OPTICOMMS is a mobile phone and mobile data provider that has its own network infrastructure (mobile phone towers etc.) and in the past sold its services to the general public known as the retail market. The sales growth in the retail space has been very strong and managers were earning bonuses based on growth in market share and sales growth however the Board and Senior executives believe this will change due to increased competition and may lead to lower profit in the future.

The Board and Senior management conducted a major strategic review and decided to transition away from direct selling to the retail sector and transfer the retail business to third-party retailers. Instead of pursuing the retail business, OPTICOMMS decided to refocus on Corporate Customers. Corporate Customers take more work to make sales to however once switched to a service tend to stay for at least 3-5 years with the one supplier and the company believed this will be the most profitable course for the company over the long term. Unlike retail customers, corporate customers are more focused on quality of service, reliability of service and high-level technical support to their own IT teams rather than individual users.

To achieve the conversion, the Board recognises that considerable training and support will need to be given to staff to adapt to servicing the new customer needs.

Before they announce the change to the various sales departments, the Board has asked you, a consultant Management Accountant, to report to them on suggestions on the measures that should be the basis for calculating bonuses such that the general management and staff will now focus their attention operationally on achieving the new strategic priorities.

Required:

Write your response as a report to the Board giving SPECIFIC suggestions on the measures that should be the basis for evaluating performance and incentives such that the general management and staff will now focus their attention operationally on achieving the stated strategic priorities (i.e. Conversion from retail sales to Corporate Sales) taking into account the needs of the new target market.

In your response, give examples of specific measures such as used in the Balanced Scorecard (BSC) perspectives that could help this organization LINK OPERATIONAL PERFORMANCE to STRATEGIC PRIORITIES better than only using financial measures of performance? (20 Marks)