Feasibility of Pressure Hydraulics - Case Study Example

Accounting Assignment 2 Name Course Institution Date Feasibility Study of Pressure Hydraulics Executive Summary Pressure Hydraulics has had several challenges within its system. In as much the business has managed to remain profitable, poor management systems have derailed its progress. The owner is committed to transforming it and ensuring that the company moves into a completely new dimension of growth. This report has been prepared as a feasibility guide to evaluate the challenges facing the company and recommend what is considered as the best way forward for the company. All the issues facing the company have been dissected in line with the available possible solutions. The various proposals on the best technologies that can be used to transform this company have been provided. It is the role of the owner to choose what is deemed the very best for the organization under prevailing circumstances. Description of the Problem Pressure Hydraulics is a company that is on its course to growth. Nevertheless, there are many factors that the company ought to overcome in order to attain the desired level of output. In essence, most of the issues facing the company relates to information systems. The various transactions and processes in this company ought to be effectively facilitated through adoption of the required information systems. Seemingly, the use information systems will greatly influence the company’s expansionary plans. This will enable the company not only maintain the current profits, but also venture into new markets profitably. Lack of information systems has meant that the owner spends somehow equally-apportioned time to each outlet (Laudon& Laudon 2013, p. 265). This is time consuming indeed. Manual updating of price quotes to the customers can never be efficient. Chances are very high that inaccurate quotations may be given to the customers. Another challenge with the current system relates to recording of bookings by customers manually. This particular method compromises the accuracy of the information details recorded. As a result, problems to do with overbooking have been recorded. At the same time, misinterpretations have also been reported as a result of this recording style. Another problem that has been noted with this company’s existing system relates to price quotations to the customers. The manual system has proven ineffective in nature. In most cases, there have been noted some variances between the claimed price by the customer and what the real price is supposed to be. This at the end of it compromises customer satisfaction of service delivery. Moreover, tracking payments for services offered especially for outside services has also been found to be very poor. In most cases, the manual recording of such transactions compromises the authenticity of the process. The company may end up losing a lot of money in the case where scrupulous employees are involved. The issues affecting service delivery at Maitland points to the laxity in relation to transaction processing and service delivery to the customers. At this specific outlet, the nature of services required by the mining companies does not give room for delays. Having considered this, the fact that there is no repeat business with the mining companies show that poor service delivery has been common. Similarly, there is a problem with the payroll system of the company. The fact that the owner has to call every center to confirm the number of hours worked before preparing the payroll creates room for foul play by the employees. The authenticity of the working hours by each employee cannot be verified at all. Through this, the company may end up losing a lot of funds to ghost work. Solution Objectives The section describing the problems has clearly elaborated the various issues that this company must overcome before achieving its investment goals. The potential of this business has been noticed based on the current operations. The laid down goal of venturing into new markets is a sign of growth to this company. Therefore, the company must design clear objectives to guide it in dealing with the current issues. In order to attain this, the company must ensure that feasible options have been selected to drive the company’s new investment goals. The ultimate goal of all the objectives is to ensure profitability of the company is greatly improved. Using fewer resources to harvest superior profits is the underlying goal of these objectives. For the new outlets that the company has identified, it must be in position to effectively break even and start making profits in the shortest time possible. In order to attain such goal, the following are the solution objectives that can be used by Pressure Hydraulics: To implement a payroll system that will ensure that money paid out to employees is equivalent to their work input To implement a management or planning information system that will enable better overseeing of transactions of the business by the owner. The owner must be in a position to know what is taking place in various centers within the shortest time possible. To ensure accuracy of records of customers placing orders for various services. There should be no variances between the services ordered by the customer and what is finally offered. To ensure price quotations to the customer is effectively updated based on the new pricing in the company’s system To ensure timely delivery services to customers especially the mining clients in order to encourage repeated business. To ensure better customer service delivery to customers. The calls of customers must be answered timely and their questions responded to as soon as possible. To ensure that proper invoicing methodologies are adopted in order to guarantee authenticity of transactions. To ensure the work done by the employees to various clients outside the company is properly monitored To ensure that the required component of work required is in stock is quickly identified Constraints The transition that Pressure Hydraulics must go through can be very demanding to the company. The company must be ready to commit the necessary resources and expertise in order to ensure that its mission is attained. Furthermore, the issue of resistance remains a critical factor as well. The employees in every organization have a tendency of resisting change. They have preference for status quo even if it is at the expense of the company. The same is also a possibility to this company. The employees may resist the proposed changes based on the fact that the new working conditions may demand a lot from them. At the same time, if the new system is going to entail information systems, the fear could relate loss of jobs since such system may take up most positions occupied by men. Moreover, as already indicated, a major constraint relates to the financial ability of the company. The company not only wants to expand, but also redesign the organization to override the prevailing challenges. This may require a lot of finances to be effectively achieved. Therefore, the company ought to ensure that it has enough financial resources to support this. In the situation where the company has to introduce various information systems in the organization, there are some challenges that come with it. Apart from such information technology systems being too expensive, the issue of compatibility also must be evaluated. It is very challenging to get information system that completely meets the needs of the organization. For an information system to be compatible with the prevailing structure of the organization, it is not easy sometimes. As a result, some organizations have been forced to suffer losses because some systems were found obsolete and outdated. Moreover, the introduction of the new system is likely to take some time. The new way of operation in this organization must be introduced on piece meal basis to ensure that the operations of the company are not interfered with during the implementation process. The company ought to ensure that customers are served with the required services throughout the transition period. In such transitions, it is not easy to witness a pure panacea of increased efficiency. Therefore, the company must be in a position to design strategies that overrides the challenges that are eminent. Development Plans In order for Pressure Hydraulics to ensure an effective system is designed, the company must seek professional counsel over the issues facing the organization. This is the only way the organization will be in a position to identify the required aspects to blend into the new organization’s functioning. Such expertise will also include information regarding information technologies that are suitable to the organization. After the possible options have been identified, the next important thing will be to ensure that the costs involved are evaluated keenly. The underlying guiding principle is that the organization is not expected to invest in an information system whose returns are lower than the investment. The company ought to make sure that the returns are reasonable in the sense that they can fully cover the initial investment and some other subsequent expenses. The company must ensure that there is proper coordination to facilitate adoption of the new design without seriously affecting the flow of work in the organization. Considering where the company is moving in relation to its expansion, there is a need to ensure that various departments are established in order to address the needs of the organization appropriately. For instance, departments like accounting and finance, human resources, marketing and sales, procurement, etc. Such departments will be more productive in dealing with the various activities in the organization. The company must divide its operations in order to ensure professionals are hired to oversee the various progresses in different departments. At the same time, the information systems that aid management of organizations exhibit unique features. For instance, there are special information systems to help in a firm’s accountancy work, employee appraisal, planning, tax, etc. With the function of each department clearly set out, it is possible to find approaches that can improve the operations on the organization. Having laid the several functions of departments, the selection of information technologies can easily follow. In line with that, there must be a feasibility study to evaluate the effectiveness of each preferred system to the operations in the organization. This will include the technical feasibility test. This analyses the ability of the system to meet the technical capability of the organization. Operational feasibility is also another arm that must be considered keenly. This handles the manpower in the organization in line with the labor requirements. Lastly, the economic feasibility calls for cost benefit analysis of the entire development plans. Such plans ought to be put in place to ensure that indeed every aspect of concern has been attended to appropriately. Possible Solutions This report has dissected the various problems facing the company so far. Having analyzed the various obstacles, it is also important to bring forth the possible solutions for these challenges. These suggestions are supposed to be perused by the management of the company and the feasible ones selected for implementation. One of the improvements required in this company is to upgrade the customer phone system. The customer care line should be redesigned in a manner that makes it possible for callers to automatically get quotations for all the predetermined services being offered by the company (Rainer, Watson & Prince 2013, p. 50). This is aimed at achieving consistency and accuracy in relation to price quotations given to customers. In relation to management of payroll in the company, Allan has wide options to choose from. Currently, there isdiverse payroll software on the market that can be of great significance to the issues facing this company. One of the common systems that are suitable to this company is use of QuickBooks. This indeed has been proven reliable especially for small and medium size enterprises (Proctor 2006, p. 360). By using QuickBooks, Pressure Hydraulics Company will be in a position to manage transactions like employee data, banking, bills, vendor data using online platform. Moreover, QuickBooks can compute sales and profitability reports. In connection to inventory control, the company should put into place inventory management measures in order to accurately monitor inventory flow. To achieve this objective, one of the reliable options for this company is ABC Inventory Software. This software is suitable for small size and medium enterprises. The program offers excellent features of purchase order management, inventory tracking and sales update. By using this program, an organization is guaranteed of constant inflow and outflow of stock in the company. Such a program allows maintenance of buffer stock in order to deal with every kind of uncertainty. More important, Allan must put in place supervision strategies to oversee the work being undertaken by workers outside the various stations. Considering the fact that the time taken for completion of such tasks is varied, it is important to put in place strategies to ensure that the quantity of work reported is what is actually done and paid for. To deal with such an issue, it is important put in place policies that requires clients to formally place orders and make payments to authorized entities only. Recommendations This report has explained the various issues that the company has to deal with as it looks forward to achieving its strategic goals. More important, various possible solutions have been provided that can aid the company to make viable decisions in relation to overcoming prevailing operational impediments. From the solutions that have been suggested, the company has a prerogative to choose what is suitable for the organization. This will be determined by the financial position of the company during the current financial period. Having made all those considerations, the underlying issue for this company is digitalization of transactions. In order to effectively compete in the current market, technology cannot be neglected at any point. The various programs that have been identified ought to be implemented by the organization. The company must introduce QuickBooks to aid in overseeing transactions related to employee details, banking and other vendor details. The latest version of QuickBooks offers even a wider range of services that will definitely benefit Pressure Hydraulics. In addition, the company ought to introduce a management information system like ERP. ERP integrates various facets of the organization to ensure all functions of the organizations are managed well (Hamilton 2002, p. 160). This is suitable to sizes of organization. The company ought to make a choice of the best module based on the needs. Another program that has been proposed is for inventory management control. This is the ABC Inventory Software. This will enable the company in tracking the flow of stock in the organization. In addition, the company is in dire need of upgraded customer care system. The system ought to be upgraded to allow better attendance to the needs of the customers. Conclusion Pressure Hydraulics is geared towards expansion. It is literally impossible to achieve the various expansion goals without embracing technology. The company must prioritize the adoption of technology in all possible areas of the organization. This will ensure that all the critical transactions are expedited as much as possible ensuring that customer satisfaction is not compromised. The areas that require automation must as well be addressed appropriately. The company ought to set a side adequate fund to drive this process to completion. The proposals that have been made in the prior sections of this report are meant to ensure that customer satisfaction is actually attained. When this aim is achieved, it becomes easier to realize repetitive business trends from customers. This may begin with the mining industry and others followed as well. References Hamilton, S 2002,Maximizing Your ERP System: A Practical Guide for Managers, McGraw- Hill, New York, pp. 158-176. Hightower, R 2008,Internal Controls, Policies and Procedures,Wiley, New Jersey, pp. Laudon, K. & Laudon, J 2013, Management Information Systems, Prentice Hall, New York, pp. 249-278. Proctor, R 2006, Managerial Accounting for Business Decisions, Prentice Hall, New York, p. 355-367. Rainer, K., Watson, H. & Prince, B 2013, Management Information Systems, Wiley, New Jersey, pp. 34-58. Stone, R.J 2013, Human Resource Management, John Wiley, New Jersey, pp. 417-488. Weetman, P 2006, Financial and Management Accounting, Prentice Hall, New York, pp. 600- 607. Read More