May 2012 Walkthrough

CIMA Enterprise Management (E2) Answer Walk through May 2012 Q6

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ASAP The examiners say……

“Two of the main reasons why candidates lose marks are by answering only part of the question, and by answering the question they hoped for rather than the question asked.”

• Analyse the question’s requirement • Source your syllabus knowledge • Analyse the scenario • Plan your answer

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ASAP – Analyse the question’s requirement May 2012 – Enterprise Management Q6

Marks

Time

a

Discuss the rationale for TFX Company moving to a shared service centre model, including the benefits and any possible disadvantages.

13

23 mins

b

Explain how TFX Company should develop and build the new finance teams, if the move to a shared service centre goes ahead.

12

22 mins

25

45 mins

Total

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ASAP – Analyse the question’s requirement May 2012 – Enterprise Management Q6 a

Discuss the rationale for TFX Company moving to a shared service centre model, including the benefits and any possible disadvantages.

Marks

Time

13

23 mins

• Discuss = Level 4 verb; Examine in detail by argument, i.e. 2 sides of argument • Start by explaining what is a share service centre model • Explain the rationale for moving into a share service centre model • For a 13 marks question, comprehensive view of benefits and disadvantages are required • Usually 4-5 points in favour and 4-5 points against

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ASAP – Analyse the question’s requirement May 2012 – Enterprise Management Q6 b

Marks

Time

12

22 mins

Explain how TFX Company should develop and build the new finance teams, if the move to a shared service centre goes ahead.

• Explain = Level 2 verb; Make clear or intelligible/ state the meaning or purpose of • Steps involve in building a new finance team • Make reference to relevant theory, such as Tuckman’s framework • Explain each stages (Forming, Storming, Norming and Performing) in details • Other factors for consideration or relevant theory

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ASAP – Source your syllabus knowledge Part (a) – Concept of the shared service model Syllabus C2(c) – Discuss the effectiveness of relationship between the finance function and other parts of the organisation and with external stakeholders.

Part (b) – What is involved in building effective teams Syllabus C2(d) – Identify tools for managing and controlling individuals, teams and networks, and for managing group conflict.

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ASAP – Analyse the scenario TFX is a multinational company which manufactures and retails branded designer clothing with business units in a number of different countries globally. Up until now, each of the business units has had its own finance department.

• Control issue ? Multi-national company → ability to control its units globally • Some locations are more expensive than others • Duplication of resources?

• Consistency? Each finance department has its own practice? → Conflicts?

• Ability to share global best practice?

• But able to work closely with local staff In taking this recommendation forward a number of factors will need to be considered, for instance any possible difficulties of moving to a shared service centre model, and also in which country the shared service centre should be established. The implementation of a shared service centre will also require the formation of new teams of staff.

• Moving people from different countries/ culture together • How to ensure the new team form is effective?

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ASAP – Plan your answer May 2012 – Enterprise Management Q6 a

Discuss the rationale for TFX Company moving to a shared service centre model, including the benefits and any possible disadvantages.

Marks

Time

13

23 mins

Explain Share Service Centre (SSC) model

Up to 2

• provision of a service by one part of the organisation where that service has previously been found in more than one part of the organisation.

• In TFX case, this means bringing together the various finance departments across the organisation into one central unit Rationale for SCC Model • Take advantages of the benefits of consolidation whilst maintaining full internal control and thus minimising the control risks associated with outsourcing.

• Enjoy substantial payback in terms of reduction of overhead costs and hence unit transaction costs.

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Up to 2

ASAP – Plan your answer Benefits

1 each

• Economies of Scale • Reduction in premises costs • Favourable labour rate – depending on the location • Enhance quality of service • Sharing of knowledge • Consistent management of data Disadvantages • Negative impact on the relationship between Finance and Business unit • More difficult to gain local knowledge • Setup cost can be costly • Some staff may be made redundant

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1 each

ASAP – Plan your answer May 2012 – Enterprise Management Q6 b

Marks

Time

12

22 mins

Explain how TFX Company should develop and build the new finance teams, if the move to a shared service centre goes ahead.

Explain the need to build team proactively

2

• An effective team will not form automatically and there are challenges to overcome • Team should be allowed to develop through various stages Introduce Tuckman’s framework of various stages

1

Identify the 4 stages and state what will happen and what to be done in each stage

3 each

• Forming: know each other, team objectives and parameters are established • Storming: period of disagreement, allow conflicts to surface • Norming: Resolve conflicts, established procedure and standards • Performing: Concentrate on achieving goals Other considerations: Defining roles & responsibilities; Leadership; Socialising

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2-4 each

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