Value For Money

Mercedez Benz !!!

All VFM Audits are not the same. An automobile chain based out of Muscat to promote a luxury brand in its showrooms had organized a very big bollywood temptations show at Muscat. Response to the event was overwhelming. The bollywood temptation show gathered huge crowd more than the expectations of the marketing department of the sponsoring automobile dealer. Great advertisements, banners, public and press exposure however, not yielded any significant results as far as sale of the latest brand was concerned.

Internal Auditors were called to examine the case. The task was to comment on operational performance including activity beyond the purely financial domain. Audit strategy required an organized procedure for the effiecient identification of unnecessary cost.

Just one years back Internal Auditors had carried out Value for Money audit using Value Analysis technique. A car seat covering could be made of leather, cloth or a vinyl product each requiring different techniques of production with different costs yet providing same basic service with different quality standard. If the standard provided more than adequate for the perceived need there will be an element of waste in the use of resources. With use of Value Analysis technique, wasteful expenditures were saved.

Internal Auditor required a different approach this time to carry out the Value for Money audit. They selected Functional Cost Analysis technique. Analysing cost objectively identifies the purpose of every item of expenditure and attributes it to specific management activities. Departmental management can then be made accountable to monitor their own performance in terms of exercising both economy when incurring costs and efficiency and effectiveness in the use of resources.

With thousands of the luxury brand on the road in other part of the world, the legions of luxury car drivers certainly included regular folks too. But who were they? Internal Auditor started studying the luxury car buyer's demographics for past years, and the trends were clear:

The luxury drivers had higher incomes, much higher than the average car buyer. In 2005, luxury car owner's incomes were about $100,000 a year versus $65,000 a year for the average buyer. As per 2007 survey 81 percent of respondents earned more than $125,000 per year for the selected luxury car model.

The luxury drivers were a few years older than the average car buyers - closer to 50 rather than the average age of 40. The study of auto industry marketing showed that only 2 percent of the luxury car owners were 24 or younger; while 29 percent were between 45 and 54; and 33 percent were 55 and older. An independent survey carried out in 2007 suggested similar results. And, the most important market factor for similar cars in Muscat - Luxury car owners were the locals i.e. Arabs.

And, the Bollywood temptations show at Muscat by the automobile chain attracted nearly 90 % audience who were young migrants from India having low income levels. Now Smile :)

Its Powerful Than Google

This will inspire you to leave the beaten track occasionally and drive into the woods. You will certain to find something you have never seen. You will create new insights about science of doing successful business. However, you need to invest. You need to invest your mind. You need Interest and Curiosity, the two batteries for your flashlight, without which you cannot search for knowledge. No Google can search it for you.

Professionals & Managers who have no curiosity or interest, or very little of either, are the one who are suffering from boredom. They fail to find correct solutions. The problem with them is they have seen everything with their eyes, but not with their minds. An active mind cannot fail. Mind is spurred to activity only by a healthy interest and a searching curiosity. The managers seek the path of least resistance and keep distance from anything that they cannot grasp or understand. The results are not up to mark or are substandard.

Leadership is all about results. You achieve results when you can move masses than when you can move leaders. I mean solution is not always about changing the leadership.

Let us make some difference and leap into a more interesting world which will turn your curiosity and transform you into a more curious and innovative businessman. Although there are numerous stories of successful people; nobody knows how they have got the right opportunity. Curious people have their pick of opportunities. The right opportunities find them.

How many ideas you are currently working on? What is the value of Intellectual Property showing up on your Balance Sheet? Are you enjoying experimentation? Or are you busy reading change management books? Don't just become ready for the change but have a role in bringing it. Let curiosity prevail for the new and the unknown among your customers and employees.

Are you curious about the new technology that has launched recently in the market? Are you curious about the new financial product which can enhance your financial freedom? Are you interested in any new segment of the business? Do new management methods evoke your curiosity?

Now question is - do departmental heads within your organization has similar curiosity and interest. Boredom makes people old before time; curiosity you will find, is the best substitute for mythical "fountain of youth".

Every project that you take up or for every complex aspect of your business, you need curious and interested people. Have you ever hired an outside consulting firm to add value to your business? Find out the level of curiosity for the assignment among those who will be executing it for you. Be it a big 4 or a big consulting giant, you need to know it. Don't take the risk of working with a half committed team with teammates who are least interested in your organization, your people, your technology, your business or the assignment itself.

Are you bringing the change? Check the level of curiosity among your employees, consultants and customers? Create curiosity and interest. Main drivers of Execution are Interest and Curiosity.

When you want to exercise 'innovation' option of the risk management, you need to invest in creating required interest and curiosity among all the stakeholders. You need escaping velocity when you want to fly to Moon. Yes, its rocket science.

What you have done so far in this regard? If you think curiosity can kill the cat then ponder on what Albert Einstein wants to say. "The definition of insanity is doing the same thing over and over again and expecting different results."

Contact us to know more about innovative knowledge application services that can transform your business curiosity. Or just click anywhere on this site to know our curiosity. Its contagious.