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Six Sigma

What is Six Sigma ?

Contrary to the popular belief of Six Sigma being just a rigorous statistical tool for quality control, it is a mechanism that delivers overall business excellence by dramatically improving every process of an enterprise & has proven its affect in a wide spectrum of industries ranging from software to manufacturing, IT to health care, insurance services and telecommunications. 

A Fun fact to consider: Six Sigma is related to reducing the defects to just 3.4 faults per million opportunities!

Application No.1

Consider a Service Delivery - a customer always expects timely and a zero defect service or product; which means they experience any variation that could occur and not the mean. Mean is their expectation and our target.

If we can manage the possible variations that could cause the defects, which is unacceptable deviation from the target or mean; we are working towards a zero defect model.

Six Sigma is this process of managing the variations that could take place that would otherwise result in defects in various aspects across the enterprise. 

Application No.2

Looking at another example - Pizza delivery is guaranteed within 30 minutes of accepting an order. In the case of a delivery miss, 100 % of the money is refunded. So while evaluating, when do we ever count the times the delivery is on time; in contrast, the amount of times service delivery fails is what is taken note off, or that shops’ variation. So for a model six sigma company, this delivery process needs to be 99.9997% deliveries right within 30 minutes.

What is really evident is that the critical quality parameter in this case would be the service delivery time from a customer’s perspective and has significant impact on the profits. In addition, it is an obstacle for competition to enter the same market.

A defect in this case can be easily defined as:-

Defect: Delivery when taken longer than 30 minutes
Unit: Every order.
Opportunity: 1 per order, that is, only 1 defect is the scope and possibility with each order.

The driving force for the six sigma framework comes with the primary focus of “bringing breakthrough improvements in a manner which is systematic and routed by managing variations and defects”.  Such culture poses difficult changes that are absolutely essential and to raise the bar significantly forcing the team members to think out of the box and be innovative with solutions. To put it in different words and summarize the objective, it is to stretch but stretch physically not mentally!

Types of Six Sigma Methodologies

There are only two possible scenarios - First, that a process exists but is working only “reasonably” well; the second being there is no process at all. A non-productive process is as bad as a process that does not exist.

Scenario No.1

The first scenario dwells upon changes that would be required in in existing processes and improvements that could be made using DMAIC
•    Define - design the process goals in terms of key parameters that require attention and focus (critical to quality and production) on the bases of customer requirements.
•    Measure - Understand of the length and alignment of current procedures with the newly set goals. Identify if the goals and processes are in sync.
•    Analyze - Study the current scenario with respect to the causes of variations that could occur and the possible defects.
•    Improve - Smoothen the process systematically by reducing the causes of variation and eliminating the defects.
•    Control - the continuity of processes needs to be addressed and managed and progress of the performance needs to be monitored.

Scenario No.2

The second scenario where there is no process in place; the below would apply- the design for Six Sigma- (DMADV)
•    Define Measure - It is most necessary to first understand the goals, internal and external customer deliverables.
•    Analyse - Review of all the possible process options that would meet client needs and specifications.
•    Design - Once the process is finalized; it needs to be designed in detail to meet all requirements with the necessary detailing which would call upon the next step.
•    Verify - To make sure the process is working in a way that meets goals and exceeds client expectations. 

Many cases, a DMAIC project becomes a DMADV when it requires complete redesigning to bring about the desired improvements. Such shifts happen in the improvement phase of DMAIC.

Final Summary

It is extremely important to remember that Six Sigma is not just about product quality where only three products in a million are defective. It is about what is important or critical to the customer, whether internal or external. It focuses on value in context of the customer and the market.

For example, Polaroid had a sale of over US$ 2 billion in 1988 and was doing very well on stock exchange. It embraced Six Sigma and became a Six Sigma company sometime around 1997. In late 2001, they filed for bankruptcy. This is because Polaroid only focused on improving the quality of their products and failed to assess the needs of their customers.

Today Six Sigma focus has moved from simple "defect reduction" to "cost reduction" to "value creation", as pointed out by Mikel Harry. The objective is not to achieve the magic number of 3.4 DMPO but to beat your nearest competition by just 0.5 sigma in overall business excellence.

Want to get more information about Sig Sigma training and certification?
Connect with one of our consultants for more information!
Email us now at kounal@henryharvin.com or call us at our centralized number: 9015266266.
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1.  Client Name: Poornima Redla
    Company Name: Cleanon Hospitality Services Pvt. Ltd.
    Designation: Director
    Course Name: Lean Six Sigma Green Belt
    City: Mumbai


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2.  Client Name: Saurav Suman
    Company Name: Bokaro Power Supply Co. Ltd.
   
Designation: Junior Manager
    Course Name: Lean Six Sigma Green Belt
    City: Kolkata


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3.  Client Name: Jaishree Rajasekaran
    Company Name: N/A
   
Designation: N/A
    Course Name: Lean Six Sigma Green Belt
    City: Chennai


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4.  Client Name: Abhishek Kumar Mishra  
    Company Name: Bokaro Power Supply Co. Ltd.
   
Designation: Junior Manager
    Course Name: Lean Six Sigma Green Belt
    City: Kolkata


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5.  Client Name: DR Vandana Sardana
    Company Name: Sita Ram Bhartia Institute of Science and Research
    Designation: Associate Consultant Pathologist
    Course Name: Lean Six Sigma Green Belt
    City: Noida


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6.  Client Name: Supriya Amay
    Company Name: Team Lease Services Ltd.
    Designation: Quality Manager
    Course Name: Lean Six Sigma Black Belt
    City: Bangalore

    Client Name: Kushagra Mathur
    Company Name: Loginext Solutions Pvt. Ltd.
    Designation: Manger Operations
    Course Name: Lean Six Sigma Green Belt
    City: Gurgaon


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7.  Client Name: Bhoomica Nataraja
    Company Name: Schneider Electric India
    Designation: Senior Functional Analyst
    Course Name: Lean Six Sigma Green Belt
    City: Bangalore

    Client Name: Nitish Singh
    Company Name: Schneider Electric India
    Designation: Technical Analyst
    Course Name: Lean Six Sigma Green Belt
    City: Bangalore


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8.  Client Name: Ambarish Jakate
    Company Name: Selec Controls PVT ltd
    Designation: BDE
    Course Name: Lean Six Sigma Green Belt
    City: Mumbai


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9.  Client Name: Ankita Prasad
    Company Name: N/A
    Designation:  N/A
    Course Name: Lean Six Sigma Green Belt
    City: Hyderabad


    Client Name: Ankit Taragi
    Company Name: Larsen and Toubro
    Designation: Asst. Manager Poject Monitoring and Control
    Course Name: Lean Six Sigma Green Belt
    City: Pune


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10. Client Name: Bholendra Pratap Singh
    Company Name: Videocon Industries Limited
    Designation: Head - Corporate Strategy Team (Mobile Phone Vertical)
    Course Name: Lean Six Sigma Green Belt
    City: Gurgaon


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11. Client Name: Aditya Ghag
    Company Name: Aditya Birla Finance Limited.
    Designation: Operations Executive - Capital Market Group
    Course Name: Lean Six Sigma Green Belt
    City: Mumbai



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12. Client Name: Gowri Shankar
    Company Name: Student
    Designation: N/A
    Course Name: Lean Six Sigma Green Belt
    City: Chennai


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13. Client Name: Mohd Abbas
    Company Name: Basmah Metal Furniture Company
   
Designation: Production Engineer
    Course Name: Lean Six Sigma Green Belt
    City: Mumbai


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14. Client Name: Shrikant Kulkarni
    Company Name: Freelancer
   
Designation: N/A
    Course Name: Lean Six Sigma Black Belt
    City: Pune


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15. Client Name: Veekshith K Shetty
    Company Name: Keystone Automotive Operations Inc.
    Designation: Process Associate
    Course Name: Lean Six Sigma Green Belt
    City: Bangalore


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16. Client Name: Marimuthu J.
    Company Name: N/A
    Designation:  N/A
    Course Name: Lean Six Sigma Green Belt
    City: Chennai


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17. Client Name: Gaurav Sagarwal
    Company Name: CPA GLOBAL
    Designation: Project Lead
    Course Name: Lean Six Sigma Green Belt
    City: Noida


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18. Client Name: Veekshith K Shetty
    Company Name: Keystone Automotive Operations Inc.
    Designation: Process Associate
    Course Name: Lean Six Sigma Green Belt
    City:
Bangalore

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19. Client Name: Abhishek Johri
    Company Name: Ameriprise Financial
    Designation: Associate Team Lead
    Course Name: Lean Six Sigma Green Belt
    City: Gurgaon


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20. Client Name: Sarvesh Mehra
    Company Name: Digital River World Payments AB ,Stockholm, Sweden
    Designation: Senior QA Engineer
    Course Name: Lean Six Sigma Green Belt
    City: Gurgaon


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21. Client Name: Anil Shyam Butani
    Company Name: ABIT Ptv Ltd.
    Designation: Senior Business Analyst
    Course Name: Lean Six Sigma Green Belt
    City: Mumbai


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22. Client Name: Mehboob ur Rahman
    Company Name: Aditya Aluminium - Hindalco Industries Limited
    Designation: Assistant Manager
    Course Name: Lean Six Sigma Green Belt
    City: Kolkata


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 ..

SIX SIGMA

Six Sigma is a quality management methodology aimed at performance improvement by reducing the number of defects to 3.4 or few defects per million items produced and a subsequent increase in profits and decrease in costs. It mainly targets to remove the obstacles in a process which are resulting in defects. Six sigma rating indicates that 99.999966 % of what is produced is free from all kinds of defect and is a quality product.

Pros

A methodology proactive in nature and examines the entire production process to identify process improvement for removing defects even before their chance of occurrence.

Cons

Rigidity in planning process due to holistic approach limiting the creativity and innovation of team members

PRINCE2

PRINCE2 (an acronym for Projects In Controlled Environments) is a process-based method for effective project management. It is widely recognized and used in public sector and is especially used extensively by the government of UK .It serves as one of the best guide on project management. It provides the ability to manage business and deal with project risk more effectively. It is considered as an invaluable asset as it brings effectiveness in the performance of employees and increases the employment prospects for an individual. It was originally based on PROMPT, a project management method created by Simpact Systems Ltd.

Pros

The excess documentation involved can be helpful in tracking performance and corporate planning.

Cons

It is quite difficult to adapt to project changes as maintaining documents and logs require considerable efforts.
 
Where does the difference lie?

 

  1. Lean Six Sigma deals with the way to solve the problem whereas PRINCE2 lays down the mechanism to run the problem.
  2. Six Sigma doesn’t allow execution and completion of a large IT project in a way that it is delivered on time, in the budget and within the scope whereas PRINCE2 is a process that specializes in project management and ensures that its complete focus is on delivering the project within the time frame set by the company.
  3. Six Sigma relates to specific methodologies which help in understanding how business processes are performing, what isn’t working i.e. where the waste is occurring in the process life cycle and then the process of rectification is carried out to ensure minimum wastage. 
  4. On the other hand methodologies like PRINCE2 sets out a framework in managing the delivery of the project. They are defined in such a manner which clearly lay down that what it needs to have in the place in order to make the project work.
  5. Six Sigma is mainly based upon Lean Process Improvement whereas Prince 2 is based on Waterfall/Sequential Project Management.

Want to get more information about Six Sigma training and certification?
Connect with one of our consultants for more information!
Email us now at kounal@henryharvin.com or call us at our centralized number: 9015266266.

 ..

SIX SIGMA

Six Sigma is a quality management methodology aimed at performance improvement by reducing the no of defect to 3.4 or few defects per million items produced and a subsequent increase in profits and decrease in costs. It mainly targets to remove the obstacles in a process which are resulting in defects.

PMP

Project Management Professional (PMP) is the one of the most significant Certification for project managers. It is an International Designation offered by Project Management Institute (PMI). PMP certified project managers are employed by organisations all over the world as they seek to improve the success rate of projects in all areas, by applying a standardized and evolving set of project management principles as contained in PMI's PMBOK Guide.

It contains over 42 processes which can be adopted for successful completion and implementation of the projects.

Where the difference lies?

The main difference between Project Management Professional (PMP) and Six Sigma lies in the Methodology.

PMP uses various project management principles and processes to improve the success rate of the projects. On the other hand, Six Sigma leverages statistics to identify the defects and remove those defects for improvement in quality of the process.
 
LEARNING
 
Under Six Sigma Certification, the learning is imparted with the main focus of reducing defects as much as possible in order to reduce time and improve quality as per the standards set by the Company whereas in PMP Certification, learning is imparted to the practitioners with the main focus on how to properly plan and execute projects in order to ensure a high success rate for the projects.
 
DESIRE
 
The desire for PMP certification generally arises in an individual himself in order to develop his competencies in the challenging world whereas the need and criteria for Six Sigma Certification is specified by the company to makes its employees more efficient and capable of performing in the organisation.
 
NATURE
 
Project Management Professional is broad in nature as compared to Six Sigma which is much more specific and conceptually broad in nature.
 
WORK-CYCLE
 
Most of the Black Belts after the certification have to work for minimum 12-24 months in full time employment but there is no such obligation for the Project Management Professionals. However PMP have to complete 60 PDU’s in next 3 years to maintain certification.
 
COST ESTIMATION
 
Average Cost Incurred in completion of Six sigma black belt is quite high as it ranges between 25000-50000 US $ whereas the estimated costs in certification of PMP is significantly low at just 1500-3000 US $.

Want to get more information about Six Sigma training and certification?
Connect with one of our consultants for more information!
Email us now at kounal@henryharvin.com or call us at our centralized number: 9015266266.
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IFRS

1.  See, What Ms. Neha is saying about the IFRS Training Program:

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2.  See, What Ms. Swarna Singh is saying about the IFRS Training Program:

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3.  See, What Mr. CA Manoj Goel is saying about the IFRS Training Program:

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IFRS or International Financial Reporting Standards as would be the associated expansion of this acronym is a globally accepted accounting standard. It is a precise set of preparing reports and financial statements that help read the company data in a fashion observed worldwide. The advantages of this approach in the global business world are elaborated below.

1. Easy Comparison - Globalization to start with! The main advantage of IFRS is it allows the comparison of different companies, as data is presented on the same basis. All countries have their own Generally Accepted Accounting Principles (GAAP) which is used to evaluate and make the financial statements, this data is varies in all countries depending on their basic guidelines and principles hence making comparison with competition or otherwise unfeasible.  When all companies follow the same accounting pattern which is with IFRS, this process of comparison and analyses thus becomes possible.

2. Developing a Unified Set of Accounting and Reporting Standards - With a single set of accounting framework, the understanding of accounting procedures can be broken down from its complexity to a standard procedure. It also facilitates better understanding and efficient reporting of financial data.

3. Highly transparent and globally enforceable reporting - IFRS works on a principle based philosophy rather than a rule based philosophy. The rules philosophy could prove to be in favor of one entity or for a particular period of time and bad for the opposite entity or another stretch of time. Whereas working over principles, there is equality and transparency in the picture. IFRS also takes into account substance along with the legal form. It makes sure that the complete and relevant information is present in the financial statement, always providing a transparent picture with the least scope of manipulation.

4. Encourages cross border transactions and investments - With a framework that everybody can understand in the different parts of the world, the financial statements are more recognizable for investors and potential collaborators, which brings about trade on a global level and facilitates business growth. It builds a great amount of trust amongst all the parties involved, which is the buyers and suppliers, or the investors and investees since the single set of accounting makes the current position of each entity extremely clear and transparent. This also helps to build the confidence of the company’s global stakeholders.

5. Facilitate international acquisitions and mergers - With the increased exposure to the global market; access to foreign companies has become easier and more approachable. This has shown an increased trend in making way for more foreign capital drawn in, in the forms of acquisitions and mergers with bigger brands and multinationals. IFRS is the key to reporting statements that are globally understood and can be analyzed and assessed by the financial authorities, a transparent picture is provided and risk involved are clear which help in facilitating such huge business decisions.

Other advantages of IFRS also include prompt provision of financial data, shortened time taken through automation and reduced cycles of reporting. Potential improvement in the quality of regular reports and scope of planning and forecasting revenues of the company is what can be expected out of the IFRS system of reporting.

Want to get more information about IFRS training and certification?
Connect with one of our consultants for more information!
Email us now at kounal@henryharvin.com or call us at our centralized number: 9015266266.
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Ernst and Young (EY) is one of the global leaders in Tax, Assurance, Advisory and Transaction Services. It plays a critical role in building a better world for their clients, communities and people. It offers various training programs to help people develop their competencies in the field of finance and IFRS with the help of trained professionals who ensure development of the participants.
Some of the training programs offered by EY are:

1. Finance for Non Finance Managers 

This 3 day program offered by EY provides awareness and understanding of the ways in which finance affects the business objectives of an enterprise. It also provides valuable insight on important financial areas which are quite relevant for decision making in a business enterprise.
 
Participants are made familiar with the form, content and analysis of financial statements and the main accounting principles and techniques.
 
The program will also help to improve an organization's performance by highlighting the importance of cost control, breakeven and variance analysis.
 
The course is beneficial to all Non Finance Managers/Professionals.
 
2. IFRS Course 

It is important for the finance professionals to understand the accounting standards in the Ind-AS framework, and the related practical application issues. Keeping this need in mind, 80 hours face to face training program on IFRS has been designed by EY which will help participants to understand the structure of the IFRS framework and apply relevant financial reporting standards to key elements of financial reports.
 
3. IND-AS Master Class 

It is a Comprehensive 4 day Master Class which provides a detailed understanding of IND-AS, differences from the current Indian GAAP, insight into the practical application in IND-AS implementation. It is delivered by senior professionals who have extensive training experience as well as experience of working on IFRS/GAAP conversion engagements.
 
4. Internal Financial Master Class 

It is a 2 day master class offered by EY on IFC which aims to provide a complete understanding on requirement of Internal Financial Controls (IFCs) with practical examples focusing on regulatory requirements, applicability and timelines for implementation.
 
 
5. Financial Instruments Accounting Master Class 

It is a Two Day Master Class delivered by trained professionals possessing expertise in financial instruments enabling understanding on how these challenges impact one’s business, and to arrive at an informed decision. Facilitators share global best practices and perspectives to provide a holistic understanding.

Want to get more information about IFRS training and certification?
Connect with one of our consultants for more information!
Email us now at kounal@henryharvin.com or call us at our centralized number: 9015266266.
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US GAAP are the generally accepted accounting principles used in the United States while IFRS are the international financial reporting standards used around the world.
There are some major differences between US GAAP and IFRS.

 

Difference US GAAP IFRS
Financial periods required Generally, comparative financial statements are presented; however, a single year may be presented in certain circumstances. Public companies must follow SEC rules, which typically require balance sheets for the two most recent years, while all other statements must cover the three-year period ended on the balance sheet date. Comparative information must be disclosed with respect to the previous period for all amounts reported in the current period’s financial statements
Layout of balance sheet and income statement No general requirement within US GAAP to prepare the balance sheet and income statement in accordance with a specific layout; however, public companies must follow the detailed requirements in Regulation S-X. IFRS does not prescribe a standard layout, but includes a list of minimum line items. These minimum line items are less prescriptive than the requirements in Regulation S-X.
Balance sheet — presentation of debt as current versus non-current Debt for which there has been a covenant violation may be presented as non-current if a lender agreement to waive the right to demand repayment for more than one year exists before the financial statements are issued or available to be issued. Debt associated with a covenant violation must be presented as current unless the lender agreement was reached prior to the balance sheet date.
Balance sheet — classification of deferred tax assets and liabilities Current or non-current classification, generally based on the nature of the related asset or liability, is required. All amounts classified as non-current in the balance sheet.
Treatment of certain costs in interim periods Each interim period is viewed as an integral part of an annual period. As a result, certain costs that benefit more than one interim period may be allocated among those periods, resulting in deferral or accrual of certain costs. Each interim period is viewed as a discrete reporting period. A cost that does not meet the definition of an asset at the end of an interim period is not deferred, and a liability recognized at an interim reporting date must represent an existing obligation.
Preparation of consolidated financial statements — general Required, although certain industry-specific exceptions exist (e.g., investment companies). Required, although certain industry-specific exceptions exist (e.g., investment companies), and there is a limited exemption from preparing consolidated financial statements for a parent company that is itself a wholly owned or partially owned subsidiary, if certain conditions are met.
Preparation of consolidated financial statements — Investment companies Investment companies do not consolidate entities that might otherwise require consolidation (e.g., majority-owned corporations). Instead, these investments are reflected at fair value as a single line item in the financial statements. A parent of an investment company is required to retain the investment company subsidiary’s fair value accounting in the parent’s consolidated financial statements. Investment companies (“investment entities” in IFRS) do not consolidate entities that might otherwise require consolidation (e.g., majority-owned corporations). Instead, these investments are reflected at fair value as a single line item in the financial statements. However, a parent of an investment company consolidates all entities that it controls, including those controlled through an investment company subsidiary, unless the parent itself is an investment company.
Uniform accounting policies Uniform accounting policies between parent and subsidiary are not required. Uniform accounting policies between parent and subsidiary are required.
Measurement of noncontrolling interest Noncontrolling interest is measured at fair value, including goodwill. Noncontrolling interest components that are present ownership interests and entitle their holders to a proportionate share of the acquiree’s net asset.
Costing methods LIFO is an acceptable method. Consistent cost formula for all inventories similar in nature is not explicitly required. LIFO is prohibited. Same cost formula must be applied to all inventories similar in nature or use to the entity.
Measurement Inventory is carried at the lower of cost or market. Market is defined as current replacement cost, but not greater than net realizable value (estimated selling price less reasonable costs of completion and sale) and not less than net realizable value reduced by a normal sales margin. Inventory is carried at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.
Reversal of inventory write-downs Any write-down of inventory to the lower of cost or market creates a new cost basis that subsequently cannot be reversed. Previously recognized impairment losses are reversed up to the amount of the original impairment loss when the reasons for the impairment no longer exist.
Revaluation of assets Revaluation not permitted. Revaluation is a permitted accounting policy election for an entire class of assets, requiring revaluation to fair value on a regular basis.
Depreciation of asset components Component depreciation permitted but not common. Component depreciation required if components of an asset have differing patterns of benefit.
Measurement of borrowing costs Eligible borrowing costs do not include exchange rate differences. Interest earned on the investment of borrowed funds generally cannot offset interest costs incurred during the period. Eligible borrowing costs include exchange rate differences from foreign currency borrowings.
Investment property Investment property is not separately defined and, therefore, is accounted for as held for use or held for sale. Investment property is separately defined in IAS 40, Investment Property, as property held to earn rent or for capital appreciation (or both) and may include property held by lessees under a finance or operating lease. Investment property may be accounted for on a historical cost basis or on a fair value basis as an accounting policy election. Capitalized operating leases classified as investment property must be accounted for using the fair value model.
Method of determining impairment — long-lived assets Two-step approach requires that a recoverability test be performed first (carrying amount of the asset is compared with the sum of future undiscounted cash flows generated through use and eventual disposition). If it is determined that the asset is not recoverable, an impairment loss calculation is required. One-step approach requires that impairment loss calculation be performed if impairment indicators exist.
Assignment of goodwill Goodwill is assigned to a reporting unit, which is defined as an operating segment or one level below an operating segment (component) Goodwill is allocated to a cash-generating unit (CGU) or group of CGUs that represents the lowest level within the entity at which the goodwill is monitored for internal management purposes and cannot be larger than an operating segment (before aggregation) as defined in IFRS 8, Operating Segments.
Reversal of loss Prohibited for all assets to be held and used. Prohibited for goodwill. Other long-lived assets must be reviewed at the end of each reporting period for reversal indicators. If appropriate, loss should be reversed up to the newly estimated recoverable amount, not to exceed the initial carrying amount adjusted for depreciation.


Want to get more information about IFRS training and certification?
Connect with one of our consultants for more information!
Email us now at kounal@henryharvin.com or call us at our centralized number: 9015266266.
..

Finance for Non-Finance Managers

Financing is a vital aspect which is required to start a business and increase its profitability. It is also needed to tap the necessary resources for the firm. There are couple of means through which financing can be done. However the firm needs to weigh the pros and cons of each source of financing in the light of real world situations and then choose the means through which financing can be performed.

There are two major sources of financing, namely

  1. Debt Financing
  2. Equity Financing

DEBT FINANCING

Debt financing is the process of raising money for meeting the working capital need or capital expenditures by sale of bonds, bills, or notes. The company gets a loan and the individuals or institutions become the creditors of the business enterprise. The company promises to repay the principal amount and interest thereon within a stipulated period.

Debt financing can come either from a Lender’s Loan or through Sale of Bonds to general public.

Debt financing consists of both Secured and Unsecured Loans.
 
A Secured Loan requires the borrower to offer a collateral security to guarantee repayment. In case of default on loan, the collateral is forfeited to satisfy payment of the debt. Various assets are acceptable as collateral such as Guarantors, Co-makers, Real Estate, Savings Accounts or Certificate of Deposit, Chattel Mortgage.

In case of unsecured loan the credit reputation of the borrower is the only security that the lender accepts. But these are usually short-term loans carrying a very high rate of interest.

Selling bonds or commercial paper is another way to raise money through debt financing. This is more economical and easier than taking a bank loan.

Debts are also subject to a repayment period. There are three types of terms of repayment:
  1.  Short-term loans are to be paid back within six months to 18 months.
  2.  Intermediate-term loans are to be paid back within three years from the date of borrowing.
  3.  Long-term loans are to be paid from the cash flow of the business within five years or less.

SOURCES OF DEBT FINANCING

FINANCIAL INSTITUTIONS

Financial institutions such as banks, building societies and credit unions offer business loans, lines of credit, overdraft facilities, invoice financing, equipment leases and asset financing as both short and long term finance solutions.

RETAILERS

Many retail stores offer store credit to purchase technology and equipments via a finance company. It carries a high interest rate.

SUPPLIERS

Most suppliers offer the facility of trade credit allowing the business enterprises to delay the payment for goods.

FACTOR COMPANIES

Factor companies offer finance in the form of purchase of a business' outstanding invoices at a discount. The factor company then chases up the debtors. While this is a simple way to get quick access to cash, it is at the same time expensive as compared to traditional financing options.

FAMILY OR FRIENDS

Offering of a loan by a friend or a relative is called debt finance arrangement. 

EQUITY FINANCING

Equity financing is the process of raising capital through the sale of an ownership interest in the form of shares. 

Equity Financing involves issue of prospectus, which contains detailed information about the company's activities, directors, risk factors, financial statements, etc to help the investor to make an informed decision regarding his/her investment. 

Equity financing depends significantly on the state of financial markets and equity markets. During the Bull period, Companies find it easier to raise funds through Equity Financing while the confidence of investors shake in Bear Period and thus Debt Financing is preferable in the same.

SOURCES OF EQUITY FINANCING

SELF FUNDING

Self Funding involves funding purely through personal finances and revenue from the business. It is also called 'bootstrapping'. Investors expect some amount of self funding before they agree to offer finance to the enterprise.

VENTURE CAPITALIST

Venture capital is used to finance high-risk, high-return businesses. Venture capitalists invest large sum of money in start-up businesses which have the potential for high growth and large profits. They provide management or industry expertise to the business.

PRIVATE INVESTORS

Investors provide funds to the business enterprise in lieu of share in the profits and equity. Investors such as business angels can also work in the business to provide expertise in addition to providing funds.

STOCK MARKET

Initial Public Offering (IPO) involves offering shares to public to raise capital. It is expensive, complex and carries the risk of not meeting the amount of minimum subscriptions.

CROWD FUNDING

'Crowd Funding’ is a platform offered by social media websites to entrepreneurs for their product prototypes and innovative projects. It involves provision of project and budget details and inviting people to contribute to a start-up capital pool.

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Finance plays a crucial role when it comes to taking decisions regarding the continued survival and growth of a business. Various decisions regarding the organisation are taken by analysing the financial statements as they help in ascertaining the viability in aspects related to financing. Finance basically serves as an enabler of various business opportunities in terms of expansion, larger market capitalization and a new offering of service.

Companies generally finance its funds through two ways – Equity Financing and Debt Financing. A balanced ratio of debt and equity is maintained in order to avoid future contingencies.

Debt financing includes loans which may be ranging from short term to long term which requires some sort of payment to be made either monthly or yearly.

Equity financing is financing representing an ownership interest in the company including financial instruments such as equity shares, bonds, stock and private investments.

Various analysts are recruited to analyse the financial position and how it can result in meaningful business decisions in this regard.
As we all know, finance directly or indirectly affects the decisions related to business. So it is a vital aspect which is usually taken in consideration in order to arrive at feasible business decisions.
Some of the reasons which are affected by the current financial position of the company are:
 
LABOUR/MANAGERIAL PERSONNEL
 
It is one of the most important factor that is ascertained by finances of the company. A good financial position indicates that a business is capable to recruit more experienced and well trained professionals that will prove an asset to the organisation in terms of making significant contribution in growth and expanding capabilities of the business. Decisions regarding recruitment should be done quite carefully as each employee involves a dedicated cost that firm has to incur. However, if the firm is having lower profitability, it is not in a position to retain all the employees in the business. In order to recover the finances and improve the financial position, Layoff of employees is performed in which companies trim the manpower in order to stabilize profits.
 
DECISION REGARDING COST AND PRICING
 
Costing decisions are also affected by the finances of the company. When there is a recession or crisis, a firm formulates various decisions in respect of cost for retaining sufficient profits and to avoid a situation of bankruptcy. Business might look for elimination of unnecessary expenditure and develop more cost saving and efficient methods for reduction in costs.
 
GROWTH
 
Growth is an important factor that contributes to the success of business enterprise. A business constantly strives to grow in the long run. Growth of a business helps to increase revenues profits and margins to an extent. It even contributes to improved image of the enterprise. However, there are various factors of growth that can only be undertaken if the financial position is stabilized and the firm is earning enough revenues to adequately cover its cost. These factors vary widely by industry, size of business, market and even the taste for risk of the management and ownership. Thus it can be said that when the business lacks adequate financial resources growth is unattainable or may stagnate.

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Personal Financial Planning is a process of management of finance facilitated by an individual or a family unit in order to plan its savings, investment and expenditure for a given period of time taking into consideration future events and contingencies. This process guides regarding budget and spending of monetary resources. With the help of personal planning, one can figure out the minimum amount to be retained as saving which will benefit to a huge extent in the future.

While planning personal finance an individual takes into account various options of investment ranging from investment in private equity such as shares, bonds to banking products such as fixed deposits and even insurance policies in order to avoid contingent losses.
 
BENEFITS OF FINANCIAL PLANNING

  1. Mistakes regarding wrong investments can be avoided.
  2. Goal achievement is much easier due to clarity of finances.
  3. Security against future crisis or contingencies.
  4. One can define financial goals and know whether they are realistic or not.
  5. Maximization of Monetary Funds.
  6. Provides a comfortable living with less worry.
  7. Helps in building of wealth.
 
PROCESS OF FINANCIAL PLANNING

Personal finance planning is a dynamic process that has to be monitored continuously and its results should be valued against the defined financial goals in the light of occurrence of various financial or non-financial events.

Generally, 5 steps are involved which are as follows

1.     Assessment

The very first step involves assessment of finances. Personal finances are analysed with the help of financial statements such as Balance Sheet and Income statement which helps to ascertain the financial position of an individual or family unit. It helps to know the expenses and income received during the year as well as Net assets available on a certain date.

2.     Goal setting
 
After assessment of financial statements, Goals are set up on short term basis and long term basis. The goals defined should be realistic in nature and should be achievable within the time frame planned for each of the goals. It provides satisfaction and serves as a motivating factor.it acts as a directing function of financial planning.
          
3.     Plan creation

After goal setting, plans are created in a way so that the goals can be achieved as early as possible. The financial plan describes how to achieve the plans in reference to goals. For example: Reduction of Unnecessary Expenses or Investment in equity.

4.     Execution

A financial plan is executed in line with the plan created and goals defined. One should execute the plan with a disciplined and regular approach.

5.     Monitoring and reassessment

After the execution of financial plan, the plans should be continuously monitored from time to time and should be evaluated against the target goals in order to ensure successful financial planning.

CONCLUSION

Thus, Personal Financial Planning is the process of achieving life goals through proper management of finances in a strategic manner. It may include purchasing a house, saving for higher education or other aspiration goals set to enjoy a higher standard of living. It is not limited to a particular class but such practice should be carried out by each and every individual in order to maximize savings.
 
A large contribution can be made in every sphere of life if we properly plan personal investment, finances and taxation.

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BUDGET
 
Budget is generally defined as a quantitative plan which is chartered for the forthcoming period of time. It generally takes into consideration planned sales volumes, costs to be incurred, expenses to be met out, expected revenue to be generated and flow of cash and cash equivalents during the time period for which the budget is planned.
 
Budget can be prepared at any level ranging from an individual to national level. It is basically the estimation of revenue and expenses.
 
Budget is Broadly Categorized into the following 3 categories

  1. Surplus Budget: It usually means that the expected revenue is more than the estimated expenses. Thus, profits are anticipated.
  2. Balanced Budget: It means that the expected revenues almost equal the estimated expenses. No profits as well as no losses are anticipated.
  3. Deficit Budget: It means that the expected revenue is less than the estimated expenses. Hence, losses will be incurred.
 
PURPOSE OF BUDGET
 
The purpose of budget includes the following 3 aspects:

 
  1. It is a forecast of estimated income and expenditure to be incurred over the time period for which budget is planned.
  2. It serves as a tool for decision making as it provides clarity with respect to revenues and expenses.
  3. It is an appropriate mean to measure business performance.
 
BUDGETARY CONTROLS
 
Budgetary Control is basically a technique where the actual results i.e. actual revenues and expenses are compared with the budget planned before the start of the financial year. It highlights the need for adjustment of the performance, if required. It also shows how well the managers have controlled costs and operations in an accounting period.
 
It analyses the budget after its implementation to know major deviations.
 
TECHNIQUES OF BUDGETARY CONTROL
 
For the purpose of budgetary control, various techniques are used which are briefly explained as follows
 
 
1.         Variance Analysis
 
In the following analysis, Budget is prepared for each and every department. Further, a comparison is made between the actual and estimated accounting figures. With the help of this technique, variances are found. The variances are further divided into Favourable and Unfavourable Variances.
 
For instance, the difference between actual production cost and estimated production cost will be denoted by production variance.
 
This technique helps in reducing cost and is commonly used for budgetary control.
 
2.         Responsibility Accounting
 
It is considered to be a good technique for budgetary control. In this, 3 centres namely Cost Centre, Profit Centre and Investment Centre is created. All these centres are like the department of the organisation and employees are classified on the basis of these centres.
 
The performance of the employees in manually recorded and their accountability is fixed regarding certain goals that might be quantitative or qualitative. This technique helps to take decision regarding promotion or demotion based on employee’s performance.
 
3.         Adjustment of funds
 
Under this technique, Top management takes decisions regarding adjustment of funds from one project to another.
 
For instance, if a new project started by an organisation needs money and there is surplus money allocated to an already existing project, then the surplus funds can be adjusted against new project for its initial setup. This technique facilitates proper allocation and adjustment of funds and prevents misuse.
 
4.         Zero Based Budgeting
 
Another technique which is immensely popular these days is zero based budgeting. Under this technique, budget of next year is considered as nil which can be only possible if estimated revenue is equal to estimated expenses. At that time, difference between estimated revenue and estimated expenses will be zero. Any excess amount of money will be adjusted. This technique helps in having control over each and every amount of money spent during the year.

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Agile

Agile Project Management- In simple terms; Agile Project Management achieves the scope to embrace change and deliver the most ambitious results. It has been observed that companies with Agile principles can adapt quickly to the complexity and uncertainty of today’s business conditions thus having a greater chance in the market compared to companies that would more often crumble under the pressure.

What exactly is Agile Project Management?

Agile Project Management is an interactive process that drives focus on consumer satisfaction first, team harmony over the tasks, and adapting to the current business requirements rather than just sticking to a textbook plan. Agile Project Management is based on the same principles as that of the Agile Manifesto (Agile Software Development). These principles are the guiding light for how to deliver high value service that is technically sound and delivered in a timely manner within the constraints of budget or time. The people when having a management approach and mindset can reach over a consensus quickly thus making the necessary business decisions in this fast pace environment.

The principles of Agile Manifesto:

  1. Individuals and interactions over processes and tools - Agile framework chooses individuals which is team members and the harmony at work over following just textbook procedures
  2. Working software over comprehensive documentation - Rather than drowning in excessive reporting and always competing a backlog, Agile focuses on getting the work done. Shorter procedures but more action and lesser theory of work are what the philosophy of Agile follows.
  3. Customer collaboration over contract negotiation - Agile believes in process that are completely customer centric and focuses on the needs of the customer that needed to be catered to instead of formulating the terms and conditions of the company and negotiating over that with your clients. Hence Agile framework recognizes the importance of collaboration with the customer and getting them involved to ensure a flawless delivery of service.
  4. Responding to change over following a plan - With today’s market scenario, Agile recognizes the need to be swift when it comes to making business decisions or risk management processes that need immediate action. If an organization is stuck into the dilemma of following the rule book and the drawn out plan, the reaction to changes are not always carried out in time which can have severe and long term damage to the company. The Agile approach believes in practices and processes that facilitate responses to change in a more timely and efficient manner.

As mentioned above, Agile doesn’t believe in the conventional ways of process and operations. It is a new approach that throws light on aspects that actually affect team morale and business outcomes. Given below are the key areas with which Agile helps in enhancing an organizations performance.

Discover the problem your business is trying to fix- Agile Project Management uses work sessions and IT divisions and that of business to get a better understanding and shared view of the problems, the prospect solutions and the plan. Urgency is of prime importance and Agile uses outputs such as low-fidelity prototypes and story maps that help in moving to a solution quickly.

Evolve quickly, respond and adapt- More often than not, the first time is never when you get it right completely. Agile helps find the source of the problem swiftly by making frequent testing a standard procedure. Also, Agile practices facilitate keeping stakeholders in the loop for any such problem which gives the company necessary tools to tackle the issues continuously.

It’s a new way of thinking- Just as elaborated above with the Agile Manifesto; Agile gives way to a new school of thought and embraces the leadership mindset within team members. It is about understanding self organizing teams, taking ownership and the interaction between all the roles contributing to the development process. It further elaborates on encouragement of collaboration and discovering innovative solutions which unleash the power of true Agile thinking.

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For any working professional, be it a private job, government officer or a businessman it’s always exciting to get where the real action is! Creating innovative products, meet clients, seal deals and develop business. What usually gets side-lined in the process is effective Management- of people and of the task in hand. That’s what we are here to help you with our Agile Project Management program. Below is an excerpt of what you can expect to learn through this workshop.
 

  • (a) Delegation: An effective manager is not one who only can do everything himself. Recognizing the talent your team holds and delegating responsibilities accordingly helps bring out the best product while also enhancing your team’s skills.
 
  • (b) Get Set GoalsIndividual goals for employees help them remain motivated. It brings purpose to their role while also directing them to observe the organizations objectives. An agile course help develop the process of goal setting which also becomes an effective tool to monitor performance and therefore renders better productivity. 
 
  • (c) Communication is KeyAgile helps you understand the need of and thereby maximize communication between managers &business owners with the ground level staff. Positive updates about the company and other special mentions go a long way in retention of employees.
 
  • (d) Time out! – Management is all about dealing with people- your clients and your staff. And with people it’s all about emotions. Agile emphasizes on the importance of rendering a listening ear to your employees and addressing their grievances & focusing on their upliftment.
 
  • (e) Job well done!!- Every employee urges for Recognition. It is important for the morale of your staff to know that good performance will be noticed and acknowledged adequately. Inexpensive and highly effective ways of recognition are detailed within the workshop to help you be an inspiring leader.
 
  • (f) Long term solutions- While it’s great to solve problems quickly; it only is efficient if the solution is long lasting. Agile helps you to deal with problems in an effective manner which enhances processes and increases productivity.
 
  • (g) All work & no play make Jack a dull boy -To create a more loyal and energetic workforce it is necessary for you and your team to let your hair down once in a while. While bearing in mind the serious responsibilities of business Agile helps formulate a wavelength to maintain work pressure and leisure.
 
Taking care of the above mentioned skills, Agile also helps you achieve:-
 
  1. Better Quality Products: Through the Agile workshops you can ensure highest quality products with regards to design, innovation & applied technologies through proactively exercised knowledge of employees to the best of their abilities.  
  2. Shooting team Morale:  With guidelines that can be easily applied in day to day operations, Agile techniques brings about positive re-enforcement within the employees, enabling better performance & a more focus driven team.  
  3. Eliminate risks!Taking necessary measures proactively & precautions against potential problems, Agile reduces the risk of major hurdles that can occur. Always looking at the bigger picture Agile ensures the alignment of operations with the company’s’ goals and objectives.  

Summarizing all the factors involved- Agile helps with delegating the correct goals to your team while understanding the importance of better communication & employee recognition. Through enhancing problem solving abilities and building team morale we help you in becoming an inspiring leader taking your company and yourself ahead in the game!

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Testing as a Phase

One will never know how good something is unless it has been tested. Testing is the process of evaluating a system or its components with the intent to find whether it satisfies the specified requirements or not. So, testing is a very important part of any product development process. The results of the testing will determine what features have been built strong, what changes need to be made, and whether the product is meeting the customer requirements or not. A proper, methodical testing is essential to develop a quality product.

Importance of Testing in the Software World

When we develop a product, we do so with an intent that it serves its purposes well. In the working stage, how do we know if the product or its components is developed correctly? That’s where the testing comes in. We need to ensure that the features: 

  1. Meet the set requirements,
  2. Function correctly in the desired range of inputs,
  3. Perform its functions within an acceptable time,
  4. Are as user-friendly as possible,
  5. Can be installed and run in its intended environments, and
  6. Have an overall desirable performance.

Testing is done by writing test cases for the product components, and reviewing the outputs and performances for those cases. If the product construction follows the design specifications set by the design team, and the performance from the test cases are satisfactory, the process can go further, and if the outcomes are not satisfactory, then the design and product development is redone and rechecked.

Why Agile Testing over Traditional Methods?

When we implement Agile Methodology in testing, we take testing in every life cycle. Any errors identified will be easily tracked within that component and can be addressed quickly. This is in contrast to the way things are done in the traditional models, where the entire product functioning is tested for overall functionality, and the errors are identified only in the end stage. The problem in this approach is that, at the end stage, the overall scope of the source of the bugs is too vast to pin point where the error may be. This will lead to tedious testing of each and every component and feature. 
 
Testing Levels

As mentioned, in Agile, the testing is done throughout the process, simultaneous to the designing, planning, development and implementation of the product. 
At the component level: while coding a particular segment, the developer can run a few tests to correct any syntax errors, and check the working of that segment.
At the compilation phase: while integrating all the units and segments together, even if the segments individually work fine, tests  should be run to check whether the compiled form has errors.

Test run: the product should finally be tested as a whole to see performance, both by the development team, as well as an outside user group. This ensures that error that may have been missed by the developing team can be identified from an outside perspective.

Writing Agile Test Cases

Test cases for a program help in verifying if there are no bugs present in the program. When strong test cases are written, it saves the effort and time in testing again and again, making the whole testing process smoother.  A good test case is one that is capable of being used repeatedly, covers maximum number of situations and conditions, can trace back to the source of error, and should be such that it is relevant in testing from the user’s perspective. Writing test cases for software takes a little practice and knowledge of the software that’s being tested. Testing can be a challenging process, but only through methodical testing can we achieve perfect results.

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The history of product development and project management has seen numerous methodologies and approaches, each having merits of their own. Let’s look at the benefits of using Agile.

1. When you look at a product development process, a project can take a lot of time, right from 3 or months to around a year. In this time, with the current rate of change in trends and innovation, it is highly possible that the requirements, collected at the time of initiation of the project, have changed. In Agile, the project team is constantly in touch with the customer, taking frequent updates. So, when the customer reports the change in requirements of feature, the feature list is updated. This greatly helps in making a better product.

2. It is very common for projects to take longer time to get completed and delivered, than was estimated and promised by the project team. That can be changed when you adopt Agile. In most cases, the time gets exceeded due to unforeseen errors, rework time, and the fact that team completes the entire product one phase at a time. In Agile, the development, testing and documentation of the product happen simultaneously. Also, the development occurs in cycles, with one feature or component being developed at a time. This narrows the scope of errors, and when identified, is corrected immediately. Adding to this, the frequent team meets ensure that the project is on schedule.

3. A good product is one that meets the set requirements and functions as desired. In order to make a good product, any errors or undesirable results must be removed. This process is called rework. Rework, when done for an entire product, is a very tedious task, and takes a lot of time and effort. The procedure followed in Agile ensures lesser rework and lesser time spent on rework, since the development is done one component at a time.

4. For any development process, the team is very important. A team should have members who share the same vision for the product and have the same understanding of what the product must look like. In Agile, the team is even more important. All the decisions in the project are made with the discussion with the entire team. Being a process methodology where the many teams work simultaneously on different tasks in the project and the team members are required to meet frequently to plan the course of action, Agile requires a great amount of team coordination. In this way, Agile contributes to forming better professionals who are capable of functioning smoothly in a team.

5. With great quality of products comes great customer satisfaction. When a product is of a high standard, the documentation has been done though roughly, the requirements are met, and the product is delivered properly, the project is said to be successful. Obviously, the main aim is to make sure that the customer is satisfied, as it ensures that the customer is satisfied, and creates a gateway of further business prospects.

Among all the methodologies followed in product development, Agile is one of the most modern and effective ways.

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ITIL

An organizations biggest strength is their human resource- their capabilities, processes and technologies. These are the assets that help deliver organization goals and objectives. It is therefore critical to develop these virtues to create a strategic advantage and serve business goals. ITIL- Information Technology Infrastructure Library is a tool to enable these processes.  It is an approach which incorporates IT Service Management as a continual improvement process to develop business growth.

Along with technology management and process management in the IT sector, ITIL drives focus on the business services which support organizational goals.

The Framework of ITIL:
The IITL practices assist an organization processes from inception to its product delivery and customer service. The framework can be explained as below:

Service Strategy: Customer service being the base of a productive business model, ITIL focuses on the directions to improve IT services over time.

Service Design: To evolve from just technology to appropriately designed strategies after understanding customer needs.

Service Transition: focusing to build a smooth and validated process enabling the efficient process of product delivery.

Service Operations:  Supervising the daily activities and performance review to understand and the work the gaps within IT management.

Continual Service Improvement: Identifying the ways and means to keep the best practices ongoing and standardize the process thereby inducing higher probability of excellence.

ITIL and its Organizational Benefits

Professional service Delivery- ITIL helps looking at service delivery through a serious approach rather than just a mere routine step after the technical processes.

Customer Satisfaction- Focusing on customer service of a continual nature, it reflects on the company’s marketability. This results in greater and improved Return on Investment on IT. 

It’s about the Money!- By implementation of ITIL, IT Departments have a better visibility of costs and assets which further help in utilization of resources better and reduction of hidden costs which otherwise reflect as higher cost to Ownership.

Apart from these direct effects to the organization; there are various indirect positive implications of ITIL. It facilitates reduced cost of training since employees are certified with ITIL. Improved morale of the staff along with retention of the professionals is seen to be higher among organizations adopting the ITIL practices. Increased productivity along with greater competence levels are also observed as the benefits witnessed with ITIL Certifications.

Tip: Being a globally accepted approach companies like Microsoft, Visa, Procter & Gamble, Disney, Honda. Sony etc. have been practicing this approach and have found them beneficial in meeting their respective organization’s objectives.

Benefits of ITIL to Individuals:

Who is doing ITIL?

Well, depending on your experience in the field there are different levels of ITIL that can benefit you most precisely being designed for which stage of your career you find yourself in.

With its business purview ITIL helps an individual understand the bigger picture of an IT functioning. Therefore it would cater best to mid level to top management of the organizational chart. This is mainly suggested because the line members are still getting grasp of their technological roles and services, which makes mid management the perfect fit to read into business understanding after spending enough time understanding the core functioning. Although those keen on learning even from the junior level can clearly benefit from the program increasing their exposure and encouraging their involvement from an early stage itself.

Also job trends are in favor of those with ITIL certifications as companies are recognizing the benefits and ITIL professional brings into the functioning of an organization. 

With Foundation, Intermediate, Expert and Master- there are different levels of ITIL Certification where you can expect to learn the framework in the degree of details as desired and crafted, by your own career path.

Explore the guidelines of ITIL and understand the scope to incorporate the same within your personal and organizations’ functioning to enable better service and thereby boost growth.

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1.  See, What Mr. Aditya Kumar is saying about the ITIL Training:

ITIL feedback, ITIL certification feedback, Henry Harvin ITIL feedback

2.  See, What Kshitij Rai has to say about the services provided by Henry Harvin pre, during and post ITIL Training:

itil feedback, itil certification feedback, itil certificaiton feedback


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1.  See, What Mandira Rana is saying about the amazing service she received from Henry Harvin:

ITIL feedback, ITIL certification feedback, Henry Harvin ITIL feedback

2.  See, What Vanitha Raja Rao is saying about the trainers:


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3.  See, What Dinesh Rajput has to say about the ITIL program he attended with KPMG:

itil feedback, itil certification feedback, kpmg itil certificaiton, itil program feedback..

What is ITIL?

The Information Technology Infrastructure Library, or ITIL, is an entity within IT Security Management (ITSM) field is a practice framework from public and private sectors internationally. It guides the IT resources to be organized while delivering business, documenting the goals and processes, monitor the functions and roles in ITSM.

Who can learn The ITIL framework?

The ITIL framework is a widely accepted framework, with set of practices mainly for the IT professionals in IT enabled services and management,  IT  service and support managers , IT Consultants, CIO’s  and  Project Managers.

ITIL Service Management supports the transformation of IT services and has been implemented in companies like Microsoft, IBM, Caterpillar and Boeing and adapted well with changing economic and market conditions.

The ITIL Service Management Lifecycle has 5 distinct lifecycle stages:

  1. Service Strategy
  2. Service Design
  3. Service Transition
  4. Service Operation
  5. Continual Service Improvement

ITIL knowledge is required for various organizations to handle projects demanding the skilled workforce and companies are sponsoring employees with ITIL training and also provide onsite job training.

The ITIL Certification Path:
ITIL certification, levels of ITIL certification, ITIL                        

There are 4 levels in ITIL Certification Path
ITIL Foundation:
provides details on the fundamentals of ITIL for better understanding of the concepts.
ITIL Intermediate: explains 5 ITIL framework phases to manage across the lifecycle.
ITIL Expert: explains all the finer details of ITIL Structure.
ITIL Master: provides a comprehensive knowledge with ITIL phases to be implemented in real time.

ITIL Certification serves as a gateway for various opportunities at different organizational levels. The benefits are as listed below:
  - Fosters Creativity and Appropriate Process Selection at organization levels.
  - Increased Productivity with greater customer satisfaction at professional upfront.
  - Increased ROI in IT setup by implementing appropriate skills in various levels of projects.
  - Long Term Pay off in terms of income, cost savings and improved services.
  - ITIL customers are offered better flexibility with pick and choose option available to mix and match ITIL model based on requirement.
  - With better skills and expertise in ITIL it paves way for better third party services.
  - Solutions provided with better identification of weak areas.
  - Resource utilization to reduce cost on training and framework implementation.
  - Many IT Professionals are ITIL certified to have a greater edge over their competitors in the company and seek better opportunities in the market.
  - ITIL Certification provides global opportunities in ITSM arena.
  - ITIL has been adopted by various organizations and certified professionals can choose their options rather than companies selecting them.
  - ITIL has been ranked among the top 15 highest paid certifications and the demand for the same is increasing in leaps and bounds in various fields such as incident management, service management, process        management, release management and project management roles.
  - Candidates appearing for ITIL certification examinations will find preparation materials easily available through online study materials, mobile apps, books to familiarize themselves with various jargons associated  with ITIL training and certification.
  - Professionals with ITIL certification can enhance their skills by evolving with technological changes, market demands and set strategies to maximize their skill set.

Thus with market constantly evolving with technological and market demands companies, recruiters are always in search for better qualified individuals or certified in domain specific to ITIL. There are various centers available for training candidates in ITIL through online and offline modes and one of them is Henry Harvin which provides better opportunities at all levels in the professional world and escalates themselves in their career.

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COBIT

One of the most important aspects of any modern business is the security of information systems and ensuring quality control. COBIT5 - Control Objectives for Information and Related Technology as the name suggests is a framework that looks after the integrity of information systems in the IT Process. It analyses the risks and formulates management practices that deliver organization values associated with the business. COBIT5 is a globally recognized guideline that can be implemented in the IT Sector while also is widely adapted across various other industries as well. In Brief - COBIT5 ensures reliability of information systems through effective control policies.

THE COBIT COMPONENTS

  1. COBIT Framework - by bringing in the best practices from the IT Infrastructure and those of IT governance, the link to business requirements is brought forth and achieved.
  2. Process Descriptions - this serves as a reference model with simple understanding and hence is addressed by all the employees of a company. It is in the forms of plans, implementations & daily operations.
  3. Control Objectives - COBIT has formulated the complete working principles in the form of a list to ensure the control of the IT Business Directives.
  4. Maturity Models - Addressing the adaptability and maturity of all the processes while addressing the gaps found in implementation.
  5. Management Guidelines - Helps in accomplishing better supervision, dictating responsibilities and illustrating better alignment with the other processes.

Companies with high reliance on technology for relevant information benefit greatly from COBIT. It is highly used in Government, Federal departments and helps increase the sensibility of IT Processes. Being a collaborated version of COBIT4.1, RISK IT frameworks and various other models, COBIT5 is very frequently referred to as a merging solution to various organizational gaps.

So what makes COBIT5 the most celebrated version?

The guiding principles throw light on the reason why COBIT 5 is such a highly appreciated program.
  1. Needs of stakeholders are met - security of Information controls are major concerns for the stakeholders of the company. Bringing in policies that align business goals with relatable practices is what COBIT certifies you for.
  2. Covering the whole enterprise from end to end - Ensuring the entire process and functioning of operations, all aspects are taken care of with regards to information control.
  3. Application of a single integrated framework - COBIT5 has used references from various programs and has integrated the necessary implementations making it one handy manual for practical application.
  4. Ensuring a holistic approach to business decision making - COBIT5 facilitates the art of decision making that comes after looking at the bigger picture taking all accounts into consideration, finally in favor of business development.
  5. Separating the governance from the management - The role of management is already clustered with responsibilities and duties which does not allow enough focus to fall upon the factor of governance. COBIT5 trains you to tackle the regulation with its expert programs that helps you to efficiently have under control the functioning of the enterprise.

Benefits that COBIT5 offers from a risk management Perspective!

COBIT 5 has references from a lot of modules, including those of RISK Assessment. IT requires buy-ins from stake holders but also requires quick adaptation and the need to be agile with the processes. COBET5 helps identify the needs, the risk and subsequent benefits from the action to help in this decision making process. The collaborative culture that COBIT5 facilitates also includes a change enablement approach for when IT Initiatives require it within the implementation cycle, thus reducing the chances of failure.

For business executive along with IT Leaders- to understand the Information Management and the way to receive more from information and technology while analyzing and securing yourself from the risks involved; COBIT5 is the go-to guide. With so many implementations globally, it is the way forward.

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COBIT5 is one of the popular IT tools that is being widely used by the business and organizations of IT management and governance. One similar tool and that is also quite popular in the market is ITIL. It is also extensively used by the organizations but slowly people are making the switch to COBIT 5 because of the better results are shown by the use of it. Most of the people in the IT business or sector will tell you that their default source of IT good practice is COBIT. It wins over ITIL, hands down. Most people go to COBIT first to assess, to a frame, to define, to justify, to audit and then turn to ITIL second, when they need more detail. The following points will let you know how COBIT is better than ITIL.

1. Purpose - ITIL is an ITSM framework. COBIT is an IT practice and governance framework. ITSM mean “all of IT management seen from a service perspective.” COBIT is intended to be a comprehensive description of all IT practices. Though COBIT does not do it perfectly, it is far more accurate than ITIL.

2. Coverage - According to a report issued jointly by ISACA and OGC states that ITIL includes less than half of COBIT’s reach and only covers about a quarter of the practices. This was the report issued for COBIT 4.1, and I feel that COBIT 5 will increase this gap further.

3. Rigour - ITIL is like the hitchhikers’ guide, and COBIT is the encyclopedia. ITIL’s narrative style may appeal to the users, but the people who have used both the tools suggest that the rigour and structure of COBIT are more dependable and useful. COBIT is systematically numbered, and every entity has a consistent structure. The formal COBIT structure is much easier to use than the ITIL rambling; it enables you to find answers quicker, get clearer concepts with less confusion and frame things readily.

4. Credibility - COBIT is formulated by a unit, not a couple of authors per book. The same team is used for all the books. And then the list of all COBIT grantors and analysts runs to pages. It is maintained and published by a not-for-profit society body set up and operated by auditors, process geeks, and security wonks. Its governance and discretion are impossible.

5. Accessibility - COBIT is low cost as compared to ITIL. There is a copyright and trademark waiver for use by consultants and vendors.

6. Novelty - COBIT is of course not new any more than ITIL was when the world discovered it a decade ago. But COBIT has yet to be a trend, and the world is ready for a new fad as the realities of ITIL are understood. COBIT has none of the adverse baggage gatherings on ITIL. I believe COBIT is IT's next silver bullet.

7. Governance - COBIT is becoming popular day by day because of its IT governance skills. To do the company has to realize that Cloud and SaaS and BYOD are business decisions not just IT decisions. Therefore, organizations have to take responsibilities for the same and the best way to do so is via better enterprise-level governance of IT, which is where COBIT comes in handy and is all about.

COBIT vs ITIL, COBIT, COBIT 5, COBIT Certification Program, COBIT Foundation, ITIL

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1. What is COBIT 5’s purpose?
 
COBIT helps business process owners and managements manage the risks associated with IT and deliver value from IT, by providing them with IT governance models. The model ensures information systems’ integrity.
 
2. Who uses COBIT 5?
 
People involved in business process and technology, those dependent on IT of information and those responsible to ensuring reliability & controlling IT use COBIT. 
 
3. How to train oneself to use COBIT 5?
 
ISACA provides 2 online and 4 classroom offerings on COBIT.
Online: COBIT Foundation Course
               COBIT Foundation Examination
Classroom: COBIT Foundation Course with associated Foundation Examination
                    Implementing IT Governance using COBIT and Val IT
                    ISACA On-site Training program
                    ISACA’s Training Week program
 
4. People who need to undergo this training?
 
IT professionals, business process managers, quality assurance and audit   Professionals, IS & audit managers can undergo this training.
 
5. Can COBIT be considered superior to other control models?
 
COBIT does not replace the other models. It is a framework encompassing all the other models and building on their strengths.
 
6. How does COBIT help in achieving regulatory compliance?
 
COBIT is often used by publicly traded companies to achieve Sarbanes-Oxley Act compliance. The public traded companies need to get their financial reports attested by their chief executives. These reports necessitate reliable IT processes and controls.
 
7. How can I suggest that my IT management use COBIT 5?
 
Basically COBIT 5 is used to understand IT control objectives, manage risks and deliver IT value. Suggesting the IT management use this would be rather straightforward.  

o    The COBIT 5 framework’s business objectives are to be given priority.
o    The IT processes and control objectives that will be appropriate to that particular enterprise must be chosen.
o    Operate from the business plan.
o    The enterprise’s goals, management guidelines, status, critical activities, performance etc., must be kept in mind while suggesting COBIT 5. 
o    Use the IT assurance guide to assess procedures and results.

8. What are the various dimensions of maturity that COBIT has?
 
COBIT has three dimensions of maturity. They are explained in the COBIT framework. They are: Capability, Performance and Control. These dimensions are of immense use while assessing the maturity of IT processes in specific situations. Depending on the scope of the assessment target area and how precise and detailed it needs to be, the COBIT user can choose the application of the dimensions.
 

  1. Capability is the level of maturity required in the process to meet the business requirements. The requirements are driven by business and IT goals that are clearly defined. The maturity model helps the enterprise in recognising the capability that will suit specific process requirements. The model’s focus is on capability.
  2. Control is a measure of actual control and execution of the process, in managing risks and delivering the value expected in line with business requirements and risk appetite. Inadequate control design will lead to process failure, despite being at the correct capability level and having correct management characteristics.
  3. Coverage is a performance measure. It helps decide how and where the management needs to deploy the Capability. It is usually based on the business need and investment decisions based on benefits and costs.
 
A detailed assessment for particular critical areas can be carried out using all these dimensions of maturity. Keeping in mind these three dimensions in the context of the overall business requirement, they can help with an overall assessment of the process’s maturity.
 
9. What is the orientation of COBIT focused on?
 
The orientation of COBIT is focused on the process and not the applications or functions. The framework has 34 IT processes with interrelated life cycle activities or interrelated discrete tasks. Due to several reasons, the makers preferred the Process model.
 
  1. The first of the reasons is that all processes are result oriented and they focus on the final outcome, whilst optimising the use of resources.
  2. Secondly, the objective of the process does not change often and is more of a permanent nature.
  3. Thirdly, use of IT isn’t confined to a particular department; it involves specialists, users and management as well.
 
The applications are treated as one of the 4 resource categories within the framework. Therefore they are managed and controlled in such a way so as bring the required information at the business process level. The applications can be addressed through resource vantage points, since they are an integral part of the COBIT framework. To put it across differently, one can automatically get an application view of the objectives of COBIT, by focusing on the resources only.
 
10. What about the Application controls?
 
Since COBIT was business process oriented, and the level application controls were hardly a part of the overall controls to be used over information systems and its related technology, the application controls were initially fully integrated into the COBIT model. But, this part cannot be outsourced in most cases.
 
11. How does COBIT 5 differ from COBIT 4.1?
 
The main aim of COBIT 5 is to bridge the gap between business risks, control requirements and technology. In order for the general audience to views information governance and control as assets, we must align the business objectives with the IT objectives. That is exactly what COBIT 5 intends to do. COBIT 5, the latest version of COBIT, boasts it capability to create business value by generating buy-in from all the stakeholders of the company, including top executives and directors.
 
  1. COBIT 5 helps the company achieve an organization-wide information governance perspective by the inclusion of new processes that can cover IT and business activities end-to-end.
  2. It makes the IT responsibilities and accountabilities of all the stakeholders transparent, by offering clear definitions of each player's responsibilities and involvement and also detailed explanation of the roles played in IT management, governance and control.
  3. COBIT 5 integrates all the other ISACA standards, such as Val IT and Risk IT.
  4. COBIT 5 has imbibed all the aspects of the previous versions of the COBIT.
  5. COBIT5 provides a framework that integrates all other standards and approaches including ITIL, PMP, COSO, NIST, TOGAF, Prince2, CMMI, ISO27001, SIO20k and Six Sigma.
  6. COBIT 5 has introduced 7 enablers: processes; principles, policies and frameworks; organizational structures; people, skills and competencies; culture, ethics and behaviour; services, information and infrastructure and applications. These help in meeting the enterprise’s IT governance goals.

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What is the purpose behind COBIT?
 
The reason for COBIT is to give administration and business handle proprietors with a data innovation (IT) governance design that helps in delivering value from IT and dealing with the dangers connected with IT. COBIT spans the crevices among business necessities, control needs, and specialized issues. It is a control model to address the issues of IT administration and guarantee the uprightness of data and data frameworks.

Who is utilizing COBIT?

COBIT is utilized internationally by the individuals who have the essential duties regarding business procedures and IT, the individuals who rely on upon IT for pertinent and dependable data, and those giving quality, unwavering quality and control of data innovation. 

Why was the orientation of COBIT focused on the process rather than functions or applications?

The COBIT system has been organized into 34 IT forms bunching interrelated life cycle exercises or interrelated discrete errands. The procedure model was favoured for a few reasons. Initial, a procedure by its tendency is results-oriented in the way that it concentrates on the ultimate result while upgrading the utilization of assets. The way these assets are physically organized, e.g., people/skills in departments are less relevant in this aspect. Second, a method, especially its objectives, is more permanent in nature and does not risk change as often as an organizational entity. Third, the sending of IT can't be bound to a specific division and includes clients and administration and additionally IT pros.

In this specific situation, the IT procedure stays, by the by, the shared factor. To the extent applications are concerned, they are dealt with inside the COBIT structure as one of the four asset classifications. Subsequently, they are to be overseen and controlled so as to realize the required data at the business procedure level. Along these lines, application frameworks are a vital part of the COBIT system and can be tended to explicitly through the asset vantage point. At the end of the day, concentrating entirely on the assets just, one would consequently get an application perspective of the COBIT destinations. 

What is the future direction of COBIT?

Likewise, with any complete and noteworthy research, COBIT will be redesigned to another adaptation around like clockwork, with minor upgrades in the middle. This will guarantee that the model and the system stay extensive and substantial. The approval will likewise involve guaranteeing that the essential reference materials have not changed, or, on the off chance that they have, those progressions are reflected in the archive. The following rendition will be COBIT 5, and a plan report is posted on the COBIT landing page www.isaca.org/cobit under the heading COBIT Update Project.

How does COBIT 5 address reactions of prior variants of the system?

Past renditions of COBIT went under feedback for producing limited and once in a while unfavourable outcomes. The IT benchmarking firm Compass found through its very own examination customers that COBIT and comparative IT administration and control methodologies could prompt to a "hot potato" environment in which stakeholders passed assignments down the line. Commentators kept up that COBIT 5 invigorated the attention on printed material and repetition administer taking after, as opposed to advancing significant IT administration engagement and more grounded responsibility for it. Frequently, Compass discovered, benefit suppliers sent COBIT, and in that capacity, it was not completely incorporated into the business. 

COBIT 5 addresses these reactions by urging organizations to oversee and represent data and innovation in an incorporated, comprehensive way. It depends on five standards: addressing partner needs; covering the undertaking end-to-end; applying a solitary, coordinated structure; empowering an all-encompassing methodology; and isolating administration from the administration.

What inadequacies do critics see in COBIT 5?

While Gartner analysts said this is an improvement over version 4.1, it also makes the framework more complex and "could overwhelm new users and inhibit its adoption. While Gartner examiners said this is a changeover variant 4.1, it likewise makes the structure more intricate and "ignores the blurring boundary between operational technology and information technology, which will have an increasing impact on the management of risk and delivery of value, and will require additional controls." COBIT 5 protectors counter Gartner's reactions by arguing that the expert firm didn't comprehend the structure and neglected to perceive its direction as the most proficient method to oversee data and innovation.

News Analysis

News

On 10 April 2012, ISACA (formerly known as the Information Systems Audit and Control Association) released COBIT 5, an updated version of its governance and management framework, which is widely used by enterprises seeking to manage risks associated with IT and to increase the value they derive from IT investments. ISACA also plans to issue educational material supporting v.5, as well as v.5 companion guides that focus on areas such as information security, assurance, and risk management.

Analysis

A critical revive of COBIT 4.1; COBIT 5 enhances this helpful system by coordinating a few of ISACA's structures, eminently Val IT and Risk IT. The progressions have made COBIT 5 more broad and more intricate. The extent of its direction could overpower new clients and restrain its appropriation; like this, the online variant of COBIT 5 should give particular part renditions or sensible perspectives to make it easier to use.
 
Changes in COBIT 5 prone to have most noteworthy effect on associations right now utilizing COBIT include:
• Another procedure capacity evaluation approach, given ISO/IEC 15504, which replaces the Capability Maturity Model (CMM)- based demonstrating. Modifications to the process model, including changed processes and some new processes.
• Past the combination, this overhaul additionally endeavours to address various issues, including: 
• More express direction to levels of progress ("enablers") past process, for example, culture, morals, conduct, individuals, aptitudes, and skills. 
• Enhanced process ability appraisals. 
• The linkage between particular IT and empowering influence objectives to more extensive undertaking level objectives. 
• More noteworthy accentuation on esteem creation through concentrating on advantages acknowledgment, chance enhancement, and asset advancement. 
• In any case, ISACA has disregarded or put aside a few territories for this overhaul: 
• It overlooks the obscuring limit between operational innovation and data innovation, which will increasingly affect the administration of hazard and conveyance of significant worth, and will require extra controls. 
• It pretty much recognizes, however, does not expressly manage or give any valuable direction on, manageability. 
• Regardless it supplements the Information Technology Infrastructure Library (ITIL) without supplanting it.

Want to get more information about COBIT 5 training and certification?
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