Section A – BOTH questions are compulsory and MUST be attempted
The Superior Business Consultancy (SBC) which is based in Jayland provides clients with consultancy services in Advertising, Recruitment and IT Support. SBC commenced trading on 1 July 2003 and has grown steadily since then.
The following information, together with that contained in the appendix, is available:
(1) Three types of consultants are employed by SBC on a full-time basis. These are:
Advertising consultants who provide advice regarding advertising and promotional activities
Recruitment consultants who provide advice regarding recruitment and selection of staff, and
IT consultants who provide advice regarding the selection of business software and technical support.
(2) During the year ended 31 May 2010, each full-time consultant was budgeted to work on 200 days. All consultations undertaken by consultants of SBC had a duration of one day.
(3) During their 200 working days per annum, full-time consultants undertake some consultations on a ‘no-fee’ basis. Such consultations are regarded as Business Development Activity (BDA) by the management of SBC.
(4) SBC also engages the services of subcontract consultants who provide clients with consultancy services in the categories of Advertising, Recruitment and IT Support. All of the subcontract consultants have worked for SBC for at least three years.
(5) During recent years the directors of SBC have become increasingly concerned that SBC’s systems are inadequate for the measurement of performance. This concern was further increased after they each read a book entitled ‘How to improve business performance measurement’.
Required:
Prepare a report for the directors of SBC which:
(i) discusses the importance of non-fi nancial performance indicators (NFPIs) and evaluates, giving examples, how a ‘balanced scorecard’ approach may be used to improve performance within SBC; (13 marks)
(ii) contains a calculation of the actual average cost per chargeable consultation for both full-time consultants and separately for subcontract consultants in respect of each of the three categories of consultancy services during the year ended 31 May 2010; (7 marks)
(iii) suggests reasons for the trends shown by the fi gures contained in the appendix; (5 marks)
(iv) discusses the potential benefi ts and potential problems which might arise as a consequence of employing subcontract consultants within SBC. (6 marks)
Professional marks will be awarded in Question 1 for appropriateness of format, style. and structure of the report. (4 marks)