Business Forecasting

In our daily business life, executives are always faced with situations at which a decision about the future should be taken now. There are lots of techniques that could be deployed to draw the decision about the future. One of these techniques is the Business Forecasting Process. It’s the process used to estimate or predict future patterns about an issue using raw business data. Some examples of business forecasting include sales forecast, product demand, inventory stock, supply-chain order level and much more. Accuracy in decision maker forecast is directly proportional to the accuracy of the future decision.

There are few tips when you plan to forecast:

·        Expect the worse and then project the best possible scenario

·        Always freshen your source data

·        Keep the involved parties informed

·        Know your business, environment and customer behaviors well

·        Always remain attentive in order not to miss small events around you that might impact your forecast

There are many methods used to make the forecasting process ranging from simple to complex methods using models, however, we’d be mentioning only three of them due to their ease of application.

1.     Pattern Analysis

There are methods that depend mainly upon the observation of arithmetic curves and their behavior over a period of time. The most commonly understanding method belonging to this category is trend analysis, which is the study of the shapes –patterns- made cumulatively by a set of data that are graphically represented. It’s commonly known that historic data tend to repeat itself over a period of time. Even the shape of these data tends to repeat over the same period of time. For example; a head-and-shoulders pattern of data representation of a stock would mean a reverse action in the opposite way of that stock, thus we could predict a down trend for this stock value. There are as many as patterns that we can see of data over time. This is not the real scope of it at the moment.

  

2.     Analogy

This is a very simple and acceptable way to forecast an issue by comparing it to another existing issue that shares the same parameters and factors with each other. For example, launching a new product could be assisted with the observation of an existing product in the same product line.

3.     Extremes or Scenarios

This method involves identifying the core issues, uncertainties and time of a case and then building positive and negative scenarios of the possible outcomes. This gives us two case scenarios. Upon these scenarios, one could place the possible outcome and consequently the possible forecast.

For more detailed information about the subject, please follow this link. But you got to bear in mind that Forecasting is NEVER PERFECT.

Successful Training Expertise

The attached presentation summarizes my views about a successful training expertise in the private training industry. Trainers are classified according to trainee responses to:

• Perfect/Star trainer
• Very Good/Good trainer
• Hardly working presenter or bad trainer

A hardly working presenter or bad trainer is characterized by repetitive failures, frequent client complaints and bad evaluations. Very good to good trainers are characterized by frequent successes, infrequent client complaints and moderate to high evaluations. The rest of the presentation discusses the most targeted type of trainers which is the star type. It's not that easy to acquire a star instructor attitude, however, knowing these personality traits is likely to develop your skill to this area of successful training expertise.

For more information about the same topic, kindly get the PDF file of the presentation through this link.

Organizational Structure

Each organization has a defined structure that defines the division and coordination of labor. The complexity of that structure varies according to the complexity of the organizational levels and its scope of business. This structure also reflects a number of facts about a given organizations. These facts are:

1. Specialization; it refers to the division of labor and the tendency of grouping related skilled people under one specialized department. In many organizations, specialization is VALID and the founders believe that it's the right choice for the bet of the employee performance. However; many new organization believe that specialization get the employee bored of repetitive tasks and thus affect its performance negatively. Some related skilled people may be also divided according to some business needs. For example; a newspaper organization may divide its reporters according to their topic domain such as politics reporters, sports reporters and economic reporters.
   
2. Centralization; it refers to the decision-making power of some individuals. Centralized organizations hold the decision-making capabilities in one or more of the executive managers. Decentralized organization tends to spread the decision-making capabilities across the organization to the executives, line managers and supervisors.
   
3. Standardization; it refers to the similarity of the rules, procedures and regulations across the organization. There are some organizations that give a high degree of job autonomy and personality expression to employees, while others don't allow this level of autonomy because of the strict rules and procedures spread around.
   
4. Chain of command; it refers to the formal hierarchy between employees and who reports to whom. A group of employees might be reporting to section head for example. This head is the ultimate reference of those employees within this section.
   
5. Span of control; it refers to the authority level of an employee. The wider the level of control, the lesser the levels of the organization. This fact is used by some organization to decrease employment costs!!
   

Types of organization structure

There are four main types of organizational structure summarized in the following table that lists the main differences between them.

Type	Simple	Matrix	Team	Virtual
Level of labor division	Low	High	High	Low
Chain of authority	Centralized	Dual	Decentralized	Centralized
Extent of control	Wide	Wide	Narrow	Narrow
Standardization	Low	Low	Low	High

P.S. There are other nomenclatures of these types in other business literature, so don't get confused. There are almost the same.

Virtual Structure

Matrix Structure

Simple Structure

Team Structure

The selection of an organizational structure depends on many factors such as:

• Organizational Size
  
• Organizational Strategy (business scope, departments, activities, etc.)
  
• Organizational adopted technology
  

Moreover; an organizational structure can impose serious effects on employee performance, employee behavior and level of production. Going towards centralization environments for example can have the disadvantages of decreased employee involvements, lesser employee belonging, loss of innovation, decreased development of skills and much more. On the other hand, going towards decentralized environments can also have the disadvantages of losing ability to address wide-spread problems, difficulty of monitoring employee compliance with policies. This means the founders of the organization has to carefully consider the organizational structures selected.

It's also worth saying that an organizational structure is evolved over time as the organization grows, not just invented from scratch. This means that organizational structure is a flexible topic to be continuously adapted and adjusted over time. Every manager should make this issue CLEAR!!

Human Resources Management Overview

Human Resources management has three main purposes; providing a skilled workforce, controlling employment costs and reacting effectively toward change.

Providing the right mix of skills
As different jobs require different skill mix, the HR management department has to make ensure that the business has enough employees with the appropriate skills to carry out all its functions. This can be done by determining HR needs of the organization, determining current and future job needs and recruiting and selecting employees with the right skills and experiences.
Controlling employment costs
Employment of people involves costs of salaries, HR functions such as recruitment, employee benefits such as training, clothing, fleet, insurance and other social costs.
Reacting effectively to change
It is a responsibility of an HR department aimed at empowering employees to accept and embrace changes in their current business environment. This change could be strategically, operationally, missionary technologically or behaviorally (we will discuss later organizational Change Management) An HR department can facilitate change among employees by communicating with them, consulting them, involving them, helping them casting their fear about change and gaining their commitment and support about the change.

Human Resources Management has 9 distinct functional areas;

1. Recruitment & Selection
2. Employee Payment
3. Working Conditions
4. Employee Welfare
5. Workforce Planning
6. Motivation
7. Discipline & Grievance Procedures
8. Training & Development
9. Organizing Workforce

Each of these functional areas comprises lots of topics that would be discussed later.

Economic/Business Cycle

Typical Business Cycle

The business cycle or economic cycle refers to the recurring and fluctuating levels of economic activity that an economy experiences over a long period of time. The FIVE stages of the business cycle are growth (expansion), peak, recession (contraction), trough and recovery. Despite being named cycles, these fluctuations in economic growth and decline do not follow a purely mechanical or predictable periodic pattern. There are several factors that affect the economic aspects of a given country or region such as Politics, Policies, Social aspects, Technological aspects. This cycle is generally measured by an economic indicator called GDP "Gross Domestic Product" A business cycle is referred to be in expansion when there is a speedup of the pace of the economic activity. Recession refers to the slowdown of the pace of the economic activity. The maximum economic activity within a period of time is called a peak and the lowest activity within a period is called a trough. An economy is described to be in recovery in the transition period between contraction and expansion.

This GDP indicator is formulated according to the aggregate performance of the economy in terms of many business factors such as employment, personal income, trade sales, industrial production, etc. It could be impacted by macro or micro-environmental forces which obviously affect the economy. A cycle could be an aggregate of all policies, procedures affecting the economy undertaken by a given country. For example, policies providing investment opportunities and encouraging large scale production could have a positive impact on a cycle in the recovery or expansion stages. Policies against external investments might have negative impact on a cycle in the contraction stage. Moreover, these cycles might be associated with both booms and crises in the international economy. For example, countries strategically linked to the USD would be directly affected by the US economy and the US economic crisis last year is a good witness.

In order to get a real sense of the article, you got to know that time frames of these cycles are measured in YEARS.

Check this powerful tool at this LINK and it might give a good understanding of what we said above. Check USA and check GDP only (don't bother yourself with other indicators) and move the bar at your left hand side and see how the GDP was in 2008 and how it reaches the 2010 where it enters a recovery and expecting to get above normal trends in 2011.

Another detailed article may be found here.

E-mail Etiquette

E-mail is defined as the communication method at which there is an exchange of text over the computer usually at distant locations. It's a rapidly used communication method especially in nowadays growing technology. This article doesn't focus on the IT aspects of using email technologies (such as using email programs and the underlying terminologies as send, receive, forward, CC, etc.), but rather mentions the skills that should be mastered in order to express professionalism over the email. Any given e-mail message can clearly demonstrate the level of power and professionalism of the sender. This derives us to study the email skills in depth in order to project the right image about ourselves.
Using the email to send a message has the advantages of documentation (proving of issues), speed, inexpensiveness, accessibility, retrievability (getting old emails), versatility (ability to send a variety of files) and time saving. On the other hand, it has the disadvantages of occasional inaccessibility, vulnerability (security issues), permanence (fear of deletion) and overload (for huge mailboxes).
Avoid using email messages in sending the following message types:

• Confidential messages
• Negotiation messages
• Emotional messages
• Complex instructional messages
• Time sensitive messages

A clear email message should be characterized with the following:

• Clear topic line and clear message body (examples: no controversies, no gender-specific language and with appropriate tone)
• Informative (not a time waster)
• No unnecessary details

There are several factors that should be considered when deciding to write an email such as your relationship with the recipient, the purpose of the message and the subject of the message. These factors determine how your message structure and language are formulated and determine your aim from the message such as persuading, informative or inquiring. Your message at all occasions should anticipate the recipient reactions and hence would affect the way to write the message and the tone used.
Over the internet there are some agreed guidelines for email messages, these are:

1. Consider using a consistent appropriate tone (formal business tone differs from informal friendly tone)
2. Remain friendly and personable as possible
3. Avoid using unclear words (such as probable, almost) or personal qualifier words (such as "I" statements)
4. Avoid using jargon (technical abbreviations) or clichés (cultural based expressions) unless you know that the recipient knows it well.
5. Use proper fonts and avoid colorful messages with complex email templates.
6. You may use emoticons to illustrate your feelings (such as J Happy, L Sad), however use them only when needed and to project your actual emotions when writing.
7. You can use abbreviations to save time, however, be wary of the recipient knowledge level (such as FYI For Your Information, LOL Laughing Out Loud, FAQ Frequently Asked Questions)
8. Use paragraphs of varying lengths belonging to the same topic (A paragraph for each idea of the topic)
9. Single email message per single topic (Don't discuss many topics in one email message)
10. Use short topic messages (Don't let the recipient use the scroll-bar because your message is too long – ONE screen message)

You should always think about your message before you begin to write and monitor your reactions. Accordingly you to practice writing a draft email and revise it before sending to the recipient, because it can't be retrieved back. There are also some IT related skills such as:

• Email attachments
  • Attach only when needed
  • Consider the recipient's available programs
• Always use priority labels and signature files
• Organize your email client's folders and contacts
• Use emails and spam filters of the email client
• Use encryption, passwords and digital signature for highly sensitive messages

There are other skills related to the writing process itself and would be discussed later.
Happy emailing everybody!!