P is a consulting firm that provides technical advice to the oil industry.

CIMA P3 Question Answer

P is a consulting firm that provides technical advice to the oil industry. The company has consulting teams that specialise in specific areas, namely drilling, off-shore, health and safety, oil well management and ng management. Each team's consultants are charged out to clients at the same daily rate.

The demand for different skill sets varies constantly due to factors such as movements in oil prices. Exploration increases when the oil price rises and there is a greater focus on maintaining existing wells when the price fans.

The performance of P's sales team is measured in terms of revenue, based on the number of consultancy days sold Frequently the sales team agree to contracts without first checking that the relevant consulting team has consultants available. The work then has to be undertaken by subcontractors at P's expense. Sub-contractors cost more and their use can also lead to P's own consultants being under-utilised when assignments could have been scheduled more efficiently.

Which TWO of the following would correct this behavior?

Measure the performance of P's sales team on margin contribution rather than revenue.

Reduce the number of consultants within P's teams.

Employ the sub-contractor stall as lull time P employees.

Award additional incentives for selling P's own staff

Allow P's consultants to go out on any job, regardless of specialism.