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					                The Model for evaluating efficiency of Training Programmes for SME
           Introduction into the model for estimating the efficiency and impact of Training Programmes
                                        for Small and Medium Enterprises
                      When facing the decision regarding improving of the performance of national industries one
                      faces complex question of efficiency of investment. It always looks as the investments required
                      are too high. The isses is relevant when a Programme is reviewed at the each level of
                      consideration such as single enterprise, industrial sector or national industry.
                      A simple model facilitating the evaluation of investment results of the Programme is presented
                      below to assist decision makers in assesment of the problem. It is based on simplified
                      assumptions as well as actual results of already implemented Programmes.
                      Its main objective is to provide decision makers, donors and investors with indication of rather
                      pessimistic estimation of the results which can be expected after the implementation of the
                      Continuous Improvement Programme based on UNIDO methodology and Pharos, Produce
                      Plus and FIT performance management software tools. The real outcomes are much more
                      complex, rich and multidimentional, exceeding this limited model scope.
                      The model is made in easy to use spreadsheet format supporting decision makers in varying
                      parameters and observing the various consequences of the decision adjusted to particular
                      countries and economies.
                      The parameters which can be varied are marked by RED color on yellow background.
                      The prototype enterprise data was taken from the companies participated in the UNIDO
                      Programme for Colombia 2002-2003 called by participants as "PHAROS Programme". The
                      selection was made based on criteria of annual sales and number of personnel to fit into the
                      low end of the definition of "Small and Medium Enterprise". Additional information regarding the
                      selection is presented in this workbook on separate sheet "Sample Company Selection".
                      The increase of net profit post-programme results by many factors including improved
                      business performance, better use of available resources and planning, increased managerial
                      capacity and business intelligence as well as business results, including quality, productivity,
                      controllability, competitiveness and sustainability of businesses in general.
                      There are some other important factors like social stability, enterprise and industry
                      competitiveness, growth of economy, GNP, etc. which shall be analyzed additionally. Only net
                      profit factor is used in the model presented below for the sake of simplicity and
                      transparency.
          The service package delivered within the Training Programme to each enterprise contains as
          follows:
                      1. Training course of two senior managers, 5 days, 8 hours per day, total 40 hours
                      2. On-site guidance, consulting and application support for 9-12 months after the training
                      course, at least two full working days per month provided by certified regional consultant, 126 -
                      192 hours in total
                      3. Benchmarking of the initial enterprise status when the Programme starts
                      4. Benchmarking/measurement of the after-programme performance of each enterprise and
                      evaluation of the achieved improvements
                      5. Issuing the "Certificate of Enterprise Business Performance Improvement" by the
                      Programme organizers upon assessment of the actual measured improvement results after the
                      end of Programme
                      6. Issuing the certificates of “Business Performance Management Excellence” for 2 senior
                      managers, which were trained and passed tests
                      7. Obtaining Pharos - Business Navigator, Financial Improvement Toolkit and Produce Plus
                      software by UNIDO, 2 licenses of each with sample enterprise databases
                      8. Comprehensive Reference Materials on business management principles, continuous
                      improvement methodology, strategic and production performance monitoring based on
                      Pharos, Produce Plus and FIT, simulation of business targets, decisions and developments
                      based on Pharos and Produce Plus enterprise models. The materials are prepared as files in
                      .PDF format on CD-ROM which content and presentation is tuned to support self-training of
                      entrepreneurs with minimum educational background.
                      9. Accessing dedicated Web site resources for Programme participants providing know-how
                      development, reference information, user experience exchange and updates.
                      Contact: info@win2biz.com; Additional information:www.win2biz.com


Enterprise Performance Improvement Centre, GOLEM IMS GMBH, Austria, www.win2biz.com                     Page 1 of 4 pages
                The Model for evaluating efficiency of Training Programmes for SME

           Level of
                                                   Parameter                            Value
           analysis

                      Sales annual pre-programme per one enterprise, USD                  $632,000
                      Net profit typical in % of sales                                          5%
                      Increase of net profit, post programme %                                 24%
                      Net profit annual, pre-programme, USD                                $31,600
                      Net profit annual increase after the programme end, USD               $7,584
                      Sales annual post-programme, USD                                    $639,584
                      Increase of annual sales post-programme compared to initial, %       101.20%
                      Cost of the Programme service package per enterprise, USD             $4,600
                      Return on investment per enterprise, annual                             165%


          Sector
                      Number of enterprises taking part in the Programme                     2,500
                      Annual net profit estimation per sector, pre-programme            $79,000,000
                      Annual net profit estimation per sector, post-programme           $97,960,000
                      Net profit increase estimation per sector, post-programme        $18,960,000


          Government: Taxation improvement estimation
                   Taxation of enterprise annual profit by balance sheet, %                     35%
                   Taxation total pre-programme for the sector, USD                     $27,650,000
                   Taxation post-programme, USD                                         $34,286,000
                   Increase in taxation income for Government, annual USD               $6,636,000
                   Increase in taxation income for Government, annual in %                     24%

          Efficiency of the Programme Support by Government
                      Partial coverage of Programme service package costs, in %                 50%
                      Partial coverage of Programme service package costs in USD             $2,300
                      Total annual investment into Programme by sharing its cost         $5,750,000
                      Return of investment (considering only taxation issue)                  115%




Enterprise Performance Improvement Centre, GOLEM IMS GMBH, Austria, www.win2biz.com          Page 2 of 4 pages
                 The Model for evaluating efficiency of Training Programmes for SME


                                  Return of Investment at Enterprise and Governmental Levels


                      180%
                      160%
                      140%
                      120%
                      100%                                                                                ROI Enterprise
                ROI




                      80%                  ROI Enterprise    ROI Governmental                             ROI Governmental Support
                      60%                                        Support
                      40%
                      20%
                       0%


                                                Annual Net Profit
                                                   Increase                     Enterprise Investment Efficiency

                                 $8,000
                                 $7,000
                                                                             Cost of service
                                 $6,000                                        package
                                 $5,000
                                 $4,000
                                 $3,000
                                 $2,000
                                  $1,000
                                      $0
                                                             1
                                                                                             Annual Net Profit Increase
                                                                                             Cost of service package
                                   Annual profit vis costs



                                                           Net profit increase by   Net Profit increase by
                                                             Industrial SectorIndustrial Sector and Government



                                           $20,000,000

                                           $15,000,000                           Taxation
                                                                                 increase
                                           $10,000,000

                                             $5,000,000

                                                      $0

                                                                 Gains by Industrial
                                                                    Sector and
                                                                   Government

                                                                                            Net profit by Industrial sector
                                                                                            Taxation increase




Enterprise Performance Improvement Centre, GOLEM IMS GMBH, Austria, www.win2biz.com                                           Page 3 of 4 pages
            Selection of the sample company parameters for the Model of Training Programme efficiency.

       The table presented below contains the basic information regarding the enterprises form leather/shoe
       sector located in Bogota, Colombia which took part in the UNIDO Programme for Colombia in 2002-2003


       The parameters company #5 were selected as typical representative case for using in the model. The
       values of annual sales revenue were introduced into the calculations presented in the previous sheet.
       The variations of particular industrial sectors may be analyzed in detail additionally based on statistics for
       each country and target industrial sectors.



                                                                                                      Annual
                                                                      Number of         Total          sales
        #        Company name              Production typical
                                                                       workers        personnel       average
                                                                                                     2002, USD
                                         Fabricación de
        1 Esmeralda Leather Ltda                                           9              12            $120,000
                                         Cinturones
        2 Shoomarker Ltda                Fabricación de Calzado            35             40            $287,655
        3 Henry Mouse Ltda               Fabricación de Calzado            17             22            $400,000
           Industria de Calzado Soani
        4                             Fabricación de Calzado               16             20            $475,000
           Ltda.
           Manufacturas en Cuero V &
        5                             Fabricación de Calzado               14             19            $632,000
           C Ltda
                                      Fabricacion y
        6 Boston Shoes Ltda           Comercializacion de                  45             50          $1,430,600
                                      Calzado para Hombre
        7 Imacal Ltda.                Fabricación de Calzado               50             62          $1,500,000
        8 Districarnazas Luna         Curtición de Piel                    39             42          $1,676,500
        9 Curtiembres el Reno Ltda    Curtición de Pieles                  31             44          $1,800,000
        10 Calzado Atlas Ltda.        Fabricación de Calzado               65             80          $2,000,000




Enterprise Performance Improvement Centre, GOLEM IMS GMBH, Austria, www.win2biz.com                       Page 4 of the Sheet #2

				
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