Description
Solution
Measuring Financial Performance: Revenue
A company’s revenue is the sum of all the money it makes from its operations, most commonly from selling goods and services. It’s a basic metric for evaluating a company’s financial health. It can be determined by applying the formula that Hayes (2024) emphasised:
The formula for net revenue is the price per unit divided by the quantity sold.”-Returns, Allowances, and Discounts”
The formula for calculating revenue would look like this: Revenue = (£50 * 1000 = £50,000) -£40-£100-£30. This would apply if the product sold 1,000 copies for £50 each and the company applied a discount of £40, allowances of £100, and returns of £30.
Because it shows how much money a firm can make in the future, this statistic is crucial for assessing its market position and growth potential.
Appraisal:
Pros: The benefit of calculating revenue is that it provides useful information regarding the financial status of the firm during a given period and is relatively easy to do. Profitability and growth ratios, which allow stakeholders to gauge organisational performance, are built upon this foundation (Patriot, 2021).
Cons: It provides an inaccurate picture of financial health if charges have not been satisfied since it does not account for all costs. There is a high degree of seasonality and market volatility that affects the revenue amounts.
When HR Experts Make Use of It: According to Kucherov and Manokhina (2017), revenue metrics can be utilised by people professionals to ascertain the cost-effectiveness of specific employee-related improvements, such as sales training programs, through the enhanced generation of revenue.
Measuring Non-Financial Performance: Stakeholder Benefits and Feedback
Measuring organisational success in terms of stakeholder gains—including employees, suppliers, and the community at large—is made possible through stakeholder benefits and feedback (Patriot 2021). To gauge the level of satisfaction among stakeholders, this can be assessed through the use of questionnaires, interviews, or focus groups.
Appraisal:
Pros: This approach provides a structured mechanism to examine the effects of organisational actions on different stakeholders, allowing for the identification of both strengths and areas that need improvement. Organisational culture can be improved through the use of feedback to boost employee motivation and customer satisfaction (CIPD, 2024)
Cons: It may take some time to engage stakeholders and get their comments, and the data gathered may be more subjective and difficult to quantify.
When HR Experts Make Use of It: When it comes to managing employee engagement, customer satisfaction, or corporate social responsibility, HR professionals often use stakeholder feedbacks. With this data, organisations may better meet the expectations of their stakeholders and boost their performance.
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- Within six months, PS&M personnel will be provided with chances for capacity building through partnerships with educational institutions to gain knowledge and skills for implementing category management.
- The PS&M would become more motivated in the long run by providing recognition and benefits for pursuing category management implementation.
- Within a year, an effective change management strategy would be pursued, focusing on tracking the change and spotting change resistance
1.0 Introduction
1.1 ADNOC Organisation Background
In this report, the organisation of focus is Abu Dhabi National Oil Company (ADNOC). This is for understanding the impact of contract terms and conditions on distribution of risk and power with their suppliers. This is an organisation which began its operation in 1971 and today is ranked as the leader in diversified energy group which is owned by Abu Dhabi Government (ADNOC, 2022). The organisation network of holistically integrated business has based their operations across the entire energy value chain assisting their capacity for meeting overall demands of the consistently changing energy markets. For remaining competitive, the organisation has allocated $15 billion for advancing and accelerating lower-carbon solutions, investment in new energy solutions and decarbonisation technologies for lowering their carbon intensity with 25% by 2030 and successfully facilitating their NetZero by 2050 target. The company has a network of fully operational companies that operate throughout the entire hydrocarbon value chain, handling tasks including exploration, production, processing, storing, refinement, and supply in addition to manufacturing a wide range of petrochemical products. I work as a Contract Engineer for ADNOC Offshore, one of the company's divisions. The offshore division of ADNOC is responsible for the delivery and development of oil and gas resources in the waters surrounding Abu Dhabi. With OPEX and CAPEX, ADNOC Offshore spends over 3,000 million dollars annually. The organisation structure is as illustrated in figure 1; Figure 1: ADNOC Organisation Structure1.2 Identified Category Management
The deployment of the iSourcing system, a technology-focused procurement procedure, was chosen as the category management in this study. The need for oil and gas has significantly expanded in the modern era since the Covid-19 epidemic. As a result, ADNOC is forced to spend money on equipment to help them process and refine more oil and gas products. In light of this, the team leader's responsibility is to see that an iSourcing system is in place and can be utilised to purchase the new machines that the company needs to upgrade its operations. Locally in UAE, regionally in the Middle East, and internationally in Western nations, this would apply. This project aims to produce a report outlining the implementation of the change approach. This is done while ensuring the team members and leader have the necessary abilities to carry out the plan successfully. Implementing the new category management strategy is the kind of change being sought. The learner will be the team leader throughout the full category management process since a team has been chosen to oversee the deployment of iSourcing. The practical approach would be utilising various tools and strategies that demonstrate leadership and best practices in change management, along with a focus on the category management data from the ADNOC firm.2.0 Change Management Approach
2.1 Introduction of the Required Change Process
In its Procurement Supply and Management (PS&M) budget, ADNOC had allocated roughly 10 million UAEis before the COVID-19 epidemic. Up to 5,000 domestic and foreign providers are currently utilised in this. Because of the significant financial allocation in PS&M, the ADNOC sourcing method is crucial to their operations in this scenario. Logistics, equipment, and facility administration are all purchased separately by the organisation, all of which fall under the organisation's primary spending categories of computers and technical systems. As a result, they lack a centralised system that would allow all departments to be involved in aiding the procurement procedure (CIPS, 2020). The Burke-Litwin Model (Coruzzi, 2020) can pinpoint the internal and external factors that contributed to the identified change. This model ranks the many change drivers according to their importance and provides evidence of each one in figure 2; Figure 2:Drivers of Change Model When taking into account the ADNOC organisation and indicated change, these elements have the following effects, as stated in Table 1: Table 1:Summary of the Drivers of Change in ADNOC OrganisationFactors of change | Explanation |
External environment | Supply chain networks have been significantly impacted since COVID-19. ADNOC's ability to replenish stock, equipment, and machinery has been affected. Therefore, ADNOC would participate in strategic alliances by including diverse actors and intermediates in the complete value chain through iSourcing |
Individual and oganisational performance | ADNOC's investment in iSourcing would reduce PS&M turnover, everyone's performance, and supply chain network satisfaction. |
Leadership | To ensure iSourcing success, the PS&M will lead and manage efficiently. This inspires and guides other organisations to iSourcing success. |
Mission and strategy | The achievement of ADNOC's aim to provide high-quality oil and gas products would be ensured by the deployment of iSourcing. The justification for this is to quickly and effectively engage highly qualified vendors. |
Organisation culture | Implementing iSourcing would promote the collaborative and teamwork-oriented organisational culture of ADNOC. This is due to the platforms offered by iSourcing that provide suitable options for teamwork and collaboration. |
Task requirements and individual skills | Employees at ADNOC lack the knowledge and skills necessary to deploy iSourcing. This deficit might be filled by offering possibilities for professional advancement. Implementation of the change would be successful. |
Employee motivation | This report's proposal suggests that providing monetary and non-monetary rewards is necessary to encourage people to adopt iSourcing. This is for employing remarkably contemporary systems of practice. |
Since the COVID-19 pandemic, ADNOC has struggled. Flechsig et al. (2022) say delayed service delivery and internal process automation reduce efficiency. Thus, integrating internal procedures, evaluating vendors, and monitoring the sourcing process with iSourcing will benefit ADNOC. A successful and efficient supply chain would result—in situational leadership to handle all everyday situations. Mulyana et al. (2022) define this as improving cost reduction, client satisfaction, and complex and critical processes. The ADNOC organization's automation and flexibility would improve. This involves learning, teamwork, and smart buying. Those fighting against iSourcing face massive supply chain challenges. Yevu et al. (2021) projected network security, system reliability, and persistent unauthorised access difficulties for ADNOC. This would hurt ADNOC's reputation with stakeholders, make persuading clients hard, and alienate supply chain actors. Transformational leaders may remedy this by creating enduring, positive change in their followers and moulding ADNOC PS&M followers into leaders.
2.2 Strengths, Weaknesses, Opportunities, and Threats (SWOT) of the Change Management
Additionally, it is crucial to comprehend the Strengths, Weaknesses , Opportunities, and Threats associated with the present strategy and the new category strategy for the change implementation to succeed. To do this, CIPS (2022) recognizes SWOT analysis as influential in capturing various decisions taken and would aid in guiding and educating category management. Table 3 illustrates the SWOT Analysis; Table 2:SWOT Analysis In conclusion, as shown in Table 1, while the existing strategy has strengths such as giving opportunities for comparison, transferring risks, and extensive evaluation, it is time-consuming and expensive. Using iSourcing makes it feasible to provide chances for risk transfer, pricing comparisons between suppliers, and finding the best items. Furthermore, it ignores sustainability-related aspects essential to contemporary procurement strategies (Hazaea et al., 2022). To equip staff members with the necessary abilities to use the new system, ADNOC must pursue security measures and ongoing capacity development. To handle the interference, a leader must promote the consultative approach in the sourcing process. To continuously acquire new skills and information, relevant L&D plans have been granted.2.3 Process of the Change Management
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(Solution) CIPS New Global Strategic Supply Chain Project
- The purpose of this project is to evaluate supply chain automation by leveraging Industry 4.0 technologies. The identified technologies include Artificial Intelligence (AI) and Machine Learning (ML) noted as critical for streamlining operations and obtaining value-for-money outcomes. This has been pursued by focusing on Wood Plc.
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