CHAPTER 6-8

Chapter 6 – ORGANIZATION AND MANAGEMENT OF MAS PRACTICE

Developing MAS Practice

1. TO BE A CONSULTANT
 Assessment of your own talents and skills
o Communication Skills
o Sales Ability
o Ability to Focus
o Objectivity
o Business and Professional Judgement
2. SCOPE OF PRACTICE
 Defined by the expertise and experience of the consultant
 Can be technical consulting in:
o Engineering
o Industrial Management
o Marketing
o Business Management
o Financial Areas
 Recognize the firm’s BACKGROUND and EXPERTISE for a well-defined scope
3. IDENTIFYING MARKET OPPORTUNITIES
 Specifically involves:
a. study of the listings of management consultants
b. survey of local CPA firms to determine which are offering consulting services
c. determination of possible oversaturation of consultants in one’s specialty area
d. identification of new services that may provide a competitive edge
 Practice Development Program and Market Research for the firm to have a continual flow of work
and steady stream of new opportunities and new contracts
4. ESTABLISH OPERATING PLAN
 Should include:
a. a desired income level
b. potential clients
c. strategies to obtain those clients

5. IDENTIFY STAFFING REQUIREMENT AND FINANCING NEEDS

6. DEVELOP A NETWORK
 Establish quality contacts and educate the network
 Keep the practitioner’s name in front of clients and contacts
Organization of MAS Division
 Consists primarily of ACCOUNTANTS OR MAS SPECIALISTS
 Train accountants as specialists or engage in men with experience in other areas (e.g. engineering,
economics) to meet the need of large clients
 Periodically assess the firm’s needs and compare with the firm’s existing knowledge and skill
 Determine the extent of the firm’s deficiencies. If there are, the firm can
o Employ additional consultants
o Undertake various staff development activities
 Staff Pyramid and Fee Structures

Partners, Principals, Directors

Level 1
 Composed of most experienced and highly paid
(1) Partners, Principal, individuals responsible for the success of engagements and
Director
deals directly with clients
Level 2  Activities include: practice planning, administering and
(1-3) Senior Managers, developing practice, consulting with top-client managers,
Managers, Supervisor
approving engagement reports, managing client crises
Level 3  Considerations for Recruitment:
(1-5) Senior Consultant,
Senior a. external reputation as a highly competent
consultant
Level 4
(2-6) Associate
b. remaining period of useful and productive
Consultant, Staff service to the practice
c. compatibility with the existing practice and
current partners
Senior Managers, Managers, Supervisors
 Perform week-to-week management of the engagements and are responsible for identifying new
client prospects and assisting in the sales process
 Activities include: planning engagements evaluating consultants, supervising consultants, writing
proposals, reviewing working paper and reports, consulting with client managers and serves as an
expert in one or more applied knowledge areas
 Considerations for Recruitment:
a. previous successful consulting experience
b. previous successful middle and top management experience
c. specialized or advanced knowledge in major areas
Senior Consultants, Seniors
 Individuals with 2 or 3 years of consulting experience and are capable of supervising the daily work of
younger staff
Associate Consultant, Staff
 Consists of young or new staff typically having less than 2 years of consulting experience

Billing Rates
Level 1 P6000 – P12000 per hour
Level 2 P3600 – P6000 per hour
 Level 3 P2000 – P3600 per hour
Level 4 P1200 – P2000 per hour

Defining the Target Level of Competence of Management Consultants

4 Major Factors
1. Scope of Practice Area
2. Service Variety
3. Client Requirements
4. Service Delivery Capability

Scope of Practice Area

A consultant who desires to grow should take the following steps
1. Review the economic region in which the consulting firm draws, or expects to draw, most of its
clients
2. Inventory the services required by the existing client, and in most cases, by the clients the
consultant would like to add
3. Select services from this inventory that will be provided
4. Acquire the competence needed to provide the selected services
5. Notify clients and potential clients that the consulting firm is able and willing to perform the
selected advisory and consulting services

Service Variety
Categories of Engagements:
1. Planning, control and reporting systems
2. Operational computer system analysis, design, implementation, and evaluation
3. Specialized technical services such as advice in new laws, entering international markets or
keeping abreast of new economic or technical development

Client Requirements
In reviewing client requirements, the consultant may assess the following questions:
1. Will a fully implemented service be turned over to the client ready for use?
2. Will the service require changes or adaptation?
3. Does the client belong to an industry with special characteristics or problems?
4. Does the client have special financial or growth problems?

Service Delivery
Service delivery is the application of consulting skill. In delivery services, the consultant undergoes
the following phases:
1. Setting objective, identifying problems and needed services, predicting specific expected benefits
from these services, and gathering essential facts pertaining to the problem and means of
delivering the services.
 2. Adapting and beginning the services that are to be the principal deliverables from the
Engagement.
3. Implementing these services to the client’s satisfaction.
4. Evaluating the results in operation, in order to determine the extent to which the anticipated
benefits were received from the services.

Management of MAS Practice

• CPAs have been providing companies with technical assistance and advice for as long as the
accounting profession has existed.
• The increasing complexity and size of businesses meant that they had to seek outside professional
help as well.
• CPAs review various aspects of an organization which gives him the opportunity to know the
strengths and weaknesses of a firm
• A number of accounting firms offer advisory services now on a systematic and organized basis.
• A practicing CPA may use the steps in the following slides as guidelines to formally conduct
management services.
• Leads can come from outright request from the client.
• CPAs can capitalize on their audit and tax engagement.
• Mention can also be made of the CPA’s availability for MAS work in his audit letter of engagement.
• Use of letters and brochures to inform present clientele is also allowed.
• All is well as long as it is done within the bounds of the Code of Ethics.
Suggested steps in starting MAS practice
1. Determine and make a list of services that one can truly offer with a confidence of competence to
perform.
2. Review a client list classified by industry, size etc. and prepare a package tailored to fit the firm’s
competence and a particular type of clientele. “Initial package” usually consists of services that are closest
to the conventional accounting function such as budgeting, financial planning situational analysis
(mergers, make or buy) cost systems or studies etc.
3. Prepare a line-up of MAS personnel. The sources can be the ff:
a. Accounting firm’s own staff
b. Experienced specialists (engineers, management consultants) from outside firm
c. Referral by other CPAs
4. Seek out advisory engagements.
Sources of MAS engagement
• The primary source of MAS engagement is the audit client of the CPAs
 • In the course of his review and audit, he obtains first hand knowledge of the problems of the
company.
• Other sources:
a. Referrals from other CPAs.
b. Referrals from audit clients.
c. Referrals from businessmen.
d. Referrals from financial and government institutions
e. Referrals from legal and other professional firms.
Problem Areas in Rendering MAS by an Independent Accounting Firm
1. Question as to the effect of the practice of MAS on the firm’s independence
• Agreement should be reached as to the relationship that MAS work will have on the audit
work.
2. Development and maintenance of a high level of confidence in MAS
• Policy should be established for resolving the problems in the event of disagreement
between MAS partner and Audit partner.
• Policies in continuing education must also be established.
3. Question of what fee to charge - a clear policy on the fee structure and its justifications should be
established.
4. Question of AUDIT-MAS cooperation in obtaining engagements. - efforts to obtain MAS engagement
and the cooperation to obtain MAS engagements and the cooperation of audit partners and staff should
be clearly defined.
5. Question of regular communication between the MAS function and the rest of the firm.
Financial Management of MAS Practice
1. Working Capital
• Used to pay monthly operating expenses. This will fund accounts receivable that
represent time billings to client.
• Should be for 3 – 4 months worth of expenses.
• Some consultants obtain retainer’s fee to help finance the burden of monthly expenses.
2. Office facilities and equipment requirements.
• Stationery, telephone answering procedures, quality typed material.
• Start-ups usually lease office space in a professional suite that offers secretarial services,
copy machine etc.
Revenues, Expenses, Billings and Collection of Management Consulatants
 • Net service fees are determined by subtracting gross fees (total chargeable hours worked by a
professional multiplied by a billing rate) the allowance, fee adjustment or write off. The allowance
is usually 12-16% depending on the effective use of staff.
• Some consultans bill services on an hourly basis, while some on a daily or per diem basis. Some
also directly charge out of pocket expenses to the client’s bill. Staff billing rates are often a
multiple of the salary paid to the employee.
• Another billing approach is Project Basis. The fee is determined for the project and the work
completed within a reasonable time.
Preparing a Business Plan for MAS Practice
Why prepare a plan?
• Consultants prefer to be a consultant first and a business owner second but planning and
management is vital to business success.
• Business plan – Written summary of what the consultant hopes to accomplish by being in business
and how to organize the resources to meet his/her goals.
• This will also be used as a financing proposal by the lender in his assessment.
4 parts of Business Plan:
1. Introduction
• Highlights of the business plan
2. Business Concept
• Description of the industry and outlines the action plan for the coming year.
3. Financial Plan
• Outlines the level of present financing and identifies the financing sought.
• Contains financial forecasts – future projection based on current assumptions.
4. Appendix
• Contains all items that do not naturally fall elsewhere in the document or which expand
further on the summaries in the document.
CHAPTER 7
Identification of Suitable and Accurate Sources of Information and Data Gathering

Facts- help the consultant in sorting out client symptoms from client problems as well as in structuring
and organizing the problems

Internal Sources

1. People are the most important source of facts

2. Client documentations are the second most important source of facts

a. How the organization is structured

b. What the organization has been doing

c. What the organization plans to do

3. 3. A third internal source of facts important to a consultant can be termed as relationships.

Fact gathering techniques

1. Interviews

• A series of interviews with client personnel is considered the best way to zero in on problems

• It can be conducted at all levels of the organization

• The consultant should have a temperament to adjust to people and many environmental
variables

2. Questionnaire

• Should be used with great care for the purpose of fact finding

• Best used when the persons from whom the consultant wants information are physically removed
and travel is prohibitive or when numerous persons are to be asked and the facts to be so
determined are verifiable from other sources

3. Observation

• Facts can be gathered by observing the employees of a client perform their job-related duties

• The technique of observation is useful in gathering facts prior to an interview, in verifying

statements made during an interview, and in ascertain relationships between individuals.

4. Document Gathering

• source documents, work sheets, reports, etc

• Efforts in gathering facts during interviews and observations can often be enhanced if copies of
documents have been gathered and are in hand

5. Charting
 • Fact-gathering technique that provides a pictorial representation of a dimension of the client’s
organization or of its activities

Under charting:

Organization chart

- provides facts concerning reporting relationships, quantities of resources, and levels of

authority and responsibility within the client’s organization

Data flow diagram-

-logical view of data flows through a system

System flowchart

-depicts an overall view of a system in terms of major elements such as processing

programs or runs, files, inputs, and outputs

Detail flowchart

- graphically represents the logic of a process

Decision table

-a viable alternative to a detail flowchart, since it portrays a situation involving logic

Data Analysis and Diagnosis

Most consulting engagements need to apply a variety of fact analysis techniques.
Four representative approaches to analysis:
1. Decision-Level - Depicts the varied interrelationships among the decisions made throughout
the segments and levels of organization
Begins with interviewing client managers and focusing on resources in order to:
I. Categorize resources into major tangible and intangible resources
II. Identify the resources required at each decision level
III. Ascertain specific items of information and their sources, needed to make
decisions regarding the resource requirements.
2. Input/Output - The analysis of a problem situation in terms of its inputs and outputs.
3. Structured - Analysis of the functions and sub-activities of an organization in order to gain a
clear understanding of inputs, processing and outputs.
• Analysis started from the highest to the lowest activity level
• Large functions are subdivided into smaller functions until the lowest activity level is
identified
• The resulting structure looks like an upside-down tree that looks like an organization
chart called a function diagram
4. Unstructured - Employed to counteract limitations of structured approaches such as difficulty
in application and
stifling of the consultant’s creativity
Two types of unstructured approaches
a. Brainstorming – free flow of ideas from group members which are later sifted to find
the best suggestion
 b. Delphi Approach – obtaining opinions of managers concerning issues and making a
consensus of these opinions.

Creative Approaches to Analysis

Importance of Creativity and Innovation
• The growth of information has changed the way managers approach their tasks.
• Because of this, managers’ jobs became more complicated because they need to learn how
to store and manipulate more data needed in order to make effective decisions
• Consultants need to turn this information into valuable decision-making knowledge by being
able to adopt an appropriate analysis strategy.
Analysis Strategies
Six examples of analysis strategies:
1. Categorization 4. Association
2. Classification 5. Correlation
3. Numerical Analysis 6. Causation
Categorization
Data, facts, and items are sorted into different groups by virtue of their features.
Notable Examples:
- SWOT analysis
- PEST (Political-Economic-Sociological-Technological) model
Classification
Similar to categorization, but sorting is based on analysis of external criteria rather than
by arbitrary features.
Example:
Porter’s Generic Strategy Model
Numerical Analysis
Any technique where numbers are combined in order to understand how they relate to
each other with the use of equations
Examples:
Financial Analysis – use of profitability and liquidity ratios to assess performance
of an organization
Statistical Analysis – use of more sophisticated formulas in a wide variety of
business situations

Association
- The recognition that two things are connected in some way.
- If two things are associated, considering one thing is made easier if another thing is
concerned at the same time.
Examples of associations:
- Competitors and a strategic group
- Products and their substitutes
Correlation
More precise than association; recognizes that a variation in one variable occurs in step
with another variable. It uses a correlation co-efficient to indicate a correlation between
variables. Suggests only a casual link but does not prove it.
 Causation
Explains correlation by the cause and effect link between two variables. An important
insight for management because being able to control the cause will also automatically
mean being able to control the effect.

STAGES OF MANAGEMENT CONSULTING ENGAGEMENT

Negotiating the engagement

Stage where the CPA and the client discuss the proposed professional consulting services.
Both parties decide whether or not they want to engage with each other.

Steps necessary to assess this:

 Ascertain the real problem and what is required to reach a solution.
 Identify the end product of the assignment.
 Agree on the role to be performed by the CPA.
 Agree on the basis for establishing billing fees
 Confirm understanding in writing.

Proposal letter
 An advisable first step in MAS engagement
 A written communication between the CPA and the client setting forth the terms and conditions.
Purposes
 To minimize misunderstandings
 To assist in better administration of the engagement

This will generally include

 The objectives and benefits of the engagement
 The scope of the work and role of the CPA
 The approach to the study
 The project organization
 Fees and billing arrangement
 Firm qualifications, where appropriate

Engagement planning
After the proposal is accepted, a detailed work plan is developed which will become the blueprint
of the remainder of the project.

Contents of the work plan

 The objectives and description of each task to be accomplished
 A description of the tangible output required at the completion of each task
 A list of manpower required
  A list of the personnel assigned
 The starting and completion dates
 Project costs

Objectives of the work plan

 Provides a means for arranging, distributing and assigning responsibility for various segments of
an engagement.
 Provide a means of control for determining whether all segments of the engagement have in fact
been completed.
 Provide the framework for reporting progress of the engagement.
 Facilitate time and efficiency control over personnel assigned to the engagement.
 Assist in an engagement review by a partner or a supervisor.
 Provide the basis for estimating fees.

Conducting a Consulting Assignment

Stages of Problem-solving Process

 Problem identification and desired outcomes
 Identification of suitable and accurate sources of information and data-gathering
 Data analysis and diagnosis
 Solution selection
 Preparation and presentation of the report and recommended solution
 Implementation of recommended solution
 Follow-up evaluation of the implemented solution

Problem Identification and Desired Outcome

“A problem is said to exist when the observed behavior of a system or process violates the bounds of
reasonable expectations.”

Requires the existence of the following factors:

 Human awareness of the problem
 Predefinition of the allowable tolerances, and
 Recognition of the established standards

Problem definition phase

Begins with the initial recognition of a symptom pointing to a problem and ends with the complete
problem description.

Key facets:
Identity of the problem
 “What is the problem?”
the final answer to this question will emerge only after completing two procedures namely:
1. problem finding, and (e.g. operation of standard cost accounting system.
2. problem stating (the formulation of a comprehensive and valid statement of the
problem)

The consultant should also be aware of and avoid pitfalls in identifying the problem such as
 Mistaking symptoms for the underlying problem
 Accepting without question the opinion of others concerning the problem
 Assuming that the problem is a person rather than the behavior or nonbehavior of people
 Assuming that the person who reports the problem is the cause of the problem
 Overlooking the multicausality of problem

b. Objectives of the problem solving process

The desired outcome is generally the objective of the problem solving process.
“To improve the deliveries of goods so that by the end of the year 99.5% of all deliveries are made
on time”
c. Scope of the problem
A clear statement of problem scope should suggest the extent of the needed response or solution to
the problem.
d. Intensity of the problem
The intensity refers to the degree of difficulty or adverse effects they bring to interested parties.
e. Time dimensions of the problem
Answers the following questions:
“How long has the problem existed?”
“How much longer is the problem likely to continue if left unsolved?”
“How often is the problem likely to occur in the future?”
f. Location of the problem
The focus of the problem is the geographic point or points where it occurs.
g. Human elements of the problem
e.g. attitude of involved managers and employees, training of involved managers or employees
and etc.
h. Support system surrounding the problem
Elements that comprise a support system should be identified in the problem statement together
with an analysis of their functional or dysfunctional effects upon the problem
i. Tracking systems related to the problem
j. Institutional process for managing the problem
An institutional process for managing the problem in the organization may be formal and
informal.
CHAPTER 8 (continuation of Chapter 7)

D. Solution Development
1. Generation of solution alternatives
2. Evaluation of solution alternatives
3. Choice of preferred solution alternative
4. Detailed development of the selected solution

1. Generation of solution alternative

First Step – generate and thoroughly search for solution alternatives
Approaches:
a. Pattern recognition and matching approach
- Emphasizes experience
- Those having very similar characteristics to the problem
b. Brainstorming
c. SCAMPER Approach
- Substitute, Combine, Adjust, Magnify, Put to other uses, Eliminate and Reverse
d. Delphi Approach
- Experts are individually polled for ideas
- Ideas are summarized and presented to each participant
- Participants reviews feedback
- Consultant polls again the experts to establish collective responses
- Responses are stabilized then summarized
- Presented as refined ideas of collective experts

2. Evaluation of solution alternatives

Second Step – Once alternative solutions are identified, they must be evaluated to determine the
most preferred solution
EVALUATION – BE BASED UPON A SITUATIONAL FEASIBILITY ANALYSIS
2.1. Compare alternative solutions by means of established criteria
2.2. Criteria be represented with QUALITATIVE AND QUANTITATIVE FACTORS chosen by evaluator
2.3. An alternative solution that does not represent IMPROVEMENT over existing situation may
immediately be eliminated
Areas of Consideration each alternative solution may be analyzed:
a. Economic Feasibility
- Analysis of a project's costs and revenues in an effort to determine whether it is logical
and possible to complete.
b. Operational Feasibility
- Usability of each solution alternative in the environment and for persons for whom it is
intended
c. Technical Feasibility
 - Concerns the adequacy of the existing state of technology to meet requirements of each
solution alternative

d. Scheduling Feasibility
- Determine if alternative solution can be rendered operational by a specified time or date
in order to achieve certain objectives or avoid certain consequences
e. Legal Feasibility
- Ability of each alternative solution to meet legal requirements imposed by outside
authorities
f. Other evaluation factors
- Simplicity, Flexibility, Adaptability, etc.

3. Choice of preferred solution alternative

GENERAL RULE:
“Choose the alternative solution that yields the best fit value relative to the established criteria.”

Approaches in an Environment of Certainty

- Only one event therefore a single outcome for each action
- When event is certain, there is a 100% chance of occurrence
- Probability is 1.0

2 approaches in choosing alternative in this environment:

a. Optimizing Approach – mathematical approach like linear, inter, and dynamic
programming
b. Satisficing Approach – search among alternative solutions for any solution that
satisfies desired performance criteria
Approaches in an Environment of Certainty
- Decision approaches are not so refined since
- It does not provide sufficient information to assign probabilities to the future states of
nature
- SO they can only reflect personal attitudes concerning one’s WILLINGNESS TO ACCEPT
RISK

Approaches that may be used in this environment:

a. Maximin Approach – downside protection to insure survival
1. Identify worst outcome under each alternative
2. Choose alternative with greatest worst outcome
b. Minimax Approach – reflects an attitude of regret avoidance
1. Compute maximum opportunity loss associated with every alternative
2. Compute alternative solution that minimizes the maximum summed-up
opportunity cost
c. Maximax Approach – optimistic attitude of accepting a high degree of risk in order to
maximize the return
1. Identify best outcome that can occur in an alternative
2. Choose alternative with the best outcome
d. Rationality Approach – assumes that in absence of available information, each state
of nature has an equal probability of occurrence
 1. Apply equal probabilities to outcome associated with respective states of nature
2. Choosing alternative having highest expected pay off

Approaches in a Risk Environment

Approaches that may be used in this environment:

a. Expected Value Calculation
1. weighting outcomes by probabilities of occurrence
2. add up weighted outcomes to obtain expected value of payoff for each alternative
3. choose alternative with highest payoff
b. Decision Tree Approach
Suitable to problem situations in which a series of sequential decisions must be
made
c. Monte Carlo Simulation Approach
Used in complex situations where analytical methods cannot be applied.
d. Other risk environment approaches
Based on queuing theory and game theory; seldom applied

4. Detailed development of the selected solution

 Implementation be carefully planned in order to maximize required time and costly
mistakes
 Design team members be carefully selected on the basis of their proficiency in technical
design, skill in attaining management involvement and understanding users’ perspective
 Involves designing of: outputs, inputs, conversion process, resource and data bases, and
organization
 Involves also the employment of sound design and project management techniques
GUIDELINES FOR SOLUTION DEVELOPMENT
1. Selected solution should be directly related to the objectives that the client desires to achieve
2. Maintain a comprehensive view of the problem situation and how it relates to overall
organization. Always focus on the key issues and concerns.
3. Search for all the important relationships involved in the situation.
4. Employ systematic procedures and methodologies while maintaining an openness to creative
insights.
E. Preparation and Presentation of the Report and Recommended Solution
 Solution presented in a PERSUASIVE MANNER if consultant expects to obtain client’s
acceptance of recommendation

Some guidelines in presentation of recommendation:

1. Presentation be made orally together with audiovisual aids and a written report.
2. Facts and arguments should be presented clearly, concisely, and in a nontechnical
manner.
3. Do not overwhelm client with too much details and unnecessary discussion of data
analysis techniques.
4. Be ready to discuss significance of any gathered facts and purposes of techniques
used.
 5. Discuss information concerning the risks and difficulties in implementing the solution.
6. Interim presentations and written reports should be made throughout the solution
development phase. These must be given to client at completion of each step.
F. IMPLEMENTATION
 MAS Review or Study
results in RECOMMENDATIONS
require development and adoption of plans for new programs or systems
making revisions in existing programs or systems
 What CPA should/may do
Evaluate client's capacity to develop and carry out plans
Recommend that a client hires additional qualified personnel

-CPA has no responsibility in making management and policy decisions

-CPA cannot exercise absolute administrative control of client personnel

IMPLEMENTAION PHASE
Work plan
Controls
Personnel
Physical facilities
Standard and Documentation
Evaluation

Follow-up Evaluation of the Implemented Solution

conduct post-implementation evaluation after solution implementation
prepare written documentation of the evaluation

Example: Information system

actual performance vs. expected performance
details of implemented system vs. documented design
potential improvements
means of improving system development methodology

Three qualified personnel to conduct the evaluation

1. special audit team from the managers of the organization
2. internal audit team
3. external team of consultants
Specific areas to focus in review and evaluation
ECONOMICS
ACTUAL VS. EXPECTED
benefits and costs benefits and costs developed
of new system in system design phase
OPERATIONS
actual use by the intended users of the implemented system
FUTURE PERFORMANCE REVIEW
identification of potential improvements to the system and estimate effort required to
implement improvements
Evaluation of the Engagement
-necessary to achieve improvement and refinement in the quality of future advisory services

Evaluation covers the following:

1. Proposal
Were specific problems with the client encountered which might not have arisen if the problem area had
been adequately covered in the proposal letter?
Did the proposal letter recognize all requirements of firm policy in establishing the engagement?

2. Engagement Program
additions to or deletions from the planned scope
skill level of personnel utilized is commensurate with requirements of the phase
utilized techniques performed or not in accordance with firm policy

3. Work Program and Schedule

determine if actual duration differ from plan, state opinion as to reasons of deviation
state the reason why dates of interim reports or engagement completion not in accordance with client
agreement

4. Source Data and Documentation

oral or written recommendations supported with evidence in work papers
specific respects in which organization or content of work papers not in accordance with standards of the
firm necessity to do additional work or to contact client for additional information before making a final
report

5. Reports
progress meetings held
errors of fact in interim or final reports
recommend changes in report content, format or style

6. Results
recommendations accepted by client or not
degree of satisfaction expressed by client
reason for expressed or implied dissatisfaction of the client
any additional services requested by client
Post-engagement Follow-up
Problems in programs and systems arise after implementation due to:
change in operating conditions
faulty design