
MN506 System Management Assignment Help
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This assignment relates to the simulation of Fit Life which is a chain of health and fitness clubs in Australia by determining the strategic change requirements and opportunities for implementing the change management strategies.
The goals and objectives of Fit Life focus to develop strategy for premium pricing and differentiation of its main products and to introduce innovation in fitness and lifestyle grow future Employee Relation and enter new markets through developing retail business and building physic-gym culture. In order to achieve these goals and other financial and marketing objectives the strategic change needs required by the company area s follows:
Current Policy & Practice | Contribution | Limitation |
Children and elderly exercise and diet programs | Competitive advantage | Only for children and elder people. |
Youth swimming classes and recreational activities | A variety of activities available. | No specialization |
Availability of many classes and trainers during peak hours | Availability during peak hours | Lack of qualified and experienced trainers |
Customized fitness and health programs for specific needs | Consideration and satisfaction of specific needs of each customer | Requires a variety of skills and expertise for tailoring programs according to specific needs |
Required policy and practice | Rationale |
Introduction of health bar in the highest CGU within next six months | To compete with other health and fitness organizations who already provide on-site extras such as health bar to clients and also achieve the objective of ROI of 20%, gross margin 20% and increase in membership count by 10% |
Open the physiotherapy facility at health clubs with at least two physiotherapists within next nine months | To build the physic-gym culture and enrich brand value. |
Register as a Registered Training Organization | To provide internal growth and training of employees and grant them nationally recognised qualification. |
Introducing innovative health and fitness programs during the year | To accomplish the goal of introducing innovative fitness and lifestyle and enrich brand value |
Launching Iron Man loyalty Card Program within next three months | Achieve 5% improvement in customer retention rates every year for five years. |
(DAS, 2013)
Organisational behaviours | Impact |
Resistance to change by long term staff members | The innovative health and fitness programs will not be implemented effectively. |
Lack of expertise of executive management to implement changes | The change strategies will not be successfully implemented and the objectives of Change management plan will not be achieved. |
External Factors | Impact |
Political | The factors such as VET free help loan scheme, smart and skilled government subsidized training, updates in national standards and training packages change regularly which may affect the compliance processes. |
Social | The popularity of fitness shows and Fitness Industry Survey helps in increasing demand of fitness and health clubs and thus increasing growth of fitness clubs of company. |
Economical | The growth of fitness industry will result in achieving the financial and marketing objectives of company. Although he decrease in household income may result in shifting of customers to other cheaper alternatives available. |
Technological | The increasing use of technologically advanced equipments and products will be a competitive advantage for company since the company is already technologically advanced and developed. |
1.4 Identify major operational change requirements
Operational change requirements | Rationale |
Appointment of qualified and experienced trainers and staff members and training and development of existing executives | To achieve the objective of better service quality and customer retention for long term and enrichment of brand value |
Inclusion of innovation and creativity in operational policies and procedures through their redesigning | To increase brand value and develop the strategic business plan in line with the Marketing Management and objectives. |
(Torppa, 2011)
The change requirements reviewed and prioritised in consultation with Business Change Manager are as follows:
Category (Cost) | Cost |
Appointment of qualified trainers | Salary of trainers at clubs |
Training and development of existing staff | Salary of training personnel |
Iron man loyalty card scheme | 10% discount on eligible purchases |
Contracts with international agents for direct distribution channel. | Agents’ commission |
Developing online portals | Website development and service charges |
Registration as RTO | RTO licence and compliance fees |
Increase in operating hours of clubs | Overtime wages |
Category (Benefit) | Cost |
Appointment of qualified trainers | Increase in membership count |
Training and development of existing staff | Increase in profit margin |
Iron man loyalty card scheme | Increase in membership count |
Contracts with International Environment agents for direct distribution channel. | Increase in market and customers |
Developing online portals | Reduction in costs |
Registration as RTO | Customer retention for long term |
Increase in operating hours of clubs | Increase in ROI |
The increase in cost of implementing the change strategies will also result in benefits by increase in ROI, increase in profit margin, increase in membership count by 10%, achieve ratio of current assets to current liabilities of 2:1, ratio of 1:1 of owner’s equity to borrowed funds, increase of 5% in customer retention rates and brand enrichment. Thus the initial investment as the cost of implementing changes will be recovered within one or two years by the company.
Barrier | Likelihood | Impact | Consequence | Risk Level | Risk Ranking | Risk Mitigation |
Substitute fitness centres | ½ | Loss of customers | Reduction in membership count | High | 3 | Gain competitive advantage |
7/24 open fitness clubs | ¾ | Reduction in customers | Decrease in profit margin | High | 1 | Increase hours of operation |
Seasonal customers | ¼ | Reluctant to pay prices when outdoor sports are available in summer | Decrease in profit | Moderate | 4 | Launching customised seasonal packages |
Fitness gadgets and apps and Free health resources on internet | ½ | Non-availability of services | Decrease in customers | Moderate | 3 | Establishing online presence. |
High pricing structure | ¼ | Non-availability of services | Decrease in customers | Low | 5 | Discount schemes and incentives on products. |
Lack of manager expertise | 3/4 | Failure to achieve objectives | Loss of reputation and brand image | High | 2 | Training and development of mangers |
(Bradley, 2016)
The change management project along with the details of activities and duration of those activities for successfully implementing the change management initiatives can be represented by the following table and Gantt chart:
Activity | Description | Duration (in days) |
1 | Training and development of executive management and long term staff members and Appointment of highly qualified and experienced trainers | 15 |
2 | Entering into contracts with international agents for establishing direct distribution channels | 10 |
3 | Developing online portals and internet presence | 14 |
4 | Registration as RTO | 6 |
5 | Framing policies and procedures for strategic business plans | 8 |
6 | Launching Iron man loyalty card program | 1 |
7 | Adopting methods of cost reduction and cost control | 7 |
8 | Monitoring and evaluation | 10 |
Gantt chart
Parent task | Sub task | Labour | Capital | Cost (AUD) | Time | Outcome |
Training | Appointment of training personnel | Trainers | NA | Salary | 15 | Better service quality |
Agents contract | Establishing terms of contracts | Agents | NA | Commission | 10 | Access to international market |
Online portals | Developing websites and portals | Web developer | Websites | Service charges | 14 | Internet presence |
RTO Registration | Compliance procedures | Legal personnel | Registration Certificate | Licence fees | 6 | Increase in brand value |
Framing policies | Preparation of plan | Managers | Policies and procedures | NA | 8 | Development of strategic business plan |
Cost reduction | Implementing methods | Employees and executives | NA | NA | 7 | Increase in profits |
(Burr, 2010)
Reporting Protocols | Management | Customer | Government | Employees |
Outcomes | Achievement of organizational objectives | Better quality services through satisfaction of needs and fitness goals | Compliance of laws and regulations | Improvement in performance and increase in knowledge and skills |
Key message | The project will result in increase in performance of company by achieving the goals and objectives through customer satisfaction. | The services are provided to improve your health through appropriate and accurate means using best training health and fitness practices. | The project has been undertaken in adherence of applicable regulatory framework and compliance of applicable laws related to health and safety | The project aims at increasing the overall performance through development of skills and knowledge of employees through training and development programs. |
Channel | Project Plan | Advertisement | Compliance Report | Employee notices |
When/Frequency | Monthly | Once | At the start of project | At the start of project |
The change management cycle refers to as the process of initiating the change, implementing the change and monitoring and evaluating the performance to recognise the impact of change. Thus change management is a continuous process. The Change Management Cycle is represented as follows:
(Brown, 2015)
The modifications need to be made in the Change Management plan in order to ensure successful implementation of changes in the policies and procedures of the organization. The cost involved for modification and the delay in time duration of the project likely to be caused will also is included in the report. This report will be used to obtain approval from Business Change Manager.
The meeting will include presentation of project plan to the management of Board of Directors of Fit Life formally through business presentation and receiving their suggestions and recommendations for the project plan in order to obtain approval from them.
The meeting with the employees including the trainers and other staff will be done in order to define the roles and responsibilities of each of them for implementing the changes. The Activities to be performed by them will be defined along with determination of expectations for achieving the organizational objectives.
Performance gaps
Parent task | Subtask | Labour | Capital | Cost (AUD) | Time | Actual Outcome | New Outcome |
Training | Appointment of training personnel | Trainers | NA | Salary | 15 | Better service quality | Increase in expertise |
Agents contract | Establishing terms of contracts | Agents | NA | Commission | 10 | Access to international market | Increase in popularity and brand value |
Online portals | Developing websites and portals | Web developer | Websites | Service charges | 14 | Internet presence | Broad market access |
RTO Registration | Compliance procedures | Legal personnel | Registration Certificate | Licence fees | 6 | Increase in brand value | Loyalty of customers |
Framing policies | Preparation of plan | Managers | Policies and procedures | NA | 8 | Development of strategic business plan | Efficiency in processes |
Cost reduction | Implementing methods | Employees and executives | NA | NA | 7 | Increase in profits | Growth of company |
Risk management Outcome
Risk | Root causes | Risk Control measures (Actions to be taken) | Monitoring Procedures | Responsible person | Timeline |
Financial loss | Decrease in sales | Reduction in excessive costs | Budgeting | Financial manager | Throughout the year |
Non-compliance of health laws | Lack of information about regulatory framework | Identifying applicable health and safety laws | Compliance check | Legal and compliance manager | Before and during implementation of plan |
Technology failure | Fault in technology | Installing technically advanced equipment | Maintenance and repair on regular basis | Purchase manager | Life of machinery |
Delay in schedule | Not meeting the deadlines | Flexibility in schedule | Putting a regular check on deadlines | Project manger | Throughout project implementation |
(Garde, 2010)
From the above mentioned Change Management Plan and communication plan developed for FitLife as a Business Change Development Officer it can be concluded that the recommendations determined through the strategic review of company can be incorporated through the change management plan which can be implemented into the organization effectively and will help Fit Life in achieving the objectives.