The Type and Nature of ARM Holdings PLC - Coursework Example

of Huddersfield International Study Centre XFX1074 The Professional Engineer Management and Financial Analysis of ARM Holding PLC by Author’s Name For: Mr. T. J. Amsdon Date: DD/MM/2014 Summary This report discusses the type and nature of ARM Holdings PLC in terms of its key customers, markets, products and operations. ARM is a company dealing in architecture of computer processors using RISC (Reduced Instruction Set Computing). ARM Holdings British Company first developed RISC architecture. RISC approach aids in significant reduction in costs, power and heat consumption. The features built by ARM are important to the design of notepad computers, tablets, laptops, smartphones, and other rooted systems. The target market of the company are in the companies building embedded systems (for example, smart meter, smart cards, IoT-Internet of Things, MCUs, automotive infotainment, and embedded computing), home appliances (for example gaming, digital TV, Digital cameras, set-top box, DVD and Blue-Ray), and mobile systems. The case study indicates various financial parameters that have improved since the inception of better project management techniques in the company operations. The organizational structure of the company describes the directors and their roles in the management of the company’s business. Main financial statements indicate that the company has realized improved profits with the implementation of project management into major business operations. The company uses direct cash flow in the presentation of its financial performance and company value. Annual financial highlights have been provided in the appendices to illustrate how the company makes use of direct cash flows. In terms of investing, the company is expanding. The number of staff and customers has significantly increased. Financing also indicate that more money is pumped into projects that increases the company composition and size. Annual reports collected from 2009 to 2013 financial years will help inn understanding the financial performance of the company and how the company is positioned to realize further improvement in service to satisfy all stakeholders. Contents Summary 1 1 Introduction and Background 3 2 Aims and Objectives 5 2.1 Planning and Scheduling 5 2.2 Management of the Project 7 3 Critical Literature Review 7 4 Case Study 8 5 Discussion and Conclusion 9 6 References 10 7 Appendices 11 1 Introduction and Background Background People deal with types of businesses and organizations in their daily lives. Government enterprises, non-profit organizations, service providers, retailers, and manufacturers a diverse array of service and goods. Separate groups of individuals may view these organizations differently, but they share three things. First, organizations of all kinds need to define their objectives and purpose. For example, a firm may describe their purpose as making products by employing innovative technology. In the case of ARM Holdings PLC, the major objective may be to provide technology solutions that will make service delivery easier and safer within the next five or ten years (Heerkens, 2002). For the publicly listed company, in particular, the objectives of the firm generally emphasize on adding value considering the perspectives of stakeholders (customers and owners). Second, in the process of pursuing the stated objectives, company managers need to construct a number of decisions. Therefore, they need to access to the information concerning the effective running of company businesses. Information wants of company administrators cuts across environmental, legal, marketing, production, and financial areas. Publicly listed organizations are characterized by huge operations requiring more complex and wide information needs. In the financial services sector, senior administrators will require information and data to evaluate steps towards achieving company objectives. Relevant information regarding this sector include cash flow statements, processes involved in production of goods, enterprise value, financial performance in the stock market, and or the role of technological advancements in planning strategically (Heerkens, 2002). Finally, to aid the company achieve its objectives, administrators and other responsible authorities or decision makers need to employ efficient and effective management of available resources (Lock, 2007). Resource management is aimed at achieving improved results compared to previous financial performances. This technique involves efficient allocation of resource to meet business needs and using the available resource effectively to achieve better results. In this document, a case study is used to help ARM Holdings PLC understand information and data requirements of managers to ensure effective resource management and value addition for the entire stakeholders and shareholders. Introduction ARM Holdings PLC is the parent company of several banks conducting their operations in Sub-Saharan Africa. The group’s ticker symbol in the financial market is ARMH. Primary listing of the company is on UK Stock Exchange. ARM Holdings PLC depository shares in the United States are listed in NASDAQ. The management board structure of ARM Holdings group follows the traditional United Kingdom approach comprising the company or organization chair, non-executive and executive directors. Remuneration and Audit committees comprise independent directors who are non-executive. Nomination committee and non-executive directors report to the management board. Functions and divisions report to the company’s executive committee. Risk review committee provides periodic reports to the board, audit committee, and executive committee. Names and salaries of the company’s major executive are provided in the diagram below: Source: Yahoo Finance (ARM Holdings PLC) 2 Aims and Objectives Aims and objectives The following are the aims of this project: I. Identifying how ARM Holdings PLC is operating, its key markets, products, and customers II. How the company can use project management to improve its operations III. The company’s organizational chart or company structure IV. Financial statements of the company including cash flow, balance sheet, profit and loss (in addition to descriptions of the purpose of individual financial statements) V. Company’s financial analysis using cash outflow and inflow. 2.1 Planning and Scheduling Planning Task Description Estimate of Completing Time Actual Time Taken for Completion Identifying how ARM Holdings PLC is operating, its key markets, products, and customers 1 day 1 day How the company can use project management to improve its operations 12 Hours 10 hours The company’s organizational chart or company structure 18 hours 12 hours Financial statements of the company including cash flow, balance sheet, profit and loss (in addition to descriptions of the purpose of individual financial statements) 10 hours 11 hours Company’s financial analysis using cash outflow and inflow 1 day 1 day Schedule Task Description Week Number Planned Deadline Actual Deadline Identifying ARM Holdings PLC is operating, its key markets, products, and customers 1 2 days 2 days How the company can use project management to improve its operations 1 1 day 1 day The company’s organizational chart or company structure 1 2 days 2 days Financial statements of the company including cash flow, balance sheet, profit and loss (in addition to descriptions of the purpose of individual financial statements) 2 1 day 1 day Company’s financial analysis using cash outflow and inflow 2 2 days 2 days 2.2 Management of the Project Progress monitoring In the first week, the project entailed an intensive collection of data from online sources about the ARM Holdings PLC organization structure and the entire company information. Data collection took 2 days to complete. Literature review conducted with the aim of getting critically analyzed literatures for compiling the report also took place in the first week when the project was initiated. Available literatures were collected for 2 days and the critically analysis was conducted for one day. Organizing the analysis of financial statements of the company was conducted in the second week since the project’s inception. In-depth evaluation of the company performance was also conducted in the second week including compiling the final draft presented in this document. 3 Critical Literature Review Experiences of project management in multi-project companies such as financial institutions is important in identifying the values achieved after implementation or execution of the project Baker, 2011, Pg. 231). Baker notes that project management has the ability to force an elevated focus on major-impact improvement on business operations. Studies have been conducted on the influence of project management on the leadership structure and improvement for an organization, equipment and customer consolidation, and application of methodologies and teams in business operations. A distinction needs to be drawn on the contribution of Baker’s findings to understand how multi-project management may help ARM Holdings PLC achieve its long and short-term objectives in service provision and profit accumulation. In the study conducted by Resch (2011, Pg. 1) project management professionals are charged with the responsibility of delivering profitability considering that projects have become investments. In the same way investors expect investment companies to conduct thorough and proper analysis of performance of stock portfolios, project stakeholders rely on project management teams to provide reports of the performance of the implemented project. (Resch (2011, Pg. 2) further notes that project management teams need to indicate how projects deliver value and improvements to the business. This source will be vital in the achievement of the aims and objects of the research. In the analysis of ARM Holdings annual reports, the company’s performance in relation to different project management implementation is indicated. Annual reports collected from 2011 to 2013 financial years will help inn understanding the financial performance of the company and how it is positioned to realize further improvement in service delivery and product architecture to satisfy all stakeholders. Comparing financial statements from different financial years will provide an overview of: (1) the use of indirect and direct cash flows; (2) understanding whether the company is contracting or expanding; and (3) whether ARM Holdings PLC is changing in its composition and size). 4 Case Study According to ARM Holdings 2013 report, project management has helped in improving financial performance. In the report released by the former bank’s CEO-Warren East in 2013 (ARM Holdings Limited, 2014, Pg. 8), the company realized an improved performance in 2013 particularly because of initiating a project that identified the benefits of broadening technology offering to entail range of new processors targeting new end markets. The current CEO points out that the need for increasing shipment of ARM-based chips to international markets results froom the growth of smaller enterprises dealing in technology. There was a significant increase in revenue by 24% between financial years 2013 (with 714.6) and 2012 (576.9). Gross profits also increased by 23.9% between financial years 2013 (675.3) and 2011 (545.0). According to the company’s reports, share results of joint venture increased from o.7 in 2012 to 4.7 in 2013. This is an indication of the benefits of applying project management in the daily operations of the bank. The salient features of improved performance of ARM is presented in Appendix 1. In the company’s 2011 annual reports, the chairman reports that farther expansion strategies helped in achieving improved results in almost all the critical areas of cash flows and balance sheets. Between 2011 and 2010 financial years, investment income accrued from 106,959 (2010) to 148,981 (2012). Profit before tax also grew from 110,027 to 156,949 (representing an increase of 42.6%%). 5 Discussion and Conclusion The information collected in the case study section indicates that the company has realized improved performance in terms of profits, shares and increased customer numbers. Projects aimed at expanding markets to reach out to developing countries will helped in improving performance. In addition, the ARM also initiated a project aimed at implementing a system that effectively identified different customer and market segments. The project helped in expanding company operations, hence the improved performance between financial years 2011 and 2010, and 2012 and 2013. Operating margin grew from 20.1 in 2008 to 36.1 in 2012. In addition, there was a significant rise in the value of earnings per share (Appendix 2). This indicates that the company was increasing in its composition and size. The target customers majorly fall between the lower and middle class earners of the developed and developing countries. Since projects were to be monitored and managed for the increase in number of company services to satisfy the rise in customers, the staff increased from 1,024 to 1,191 between 2009 and 2010, 1,191 to 1,382 between 2010 and 2011, 1,382 to 1,652 between 2011 and 2012, and 1,652 to 1,961 between 2012 and 2013. The increase in number of engineers and company staff is represented in Appendix 3. In the company’s 2011 annual reports, the chairman reports that farther expansion strategies helped in achieving improved results in almost all the critical areas of cash flows and balance sheets. 6 References Top of Form Resch, M. (2011). Strategic project management transformation: delivering maximum ROI & sustainable business value. Ft. Lauderdale, Fla, J. Ross Pub. Top of Form Baker, D. A. (2010). Multi-company project management: Maximizing business results through strategic collaboration. Ft. Lauderdale, FL: J. Ross Pub. ARM Holding PLC. (2014). 2013 Annual Report. Retrieved May 28, 2014 from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjIzNzM3fENoaWxkSUQ9LTF8VHlwZT0z&t=1 ARM Holdings PLC. (2012). 2012 Annual Report. Retrieved May 28, 2014 from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTczODc5fENoaWxkSUQ9LTF8VHlwZT0z&t=1 Top of Form Lock, D. (2007). Project management. Aldershot, England: Gower. ARM Holdings PLC. (2012). 2011 Annual Report. Retrieved May 28, 2014 from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTI4Nzk3fENoaWxkSUQ9LTF8VHlwZT0z&t=1 Bottom of Form Top of Form Heerkens, G. (2002). Project management. New York: McGraw-Hill. Bottom of Form Bottom of Form Bottom of Form 7 Appendices Appendices Appendix 1: ARM Holding (2013) Appendix 2: ARM Holding Important Ratios (2012) Appendix 3 Read More