Analysis of Project Management Tools and Techniques

This assignment provides a detailed examination of the application of project management tools and techniques in Information and Communication Technology (ICT) Small and Medium-sized Enterprises (SMEs). It includes various research papers and case studies from Western Cape, focusing on SME succession planning, knowledge loss assessment, people-process-technology (PPT) application models for risk management, business network approaches, barriers to agile methodology implementation, filtered big data for knowledge management, and pragmatic security modeling. The assignment aims to facilitate a deeper understanding of project management in SMEs and its impact on competitiveness.

MANAGING AND
RUNNING A SMALL
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1) Main considerations a small business or social enterprise needs when planning and
allocating resources................................................................................................................1
TASK 2............................................................................................................................................3
P2 Explain and evaluate different processes of customer relationship management for a small
business or social enterprise...................................................................................................3
P3) Way of small business can develop transnationally benefits and drawbacks..................4
TASK 3............................................................................................................................................5
P4 Produce an annual itemised monthly cash flow forecast showing fixed and variable costs
set against income for a specific organisation........................................................................5
P5 Explain how break- even analysis could be applied to an organisational situation..........8
P6) Interpretation on key financial statements for an organisation for contribution in
successful management..........................................................................................................9
TASK 4..........................................................................................................................................14
P7 Key legislation and regulations which have major implications on small business
companies.............................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Being a business owner, an entrepreneur needs to develop various intellectual ideas
through which organisation can run in efficient manner. Employers are required to plan activities
of business which include identification of resources, capital utilisation and management, job
specification and more. In addition to this, they should set a proper vision, mission and
objectives of company so that people associated with them can understand and support in
achievement the same. Thus, this assignment focuses more on how entrepreneurs transfer their
idea into business and develop effective relationship with consumers (Durst, Yip and Lee, 2015).
Along with this, it also showcases some business activities like planning and allocating
operational resources, forecasting & budgeting, interpreting key financial statements, recruitment
& selection of employees etc. In this regard, Wiser Company is taken in report. It is a
consultancy company of UK which specialises in giving recruitment to young people. This firm
is led by Fin O'Kane and situated in London.
TASK 1
P1) Main considerations a small business or social enterprise needs when planning and allocating
resources
As in today's modern world, every entrepreneur wants to open outlet in highly populated
area so it requires to develop new and innovative ideas first. It would help them in opening
business and gain attention of customers towards products or services in an efficient manner. In
starting process, such firms are generally established on small scale but by developing innovative
ideas they rapidly expand their business in various locations. In general, main motive of such
companies is to earn higher profitability (El-Rafei and et. al., 2017). This would aid a nation in
improving its economical condition too. Therefore, Government support entrepreneurs in
launching small business by providing them sufficient funds on reasonable rate of interest. In this
regard, Wiser is a small consultancy company in United Kingdom which provide job to young
people. It has provided a calmly environment where creativity meets recruitment for building and
transforming employer brands. Various partners of world's best brands are associated with this
firm such as Worldpay, Just Eat, Expedia, Sky Betting and Gaming etc.
In order to expand business and increase growth of company, entrepreneurs of this firm
are required to develop a proper plan. In this regard for developing such a plan and planning or
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allocating resources, it is required by employers to concern on some major factors through which
functions of business can be carried out in an efficient manner:-
Financial resources: It is the main factor which every company whether small or big
requires to consider first before making a plan. Finance is required in each and every sector of an
organisation as without proper money, functions of business cannot operate in desired manner.
Therefore, a firm like Wiser which is a small consultancy required to arrange efficient funds.
For this process, they can take loan from banks or other financial institutions. In addition to this,
after getting proper fund, employers are needed to allocate the same in various departments in an
appropriate manner. They should keep an eye on every transaction of business so that
expenditures can be controlled and save money for future usage.
Human resource and their skills and qualities: For carrying out functions of business, it
is required by managers of an enterprise to recruit best candidates in workplace. Without skilled
and qualified workers, a company cannot achieve its success in a predetermined time. Therefore,
workers in an industry are considered as most valuable assets. So, it is required by such firms to
provide benefits and compensation to them in an efficient manner. In this regard, management of
Wiser Company use to recruit eligible and fresh candidates in workplace who have possessed
high skilled, abilities as well as capable to understand requirement of other companies and
complete the same on time (Javaid and Iqbal, 2017). Giving chance to inexperienced people aids
this firm in getting their fresh and unique ideas so that innovation in products and services can be
created. In addition to this, this enterprise provides them necessary training at the time of
recruitment so that they become able to work in desired manner.
Goals, vision and targets: Every firm requires to set proper goals and objectives so that
management can evaluate in what manner they have to work to achieve the same. In addition to
this, they should provide proper guidelines and direction to workers so that they can support
enterprise in accomplishment of achievable target within set period of time. In context with
Wiser Group, it mission statement “To achieve profitable and manageable growth of business by
delivering high quality IT services and qualified employees in established companies”. Along
with this, its vision statement, “To be able to deliver high quality solution and meet expectation
of customers as well as to be renowned as having the greatest level of knowledge and
competence in own field”.
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Wiser Group is built on some values also which includes being real, smart and backing
own as well as taking ownership. Therefore, for achieving this target and carry business with
such values, its management uses two essential tools which are help in planning and allocating of
resources also. It includes Critical Path Analysis and Gantt Chart which further help in designing
a proper action plan also. Concept of these tools is explained in following manner:-
Gantt Chart: This technique is used by every business enterprise in order to set time of
different activities included in a particular project. It is type of bar chart which illustrates a
project schedule by giving a time framework of various tasks (Ludmila and Stanislava, 2015).. It
also illustrates the start and finish dates of list of tasks by representing activities on vertical axis
and time interval on horizontal. Thus, this tool is helpful in boiling down multiple activities and
timeline into single project.
Critical Path Analysis: This tool is used by many small and large companies in order to
stay on track and budget of a particular project (Cojoacă, 2017). It helps in measuring the time
taken in completing a project. Thus, through this technique managers can determine which tasks
have taken much time and so that they can manage duration of other activities in a proper
manner. It will help them in completing a project in given period.
TASK 2
P2 Explain and evaluate different processes of customer relationship management for a small
business or social enterprise
Every company seeks to get attention of large number of customers towards its services
and products. For this process they use various techniques in order to serve best services
(Chauma, 2017). This will help them in achieving growth and success of business in an effective
and efficient manner. It includes conducting proper research so that they can determine new
trends of marketplace and demands of consumers. In this regard, employers of a firm like Wiser
Company are required to concern on CRM (Customer Relationship Management) and CSR
(Corporate Social Responsibility). CRM is considered as an important tool or a strategy through
which employers of a firm can interact with customers easily and develop an effective
relationship with them. This tool aids them in making good communication as well as
understanding desires of consumers also in a better manner. In addition to this, such type of
management helps entrepreneurs in getting retention of loyal customers for long-term
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profitability of business. In context with Wiser Company, managers of this firm also use to
conduct business with ethical consideration and CSR activities. CSR activities define a process
of making proper decision by considering ethical needs of employees, their family members as
well as area where they live (Nowotarski and Paslawski, 2015). Providing welfare to workers
helps in improving condition and society too. CRM technique includes various procedures which
can be explained as below:-
Customer portfolio analysis: This type of analysis aids a firm in evaluating behaviour
and standard of consumers. They can identify purchasing power, status and lifestyle of people so
that employers can judge they need to target. Through this, they can manufacture and provide
services as per requirement of targeted audience.
Customer intimacy: This kind of strategy is used by employers to get close to targeted
clients. By getting closed with customers, an enterprise can develop good relations with them as
well as improved their services. This would also help them in getting reviews of people so that
necessary changes can be done in business and complaints of them can be solved in a limited
period of time. It will aid such companies in acquiring retention loyal customers by solving their
problems in an efficient manner.
P3) Way of small business can develop transnationally benefits and drawbacks
Transnational sales is considered as an important techniques used by employers of small
business like Wiser Company to sale products in foreign market place. This would also help
them in evaluating current position of them in a particular market as well as performance of
business too. Therefore, by determining actual position of business as well as sales performance
small business owners can take appropriate measures in increasing productivity. It includes
proper business plan, strong strategies and policies as well as various activities (O’Connor and
Kelly, 2017). As translational sales is used to summarise concept of coordination and
opportunities of international marketplace in a single way so, it would help employers in
determining demands of customers living at different place and belongs to different cultures in a
proper way. For example- Wiser Company has made a contract with Delta Capita to offer
candidates in big industries (dealing in construction sector) in the ratio 55:45. For this process,
managers of both companies has launched a joint venture for a year at Devonshire Square
London, UK. Along with this, both organisations has employed near about 8 to 10 employees
over there. Since both enterprises are dealing in small sector, therefore, to introduce sufficient
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amount of capital in new venture, they have taken loan from Barclays Bank of London on fixed
rate of interest for three years.
But adopting this technique, a firm gets various problems and benefits too which can be
explained as:-
Advantages:
 Translational sales help a firm in taking their business on next level and acquire a good
position at marketplace. In addition to this, it gives various opportunities to managers of
small businesses to take decision in independent manner so that problems can be resolved
in quick manner. Selling goods and services in new marketplace or in other countries aids a firm to
increase sales performances and get a higher profitability in business.
Disadvantages:
 In order to expand business at international level, an entrepreneur is required to concern
on many factors like developing proper strategies, arranging resources as well as prepares
various documents. So, it will consume lot of time as well as a complex procedure for
small business owners.
 In translational sales, enterprises are required to sell goods or services in domestic as well
as foreign marketplace. This would demand them to arrange necessary finance and
resources. So it would directly impact on budget and financial performance of business.
TASK 3
P4 Produce an annual itemised monthly cash flow forecast showing fixed and variable costs set
against income for a specific organisation
Cash Flow Forecast is a kind of plan which reflects how much income a company has
expected to be received in and paid out during an accounting period. Generally, entrepreneurs
used to make a proper plan first which includes how much money is required to carry out
functions of they expect to earn by sales. In addition to this, it also shows money required for
purchasing equipments (Parkin, Fielder and Ashby, 2016). Thus, through cash flow forecast
Wiser Company can estimate finance required in business and make necessary arrangements.
Along with this, its management can keep track of cash flow in business and control over
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expenses. In this regard, some of the major sources available at marketplace from where they can
get required funds are explaining as beneath:-
Equity Finance: This type of financing is a procedure of raising funds by selling shares
in an organisation i.e. to sale of interest of ownership to raise capital. For small enterprises, there
are various ways like financing capital from family or relatives, venture capital, royalty financing
and more.
Bank Loan: It is a traditional and most approachable way of sourcing fund in which
small organisations can get desired capital by taking loans from commercial and private banks on
a fixed rate of interest which they have to pay in given period of time.
Budgeting, planning and forecasting: These are the three major important pillars used in
recognising trends of future. This process also aids a firm in determining long-term plans, mid-
term budgets and short term forecasts. These would help in making sure that financial targets are
covered on time, strategic objectives are achieved and more (Skolud, and et. al., 2016). In this
era, planning refers to align resources and capital with strategy as well as to measure
performance. While through budgeting, entrepreneurs can ensure accountability and execute
strategy. On the other hand, by forecasting they can adjust finance and other aspects so that
future requirements can be met. In this process, managers of Wiser Company has used following
techniques for forecasting, planning and budgeting:-
Measure moving average: This method is used to achieve an overall idea of trends in a
particular data. It is majorly used in forecasting long-term trends of a company.
Time series data or information: It has provided various applications for manufacturing
enterprises to set up and streamline production schedules. This would help in executing a plan at
estimated budget.
Balance Sheet, cash flow statement, profit and loss account of Wiser Company:
Year 2017 (value in £) 2018 (value in £)
Fixed assets 120 220
Stock 30 45
Debtors 80 65
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Bank 30 35
Total 230 340
Creditors 130 150
Services in hospitality,
education, business,
healthcare, state/local, and
GSA.Bank overdraft
80 50
Total 670 905
Working capital 30 80
Profit and Loss Account at the year ended
2017 2018
Sales 40 60
Cost of sales 20 17
Gross profit 20 43
Overheads 8 9
Net. Profit 12 34
Cash flow Statement
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Cash budget for the year
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Beginning cash balance 28000 30250 31550 29650 28750
Budgeted cash receipts 13400 37550 64690 92370 118170
Total cash available 41400 67800 96240 122020 146920
Cash distributed
Direct material 1500 1050 1650 1500 1550
Direct labour 1300 660 850 850 680
Overhead 500 650 630 700 670
Selling and distribution 550 750 740 800 760
Total cost use 3850 3110 3870 3850 3660
Cash surplus/ deficit 37550 64690 92370 118170 143260
P5 Explain how break- even analysis could be applied to an organisational situation.
It is a most beneficial method used by various associations for determining a relationship
among cost, revenue and profits at various level of output (Ali and Babiker, 2017). Through
Break-even analysis entrepreneurs can evaluate on which point of production their revenues
becomes equal to costs. So, iervices in hospitality, education, business, healthcare, state/local,
and GSA.t is also termed as profit contribution analysis. In addition to this, BEP can be applied
under two major conditions in an organisation that are Linear cost & Revenue relationship and
Non-linear & Revenue relationship. Thus, based on both methods a firm can apply this analysis
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by using various methodologies that are Graphical, Algebraic methods, Profit volume ration and
Contribution analysis.
(Source: Break-even Point, 2018)
In context with Wiser Company, its managers has used Algebraic method which helps in
making decision regarding to complex situations. According to this method, break-even quantity
of output can be determined by TFC (Total Fixed Cost), P (Price) and AVC (Variable costs per
unit of outcomes).
Qb = TFC/ (P-AVC)
For example: variable cost is 9 per unit, fixed cost is 40,000 and selling cost is 18, then Break-
even point is measured as:
=40000/(18-9)= 4444.45
P6) Interpretation on key financial statements for an organisation for contribution in successful
management
It is necessary for small enterprises to track financial data in an accurate way which is
crucial for running day-to-day operations. Keeping an eye on every sort of data related to cash
transaction aids a firm in seeking funds from investors so that business can be moved on higher
level. In addition to this, it would also helps in ensuring if products or services are offering on
right price as well as determining cash flow so that taxes can be filed easily. Generally, three
basic statements of finance are important for a company like Wiser. Concept of these statements
can be explained as:-
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Illustration 1: Break-even Point

Balance Sheet: This statement shows a snapshot of overall financial performance of a
firm. It summarises two main components as assets that are liabilities and owner's equity. In this
manner, liabilities can be divided into short-term and long term liabilities. Taxes, payable
accounts and more are termed as short-term liabilities while bank loan is considered as long-
term. On the other hand, owner's equity is defined as capital introduced in business or retained
earning. Thus, by keeping all records of transaction help in balancing liabilities and assets of
balance sheet in a proper manner (Stanciu, 2015). Therefore, through this statement investors of
Wiser Company can take important decisions which are related to how much finance is required
to invest. As per mentioned balance sheet of Wiser Ltd., of year 2017 to 2018, it has interpreted
that in current year, fixed assets' value has increased from 120k Pound to 220k Pound.
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Profit and loss statement: This kind of accounting tool is also referred as income
statement which summarises costs, revenues and expenses covered in a financial period of time.
It shows a firm how much business has incurred net profit or loss during an accounting period.
It displays revenues and losses after deducting all kinds of expenditure from income. As every
business owner seeks to get high profitability so P&L statement shows them the extent on which
they have incurred success in achievement of targeted objectives. As per mentioned P&L A/c. Of
Wiser Company, it has interpreted that in year 2017, the approximate sales of this company is
40k Pound. It has increased to 60k in current year so, it shows that products or services of this
firm are now in demand which aid to generate high profitability ratio as well.
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Cash Flow statement: This accounting statement highlights total amount of cash is
coming in business and going out too i.e. a description of Cash Inflows and Outflows. Purchased
machinery, paid expenses, inventories and other payments are considered as Cash Outflows. It
shows the way of changes in balance sheet account affect cash equivalents. Thus, through this
kind of financial statement, a firm can determine if business is able to cover payroll and other
necessary expenses. According to given cash flow statement of Wiser Company., it has
examined that in beginning Quarter, near about £28000 cash was available which has increased
to £143260.
Profitability
Ratio
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Net Profit
Margin
(Gross
Profit/Net
Sales)*100
2017 2018
Gross Profit 20 43
Sales 40 60
Net Profit Margin 50
71.666666
6667
Return on
Asset
Net
Income/Tot
al Assets
2017 2018
Net Income 12 34
Total Asset 230 340
ROA
0.0521739
13 0.1
Liquidity
ratio
Current Ratio
Current
Asset/Curr
ent
Liability
2017 2018
CA 140 145
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CL 210 200
Ratio
0.6666666
667 0.725
Quick Ratio
Quick
Asset-
Current
Liability
2017 2018
CA 140 145
Inventory 30 45
Quick Asset 110 100
CL 210 200
Quick Ratio
0.5238095
238 0.5
According to above calculation, profitability ratio reflects the final outcome of Wiser
company from year 2017 to 2018. This ratio has increased from 50 to 71.67. Similarly in context
with total assets and liabilities, in 2017, it value was 230k Pound which has increased in 2018 to
340k Pound. While in terms of liquidity ratio, which states the current ability of business that
whether it meet financial obligations or not. Thus, in this regard, liquidity ratio of Wiser raise
from 0.6 to 0.7 therefore, it shows high growth rate of this company.
TASK 4
P7 Key legislation and regulations which have major implications on small business companies
Every enterprise which is running either in small of big sectors are needed to follow some
legal and regulatory laws enacted by government in which it has registered. Various types of
issues are applicable for firms like record keeping, health and safety, insurance, measures of
cyber space security and data protection, insurance, tax and employment etc. Some of regulatory
issues faces by small business companies are environment and waste regulations, local planning
14

restrictions, professional practice guidelines and more (Van Scheers, Botha and van Scheers,
2018). In UK, government has made various laws which are amendable for all organisations
based on different types, products or services. These laws affect business in a larger manner,
therefore, entrepreneurs are needed to concern more on the same while planning their activities.
It includes majorly following laws that are:-
Employment Law: This regulation has made to protect employees from discrimination
and given them various types of benefits while working in an industry. It is necessary for
employers of every firm like Wiser Company to ensure that workers in their business are treated
fairly and equally. They should give proper wage to employees as per position of them in
company. This law also assist associations to amend leave, redundancy and termination of
employment, pension and insurance plan etc.
Consumer Law: For gaining retention of customers for long term profitability, a firm
requires to comply business with consumer law. Some consumer rights are Sales of Goods Act
i.e. products or services given to people are of high quality, fit for purpose and properly labelled.
In addition to this, if a company provides online services for selling its commodities then they
should follow distance selling regulations also (Winarno and Wijijayanti, 2018). According to
this, as a service providers they must provide some necessary information to customers such as a
description of goods with price, details of delivery, name and contact number of own,
cancellations rights etc. This would help consumers in placing their orders in a proper manner.
Competition Law: According to this law, firms having same products or services in a
marketplace are required to offer the same on similar price rates. This rule helps in preventing
some business practices like offering good on lowest price to gain attention of customers or
unfairly reduce choice etc. So, it is necessary for all small companies to offer their commodities
on fair price rates.
CONCLUSION
It has been concluded from this above assignment that entrepreneurs are required to make
proper research of marketplace. This would help them in generating innovative and better ideas
through which they can transform the same into business. In addition to this, before launching an
outlet in small sectors, business owners are required to focus on some major areas also like
requirement of finance, human resource, machineries and more. Other areas in which they need
to concern more on developing strategies like customer relationship management so that they can
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make proper interaction with consumers. Along with this, government of a nation is needed to
support small business employers in opening their business also. As these companies are helped
them in giving much employment to local citizens so that standardisation of society can be
improved.
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