order to ensure that
levels of service are maintained under offshored operations.

(Note: Mention could also be made of issues such as 24 hour enabled cover, a need to protect
intellectual property, and a need to invest in team building in order to develop team cohesion, etc.)

Requirement (b)
J ob rotation involves moving employees from job to job within the organisation. For their next
scheduled meeting T42s Chief Operations Officer has agreed to investigate the potential for
introducing job rotation amongst its technicians.

Overcome a strategi c weakness
It is a strength of T42 that each of its technicians is highly skilled and knowledgeable but it is a source
of organisational weakness that an individual technicians skill and knowledge is in only a few
business systems. So although an individual technicians knowledge may be deep it is also narrow
which is unhealthy in a number of ways. It will mean, for instance, that technicians are restricted as to
the number of clients they can currently deal with. This may be part of the reason why T42s staffing
costs as a proportion of turnover are higher than its competitors.

Effective staffing policy
From a human resourcing perspective staffing policies should be designed to lead to a set of positive
outcomes including high staff commitment and quality, and highly flexible employees. It seems from
Enterprise Operations September 2012 13
the scenario that T42 is quite 'flat' in terms of hierarchy and roles appear very specialised. It would
therefore be difficult to involve technicians in job enrichment or job enlargement schemes. The most
feasible mechanism to improve commitment, quality, and flexibility would be the use of job rotation.
Arranging for technicians to swap roles periodically will bring variety to their roles and increase their
capacity to deal with a greater breadth of clients.

Expanded skil l variety
The number of different types of skills that are used by an employee to do a job (skill variety) enables
employees to undertake a variety of tasks in their work. For T42 the use of job rotation will certainly
enhance multi-skilling amongst technicians and lead to a more flexible workforce. This will give T42
more options in covering tasks when there are absences and holidays. It may be that the workload of
technicians is currently uneven and the initiative could help distribute workload more fairly amongst all
technicians.

Shape attitudes positivel y: readiness for change
J ob rotation would certainly break any possible feelings of inertia and complacency amongst T42s
technicians so that in future they should be more receptive to organisational challenges and changes
in operation.

Shape attitudes positivel y: organisational commitment
J ob rotation can also lead to positive feelings towards the organisation. In T42s case this might
involve aligning technicians attitudes to the organisation more closely and, hopefully, T42 should
obtain positive behavioural outcomes of increased effort, co-operation, involvement and
organisational citizenship.
Encouragement for workplace l earning
T42 is a 'knowledge based' organisation and operates on the basis of having high quality employees.
Such organisations need processes of workplace learning in order that a capable and qualified
workforce continues to produce a high quality service. J ob rotation is one such mechanism that helps
T42 achieve workplace learning.

Engagement and motivation
J ob rotation may prove to be a stimulus to individual technicians leading to engagement. If employees
are more interested in the job as a result of the policy they will be more motivated and the
organisation will benefit from staff commitment and retention and possibly enhancing employee
productivity.

Breadth of perspective
J ob rotation gives each employee the opportunity to see how the different jobs within an organisation
fit together. The difficulty at the moment is that each of T42s technicians has individual knowledge
that is deep but also narrow. This can lead to a rather insular view of work. Task significance involves
how important the task is to others in the company, which is important in showing employees how the
work they do fits in with that done in the rest of the organisation. If employees can see how their work
affects others, they will attempt to do the best job they can whilst collaborating with others.

Breed healthy attitudes in the workforce
Currently technicians work in silos. J ob rotation is known for breaking these feelings. T42 employs
many technicians who each have detailed specialist knowledge of different systems and a sales team which
stays up to date on the different solutions available. J ob rotation means that technicians will have a
broader perspective. It will also encourage new approaches to be tried out in the workplace.

Potential to reduce the staff training budget
T42s Chief Executive has asked if economies could be made to the training budget. It may be that
technicians are receiving 'too much' formal detailed knowledge of too narrow a range of systems. If on
the job training (of which job rotation is one example) is introduced one benefit may be a reduction in
the current training budget. 'On the job' training will only be effective however if existing employees
have time to devote to the process, and are themselves competent and know how to impart the
necessary skills.

(Note: Mention could also be made of issues such as improved team cohesion and a broader
appreciation of jobs performed by colleagues and skill requirement, etc.)
September 2012 Enterprise Operations 14
Requirement (c)
The Chief Executive asked if economies could be made to the training budget and the Chief
Operations Officer has agreed to review the current provision.

Outputs effectiveness
The explicit input to training may be expressed as a level of budget (or an input) but when determining
training provision there should be a concentration on the outputs or outcomes of the process. If T42
already has stated the aims of its commitment to training then the outcomes of the current provision
should be measured against these aims. If no stated aims exist, senior management would do well to
consider what they hope to achieve as a result of future training provision.

Budget level and level of provision
Training can be seen as a formal, often short-term process. It can take place away from the
workplace or 'on the job', or be a combination of both. It is likely that T42s training budget, which the
partner has drawn reference to, reflects training away from the workplace and may involve costs such
as facilities hire and the use of training consultants. 'On the job' training by comparison is likely to
have 'hidden costs' and will not be obvious within the overall budget. If the decision were taken to
reduce the training budget then the lost training opportunities could potentially be compensated for to
a degree by increased 'on the job' training.

Strategi c Alignment
T42s stated business approach involves a belief in the need for the best system and high
commitment through highly trained staff. T42s technicians are indeed highly skilled and
knowledgeable. This suggests that training is essential in order for the company to be competitive and
meet its organisational goals. When deciding upon the training budget this will clearly need to be
taken into account.

Productivity levels as a result of training
Training is a process whereby the organisation attempts to increase an individuals ability to better
perform a particular set of tasks. In T42s case the effectiveness of its workforce is dependent upon
the competence it acquires. Well trained members of the sales force or technicians will be better
placed to respond to customer demands and generate income. Indeed call centre staff also need to
be competent, directing queries to the right personnel within the company.

Workforce commitment as a result of training
In some organisations training is seen as a form of reward and motivation for employees. If this is the
case within T42, then those staff engaging in training should be motivated, committed and therefore
more productive. When deciding upon T42s training budget, the level of workforce commitment
derived as a result of the budgetary provision needs to be considered.

Workforce competence as a result of training
If T42s training budget is used effectively, participants should become more competent and confident
employees. Not only should productivity levels improve as a result but, crucially, levels of workplace
stress should reduce. A consequence of a confident happy workforce is reduced absenteeism and
lower staff turnover (meaning less disruption and cost associated with recruitment and selection of
replacement staff).

Support for other initiatives and processes
Training adds cohesion to other organisational activities and these factors should be taken into
account by T42 when deciding upon the training provision. For instance, training can be a direct result
of honest collaborative staff appraisal processes or as part of an induction programme. Currently T42
is considering both offshoring and job rotation and, as a consequence, it is likely that more not less
training will be required (e.g. in skills using other systems, cross-cultural appreciation skills, etc.)

(Note: Mention could also be made of issues such as the content of the existing training provision and
its impact on budget required and morale of staff, etc.)