STAGES OF MANAGEMENT

CONSULTING ENGAGEMENT PART 2

D. Solution Development
Steps in Solution Development:
(1) Generation of solution alternatives – The first step in the solution
development phase is to generate and thoroughly search for solution
alternatives.
Approaches that can be used in generation of solution
alternatives:
(a) Pattern recognition and matching approach- emphasizes
experience especially those having very similar
characteristics to the problem situation being investigated.
(b) Brainstorming approach - is a group creativity technique by
which efforts are made to find a conclusion for a specific
problem by gathering a list of ideas spontaneously contributed
by its members
(2) Evaluation of Solution of Alternatives – after the alternative
solution are identified and refined, they must be evaluated to
determine the most preferred solution. This evaluation should be
based upon a situational feasibility analysis that consider all
relevant dimensions.
 Relevant dimension by which each alternative solution may be
analyzed are:
(a) Economic feasibility or cost/benefit analysis - An accurate cost/benefit
analysis must take into account the time value of money, the risks
inherent in the development of a new system, and the costs and
benefits of a system
(b) Operational feasibility – This is pertains to the usability of each solution
alternative in the environment and the persons for whom it is intended.
(c) Technical feasibility – concerned with the adequacy of the existing state
of technology to meet requirement of each solution alternative.
(d) Legal feasibility – the ability of each solution alternative to meet legal
requirements imposed by outside authorities
(3) Choice of the most preferred solution – general rule in making
a decision is “ Choose the alternative solution that yields the best
fit or value relative to the established criteria ”.

Approaches in an Environment of Certainty

(a) Optimizing approach - involves collecting as much data as possible
and trying to find the optimal choice.
(b) Satisficing approach- strategy that aims for adequate result, rather
than perfect results.
 Approaches in an Environment of Uncertainty
(a) Maximin approach – identifying the worst outcome that can
occur and choosing the alternative that yields the smallest loss.
(b) Minimax approach - the decision maker calculates the maximum
opportunity cost values (or also known as regret) for each alternative,
and then chooses the decision that has the lowest maximum regret.
 Approaches in a Risk Environment
(a) Expected value calculation - calculated by multiplying each of the
possible outcomes by the likelihood each outcome will occur and then
summing all of those values and choose the scenario most likely to
give the desired outcome.
(4) Detailed Development of the selected solution- this stage undergo
detailed design and refinement. Its implementation must be carefully
planned in order to minimize required time and costly mistakes.

This stage will involve the designing of:

(a) Outputs
(b) Inputs
(c) Conversion processes
(d) Resource and data bases
(e) Organization
 Guidelines for solution development
1) The selected solution should be directly related to the objectives that
the client desires to achieve.
2) Maintain a comprehensive view of the problem situation and how it
relates to the overall organization.
3) Search for all the important relationship involved in the situation.
4) Employ systematic procedures and methodologies while maintaining
an openness to creative insights.
 E. Preparation and Presentation of the
Report Recommended Solution
• The next stage in a MAS engagement is to present
the recommended solution to the management of
the client organization.
 What are the desirable aspects of presentation style? Some
guidelines in the presentation of the recommendation are:

1. The presentation should normally be made orally and accomplished by

audiovisual aids and a written report.
2. Facts and arguments should be presented in a clear, concise, and
nontechnical manner.
3. Do not overwhelm the client with numerous details and unnecessary
discussion of data analysis techniques.
4. Be ready however to describe briefly the significance of any gathered fact
and the purpose of any technique employed.
5. Volunteer information concerning the risks that a recommended solution
entails and the difficulties that are expected in implementing the solution.
6. Interim presentations and written reports should be made throughout the
solution development phase. As a minimum, these presentations and reports
should be given to the client at the completion of each step. If the client
management and users have been properly involved and informed, they could
easily understand the final presentation and be open to the presented findings.
f. Implementation
• A Consultant should not and cannot take the responsibility for making
management and policy decisions in any MAS engagement.
• He cannot exercise absolute administrative control of client personnel since he
is not a member of their organization.
1. Evaluate the client’s capacity to develop and carry out plans for the
recommended program or system
2. May recommend that a client hire additional qualified personnel to perform
some of the many tasks required.

Implementation is the important and lengthy phase that follows the solution
development phase during a problem-solving process.
The implementation phase involves the following activities:
1. Development of a work plan
2. Establishment of controls over the implementation activities
3. Selection and training of needed personnel
4. Installation of needed physical facilities
5. Development of standard and documentation.
6. Testing of the solution being implemented
7. Follow- up and evaluation of the implemented solution.

Theses steps are typically performed in the order listed above although their
sequence will vary somewhat from engagement to engagement
G. Follow-up Evaluation of the Implemented Solution
• A thorough post-implementation evaluation should be conducted shortly after
the solution has been fully implemented.
• Report should be prepared as written documentation of the evaluation and
presented to management.
 An illustration of this evaluation, in the case of an information
system, will involve the
following:

1. Compare the actual performance of the implemented system with the

expected performance.
2. Compare the details of the implemented system with the documented
design.
3. Determine potential improvements to the new system.
4. Determine the means of improving the systems development methodology
employed by the client firm.
It is better to choose qualified personnel other than the members of the
implementation team.
1. A special audit team selected from among the managers of the client
organization
2. An internal audit team that performs operational reviews as a part of its
customary duties
3. An external team of consultants

User needs change over time, and those changes will lead in time to the need
for further improvements via future system development cycles
Each review and evaluation should focus on three specific areas:
1. Economics
2. Operations
3. Future performance
Economic review
• Involves the comparison of
a. The actual benefits and cost of the new system
b. The expected benefits and costs that were developed during the system
design phase.
Typical questions
1. Were the development cost estimates the target?
2. Did the expected benefits materialize?
3. Were the operational costs in line with estimates?
4. Have significant variances occurred?
Operational review
• Focuses on the actual use of the implemented system by the intended users.

Typical questions
1. Does the system operate successfully?
2. Has the system solved organizational problems that it is intended to
address?
3. Is the system being used or is it being resisted?
4. Are the automated and manual processes are efficient as intended?
An evaluation of operations after implementation should consider how well they
function, with particular emphasis (in the case if an information system) on :
• Inputs
• Error rates
• Timeliness of outputs
• Utilization of outputs
Future performance review
• Identifies potential improvements to the implemented system
• Estimates the effort required to implement these improvements.
• Both benefits and costs are considered
• Possible improvements to be conducted by means of maintenance projects,
can be subdivided into:
- short-term attributes
- long-term attributes
- to know which should be undertaken immediately and which to delay
(explanation ko to hahahah)
IV. Evaluating he Engagement and Post-engagement Follow-up
Evaluation of the Engagement
• Evaluation is necessary if constant improvement and refinement in the quality
of future advisory services is to be achieved.
• Several benefits may be realized through an effective formal or informal
evaluation program and these are:
1. It will provide direction for staff training program in the MAS division.
2. It will serve as a basis for evaluating on-the-job performance of staff
personnel
3. It will provide data for determining required resources for subsequent similar
engagements.
4. It will provide tangible evidence of quality consciousness consistent with the
other areas of a CPA’s practice.
The evaluation will formally cover the following

1. Proposal
2. Engagement program
3. Work program and schedule
4. Source data and documentation
5. Reports
6. Results

AICPA recommends in its Guideline Series No. 1 on MAS the following criteria
for the effective evaluation of the above-mentioned items.
1. Proposal
a. were specific problems with the client encountered which might not have arisen if
the problem area had been adequately covered in the proposal letter?
b. did the proposal letter recognize all requirements of firm policy in establishing the
engagement?
2. Engagement Program
a. did additions to or deletions from the planned scope occur during the engagement?
For what reason? Were these changes approved by responsible client personnel?
b. is there evidence that the skill level of personnel utilized was not commensurate
with the requirements of the phase to which they were assigned? If so, specify the
indicator, phase, individual and recommendation for future engagements.
c. were utilized techniques performed in accordance with the firm policy? What
change in techniques would you recommend for a similar engagement?
Schedule:
1. Did actual duration differ significantly from plan? State you opinion as to
reason for deviation.
2. If dates of interim reports or engagement completion were not in accordance
with prior client agreement, state reason.
Documentation:
1. Were recommendations to the client, oral or written, supported by adequate
evidential matter in the workplace?
2. Are there specific respects in which organization or content of work papers
are not in accordance with minimum standards of the firm? If so, describe.
3. Was it necessary to do additional work and/or re-contact client for additional
information before making a final report? Describe circumstances.
Reports:
1. Were progress meetings held with, or interim reports made to the client? If
not, state reason.
2. Did errors of fact occur in interim or final reports?
3. Are there specific changes which you would recommend in report content,
format or style to improve effectiveness?
Results:
Deficiencies in any of those may or may not have a major impact on the most
important criteria – results.
Extreme caution must be observed
Following would seem to be minimum criteria for results:
1. Were all recommendations accepted by the client? If not, why?
2. What degree of satisfaction was expressed by the client?
3. Describe any phase or circumstance in which dissatisfaction was expressed
(or implied) by the client and the reason.
4. Were additional services, either implementation or a new survey
engagement, requested by the client?
Post-engagement follow-up
• Sometimes programs and systems appear to operate effectively during the
first few months after the implementation but later run into difficulty because of
some reasons like:
1. Change in operating conditions
2. Design may prove to be faulty, etc.

Therefore, Consultant should provide for observation of the programs or

systems installed for a sufficiently long period to uncover deficiencies early and
to make the necessary modifications. Such follow-ups are usually agreed upon
with the client either in their original agreement or in the course of the MS work.