4.3. Evaluating Administrative Systems

Meeting the requirements of the business

Businesses vary so much in terms of size, structure, location, expertise of staff, and levels of technology used, that no one system of administration will be best for all. Instead, each firm is likely to be better served by creating a tailor-made system to suit its individual circumstances. Bigger firms usually have a greater quantity of decisions to make about purchases, sales, production, finance, distribution, etc., and so will need a more structured and formal system of doing things.

Large firms are able to employ specialist staff to carry out administrative tasks, often aided by the use of computers and other telecommunications equipment such as faxes and modems to link computers through the telephone network. In contrast, in a small sole trader enterprise, most tasks can be undertaken reasonably successfully by just one person doing jobs as and when s/he feels they need to be done.

Table 4.1. Administrative procedures in a large PLC

Ordering	Central on-line computer receives individual orders from shops and generates bulk orders to wines and spirits suppliers. System managed by a specialist staff of purchasing executives
Stock	Computerised warehouse using bar code readers keeps a minute-by-minute record of all stock held and alerts central computer when stocks of some products are running low
Distribution	Company operates its own fleet of delivery vehicles based at regional distribution depots
Personnel	A specialised personnel department places recruitment adverts in the national press and operates a national recruitment and training program from head office
Accounts	Computerised accounts section employing credit control and budgeting executives
Mail	Mail room employing 10 staff equipped with 5 fax machines receiving 2,000 letters per day
Written Com-munications	Word-processed internal communications and electronic mail communications

Ways of improving administrative systems

A firm may seek to improve the operation of their administration system in a number of ways.

Staff training and re-training. A workforce that does not understand the correct procedures to follow, or cannot use equipment properly, will not operate a cost effective administration system. Organisations are using training to create multiskilled workforces. This refers to training to equip people with a wide variety of skills which they can use to good effect in their organisation. For example, skills in using computers, word processing, writing and presentation, negotiating, letting contracts, information processing and managing resources, as well as improving any special skills they may have as economists, production engineers, or accountants.

Introducing quality standards. In a competitive marketplace, successful firms are those which continuously attempt to improve the quality of their goods and services and production methods. In order to assist firms to improve the quality of their operations, the British Standards Institute (BSI) has introduced quality standards for firms to work towards. The British Standard 5750 provides a ‘kitemark of quality’ similar to the British Standards for Safety, which when demonstrated by firms allow them to display the safety kitemark on their products. For a firm to demonstrate its achievement of BS 5750, it must introduce a series of management systems and procedures covering areas such as training, design control, production, purchasing, inspections, and quality audits. These must be clearly documented and well maintained. External inspectors regularly check that the firm is continuing to follow these documented procedures. The status of BS5750 is recognised internationally and equates with the International Standards Organisation ISO 9000 quality standards, which operate in a similar way to BS 5750; BS 5750 and ISO 9000 standards are interchangeable.

Re-engineering. Business re-engineering or process redesign provides a way of building new administrative systems into a firm and taking advantage of new technology in order to improve on previous practice. Behind the concept of reengineering are two key ideas:

That it is better to re-design all administrative systems in one go rather than to make continual small modifications to an existing system.

That most companies today operate with many thousands of administrative specialists who are judged and rewarded on how well they perform their own specialised tasks, with no concept or interest in how these contribute to the success of the firm as a whole.

By re-engineering and looking at administrative systems from scratch, it is possible to take full advantage of rapid advances in computer technology and falling computer prices in order to build new and better systems.