| Concept |
Results |
|
Activity Based Costing - ABC is a common sense
approach to managing an organisations costs & resources. Costs are traced to activities,
and then to cost objects that drive the activity. This enables costs to be traced more accurately
to cost objects (eg. products, projects, services, channels, customers),
rather than being misallocated. |
- Reliable costs - Typically reveals
how traditionally costed products & services
are over or under costed by 25% or more.
- Customer profitability - Provides
reliable market, channel & customer
profitability analysis.
- Waste - Value Adding analysis
typically identifies that 20-30% of costs are consumed by
activity that does not add value.
|
|
Balanced Scorecard - The Scorecard is a performance measurement
framework designed to broaden management focus from
financial measures to include other perspectives such as
customers, internal processes & organisational
innovation. It translates strategic vision into goals,
critical success factors & key performance indicators
& is very powerful when integrated with process management. |
- Management focus - Focuses
management on strategic planning &
performance issues.
- Performance improvement - Balances
budgeting constraints with operational concerns.
- Harmonisation - When integrated
with Process Management concepts, the scorecard
harmonises cross-functional activity by focusing
people on process outcomes & outputs.
|
|
Process Management - Process
analysis is the foundation of many business improvement
techniques such as Six Sigma, Business Process Re-engineering, Total
Quality Management and ISO 9000. Business processes are
based on activity workflow. Business processes provide a
strategic framework for managing operational activity. |
- Profit improvement - Process
analysis typically highlights 20-30% of costs are driven by problems which can
impact many departments even though the source of
the problem may be caused by one department.
- Cycle time reduction - Lead times & elapsed
process times can often be reduced by 10% to 50%.
|
|
Fast Close
- Closing the accounts and generating consolidated reports can
be a highly complex and time consuming activity, driven by multiple
reporting standards and requirements (eg. IFRS, Sarbannes-Oxley,
Internal Policies, Equity and Forex). The concept of an Integrated Data
Model (IDM), supported by rules engines, BI and other tools can
accelerate closing the books, and integrate internal and external
reporting. |
- Cycle Time to Close - Reduced from
5 - 2 days
- Cost Reduction - Spend 45% less on
closing and reporting, saving an average of $5.5m per $1b revenue.
Reduce cost of governance and compliance by one third.
- ROI greater than 100% and payback
of less than a year.
|
|
Beyond Budgeting
- Concepts like scenario planning, output and driver based
budgeting, and rolling forecasting are driving far better plans, yet
radically reducing the time taken to generate financial outlooks. |
- Better Plans - Integrating
executive goals across departments and cost centres
- Faster - Budget cycle times reduced
from months to days
- Timely - Constant rolling
forecasts, new scenarios easily modelled.
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