Higher education institution in Oman

Table of Contents

Introduction................................................................................................................................3

Background of different departments.........................................................................................3

Identification of new resources..................................................................................................4

Human resources........................................................................................................................4

Infrastructure development........................................................................................................4

Key assumptions........................................................................................................................5

Risk management.......................................................................................................................6

Estimation of start-up cost.........................................................................................................7

Five years financial estimation...................................................................................................8

9. Important reports....................................................................................................................8

References................................................................................................................................11
Introduction

This report has the purpose of proposing a foundation a new higher education institution in

Oman. The focus of this institution is to create four departments emphasising tourism and

hospitality, logistics, nursing and entrepreneurship management. This report has the objective

to investigate on future needs of the country on basis of economic indicator as provided with

the National centre for Data and Statistics of Oman. Further, this report has emphasised on

the important resources – both the human capital and infrastructures for this new college. In

this report, the major assumptions are based on some economic predictions, which are

considered to be true. Further, these assumptions are meaningful on basis of some historical

evidences of construction project as well as new business development. In addition to this,

this report has measured both the start-up capital expenses along with projection of income

and expenses for the next five years. Further, the possible risks and impact of the same are

also discussed in this report from financial viewpoints. Finally a composite report is placed

for this project for all the four important areas of the information system of the college for

supporting the operation.

Background of different departments

In Oman, the economic data indicates that tourism is one of the most promising area for

creating international level employment. The local people are not familiar with the

international tourism much due to poor level of school goers along with skilled workers in

various sectors. Further, the majority of the population of the country are young people who

need basic employment fast (Al - Barwani, 2017). Further, women of the country prefer to

work in the private sectors that enhance the chance of generating employment through special

short-term skills for the people. The age dependency rate in the country is 32% indicating

high percentage of children population in the country (Data.un.org, 2017). Additionally, the
tourism sector is selected for enhancing skill among the young people as this country

possesses necessary natural beauty for drawing attraction of the international tourists. In fact,

Khareef Salalah Season has received visitors around 653000 annually. This sector

contributes almost 2.8% of the national GDP. Further, Sultanate of Oman has ensured to

provide enough rooms for the travellers in the city with 18400 rooms altogether as average

occupancy rate of these hotels is 47.4% only (Ncsi.gov.om, 2017). The inbound expenditure

of tourism in the country has exceeded 318991000 Omani real currently. The number of

hotels is 340 in the Sultanate of Oman. The report has also targeted to emphasise on

logistics division of the country as it is another place where people with small experiences

and training exercise might increase income. In addition to this, the service sector has

employed 57.9% of total employed people in the country. Hence, the role of service sector

is having the utmost significance in enhancing the employment to the local and expatriates of

Oman. The hospital accessibility is observed to be 100% for the citizen of the country with

adequate numbers of hospital and beds. Further, the government has provided every one

doctor to interact with 500 diseased people in all over country. However, the country does not

possess a well structured nursing college in practice, which has created majority of expatriate

jobs in the country. The training of nursing also creates unorganised level of hospitality jobs

in family for the women. Hence, opening the academic division for rebalancing the skill of

nursing in the country is a justified reason of this new foundation. The final division of the

college is entrepreneurship management. Al - Barwani (2017) has observed that young male

of the country does not want to be an entrepreneur in Oman, which has created an issue for

employment generation. Such mentality has also reduced the growth strategy of human

capitalisation in private sector with innovative ideas. Therefore, this institute might take place

to fill that gap by introducing the entrepreneurship management in the country.

Identification of new resources

For starting the new foundation, the business would need two types of resources – human

capital and infrastructure. Brewster and Hegewisch (2017) have stated that human capital is

the most sough resources in service sector on basis of the service providers can provide the

same. Further, basic infrastructure is another resource to provide quality service to the

society.

Human resources

The college would require 3 professors and two senior lecturers at the first stage for every

department. Further, nursing department requires three senior nurses for practical

demonstration on care giving activities for different patients. In this case, the department

needs special attention as the course is connected with the human health care. Moreover, the

nursing requires to interact with the doctors in practice. Hence, one medical practitioner is

hired at the initial stage for providing real life practical experience to the students. The

tourism is a department, where two different skill enhancements are required for the people –

historical knowledge and soft-skill training for managing international tourists (Beardwell

and Thompson, 2014). Further, this department requires to travelling partners for practical

training of students throughout the country. Hence, a travel guide company is associated for

conducting practical tour with the students during their course. The training of logistics

requires three different lecturers on technical training, supply chain and operation and

transport management. All these three cannot be fulfilled by one teacher. Hence, this

division requires the maximum number of teachers from the initiation. The entrepreneurship

management requires skill development and motivational professors who can motivate the

students with new ideas or influence them for thinking out of the box ideas. However, this

department requires less exposure of practical guidance as entrepreneurship has the little
practical exposure. However, this department requires varieties of lecturers such as financial

development, legal structure of the country for starting a business and business management

in general.

Infrastructure development

The new college would require infrastructure for starting the classes of the students. In this

context, the required infrastructure is divided into four categories – basic infrastructure,

technical infrastructure, administrative control and general amenities for the students.

The infrastructure of the college would be integrated with information system for providing

real time service to the students on or off campus. The basic infrastructure of the college

requires four different buildings for each department of faculty and one administrative

connecting building with a state of the art library within the campus. Further, the students

require two other buildings for providing hostel facilities to outstation students for both girls

and boys in different buildings. Hence, this foundation requires seven buildings or blocks for

administrative and operational units. The basic amenities such as play ground, conference

room and canteen service must be provided with appropriate square feet of area for all the

students. The technical infrastructure of every department is different. Nursing department

requires clinical laboratory and hospital environment for teaching facility whereas tourism

department requires only class room facilities. Further, logistics and entrepreneurship

management require computer labs for interacting with information system. The

administrative building with state of art library would provide the support to the student on

various activities such as reading, reporting, admission and placement information on class

and others.
Key assumptions

The project of foundation of new college is based on the various assumptions. These

assumptions are based on economic data provided with the government regarding the

economic development of the country. Further, some of the assumptions are also based on the

financial position of the country. In this regard, the first assumption is to enrol sixty students

each for every faculty in every year. It is assumed that the college may provide practical and

class room exposure to 60 students for each department of each batch. Additionally, the

placement department of the college will be able to provide assistance of finding jobs to the

students in future. Further, the economy of Oman will be in stable state in the next few

years, which would help to founding the infrastructure of college within budget. The

assumption on licensing of private college is to maintain same policy in future will possess

by the government. This assumption is part of the external environment of the business. The

internal environment of the academic division would not change much within the next three

years. It is also assumed that foundation of basic and technical infrastructure will be

completed by next three years. So, assumption is made that the demand of professionals for

the professionals of four departments will remain at the same level as of now. Further, the

project owner has also assumed that all the required equipment for technical and

infrastructure related can be procured from domestic market. In this context, the college

requires to buy computers and hardware from the importers of such equipment in the country.

Further, electronic goods for security reason are also procured through domestic distributors.

The assumption is made towards the government regulation on expatriate workers in the

country. The expatriate without higher skills are not allowed to work in the country.

However, expatriate possessing special skills may obtain the working visa in Oman on

contractual basis. Such regulation has created many works in logistics and health sector of the

country.
Risk management

The risk management of a business plan is an essential part of the plan as risks and

uncertainties associated with the project can be measured and identified before it happens in

practice (McNeil et al. 2015). Further, the risk management helps to identify the potential

risks associated with the activities of the college foundation in practice. The risk management

also associates with the activity such as measuring the impact of each risk on the entire

project. Lam (2014) has argued that risk management requires to find the impact on the

overall project so that management may take corrective action for eliminating those risks.

Further, the management also takes cautions for those activities where risk cannot be

neutralised in practice. Hence, the risk impact matrix is conducted for every risk assessment

of a project. The impact and possibilities of the risks associated with the project are identified

and considered as the potential threat to the owner of the project. In this regard, the risk of

this project is identified as follows:

 Potential threat is present from the competitors

 The government regulation of private school for skill development might change in

future. In such situation, the college might loss the income along with the license to

operate.

 The financial adverse situation of the economy might reduce the purchasing power of

the candidates in the country. It may hurt the financial position of the college in

future.

 The trend of placement as well as job opportunity in the four departments might not

be same in future. Hence, the student might not feel safe to incur expenses for these

courses in future.

 The threat of economy is also possess the threat to this business as the students are

mainly dependent on their parent’s income for paying the fees. Further, employee
 turnover is also an issue for a private college. The higher turnover rate would reduce

the stability of operation in reality.

 The regulations for expatriates for providing training and education to the students

might change in future. Therefore, the college management has to find some lecturers

from the local region whereas some of the teachers might come from outside.

 The risk is observed for miscommunication between each department with the

administrative department of the college. Such risk has the potential of creating

mismanagement for the students and daily operation of the college.

 Change in inflation rate might increase the fees of the training and courses offered in

this college. Hence, the external economic changes of this business might reduce the

attractiveness of the college.

 Further, regulations of expatriates might change the systematic college business in

future. Thereby, the administration needs to take cautious step for selecting the

faculties for teaching in the college.

Estimation of start-up cost

Capital Cost Omani

real
Capital requirement
land 8900000
building 9600000
technical lab 400000
equipment 800000
installation of 350000

equipment
software 410000
IT system 1700000
general equipment 1250000
Books and library 850000

materials
 Communicating 260000

equipment
internet services 180000
auditorium 1950000
sports facilities 900000
vehicles 400000
Initial Working capital 2095000
Total 30045000
Table 1: capital budget

Working capital
Salary of teachers 1850000
Salary of administrative 780000

staff
Electricity 600000
cost of service 400000
system maintenance 560000
Total 4190000
Table 2: Initial working capital

Start-up cost
Funding
Equity 12018000
Debt 12018000
Angel 6009000

investor
Table 3: Start-up funding (source)

The above tables indicate the start-up cost of the foundation of the college. In this estimation

of cost, the required funding is 30045000 Omani R for this college as capital requirement. It

is also observed that the college administration has to start with half of the working capital of

the year as initial working capital in hand from inception. Further, the critical point of the

capital expenditure plan shows that information system of the college require lump sum

amount for capital budget as well as maintenance budget of daily operation. The source of

capital investment shows that the management has to borrow 40% of total funds required to

start the college. Further, the management would consider to infuse investment from angel
investors. The cost of debt will be 8% as annual interest rate of the total borrowings.

However, this is the interest rate of the long-term secured loan against the capital assets of the

college. The college management has considered managing the working capital from the

operational income of the first semester.

Five years financial estimation

Five years income

plan Year 1 year 2 year 3 year 4 year 5

920000 1020000 1020000

Income 0 0 10200000 0 11220000

419000 4758499.

Operating cost 0 4190000 4357600 4531904 2

279500

Depreciation 0 2795000 2795000 2795000 2795000

Finance cost 961440 961440 961440 961440 961440
125356 2705060.

Net income 0 2253560 2085960 1911656 8

Table 4: Five year’s income plan

Five years' projected cash

flows Year 1 year 2 year 3 year 4 year 5

Cash from operating activities 5010000 6010000 5842400 5668096 6461501
Cash from investing activities 2795000 2795000 2795000 2795000 2795000
- - - -

cash from financing activities 2163240 2163240 -2163240 2163240 2163240

Net cash flow 5641760 6641760 6474160 6299856 7093261
Table 5: projected cash flows for the next five years

Five years' balance sheet projected

2795000 2795000 2795000 2795000

Fixed assets 0 0 0 0 27950000

Working capital 2095000 4190000 4357600 4531904 4758499.2
Total assets 3004500 3214000 3230760 3248190 32708499
 0 0 0 4
1201800 1201800 1201800 1201800

Liabilities 0 0 0 0 12018000
1802700 1802700 1802700 1802700

Equities 0 0 0 0 18027000
Reserve from operation 0 2095000 2262600 2436904 2663499.2
3004500 3214000 3230760 3248190

Total equities and liabilities 0 0 0 4 32708499

Table 6: projected balance sheet for the next five years

9. Important reports

The information system is built for covering the entire operation of this college. However, the

main aspects of this system are four – student, courses, administration and placement.

These four areas of a college business are the most crucial as these are basic of this project.

The information system has to connect all these four areas altogether so that an integrated

information system might support the stakeholders of the college. The current information

system will support these four areas in an integrated manner. In this regard, the student is the

main area of this information system as the college is built for providing service to the

students. The students require an online system of information management for

communicating with the management as well as lecturers. The students require service of

college administration for paying fees, admission in every semester, attending the

classes, receiving necessary information about examination, information about books

available in the library, vocational tours for the students and important dates. Further,

the administrative section of the college would provide the link to the placement of the

students at the end of the courses. Hence, the students are required to be connected with all
the facilities on real time basis. The online information database would provide the courses,

syllabus, assignments, special notes of the teachers and results for the students in one

place. Every student should have individual portal and log in access to the database for

checking their evaluation from time to time. Additionally, the online library of the college

would be connected with the database portal in online mode. The students can access the

online library for articles and books from hostels and homes. Further, the students will

obtain their schedule of vocational tours for practice study in outside campuses. The

following screenshots present the system of access of database by the students:

screenshot

The second most important category is the course design and materials to be presented in the

information system. The IS would be designed in such way that all the course details will be

presented in the system. The access of course details and syllabus and the faculty for teaching

the same with course duration will be present in the database. The access of this portion of

the system will be available for the external users too such as parents and aspirants.

Therefore, this system will be connected with the website of the college for external

communication. Further, the database on course would provide the information on related

field of studies and online course materials to the students. These service documents are part

of the internal usage of the college in daily operation. This section will have admin,

teacher and student access only. The teachers will upload the necessary reports, study

materials and suggestions in this field through teacher access whereas student will be able to

access the same through their respective portal. The related administrative information will

be present in this section for internal use such as examination data, course schedule and date

of submission for individual assignments. Further, the course section also will allow the

students to submit their projects, dissertations and assignments from time to time. This

section requires three different accessibilities for operation and maintenance of the
system. The admin access is important for maintenance and development purpose only

whereas student and teachers would use this section in operation. The following screenshots

present the system of access of course by both teachers and students:

screenshot

The third section of the information system is to provide administrative guidance to the

students through online system. Such online database of the college would provide all the real

time information at one place to all the students. The activities related to non-educational

programs will be available in this place for the students. Further, students might be able to

create a forum for interacting with other students. In this regard, all administrative support

will be available to the students and teachers related to change in examination date,

admission date, schedule of study and course materials, fees of semester, participation

fees and others. The administration section will have the control to the system admin for

developing the database. However, daily operational employees will be able to update the

information about the change in schedule of the courses, examination, classes and others.

Further, this section will provide an integrated communication platform for the students with

the college management regarding any complaints and queries related to course or teaching

staff. Further, this section will continue communication through the teachers and staff of

the college. Therefore, this section will connect the entire information system in an integrated

manner where all the internal stakeholders will be able to communicate in individual note.

screenshot

The placement for the professional course is an important part of the success. Hence, there

will be separate section for placement of the student for pre-qualification and post-
qualification – both. The students would be able to contact with the placement cell for their

practical training and placement offer through this portal. The placement section will be

connected with the student’s database, which will analyse ample of data for evaluating

the academic performance of the student from time to time. Further, this section will have

the access of data analytics for preparing information of successfully placing the students in

job market. The placement cell would provide online service of writing resume, guidance

for cover letter to all the students. Further, this portal would accept the resume and

academic performance of the student individually. The placement cell will also have an

external access for the registered companies where the executives of the companies

might find the suitable candidates from the database. The placement database would keep all

information of the students passed out from the college in future in active state for at least

two years of passing out. This external link of the database would help the students to

introduce them in the job market with authentic channel.

screenshot
References

Al - Barwani,, K. (2017). Oman Labour Market. [online] ilo.org. Available at:

http://www.ilo.org/wcmsp5/groups/public/---dgreports/---

stat/documents/presentation/wcms_314041.pdf [Accessed 26 Oct. 2017].

Beardwell, J. and Thompson, A., 2014. Human resource management: a contemporary

approach. Pearson Education.

Brewster, C. and Hegewisch, A. eds., 2017. Policy and Practice in European Human

Resource Management: The Price Waterhouse Cranfield Survey. Taylor & Francis.

Data.un.org. (2017). UNdata | country profile | Oman. [online] Available at:

http://data.un.org/CountryProfile.aspx?crName=OMAN#Economic [Accessed 26 Oct. 2017].

Lam, J., 2014. Enterprise risk management: from incentives to controls. John Wiley & Sons.

McNeil, A.J., Frey, R. and Embrechts, P., 2015. Quantitative risk management: Concepts,

techniques and tools. Princeton university press.

Ncsi.gov.om. (2017). ‫الرئيسية‬. [online] Available at:

https://www.ncsi.gov.om/Pages/NCSI.aspx [Accessed 26 Oct. 2017].