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CMA CANADA
PROFESSIONAL PROGRAMS
August 2013

Developing an Implementation Plan


Overview

In solving strategic business cases, problems are identified, alternative strategies for
solving the problems are assessed, and recommendations are made. Once the
strategic recommendations are made, an implementation plan must be developed.

In developing an implementation plan, the operational and implementation issues, as
well as the problems that must be addressed to help support the successful
achievement of the new strategy, must be analyzed and resolved. Once
recommendations are made to resolve these issues, an action plan for implementing
the strategy must be developed.

The general steps to completing an implementation plan are as follows:

1. Identify and analyze the implementation issues, such as those concerning change
management, acquiring the required resources, and resolving any specific risks
associated with the recommended strategy.

2. Address the operational and other minor issues (e.g. ethical, internal control,
operations management). Discuss how solving these problems can affect the
implementation of the strategic recommendations, and/or how they affect other
minor issues and weaknesses. This demonstrates integrative thinking.

3. Make clear and actionable recommendations pertaining to the implementation
issues and minor issues.

4. Provide an action plan to implement the strategic and operational recommendations.

Developing an Implementation Plan
CMA Canada 2
Implementation and Operational Issues

Any issues or risks that could impede the implementation process are addressed in this
section of the report. These internal or external risks can relate to such things as the
market, the product, the stakeholders, internal processes, or key success factors. When
a risk to the successful implementation of the strategy is identified, details on how to
resolve or mitigate this risk should be provided and the associated costs and benefits
should be analyzed. Where feasible, the recommended strategy is strengthened when
significant cons are addressed and overcome.

Details on how to resolve the issues dealing with change management should be
provided in the written portion of the implementation plan. Managing change and
allaying the concerns of those stakeholders who are affected by the change are critical
when implementing a strategy. For a large corporation, communicating a new strategic
direction can be a significant undertaking. Strategic change can involve divestiture,
acquisition, expansion, changes to the product line, shifts in target markets, or the
installation of a new corporate-wide program.

Some change management considerations include the following:

1. Communicate the reasons for the change and outline any relevant consequences to
the workers, particularly those who are affected by the change (e.g. hold a general
staff meeting).

2. Provide an opportunity to those most affected by the change to be part of the
change management team. This involvement will allow them to work out their
concerns before, during, and after the implementation of the change. This
involvement will greatly contribute to their acceptance of the change.

3. Provide periodic updates or status reports (e.g. send out quarterly updates to staff).

4. Monitor the change (e.g. require individuals responsible for a particular aspect of the
implementation plan to prepare and present a report to management).

5. Evaluate the change (e.g. compare results against performance targets).

Explain how the change issues will be addressed during implementation. This
communication fortifies the merits of any plan and ensures consideration has been
given to all the players involved. For example, if training is required as a result of the
recommended changes, provide the details of training requirements in the body of the
report and reflect these needs in the action plan timeline.

Minor issues and weaknesses that are identified in the situational analysis should also
be addressed in the implementation plan. Non-strategic matters pertaining to
information technology (e.g. ERP system upgrades) or human resources (e.g. employee
feedback) can have an indirect impact on the success of the new strategy. Other minor
Developing an Implementation Plan
CMA Canada 3
case issues that do not fit anywhere else in the report can be addressed as part of the
analysis of the implementation issues.

In analyzing the implementation and operational issues, the following objectives of the
implementation plan should be kept in mind:

1. It aligns the organizations resources and success factors to accomplish the
recommended strategy (e.g. benefits exceed costs, sufficient resources are
available or can be obtained, and competitive advantages are exploited or
developed).

2. It resolves problems without causing others.

3. It considers organizational implications (e.g. organizational structure, morale, and
the role of functions such as distribution, IT, accounting, sales, purchasing,
marketing, human resources, financing, etc.).

The impact of the alternative actions on the pro forma financial statements and cash
flow forecast should also be kept in mind. For each issue analyzed, a clear, actionable
recommendation must be made. Indicating that the issue needs to be resolved or
needs to be further investigated cannot be credited for analyzing and resolving the
issue.

Once recommendations are made for the implementation and operational issues, the
last step is to prepare the action plan.

Exhibit 1 provides an example of a small portion of the implementation plan section of a
business report. This example is based on the Toys-Plus Inc. (TP) Board Report case.

Action Plan

Preparing an action plan is the final step in the development of the implementation
plan. It should address the following questions:

1. What needs to be done?
2. Who is responsible for each task?
3. When must each action be completed?
4. What resources (money and people) are required to complete the task?

An action plan is best represented visually as a table, graph, or chart. It can be created
on a spreadsheet where each column represents one of the above elements and each
row represents a unique step. Exhibit 2 is an example of how an action plan can be
structured.

Another popular method of illustrating a project schedule (i.e. action plan) is a Gantt
chart. The Gantt chart uses bars to reflect the start and finish dates of each activity in a
Developing an Implementation Plan
CMA Canada 4
project. The calendar dates can be marked on the horizontal axis and the activities on
the vertical axis, with a bar for each activity representing the duration of the activity. This
method of charting has a couple of advantages. Updating each bar with the percentage
of completion for each activity, one can quickly see which activities are behind
schedule. Exhibit 3 provides an example of one type of Gantt chart.

Gantt charts can also be structured to reflect dependencies between activities. The
critical path for the entire project can be identified when these linkages are in place.
Slippage in the critical path can be quickly assessed once this path is established.
Knowing the delay in a project and possible cost overruns is a valuable tool in the
financial management of any project.

The visual portrayal of an action plan is usually presented in the business report as an
appendix. Its detailed timeline provides stakeholders with a level of confidence that the
recommended strategy has been well thought through.

Sample Implementation Considerations

Using the example of a strategy to acquire another company, below are some
considerations that may be relevant when developing an implementation plan that
involves an acquisition. They include typical questions and suggested action items to do
with financing and operational issues that may be relevant for implementing the
acquisition strategy. Where appropriate, the answers to the questions should be
addressed in the body of the report. In some cases, there will be an action and
associated cost that should be added to the action plan presented in the appendices.
Where relevant, an (action item required?) prompt is provided for items that might be
appropriate for the action plan.

Note that these questions are by no means exhaustive, nor are all the questions
relevant for every situation. As well, some of the responses to the questions may be
more appropriately covered in the analysis portion of the paper.

A. Financing Considerations:

1. Will additional financing be required? If so, where will the financing come from
and what steps must be taken to acquire this financing? (Action item required?)
2. Will a loan covenant be a factor? Is there any risk of loan default? If so, what is
the contingency plan?
3. Will severance packages be paid out? If so, what is the total cost? How will this
be financed? (e.g. retained earnings, line of credit, bank loan, share issue, etc.)
Will the severances be paid monthly or as a lump sum?
4. How will other expenses be affected? (e.g. interest payments, taxes, etc.)
5. How will the financing issues and operational issues affect the pro forma
financial statements and cash flow?

Developing an Implementation Plan
CMA Canada 5
B. Operational Considerations:

1. Will layoffs be necessary? If so, will the reduction in manpower lead to possible
internal or quality control issues? Is there a possibility of a lawsuit as a result of
the layoff? What is the timeline for the layoff? Who will be responsible? (Action
item required?)
2. Will the acquisition result in operating at full capacity or will it provide excess
capacity in terms of production?
3. What percentage of customers from the acquired company will be lost as a
result of the acquisition?
4. Will training be required? If so, when, how, and at what cost? (Action item
required?)
5. Will benefit packages need to be modified to be consistent between the
companies?
6. Who will lead the acquired company? When and how will they take the lead?
(Action item required?)
7. Will a press release need to be sent out to announce the acquisition? (Action
item required?)
8. Will a succession plan need to be implemented? (Action item required?)
9. How will change management help to assimilate the cultures of the two
organizations? How will the change be communicated? (Action item required?)
10. What risks need to be mitigated if the two cultures are merged (e.g. preferential
treatment, biased decision making, employee in-fighting, etc.)? How will issues
between the cultures be resolved?
11. How will the other functional departments be affected? Marketing? Logistics?
(Action item required?)
12. How will the acquisition affect the supply chain? (Action item required?)
13. What changes need to be made to information systems, and at what cost?
(Action item required?)
14. How can information technology be used to help implement a successful
acquisition and at what cost? (Action item required?)
15. What performance targets will be affected? (Action item required?)
16. What are the potential consequences of an unsuccessful implementation of the
acquisition?
17. How will the acquisition affect the pro forma statements and cash flow
projection?

Developing an Implementation Plan
CMA Canada 6
Summary

The value of an implementation plan increases once the strategic recommendations are
approved. Knowing the critical actions and the deadline dates will reveal the most
critical activities that need to be completed to ensure that the project is accomplished
smoothly and on time. Once the critical activities are identified, responsibility for these
activities can be assigned in a manner that will ensure the deadlines are met (e.g.
potential bottlenecks can be identified and dealt with by distributing the workload in an
equitable manner). Detailing cost estimates is useful for budgeting and forecasting the
financial requirements for successfully implementing the recommended strategies.

The implementation plan also helps in defining the performance measures and
establishing the performance targets. Throughout the implementation process, the
progress of the project implementation can be reviewed against the plan and
adjustments can be made where required.
Developing an Implementation Plan
CMA Canada 7
Exhibit 1

Partial Implementation Plan for Toy-Plus Inc. (TP)
1


The following is based on the strategic recommendation that TP divest the Toys
Division and grow strategically in Games by acquiring Luke Software Inc. (LS) and
expanding into Europe.

VII. Implementation Plan

A. Risk Mitigation

There are certain key risks that may impede the implementation of TPs strategic
direction to expand into Europe, to divest from the toy industry and to focus more on
software games. These risks are categorized as product risks, market risks, and
stakeholder risks.

Product Risks

Graphics and sounds are important for next-generation console games and European
consumers. As shown in the Customer Focus section, graphics are not a competitive
focal point for TP. Although graphic quality will be maintained at a basic competitive
level, TP will lag behind certain competitors on this dimension of product quality. The
following are recommended strategies for mitigating this risk:

1. Strengthening and internalizing its core competency in sound and music, thereby
protecting its unique customer reputation;
2. Creating new styles of games where graphics are not a customer focal point;
3. Focusing on games/competencies where TP can best compete.

Another way to mitigate product risk is by creating a portfolio of games with varying
complexity and associated risk. Console digital distribution offers new opportunities to
create a diversified game portfolio. All next-generation consoles (e.g. Xbox Live Arcade,
Playstation Network) have adopted digital distribution. Casual style games (e.g. poker)
can be developed at low cost and break-even point.
2
Due to the relative simplicity of
such games, success is contingent on developing uniqueness and innovation, not on
graphics and game size, which bodes well for TP.


1
Modified from Toys-Plus, Example of a Good Report 2007, pp. 55-77.
2
Hyman, P. State of the industry: digital distribution. Game Developer. March 2007. Vol.14, Iss. 3, p.11.
Developing an Implementation Plan
CMA Canada 8
B. Change Management

An Integration Manager is critical in managing change and ensuring successful
integration of LS. It is recommended that a one-year contract position be created with
an expected salary of $100,000
3
and an additional miscellaneous budget of $100,000.
This manager will develop and facilitate the integration plan, by acting as a liaison
between staff and management, and by dealing with attrition and morale issues.
J. Wener or M. Paulo needs to hire an Integration Manager by Q3 in 2008.

The division divestment will impact TP employee morale. The Toy division employees
require ongoing communication and support during the divestment; otherwise, TP may
lose the trust and respect of the remaining TP employees.
4
Furthermore, TPs situation
is unique in that both TP and the Toys purchaser will be temporarily located together.
Any unresolved issues may result in resistance to change.

Change management must be initiated and supported by the leadership team. Success
requires ongoing and candid communication between management and employees at
all levels. J. Wener should hold a meeting with staff in Q1, 2008, to communicate the
strategy and the expected financial outcomes.

C. Operational Issues

Intellectual Property Insurance

A weakness of TP is not possessing intellectual property (IP) insurance. This
contributed extensively to the current litigation, forcing TP to divest the Toys division. To
protect itself against future litigation, TP must obtain insurance.

The two policy types of IP insurance available are infringement and enforcement.
Infringement policies protect against inadvertent exploitation of another organizations
IP. Enforcement policies protect an organizations current IP and assist in covering
litigation expenses up front.
5
It is recommended that TP obtain maximum protection by
purchasing both infringement and enforcement policies. These policies cost
approximately $100,000 per year.
6



3
Salaries based on Robert Half International 2007 Salary Guide.
4
Budros, A. The Mean and Lean Firm and Downsizing: Causes of Involuntary and Voluntary Downsizing
Strategies. Sociological Forum. Vol. 17, No. 2. June 2002. pp. 307-352.
5
Diversified Risk Insurance Brokers Website (2007). Intellectual Property Insurance. Retrieved March 7,
2007, from www.drib.com/products/IntellectualProperty.htm.
6
(2.5%*$4M) assuming coverage of $4M based on LS lawsuit and an average cost of 2.5% of total
coverage per annum. Insurance Choice Website (2007). IP Sure: Intellectual Property Rights
Insurance. Retrieved March 12, 2007, from
www.insurancechoice.com.au/downloads/ipsure_brochure.pdf.
Developing an Implementation Plan
CMA Canada 9
Subcontracting Sound Development

One of TPs strengths is its reputation with customers for good quality sound and music
associated with its games. To keep development costs low, production of both sound
and music is outsourced to sub-contractors. Because these functions are critical to the
quality of TPs games and are a major element of the total production cost, it is
imperative that TP controls this competency.

Manufacturing companies, such as Dell and Toyota, have developed and managed
extensive supplier relationships which have become competitive strengths.
7
For
instance, Dell Inc.s knowledge sharing with suppliers has evolved to the point where
business partners are treated as insiders.

It is recommended that TP share explicit knowledge of development processes with
suppliers through training workshops. This will protect and build TPs strength, and link
the supplier to a long-term productive business relationship. Additional wages and
salaries will be incurred during the knowledge sharing process with key suppliers,
costing approximately $100,000 per year.
8


Other Issues

Space Wun Proposal

TP should not undertake the rebate coupon proposal to increase sales of Space Wun,
as it will result in a loss even in the most beneficial scenario (Figure 1).

Figure 1: Financial Summary of the Space Wun Proposal (in 000s)

% Coupon usage 20% 8%
% Rebates applied for 90% 85% 90% 85%
Incremental gross margin $216 $216 $216 $216
Variable costs 356 337 143 135
Fixed costs 205 205 205 205
Before-tax Net Income (Loss) $(345) $(325) $(131) $(123)

7
Using Supplier Networks To Learn Faster. Jeffrey H. Dyer and Nile W. Hatch. MIT Sloan Management
Review. Spring 2004.
8
Salaries based on Robert Half International 2007 Salary Guide.
Developing an Implementation Plan
CMA Canada 10
Exhibit 2

Action Plan

Action Responsibility Cost
Initiation
Date
Completio
n Date
European Expansion Games including copyrights
initiate proposal and assign new VP Sales as champion
New VP Sales
and M. Snuffle
$1.7M Q1 2008 Q1 2008
Hold strategy communication sessions with financial
outcomes two per month for first quarter
J. Wener Cost of
business
Q1 2008 Q1 2008
Draft and mail working condition statement to Shan
Wen Manufacturing Pte
Law firm
H,H&M
Cost of
business
Q1 2008 Q1 2008
Divest the Toys Division and sell off assets listed at
eight times true earnings
J. Wener and
M. Paulo
Inflow of
$8.1M
Q1 2008 Q2 2008
Settle lawsuit with and acquire Luke Software Inc.
settle at recommended price of $4M plus purchase
price of $1.5M
J. Wener and
Law firm H,H&M
$5.5M Q2 2008 Q3 2008
Integrate LS key personnel and disciplined development
processes contract an Integration Manager
J. Wener and
M. Paulo
$200K Q3 2008 Q4 2008
Implement new organizational structure recruit VP
Finance, HR manager, and VP Sales
J. Wener and
M. Paulo
$230K Q4 2008 Q4 2008
Vertically integrate distribution operations cancel
Agram distributor contract
New VP Sales
and M. Snuffle
Inflow of
$783K
Q4 2008 Q4 2008
Purchase and install auto-replenishment inventory
system software
IT Leadership $30K Q1 2009 Q1 2009
Develop and implement succession planning J. Wener Cost of
business
Q1 2009 Q1 2009
Develop policy and procedures/ethical standards
documentation obtain leadership support and input
R. Abboud and
HR Director
$65.8K Q1 2009 Q1 2009
Purchase intellectual property insurance both
infringement and enforcement policies
J. Wener and
Law firm H,H&M
$100K
per year
Q2 2009 Q2 2009
Obtain new office space upon expiry of lease or
renegotiate sublease
J. Wener Cost of
business
Q2 2009 Q2 2009
Build supplier networks for core competencies (sound
in particular) training workshops and establish
knowledge sharing/learning teams
R. Abboud $100K
per year
Q2 2009 Ongoing
Initiate, communicate and utilize the Balanced
Scorecard tie compensation to objectives and hold a
general meeting
J. Wener and
M. Paulo
$96K Q4 2009 Ongoing
Initiate target costing and tie performance to the
Balanced Scorecard
M. Paulo $100K Q2 2010 Ongoing
Convert the existing call centre into the Post-Product-
Purchase Team engaging customers and distributing
satisfaction surveys
M. Snuffle $60K Q4 2010 Q1 2011
Reassess supplier networks and possible integration/
acquisition options
R. Abboud Cost of
business
Q2 2011 Ongoing
Assess East Asia and India market feasibility New VP Sales Cost of
business
Q2 2012 Ongoing
Developing an Implementation Plan
CMA Canada 11
Exhibit 3
9


JUL-DEC JAN-JUN
JUL-
DEC
JAN-
JUN 2007
PRIMARY TASKS 3 mo 6 mo 9 mo 1 yr 2 years + MEASUREMENT OBJECTIVE
Hire a new Financial
and Admin Mgr.

Salary 60K, candidate
CMA, CA, 5 yrs exp.
Manage finances and
oversee finance
changes with partners
Hire Senior Project
Architect and Senior
Managing Architect

Salary 80K, licensed
architect with
10+ yrs exp.
Better manage the
project architect team
and design staff
Implement formal job
descriptions

Describe
responsibilities and
roles for employees
Set guidelines for
performance and
evaluations and firm
expectations
Enhance website
for external customer
initiatives

Enhance website
for external customer
initiatives
Enhance marketability
and support client-
focused initiatives
Devise OT, billing,
bonus and process
change policies with
JAV-TAB

New policies on staff
compensation/
performance will be
introduced
Clarify
roles/responsibilities
while lowering OT
costs and providing
staff incentives
Hire a Landscape
Architect

Salary 46K, licensed
architect with
5+ years exp.
Compliment services
offered to clients,
evidenced-based
design, etc.
Employee training
related to changes
and new skills

Employees to
participate in industry
seminars
Improve staff overall
industry/business skills
Devise and implement
performance review
process

Implement
performance
appraisals, and
1 year evaluations
Align company
expectations with
employee objectives
Outline dispute
guidelines for self-
managing team
initiative

Employees are
established into self-
managing teams
Improve staff synergy
in all phases of project
Upgrade Tracker
software/e-commerce
enhancements

Incorporation of
accounting
software/customer data
Allow for internal
reporting systems to be
accessible via the web
Implement and monitor
new policy changes

Review effectiveness
of new OT and A/R
policies
Assess that new
policies have reduced
costs
Deploy life-cycle
costing initiatives

Use life-cycle costing
to enhance proposals
related to cost
assessment
Improve information to
customers and
differentiate design


9
Taken from Cameron Roark Architects, Example of a Good Report, Exhibit 15, pg. 74, 2004.
Howard
Howard
& Henry
Howard
& Henry
Kimberley
Howard/Henry/Senior Mgmt/
Finance & Admin Mgr
Howard
& Henry
Partners and Mgmt team-led ongoing
Partners and Mgmt team-led ongoing
Senior Mgr
Architect
Senior Mgr
Architect
Partners and Mgmt team-led ongoing
Kimberley ongoing