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Summer Internship Report

On

Costing Model, Study of IFRS and ROI


analysis of available avenues
AT
Network Integrators (India) Private
Limited [NIPL],Pune

Submitted by:
Surabhi Jain
Roll No.42
INSTITUTE OF MANAGEMENT AND DEVELOPMENT AND
RESEARCH
PUNE-411004

2
TABLE OF CONTENTS

S.NO. HEADINGS
PAGE NO.

1. Acknowledgement
3

2. Objectives
4

3. Executive Summary
6

4. Organizational Background 9

5. Introduction
14

6. Organizational Processes
33

7. Methodology Used
40

8. Conclusion
47

3
ACKNOWLEDGEMENT

I believe that no task is complete without thanking the


people and the entities that made the task possible. At the
very onset, I would like to express my immense gratitude to
Mr. Anand Godse(Director NIPL), who has been helping and
at times straight forward and sharp. It was a learning
experience working for him.

I express my gratitude to all the office staff for supplying me


with the data required for the project.

Next I would like to thank Abhin, who was there with me on


the same project, for his immense patience while discussing
details of the project and without whom I may not have been
able to learn as much as I have.

I am also grateful to my faculty for the support they gave


me all time and guided me throughout the period.

4
Chapter 1
OBJECTIVES
• Objective of the Summer internship

• Objective of costing project

• Objective of Buddy Chef’s Project

• Objective of IFRS Project

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Objective of Summer Internship:
• To work in the corporate world in tune with the professional work
methodologies to induce the qualities needed to equip myself to
work effectively and efficiently in the real world scenario and
learn to manage things well.
• To observe processes in the organization and experience the
reasons for them
• To apply the classroom theories in practical situations
• To experience the integration between all the functional aspects
of business

Objective of Costing Project:


• To build a model which will help in making decision for project
estimation, Costing and contribution Analysis for a fixed bid
project

Objective of Buddy Chef’s Project:


• To Increase the avenues for boosting the sales
• Reduce wastage
• Reduce capital investment as % of reach
• Increase reach – more availability
• Increase customer Point of contacts
• To do ROI Analysis fro the available options

Objective of IFRS Project:


• To study and Understand basics of IFRS (International Financial
Reporting Standard)

6
7
Chapter 2
EXECUTIVE SUMMARY
• About Company
• About Organizational process

• About projects undertaken

8
Executive Summary:
I have completed my summer internship from an IT company
named Network Integrators (India) Private Limited [NIPL] Situated in
Pune. NIPL was founded in 1996 by three entrepreneurs (Mr. Anand
Godse (Director), Mr. Vaibhav Mahajan (MD & CEO) and Mr. Xitij
Joshi (Co-founder)) with a view of providing excellent business
solutions for customers.
NIPL offers services in three areas –
• Managed IT
• Enterprise Applications
• Business Consulting
NIPL has two offices: One for SAP related work and other is for
networking and hardware related works. I worked under the
guidance of Mr. Anand Godse, in the SAP office of NIPL situated in
Navi peth,Pune.

NIPL had a centralized management system. All the management


decision related to SAP were taken by Mr. Anand Godse and he had the
sole discretion in the organization as all the employees directly
reported to him. There was no middle level management in this
organization. Work structure in the organization was directed by him
and only him and the assigned employees knew about the work
assigned. So when he was on tour no one else could follow up with the
progress of the work but this gave immense possibilities of innovation
as everyone could directly propose him about anything that could be
done for the progress.
There was no standard process followed in the organization but the
organization’s edge over competitors was its low cost execution of
projects and delivery on time. Due to the lack of efficient

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administrative process all the people were found running at the time of
delivery. But as every dark cloud has a silver lining, this also had its
advantages. This helped us to get an insight of the internal work and
the way the work goes during the delivery time.

I worked on three projects in the tenure of my internship. They are:


• To do brochure literature Study and Understand IFRS
• To build a model for Project estimation, Costing and Contribution
Analysis for a fixed bid project of an IT company (Network
Integrators (India) Pvt. Ltd)
• Identification and Return on Investment (ROI) study for
alternative avenues to boost and diversify sales of food retail
company Buddy Chef ( a sister concern of NIPL)
The main project for which I was recruited was from NIPL Company.
The project was to build a model for project estimation, Costing and
Contribution Analysis for a fixed bid project of NIPL. The reason why I
was told to make this model was that there was no proper system
maintained in that company for decision making. Whenever they want
to make a deal with the client, they have to take a rough estimation
and negotiate accordingly with the client. The negative implications
attached with this was that they were not able to come to know
 the contribution or the amount of profit they can be able to earn
from a particular deal
 the times where they are going to face the cash flow problem
 the extent up to which they can negotiate with the clients
 About the number of employees needed from different
categories like Sr. Consultant, Consultant, Jr. Consultant or
Manager.
I also got great opportunity to learn about the latest accounting
standard IFRS (international financial Reporting Standard) as paid

10
seminar was organized by our firm on this and we were in close touch
of all the technicalities of the standard. I now know the importance of
the standard and the scope of it and I am working hard to gain more
knowledge about it. Another Project of mine was to find out the
alternatives to increase the sales and to do an ROI analysis to find out
the best avenue to invest in. In both the projects I found it difficult to
gather the relevant information because of confidentiality of
information. But finally, I found another way to manage with this
problem.

Chapter 3
ORGANIZATIONAL
BACKGROUND

• Company overview
• Major Clients
• Competition
11
• Future Plans

12
Organizational Background:
Company Overview
• Network Integrators (India) Private Limited [NIPL] was founded in
1996 by three entrepreneurs (Mr. Anand Godse (Director), Mr.
Vaibhav Mahajan (MD & CEO) and Mr. Xitij Joshi (Co-founder))
with a view of providing excellent business solutions for
customers
• NIPL provides value added services
– ERP Implementation
– ERP Audits
– CxO Consulting
– IT Staffing Services
Vision & Mission
• Mission
To be a partner of first choice to provide end to end service
in the IT space and provide niche consulting in the areas of
IT service delivery
• Vision
To help formulate the “Right Solutions” for the business
and translate the IT vision to enable the business.

The People
• NIPL was founded by three entrepreneurs with a view of
providing excellent business solutions for customers.
• NIPL’s main assets
– More than 80+ IT professionals with expertise in the fields
of
• Network Infrastructure
• IT Service Desk
• SAP Technologies

13
• Business Analysts
• Financial Consulting Services

The Management
- Mr. Anand Godse (Director)
BE, ME, PGDM (Ops.), MA (Economics), CISA
Mr. Godse is a supply chain consulting specialist with more than
12 years of SAP experience in the field of logistics.
- Mr. Xitij Joshi (Co-founder)
B.E. (Electronics & Telecom), Systems Auditor (CISA),
ITIL Professional, Executive Management (IIM-A)
Mr. Joshi specializes in Security, Risk & Assurance domains
- Mr. Vaibhav Mahajan (MD & CEO)
B.E. (Electronics), ITIL Professional
Mr. Mahajan is responsible for the global operations of
Infrastructure Management businesses. He looks after Service
Delivery, Technology and Practices.

The Technology
• NIPL’s main assets
– Being in the field of IT service delivery NIPL boasts to have
expertise in all IT related technologies with expertise in
• IBM Blade server technology
• CISCO
• Firewall
• SCADA
• Microsoft Exchange
• IBM – IBM DB2
The Processes
14
• NIPL’s rapid growth in the last few years has been mainly due to
the focus on delivery related processes.
• With its decade of experience in the managed IT space and with
a thorough understanding of the Indian customer base, NIPL has
found that a mix of formal processes with an individual attention
provides a true customer experience.
• Based on this NIPL has adopted the CMM processes which are
tailored to individual customer based on his unique needs and
culture of the organization.
Products and Services
NIPL offers services in three areas –
• Managed IT
– Network Management
– Data Centre Management
– Desktop Management
– Helpdesk & Migration Services
– Network Architecture
– Security Management
• Enterprise Applications
– ERP-SAP Implementation
– SAP Support & Audits
– Upgrades & Migration
– Global Templates Development
– ABAP Development
– Corporate Training
• Business Consulting
– IT Strategy
– Balanced Score Card
– System & IT Audits
– Concept-to-Build Consultancy

15
– CXO Advisory
– Process Modeling & Re-engineering

Major Clients:

Competition
NIPL faced a cut throat competition from many companies working in
SAP namely Wipro technologies, Infosys etc. and many of the local
software companies. The cutting edge of NIPL was its low cost and
Quality product delivery. During my tenure in the organization we
succeeded in delivering a reengineered product to the client which was
earlier made by Wipro technologies. The requirements of the Client
were not satisfied with the delivered product and were not contented
by Wipro technologies.

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Future Plans
• NIPL has successfully provided its services in western
Maharashtra.
• Now they have their sights fixed on further growth beyond their
borders.
• They plan to provide their services to clients in far off shores of
South Africa and Europe.

Chapter 4
INTRODUCTION

• My Experience @ NIPL
 Initial phase of Journey

 Attended first corporate party

 Journey Ahead

• Projects Undertaken
 Description and key learning
from Costing Project

 Overview of Buddy Chef

 Description and key learning


from Buddy Chef’s Project

 Description about IFRS project

17
18
My Experience @ NIPL:
Initial phase of Journey:
My overall experience with the organization was a pleasing one. On
the first day when I went to the office, the Director introduced me with
each one present in the office and then a brief description was given
over the costing project for which I was recruited. He also explained
the problems which they were facing due to the absence of that
costing model. After a discussion of half an hour we were told to make
Integrated Costing Model with the use of excel sheets by our own from
whatever we understood in that short discussion. After that the
Director left the office. He was going to meet us next week as he was
going to Germany for some business work. In those seven days, we
met with some more people in the organization But only the admin
and Business development were the two persons whom we used to
meet daily as all the other employees were onsite for the project. We
finally made the Preliminary prototype of the model from what we had
understood and mailed it to the Director. After looking at the model, he
changed/rephrased his requirements and gave us better insight on
what he wants actually from the model. After this we had to go back to
zero level and start our work from the scratch as the requirement did
not match with the model. This rejection was a bit disappointing for us
as we had put lot of efforts in making that. But the way Sir had
conveyed this to us made us enthusiastic about the work. He told us
that whatever you made was right but there’s always a better way.
After working again on the given task we went to show it to Sir (the
Director) but this time he didn’t even saw it, Instead he started asking
us some basic questions related to costing concepts. We answered
some of the questions, But he was not satisfied with the answers and
gave us instructions to go back to library and study the basics of

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Costing. This time we felt very shameful as we were not able to answer
the questions properly. Next day instead of going to the office we went
to the Library and read the books there, issued some books and then
went back to our work. This time we were a bit more scared and
curious to show our work to him. We finally showed our work to him
and he approved that. We were elated.

Attended First Corporate party:


In the initial phase of our project there was a project party organized
for all the employees of NIPL and each one was invited along with
his/her family. We were also invited to attend that party so as to meet
and get introduced to all the NIPL members. As that was a late night
party and everyone there was a stranger to me, I was hesitating in
attending that party But I didn’t wanted to loose the opportunity of
interacting with the members of the organization. Full fledge facilities
were given to us; We went there in the Director’s car along with his
family. We were introduced by each and everyone present there. We
interacted with all the employees. I found very frank environment
there. As I was getting late for my hostel Sir sent a car especially for
dropping me . This whole experience made me feel as if I was a special
employee of NIPL.
After some days we started developing better relations with the
employees. We used to take Lunch together and do chit-chats. We
used to do Pizza party, Samosa party etc. and celebrated the birthdays
and results of college together with the office employees. We used to
be with each other like colleagues.

Journey Ahead:

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As the first phase of our work was checked and we came to know that
we were on the right track. This built our confidence stronger and we
moved ahead after discussing further project with our mentor (the
Director). As most of the time he was on work tour, He didn’t used to
meet us daily and ask for the progress of our work. Instead, we used to
mail our work to him and if we stuck into some problem then we used
to call him and clear our problems on phone. In between this project,
one more project was handed over to us. That project was of Buddy
Chef, a food retail chain outlet in Pune. Buddy Chef was a sister
Company of NIPL. Xitij Joshi, a Co-founder of NIPL was the Director of
Buddy Chef. We were told by our mentor to have a talk with Mr. Xitij
related to Buddy Chef’s project. Mr. Xitij gave us brief introduction
about that Company and asked us the ways to minimize the wastage,
due to which their company was incurring losses. We were not given
any direction to start. We thought about that problem, tried out to find
some solutions but we were not able to come to a particular solution
as the data was not available to us. After that when we discussed this
project we were given some directions to think by Anand sir and finally
we came up with solutions, which I will explain under the projects
undertaken heading.
Along with these two projects one more project was given to me. That
project was to study and understand basics of IFRS (International
Financial Reporting Standards)
The reason behind giving this project to me was to provide me some
insights of IFRS which will be helpful for me in future as I am from
Finance Background. Also another reason for this was that NIPL along
with Wizprotek consulting was going to arrange a paid seminar on
IFRS.
Finally, I completed all the three projects successfully with the help of
my mentor and my colleague.

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Projects Undertaken:
Mainly, I worked on three projects in the tenure of my internship. They
are:
• To build a model for Project estimation, Costing and Contribution
Analysis for a fixed bid project of an IT company (Network
Integrators (India) Pvt. Ltd)
• Identification and Return on Investment (ROI) study for
alternative avenues to boost and diversify sales of food retail
company Buddy Chef ( a sister concern of NIPL)
• To do brochure literature Study and Understand IFRS

Description about Costing Project:


Objective:
 To build a model which will help in making decision for project
estimation, Costing and contribution Analysis for a fixed bid
project
The main project for which I was recruited was from NIPL Company.
The project was to build a model for project estimation, Costing and
Contribution Analysis for a fixed bid project of NIPL. The reason why I
was told to make this model was that there was no proper system
maintained in that company for decision making. Whenever they
wanted to make a deal with the client, they had to take a rough
estimation and negotiate accordingly with the client. The negative
implications attached with this was that they were not able to come to
know about:
 the contribution or the amount of profit they will be able to earn
from a particular deal
 the number of times when they would face the cash flow
problem
 the extent up to which they can negotiate with the clients

22
 About the number of employees needed from different
categories like Sr. Consultant, Consultant, Jr. Consultant or
Manager.
I along with one more student worked on this project. As I explained
earlier, we first approached the project in our own way by limited
understanding of whatever we gathered from the first meeting with
the Director. We made the Preliminary prototype of the model
and mailed it to our mentor. The preliminary model which we have
made was like below:

23
But after seeing that model, he rephrased his requirements and asked
us to build different model based on the new requirements. As in the
above model we made everything based on individual person, in the
new model we have to make changes according to the category to
which individual employee belongs. We gathered various information
about costing concepts like direct indirect costs, overhead allocation
and apportionments, contribution etc. to apply the things properly.
We also understand the process used for project estimation and
calculations done before negotiating with the client and finally
indulging in the project.
We finally made the integrated costing model (MIS) with the help of
excel by the knowledge and information we gathered and with the
guidance by our mentor. When we showed our final work to our
mentor he was happy with our work but as our model was not user
friendly, he asked us to do some work to make that user friendly so
that anyone who uses it can understand what all entries he should
make to see the result. The final model looks like below:

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25
26
27
28
29
30
There was no standard process followed in NIPL and the processes
were in developing stage. The costing project we made was a
breakthrough and highly appreciated by the director. We were highly
pleased that we got an opportunity to be a part of the process growth
in NIPL. We also got lot of opportunities to suggest innovational
changes to streamline the work methodology in NIPL.

Key Learning from this project:


 Understanding the requirements of client
 Practical application of theories
 Making a model by keeping user friendliness in mind

Overview about Buddy Chef:

Buddy Chef Restaurant is a chain of quick service food retail outlet.


The outlets of Buddy Chef are located at Kotrud, Aundh, Viman nagar,
Hingewadi, Magarpatta, and SP College in Pune .Buddy Chef was
conceived by ORGREEN which is known as Organic farming. The main
motto of Buddy Chef is to provide Healthy ready to eat meal. Buddy
Chef is the first one to come up with the concept of providing ready to
eat meals. It has Centralized kitchen and through this kitchen the food
is delivered to the retail outlets where the food is kept fresh. The
kitchen has a capacity of providing 5000 meals per day. They provide
meals and snacks in their menu. The meals include: Veg. Combo and

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non-veg. combos of Indian, Chinese and Biryani. In snacks Kathi
rolls ,Momos. Sandwitches and coffee are offered by them. There is a
facility of providing home delivery for lunch and dinner under the area
of 3 Km radius. Generally, the concept of Buddy Chef is based on take
away meals. People do not used to have Lunch or Dinner at the
outlets. They usually place order for delivery. The structure of Buddy
Chef itself communicate the people that it is a take away type of
restaurant as its outlets contain only two tables for the customers to
have Lunch/Dinner. Their Corporate Clients include WNS and Atos
origin.

Description about Buddy Chef’s Project:


Objective:
 To Increase the avenues for boosting the sales
 Reduce wastage
 Reduce capital investment as % of reach
 Increase reach – more availability
 Increase customer Point of contacts
 To do ROI Analysis fro the available options
In this project we were asked to reduce the wastage of the restaurant
as they were not able to make enough profit out of the business due to
heavy wastage. For solving this wastage problem, we met with the
managers of the outlet and discussed about the process. They gave
information about the outlets but the real process inside the kitchen
was unknown to us. The actual cost they incur and other information
which we require to solve the problem of wastage was not shared with
us as that information was confidential. One problem which we found
in the process was that the operations manager used to call to the
outlet manager daily and according to the demand predicted by them

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the production is done and the meals were sent to the outlets. There
was no system or person who used to keep track on production.
As we were finding difficulty in gathering information due to
confidentiality, we changed our approach to look at the problem. We
started thinking on the problem having the approach of increasing
Sales instead of only looking it on the basis of wastage. As the wastage
depends on sales we started focusing on increasing the sales instead
of reducing wastage. To increase the sales we gave two options:
 Table Top Counter, where we can have one boy who can take
orders from the customers and through calling he can coordinate
to the nearby outlet of Buddy Chef for delivery.
 Sale our food at other retail outlets like Vaidya, Spencers,
Reliance Fresh etc.
We gathered all the information of expenses which are going to occur
in investing in these two options. As a suggestion from our side we
gave a presentation to the top management about our findings. The
insights of our presentations are:
• Every thing which remains with us is not a waste because we
should keep some buffer with us to be responsive to the
customer
• Effective buffer management is required because a Customer
lost is the customer lost forever
We gave the above suggestion to them as there are many customers
who complained that whenever they reach at the Buddy Chef for some
particular meal they are not able to serve them as they are out of
stock as a result the company may loose the premium customers.

Options to explore:
• Increase sales channels
– New channels
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– Improve touch point with customers
• Decrease wastage
– Optimize existing channels

Increase visibility in the market:


• Increase the point of sales by-
Low cost options
– Look for retail outlets
– Table counter for order booking
Capital intensive
– Opening new outlets
– Look for franchisee
Our take on this is:
• Opening a new outlet will again require a huge capital
investment
• If we go for franchisee it will decrease our profit
• So, the most economical and viable solution is to look for retail
outlets and to open a table counter for booking orders

Reasons for more wastage


• Excess Purchase
• Excess Production
• Excess of inventory keeping by the manager of outlets
To overcome these reasons of wastage the solution suggested
by us are:
• Don’t call daily to the outlet manager for production
• Maintain some inventory in central kitchen only and send it to
outlets whenever required
• Outlet manager should confirm special orders to Kitchen
manager

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Suggested Performance indicators
• Turnover to wastage = total sales in inr for each item / total cost
of individual item - more the better
• Order to wastage ratio / forecast ratio
– Number of units orders / wastage in units – more the better
• SCM ratio – total produces / total wasted ( kitchen + all stores)
• Operating Expense to gross sales ratio = (Food + labor cost)/
sales
Inference from Ratios
• Turnover to wastage ratio indicates our revenue through sales.
- If this ratio is high that means our revenue is high
• Order to wastage ratio helps you to predict and control the
production.
- If this is high that means our wastage is controlled and our
production prediction is in line
• SCM ratio keep tab on wastage and hence helps in forecasting
the production
• Operating expense to sales ratio
- If this ratio is high that means our expenses are more than our
sales i.e. our business is at loss
Suggested Operational KPIs
• Compare this across stores
– Phonein ratio : deliveries sales / total sales
• If this ratio is low, then the main buying behavior is
by feeling the product and the brand value is low.
This also mean the reach is poor and top of mind
recall is low
• Action point :
» Increase availability
» increase visibility
– Av time per delivery

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– Idle capacity of scooters – maintain a log book
– Histogram of deliveries per hour – happy hours before the
normal times to increase sales and cross stocking.
– Better stockout data logging

Costing for Table Top and Retail outlets:

Cost For Table Top


Particulars Cost
Rent 5500
Table cost 1000
Telephone
purchase 1000
Salary of counter
boy 6000
Electricity expense 300
Telephone
expense 600
Salary of 1
delivery boy 3500
50-55
Bike running/day km 150km
Rs.1/k
Travelling m 4500
Total cost 22400

For Retail
outlets
25%of selling price of
Cost food

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Advantage of Table Top Counter:
• Total investment on Table Top = Rs.22400
• If we are able to sale only 12 Indian veg. meals per day then too
we can achieve a revenue of Rs.23760
• Opening a new point of contact through Table top means not just
additional revenue but also greater visibility.

Advantages of contacting through retail outlet-


• Visibility is high
• Operational expenses are minimal
• Diverse customer base can be accessed

Key learning:
 Gathering relevant information
 Seeing the problem from various angles
 Making rational decisions

Description about IFRS Project:


Objective:
 To study and Understand basics of IFRS(International Financial
Reporting Standard)
Basically this project was given to me for increasing my knowledge. As
I am from the finance field and this is the new trend in Finance as all
the companies have to report from 2011 in the IFRS format instead of
IGAAP. Also the main reason behind giving this project to me was that
the company (NIPL) along with Wizprotek consulting was going to
arrange a paid seminar on IFRS and its impact on SAP.

37
My basic understanding of IFRS from the study which I have done is as
follows:
What is IFRS?
International Financial Reporting Standards, or IFRS, is the collection of
financial reporting standards developed by the International
Accounting Standards Board (IASB), an independent, international
standard setting organization. The aim of IFRS is to provide "a single
set of high quality, global accounting standards that require
transparent and comparable information in general purpose financial
statements.”

From 1973 to 2001, IAS were issued by the International Accounting


Standards Committee (IASC). In April 2001 the International
Accounting Standards Board (IASB) adopted all IAS and began
developing new standards called IFRS. It is noteworthy that an IAS
remains in effect unless replaced by an IFRS.

India moves towards IFRS


In line with the global trend, the ICAI has proposed a plan for
convergence with IFRS for certain defined entities with effect from
accounting periods commencing on or after April 1, 2011.

Phase I (wef 1st April 2011):


 All index companies
 Companies with net worth > Rs. 1000 crores

Phase II (wef 1st April 2013):


 Companies with net worth between Rs.500 to 1000 crores

38
1st April, 2010 1st April, 2011 31st March, 2012
Date of transition Previous GAAP reporting 1st IFRS reporting w/IFRS
To IFRS for 2010-2011 comparatives 2010-
11

Benefits Of IFRS On Indian Corporate


• Improvement in comparability of financial information

• Better quality of financial reporting and improvement in


reliability of financial statements.

• Better access to and reduction in the cost of capital raised from


global capital market since IFRS are now accepted as a financial
reporting framework for companies seeking to raise funds from
most capital markets across the globe.

IFRS Implementation Challenges in India


• Awareness about international practices
• Training
• Amendments to the existing law
• Taxation
• Fair value
• Management compensation plan

39
• Reporting systems

Disadvantages
• Issuers without significant customers or operations outside the
Country may resist IFRS because they may not have a market
incentive to prepare IFRS financial statements.

• Many people also believe that local GAAP is the gold standard,
and that something will be lost with full acceptance of IFRS.

Chapter 5
40
ORGANIZATIONAL PROCESSES

• Observations
 Character of Motivational forces

 Communication Process and


Interaction-influence Process

 Decision making

 Goal setting process

 Control process

 Performance Characteristics

• Projects Undertaken
 Description and key learning
from Costing Project

 Overview of Buddy Chef

41
Observations:

Opening IFRS Balance


Top Management
Sheet
(Director)

Employees

Fig: Organizational Hierarchy

Character of Motivational forces:

Employees can get motivated by any of the followings:


 Increased salary/pay hikes
 Bonus provided
 Increased responsibilities
 Allocating more important work
 Conducive working environment/condition
 Support of senior management
Obviously, the pay hikes and bonus are the important tools used to
motivate the people. But here, in this organization, the increased
responsibilities, allocation of more important work, conducive
working environment and support from senior management were
the main forces to motivate the employees. As the organization’s

42
strength is small, the employees were given more responsibilities
and sometimes critical works were also allocated to them, which in
turn help them to think that they are the main assets of the
organization. Also through increased responsibility they will get the
chance to upgrade their knowledge and skills which will help them
to get a good salary.
The working environment and the support from senior management
also plays an important role in the organization. I was able to observe
that every time any work comes in ,it looks almost impossible
compared to the deadlines but the senior management loses no
second in worrying about that and jumps in with further reduce
timelines and risk mitigation steps .
A plan is produced, people are assigned and the environment in the
office becomes so conducive that even the impossible seems possible.
Some treats here and there, some chit chats from the employees keep
the environment warmer and the working becomes easy but yet there
was one of the founders who would come sometimes and would try to
show that he’s the boss by bullying around. But as he came fewer
times, office had its own way of dealing it .They always tried to
minimize the possibilities where he could burst out.
All this just made my opinion concrete on the philosophy of my life
“The world is not interested in the storms you encounter But
whether you board in the ship or not”
The risk mitigation steps and the resource allocation strategies of the
Director were rather impressive and gave us a clear idea what actual
management means and how does our management knowledge turn
out in the real world scenario.
He was a great motivation for us and led to the success of work It gave
me a great satisfaction.
Motivational forces conflict which I found in the organization was
related with the salary and pay hikes. There was one employee who

43
was a Chartered accountant and another employee was just a
Graduate. Earlier there was a salary difference between both of them.
But as the pay hike was given to the one who was only a Graduate, the
salary of both of them became equal. Through this, one who received
pay hike gets motivated but the Chartered Accountant gets de-
motivated as she thought that she is a C.A. and the salary is not apt
for her profession. This all happened because she started comparing
her salary and work with another employee.

Communication Process and Interaction-influence Process:

As the organization had a centralized management system and there


was no Middle level management, all the employees directly reported
to the Director. This System has its own advantages as well as
disadvantages.
Advantage of having this type of system is:
• It gave immense possibilities of innovation as everyone could
directly propose him about anything that could be done for the
progress of organization or any project.
Disadvantage of having this type of system is:
• As there was no middle management, so in the absence of top
management no one else was there to follow up the project.
• Employees used to work together at times as their works were
interdependent. Also, as the work from home option was
available the employees used to call the Director and gave
information for leave/work from home. Due to this, the other

44
employees were not having information of whether a person is
on leave or is working from home as a result sometimes their
work progress might get hampered as there was dependency in
their work.

Interaction between the employees was affable. Daily we used to


take our Lunch together and do some chit chats in the office. We
used to do Pizza party & celebrated Birthday parties together.
Employees used to do their work together as at times they needed
help from other functional department’s personnel.
There was two way information flow in this organization.
I was able to observe the downward communication when the top
management produced a plan and assigned work to the employees.
But the top management used to consult with the other employees
also when they planned something and the ideas of employees
were accepted. Thus I can say that there was a two way information
flow in the organization.
Some of employees have already worked with the director as a
colleague in BPTL Company. Therefore, they were candid with each
other and used to call the director with his first name only. Director
also seems to be very frank with everyone and used to ask
suggestions from them in most of the activities. To chill out from
the tedious work environment Project event party was given by the
Director and the family members of the employees were also
invited for that.

Decision Making Process;

As the structure of organization is centralized all the major decisions


were taken by the top management only but the employees were also
involved in decision making process. They were invited in the meeting

45
for discussion and the ideas and suggestions from the employees were
welcomed by the top management. Firstly, all the co-founders come
together and discuss about the matter to finally take a decision and
after deciding among themselves they share their decision and plan
with the employees and ask for their views.
In making routine decision about assigning works, which employees
should go onsite, who should go out of station for providing support to
the client etc. the top management used to consider problems with the
employees at lower level. For example- when one person was required
to go to Delhi for providing support to the client, the Director consider
the problem of a women employee who is not able to go onsite as she
was having a small kid at home and hence the other person was sent
to that place.

Goal-Setting Process:
Goals are usually set at higher level. The employees strive hard to
meet the set goals and they usually achieve them as the goals set by
the top management were realistic ones.

Control Process:
The tool used for controlling process is timesheet. Each employee has
to fill in the time sheet daily and that time sheet was sent to the
Director. Timesheet shows the time spent and the information of the
work done on the particular project. Through this tool the director can
come to know the progress of the work.
But the employees do not used to fill the time sheets properly, as they
do not feel any need or importance of filling that and the format of
time sheet was also having some deficiencies. So, while doing my
project when I noticed these problems I consulted with the Director
and then he explained the importance of filling time sheets and the
employees seemed convinced. Also, I proposed a new format of time

46
sheet which they are going to use now and the employees were given
the instruction to fill the timesheets appropriately and timely. This will
help the organization to control the process.

Performance Characteristics:

Productivity:
As a result of good salaries, incentives, support from management
and conducive working environment the employees perform to their
best of abilities and hence the productivity is high.

Absenteeism
In this organization, unlike other organization there was no salary cut
for leave and there was no incentive paid for overtime. Also, the option
of work from home was also available. As it is an IT organization, most
of the times employees remain onsite i.e. in the office of the client, so I
do not know exactly about the absenteeism. But I felt that due to
conducive and friendly environment there was a low rate of
absenteeism in the organization

Waste
As such there was no wastage found. But as maximum time employees
do not used to come to the office instead they went onsite i.e. to the
client’s office, therefore there was a waste of computers which are
taken on rent and office premises. But when the employees doesn’t
visit to the client’s office then the available computers and the office
space are required, hence as such no particular waste is found in the
organization

Quality

47
The quality of work was given utmost importance, as it was not a
manufacturing company the quality of service was important for the
growth of the organization. It also made a difference as the employees
had to take care about the quality of their work, which helped in a
better quality of work.

Employee Turnover
Employee turnover in this organization is neither very low nor very
high. Some employees left the organization, as they get selected in
MNCs at a higher salary package. While some employees doesn’t left
the organization as they were satisfied with the working environment,
salary and the experience which they are getting from here.

Innovations
Work structure in the organization was centralized and the assigned
employees knew about the work assigned to them. So in the absence
of top management no one else could follow up with the progress of
the work but this gave immense possibilities of innovation as everyone
could directly propose top management about anything that could be
done for the progress.

48
Chapter 6
METHODOLOGY USED

• Methodology for costing model


 Costing concepts used

• Methodology for Buddy Chef’s


Project
• Methodology for IFRS project

49
Methodology Used:
As I have handled three projects, Different-Different methods were
adopted by me to complete the projects. The methodology which I
used to approach the Costing Model is as follows:

Understand the problems


due to lack of that model

50
Requirement Gathering
from the client

Made a part of model and


showed it to client

Requirements are
rephrased and started the
work from scratch

Referred to books from


library and searched the
topics on internet

Remade the model with


the help of knowledge
which I gathered

The model was ready in the


 First of all, I understand theform
integrated problems
of excelwhich they were facing
sheets and the requirements
due to lack of system.
of the client were met
 I then gathered the requirements from them.

51
 Then, I went on to make a part of model and showed it to the
client.
 After that the requirements are rephrased from the client side
and then I started from scratch.
 I referred to the books of costing from the library and searched
the topics on the internet.
 Then, I made the model again with the help of my knowledge on
that topic and the requirements from the client
 Finally, the integrated model was ready and the requirements of
the clients were fulfilled.
Costing concepts used for building the model are as follows:
Cost Classifications for Assigning Costs to Cost Objects (Direct
and Indirect Cost):

Cost Object

Costs are assigned to objects for a variety of purposes including


pricing, profitability studies, and control of spending. A cost object is
any thing for which cost data are desired including products, product
lines, customers, jobs, and organizational subunits. For the purpose of
assigning costs to cost objects, costs are classified as direct cost and
indirect cost.

Here the cost object which we used are category wise employees in
the organization.

Direct Cost:

A direct cost is a cost that can be easily and conveniently traced to


the particular cost object under consideration.

Indirect Cost:

An indirect cost is a cost that cannot be easily and conveniently


traced to the particular cost object under consideration.

52
Overhead Cost:

Overhead generally refers to indirect, in contrast to direct, costs.


Indirect means that a cost cannot be matched or coupled in any
obvious or objective manner with particular products, specific revenue
sources, or a particular organizational unit.

Cost Allocation:

The assignment, using some reasonable basis, of any indirect cost to


one or more cost objects

The methodology adapted for Buddy Chef’s project is as


follows:

Understand the problems


of wastage which they
were facing

Requirement Gathering
from the client

Tried to gathered relevant


data which is required for
solving the problem

53
Changed the approach due
to lack of data shared

Gathered the data for the


new approach from the
outlet of Buddy Chef

Enquired about the rates


of retail shops and rents of
Thelawalas and done ROI
analysis

Suggested new way of


looking at the problem
along with some solutions

Given the presentation to


the Director and other top
management

54
Firstly, I understand the problems of Wastage which they were
facing
 Then I gathered the requirements from the client.
 Then I tried to gather relevant data which is required for solving
the problem
 But due to lack of data sharing I changed my approach to solve
the problem. Instead of decreasing wastage, I tried to see the
options to increase the sales.
 I then gathered the data required for new approach from the
retail shop of Buddy Chef
 Then, I went to the retail shops like Vaidya , Spencers, Reliance
Fresh to know the rates for keeping the food of Buddy Chef in
their shop. Also, I enquired to the Thewalas on the F.C Road
and J.M road for the rents which they have to pay. So as to get
an idea of the expense on Table Top Counter and have done
Return on Investment analysis of both.
 Then I suggested the Director and top management to look at
the problem from different perspective of increasing the sales
instead by decreasing the wastage.
 At the last, the power point presentation was given to the top
management for the suggestions recommended.

The methodology adapted for IFRS project is as follows:


 First of all, I was told by the mentor to study some matters on
IFRS
 I searched about IFRS on the internet and gathered some
knowledge from there.
 I was told to have some knowledge about IFRS as our company
(NIPL) was going to arrange a paid seminar on IFRS

55
 I gathered pdf files and presentations on the topics related to
IFRS and gave them to sir as he told me to make some power
point slides.
 I listen to the discussions and rehearsals going on for
presentation (Seminar).
 Finally, I attended the seminar to get more insight on the subject
called IFRS.

Mentor told me to study


some matters on IFRS

Searched on internet and


gathered some knowledge
of IFRS

I was told to read more on


IFRS as NIPL was going
to arrange a paid seminar
on IFRS

Gathered pdf files and


ppts from net on IFRS and
made some slides as told
by mentor56
Listen to the discussions
and rehearsals going on
for presentation (Seminar)

Attended the seminar to


get more insight on IFRS

57
Chapter 7
CONCLUSION
• Key Responsibilities

• Key Learning

58
Conclusion:
I had a nice experience during my summer internship in NIPL.
During the tenure of 60 days I learnt to work in the corporate world
in tune with the professional work methodologies.
Key Responsibilities:
My Key responsibilities for Internship projects were:
 To understand the process used before negotiating with the
client
 To understand the necessity of building a model for costing in
the organization
 To apply the basics of costing and make an MIS for the fixed bid
projects, which will help in taking effective decisions for the
organization
 To understand the basics of IFRS
 To understand the food retail chain’s operations
 To take rational decisions and give consultancy advice to the
organization to increase the sales avenues
Key learning:
I always used to learn from each and everyone I met. I learnt the
lessons not only from the people in the organization but also from the
work or the projects I had undertaken.
Learning lessons from Mr. Anand godse, the director of NIPL:-
 Multitasking
 Time management
 Art of presentation by keeping the audience in mind
Learning lessons from other employees:-
 Separating the personal relations from the professional ones
 Working in an integrated way

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Learning lessons from the projects undertaken:-
 Understanding the requirements of client
 Gathering relevant information
 Practical application of theories
 Making a model by keeping user friendliness in mind
 Seeing the problem from various angles
 Making rational decisions

Other Learning lessons from summer internship:-


 All the functional aspects of business are integrated
 Theoretical base is important for doing things practically
 Looking the same problem from different-different perspectives
 Time Utilization
 Multitasking

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