1. Should we be concerned that CitySoft is focusing on cost, operational control, systems, and quality at the expense of growth?
Answer: We don’t need to be concerned about this issue too much. Actually CitySoft has been growing fast since 1998 to 1999, and it is the time to focus more on its cost, operational control and systems in order to improve CitySoft’s profitability in the future. Refining the process of operation and cost management is quite necessary for CitySoft at this point, because if it kept expanding without improving its cost, operational control and system management, it would make little profit according to the huge cash flow. We can see clearly that CitySoft has already invested much…show more content… If a good cost-measurement system was set up, cost-plus contracts will demonstrate the advantages of cost-management better than fixed price contracts do. With a robust cost-measurement system, managers are able to know the real revenue drivers, to recognize the most valuable customers, and to offer more reasonable price bid. That is to say, cost-measurement system’s strength lies in differentiating clients’ value, projects’ value and operation processes’ value case by case. Under this circumstance, cost-plus contracts would surely dig more utilization and benefit more from such a system, because CitySoft would be able to charge different customers and projects for different prices, which is critical for increasing profitability. 5. What reports will CitySoft need to make those one-time decisions and decisions it will have to make on an on-going basis (in Question #2)? Who should prepare those reports, who should have access to these reports, and how frequently should they be prepared?
Reports need to make | Report | Prepared by | Access permit | Frequency | One time decisions
One time decisions | Expansion or Management Improvement | Finance & Operation & Business Development managers | Managers | Once | | Fixed Fee Contract or Cost-Plus Contract | Operation & Finance department managers | All employees | Once | On-going based decisions