CIMA Tools and Techniques 30-11-09 PDF

7/27/2019 CIMA Tools and Techniques 30-11-09 PDF

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Mnmnt ccontin toos ortoa omorro

www.cimaglobal.com/ma


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Abou he survey 4

1 Overvie o resuls 6 1.1 Ornistion o th nnc nction 6

1.2 Th innc o ornistion siz 6 1.3 Th rn o toos crrnt in s 7 1.4 Th toos most ik to b introc soon 7

2 Resposes by secor 8

3 Resposes by regio 9

4 Resposes by orgaisaio size 10

5 Operaioal ools 11 5.1 Costin toos 11

5.2 Pricin toos 135.3 Btin toos 155.4 Protbiit nsis toos 175.5 Invstmnt cision mkin 185.6 Othr oprtion toos 19

6 Maagerial maageme accouig 20 6.1 Prormnc msrmnt toos 20

6.2 Prormnc mnmnt toos 216.3 Rwr sstms 24

7 Sraegic ools 25 7.1 Prormnc rportin toos 25

7.2 Strtic tchniqs 25

8 Coclusios 28 8.1 Nmbr n vrit o toos 28 8.2 Trition vrss nw toos 28 8.3 Siz n rion vritions 28 8.4 Crrnt isss or rsponnts 29

Coes


4/32MaNageMeNT aCCOuNTINg TOOlS fOR TOdayAnd tOMORROw4

Th CIMa mnmnt ccontin srv skbot crrnt n intn s o mor thn 100mnmnt ccontin n rt toos, n wscompt b 439 rsponnts in J 2009.

Th srv covrs tchniqs miir to othr

mnmnt iscipins, n incs nrpprochs s w s th ppi tchniqssst b th trm toos.

Abou he survey

MaNageMeNT aCCOuNTINg TOOlS fOR TOdayAnd tOMORROw


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A selecio o maageme accouig ools

Th srv covrs 11 ctoris o mnmnt ccontin toos, spit into oprtion, mnri nstrtic rops. Th nmbr o toos in ch ctor vris rom v (rwr sstms) to 16 (strtictoos). us o th toos is not mt xcsiv or xmp in rtion to th oprtion ropspricin tools ctegory, dierent segments o the business my use dierent pricing strtegies, or twoor more tools m b s in combintion (or xmp cost-ps pricin n trnsr pricin btwnbsinss nits).

the imporace o selecio

Mnmnt ccontnts mst choos th riht too or th spcic contxt, cision bs on thir

tchnic know, prossion xprinc n jmnt. Whi n ccontnt invov in nncirportin oprts in stnris nvironmnt tht ows itt choic, mnmnt ccontntmst s wi rn o skis to choos th riht too or th job.

A healhy urover

usin th riht too or th riht contxt mns tht prctics chn s ornistions ns chn,n so s nw toos r introc, provn n issmint throhot rions or instr sctors.Th mnmnt ccontnt sho rssr srs tht sch trnovr in th s o toos is ntrn bnci, n os not sini sn ck o connc in too, or n mission tht its ormrppiction ws mistk.

wha he survey ells us

Th srv sks rsponnts both bot thir crrnt s o toos, n thir intntions to rop or opttoos. from this w cn rw concsions bot th xtnt to which rsponnts hv stt on thirrn o toos, or r srchin or bttr sotions. Th inormtion cptr b this srv rprsntsprctics n intntions rom th srv poption s t smmr 2009, which cn b compr toothr rvnt srvs, n ct s snpshot or bsin bnchmrk or onoin CIMa rsrch.

Ierese paries

This ppr intis th most popr crrnt mnmnt ccontin toos in ch ctor.frthr t rom th srv wi b pbish sbsqnt, to ow prctitionrs to inti thostoos which most rsponnts intn to opt within th nxt two rs, which miht thror b

worth invstitin b non-srs; th st popr toos, n thos which crrnt srs most intnto rop rsts which m inict tht crtin toos r bcomin ott, or r sorc oisppointmnt to srs.

Othr mnmnt iscipins m b intrst to rn bot th rn o toos (or nctions) withwhich th mnmnt ccontnt is or cn b miir, n so bot nr vopmnts in thiscipin. This wi b o intrst too to rvnt tchin n rsrch cmics. Constnts,sotwr voprs n othr sotion provirs wi b intrst in th intiction o poprn npopr toos, n trns in thir s.


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8/328 MaNageMeNT aCCOuNTINg TOOlS fOR TOdayAnd tOMORROw

H o th srvs rsponnts r mpo in th srvic sctor, m p o prossion srvics,nnci srvics n othr srvics (s r 2). amost on thir o th rsponss r rom thmnucturing sector. Note tht the sector lbelled other comprises public nd eduction nd ll otherrsponss (rom instr sctors sch s rti n tr; IT n tcommnictions; hospitit tc).

Figure 2: Resposes by secor

10%

8%

32%Services

sec

tor

19%

31%

50%

Manufacturing

OtherTotal services

Financial services

Professional services

Other services

fir 3 shows how th rsponss b sctor r spit cross th v rions o th srv. This shows

tht in th asin n erop (othr thn uK) rions, mor o th rsponss r rom mnctrin incomprison to othr rions.

Figure 3: Resposes by secor ihi regio

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

26% 47% 28%

30% 47% 23%

44% 44% 13%

45% 43% 12%

27% 53% 20%

Rest of World

Africa

Asia

Rest of Europe

UK

Manufacturing

Services

Other

2. Resposes by secor


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fir 4 shows tht r proportion (61%) o th rsponnts is bs in th uK. amost rsponnts r CIMa mmbrs who hv bn spcic invit to compt th srv, with vrsm nmbr o othr rsponnts. Th rion composition o rsponnts to th srv throrrcts ob CIMa mmbrship, which is 75% uK bs.

Only 12% o the respondents re rom those regions which mke up the survey ctegory Rest o World.This compriss n rion with ss thn 30 rsponnts rthr thn n ttmpt to rop rions withsimir conomic or ctr contxts. W intn to ncor mor rsponnts rom ths rionsor tr srvs, to xpor rion pttrns bttr.

Figure 4: Perceage resposes by regio

6%

3%

0%2%

61%

12%9%

7%

12%

RestoftheWorld

UK

Rest of Europe

Asia

Africa

Rest of World

Australasia

N America

C & S America

Middle East

ansis o th siz o ornistion rom ths rion sb-smps shows thr is bis towrssmr ornistions in th aric sb-smp (s r 5). Whn n aric rsts r consir,thror, it sho b born in min tht th rsts r innc b ornistion siz s ws rion.

Figure 5:Regioal resposes by orgaisaio size

Small (10,000)

Rest of World

Africa

Asia

Rest of Europe

UK

0% 20% 40% 60% 80% 100%

16% 21% 56%

41% 21% 28%

28% 28% 38%

20% 27% 43%

26% 23% 37%

7%

10%

6%

10%

15%

3. Resposes by regio



fir 6 shows tht ovr h o th srvs rsponnts r mpo b ornistions tht r ithrr (mor thn 250 mpos) or vr r (mor thn 10,000 mpos).

Figure 6: Resposes by size o orgaisaio

Small (10,000)

26%

23%

39%

12%

dt on th nmbr o bsinss nits co on b coct or 110 rsponnts, bt thr r norons or spposin this nsis is nrprsnttiv o th ntir smp. Th rsts r shown

in r 7. athoh mor thn qrtr o ornistions hv on on bsinss nit n botor-ths hv v or wr, th vr nmbr o bsinss nits within rsponnts ornistionsis v. This vr is innc b th ct tht som vr r mtintion ornistions hvhnrs o bsinss nits.

Figure 7: number o busiess uis ihi he orgaisaio

0% 5% 10% 15% 20% 25% 30%

% of respondents who had this number of BU

19%

18%

24%

11%

28%

More than 5 BU

5 BU

Between 35 BU

Between 13 BU

One BU

4. Resposes by orgaisaio size


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This sction is concrn with th trition oprtion tsks which th ornistion mns o itsmnmnt ccontin nction:

costin o ctivitis pricin o procts n srvics nsis o th protbiit o rvn nrtin ctivitis ctiv oction o rsorcs b mns o btin n invstmnt ppris tchniqs.

Respondents were lso sked bout rnge o other opertionl mngement ccounting tools, including:

qit phiosophis sch s tot qit mnmnt (TQM) n bnchmrkin pprochs which r hvi IT-pnnt sch s cstomr rtionship mnmnt (CRM) ppi n mthmtic tchniqs sch s inr prormmin.

5.1 Cosig ools

fir 8 shows th rtiv poprit o costin toos. Th mor trition toos o vrinc nsisn ovrh oction rmin th most popr.

Figure 8a: Relaive populariy o cosig ools

0% 10% 20% 30% 40% 50% 60% 70% 80%

Time driven ABC

Actvity based costing (ABC)

Overhead allocation

Integrated cost and financial accounts

Throughput accounting

Variable or marginal costing

Variance analysis

Standard costing

Kaizen costing

Life cycle costing

Target costing

Quality costing

Full (absorption) costing

Costing for jobs, batches, processes or contracts

Th rsts inict tht rsponnts s rn o costin toos on vr, n ornistion wis or rom th 14 toos srv. Th rr th ornistion, th mor ik it is to s n too nth mor toos it ss. fir 8b shows tht th rst ornistions r th hvist srs o toos,with th xcption o qit costin.

5. Operaioal ools


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fir 9b shows tht both toos r mch mor common s in th mnctrin sctor. This isnot nxpct, s it rcts th tnnc o mnctrin ntitis to oct proction whr wsor tx rts r ow, or whr rw mtris r mor ri vib. In ition it rcts th inkbtwn th two pricin mthooois; th trnsr pric btwn bsinss nits is nr cost,whi th pric to th n sr is otn cost ps prot mrin.

Th srvic sctor sms comprtiv knr on introcin nw pricin toos, showin som intrstin thm (s r 9c) bt spci in mrkt snsitiv pricin n smnt pricin.

Figure 9c: Ieres i pricig ools by secor

Cost-pluspricing Market sensitivepricing Segmentalpricing PriceSkimming PenetrationPricing Transfer pricingbetween BU

Manufacturing Service

Percentageofnon-usersproposingto

introducetoolwithin2yrs

9%

8%

7%

6%

5%

4%

3%

2%

1%

0%

This miht rct mor xib pproch to pricin in th srvic sctor, s pric comprison is mchhrr or cints who s srvics thn or cstomrs who b procts. In ition n ornistion inth srvic sctor miht tn to prioritis othr consirtions thn short-trm prot, sch s:

its rtionship with th cint (whthr inin nw on, or kpin n importnt xistin cint) th n to in xprinc or pro in nw mrkt th n to kp rsorcs po th n to cross-s othr srvics.

Ths th srvic sctor miht hv rtr intrst in smnt pricin (irnt prics orirnt mrkts), pntrtion pricin (s to ntr nw mrkts or pn mrkt shr) nmrkt snsitiv pricin.

lookin t ornistion siz, thr wr two rsts o not. 11% o vr r ornistions whoo not crrnt s mrkt snsitiv pricin propos to introc it within th nxt two rs(64% crrnt s it), n 10% o sm ornistions propos to introc smnt pricin(bt on 22% crrnt s it).

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figure 12b shows tht while one in six very lrge orgnistions use cpitl sset pricing model (CaPM) ndon in svn s r options to vt invstmnt cisions, th r not s wi s s th othrtoos. This sms srprisin s both toos r w stbish, rtiv s to s n wi tht.

anothr nxpct rst is tht rsponnts rom sm ornistions rport sin invstmntppris toos (spci CaPM n r options) mor thn mim ntitis. 8% o smornistions s CaPM, compr with 3% o mim ornistions, n 4% s r optionscompr with 2% o mim ornistions.

5.6 Oher operaioal ools

This is n intrstin ctor, s ornistion siz os not sm to b sch stron innc on too

s. On vr, rsponnts s jst ovr two oprtion toos ot o nin srv. fir 13 showstht thoh ths toos r s mor b th rst ornistions, this tnnc is not s strons or othr too ctoris.

Figure 13: Use o operaioal ools by size o orgaisaio

70%

60%

50%

40%

30%

20%

10%

0%

Theory of constraints

Small Medium Large Very large

Linear programming Learning curves Benchmarking Decision tree analysis

Customer relationship

management

360 degree reviews Value chain analysis Total quality

management

Bnchmrkin is th ominnt mnmnt ccontin too or ornistions o sizs thoh it isss prvnt in th (possib mor scrtiv) sm ornistion.

aso popr r 360 r rviws, cstomr rtionship mnmnt (CRM) n tot qitmnmnt (TQM) thoh this st is not s popr in vr r ornistions s in mim nr ons. It is possib tht vr r ornistions hv bspok qit inititivs sin orthm, which th o not consir TQM.



This sction is concrn with how prormnc is msr, mn n rwr. Th ntr osom o ths mnmnt ccontin toos with thir rrnc to prot, or cpit mpo ssts it is ncssr to jst or th innc o instr sctor.

6.1 Perormace measureme ools

fir 1 show tht prot bor tx is th scon most wi s mnmnt ccontin tooovr. fir 14 shows cr tht whn it coms to th s o prormnc msrmnt toos bsctor, prot bor tx is th most wi s msr. On vr ornistions s btwn twon thr prormnc msrmnt toos ot o th v srv, rtiv hih proportioncompr to othr ctoris o toos.

Figure 14: Use o perormace measureme ools by secor

Manufacturing

Return on capital

employed

Cash flow return

on investment

Residua l income Econ omic va lue added Profit before t ax

Other

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Professional

services

Financial

services

Other

service

Public and

education

Thr o ths prormnc msrmnt toos r mon th most s o th 100+ in th ntirsrv ROCe, CfROI n prot bor tx r in th top 20 most s toos, istrtin th

importnc o ths msrs.

6. Maagerial maageme accouig


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6.2 Perormace maageme ools

Th common pttrn o incrs poprit o toos b sccssiv rr ornistions is vr notbor prormnc mnmnt toos (r 15). On vr ornistions s jst nr two ot o ihtprormnc mnmnt toos. lr ornistions s on vr twic s mn prormncmsrmnt toos s sm or mim ons.

Figure 15a: Use o perormace maageme ools by size o orgaisaio

Balanced scorecard


Business process

re-engineering

Activity based

management

Total performance

scorecard

Value based

management

Six sigma Value mapping Performance prism

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

fir 15 shows th bnc scorcr is th most wi s msr in ornistions. Othrsrvs conrm simir rsts or th bnc scorcr, or xmp it is s b 60% o fortn 1000(i.. vr r) compnis. Its poprit shows no immit sins o btin, it bin th most ik too(o thos in or srv) to b introc b crrnt non-srs o sizs (s r 15b).



Figure 15b: Ieres i perormace maageme ools by size o orgaisaio

0% 5% 10% 15% 20% 25%

Very large Medium Small

Percentage of non-users proposing to introduce tools within two years

Large

Total performance scorecard

Value based management

Value mapping

Performance prism

Business process re-engineering

Activity based management

Six sigma

Balanced Scorecard


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6.3 Rear sysems

for toos wr srv, incin xctiv incntiv schms (or snior irctors) n mnmntincntiv schms (or mnri ros). On vr, ornistions s jst nr two rwr sstms.

fir 16 shows th rion nsis, which inicts tht prot shrin schms sm rtivnpopr in asi, with on 13% o rsponnts crrnt sin thm, n rtiv popr in aric,whr 37% o rsponnts crrnt s thm. O th othr rions, th uK bhvs mor ik aric(with 27% crrnt sin prot shrin schms), n rst o erop n th rst o Wor bhvmor ik asi (with 16% n 19% o rsponnts rspctiv sin thm).

Figure 16a: Use o rear sysems by regio

Executive incentiveschemes

Management incentiveschemes

Profit sharingschemes

Share options

80%

70%

60%

50%

40%

30%

20%

10%

0%

UK

Rest of Europe

Asia

Africa

Rest of World

Overall

fir 16b shows tht sm ornistions ppr to bhv mor ik r ornistions whn itcoms to prot shrin schms (i.. th both s thm mch mor thn mim siz ornistions).This m b xpin b th ct tht th mpos o micro n sm compnis r tpic othrmi mmbrs n th ownrs r mor ik to b ivin thm shr o th prot. Mim sizornistions m tn mor to b privt own, ths ownrs o not obi to shr prcnt o thir prots with th st. fin r n vr r ornistions m n incntivschms mor ctiv thn commn n contro mnmnt to motivt th sir bhviormonst nmros n isprs workorc.

Figure 16b: Use o rear sysems by size o orgaisaio

70%

60%

50%

40%

30%

20%

10%

0%

Executive incentiveschemes

Management incentiveschemes

Profit sharingschemes

Share options

Small

Medium

Large

Very large


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Figure 18a: Relaive populariy o sraegic ools

0% 10% 20% 30% 40% 50% 60% 70% 80%

Strategy mapping

Core competencies

CIMA strategic scorecard

Long-range and business planning

Risk management

Environmental impact assesment

Mission statement

Value for money audits

Value chain analysis

Value engineering or value analysis

Competitor analysis

Strategic planning

SWOT analysis

Boston matrix

Environmental management accounting

Figure 18b: Use o sraegic ools by size o orgaisaio

Strategic planning


Value chain analysis

SWOT analysis

Risk management

Value for money audits

Mission statement

Competitor analysis

Value engineering

or value analysis

Strategy mapping Boston matrix Environmental management

accounting

Long range and

business planning

Core competencies

CIMA strategic

scorecard

Environmental

impact assesment

80%

70%

60%

50%

40%

30%

20%

10%

0%


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Rrs cn n n ovrviw o th rsts t th ront o this rport. Som concsions r sst:

8.1 number a variey o ools

Or srv show tht mnmnt ccontnts s nmbr o toos, on vr 33, cross rno oprtion, mnri n strtic nctions. This monstrts th wi rn o ornistionprormnc or which th mnmnt ccontnt cn provi t.

8.2 traiioal versus e ools

Th toos s r mix o trition2 n nw toos. This sms hth stt or n iscipin.It ssts tht th iscipin hs soi ontion, n princips which nr t r rn so thtth bo o know is contin xpnin. Howvr, som trition toos r sti wi sspit th commnts b cmics n constnts tht th sho b iscontin. for xmp,

mn txtbooks commnt on th nsitbiit o pbck s mns o invstmnt ppris. yt itrmins popr, spit thr bin simp trntivs which iv mor inormtiv rsts.

Btin is n r whr mn commnttors sst tht trition prctics hv bcomott. dict movmnts hv vov to chmpion both bon btin, n bttrbtin; n thr is r bo o itrtr which commnts nr on th tnnc orbts to trir m-pin, bt-pin n othr sb-optim bhvior. Howvr, itwo n ric r-invntion o btin n prormnc mnmnt to prs srsthr r trntivs to csh orcsts, n nnci r orcsts (both o which r monstth most s toos).

8.3 Size a regioal variaios

Siz is n obsrvb innc on too s, s r 19 shows. Th rr th ornistion, thmor toos it ss. Whr this is not th pttrn, ssts tht thos toos r mor pproprit

or smr ornistions.

Figure 19a: Average umber o ools use (orgaisaio size)


40

35

30

25

20

Th mnctrin sctor ss th most toos, oow vr cos b th nnci srvics sctor.Rsts which jmp ot r th rtiv poprit o Six sim, n rtiv npoprit o aBM orth mnctrin sctor (s r 15c).

Th pbic sctor tns to s wr toos ovr, bt thos it ss tn to b strtic toos.This is probb bcs th pbic sctor ss ss pricin n costin toos, to th ck o protmotiv in ths ornistions.

2 B trition w mn th rtiv simp n on-stbish toos sch s minstrmbtin prctics, stnr costin tchniqs, pbck tc.

8. Coclusios


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Figure 19b: Average umber o ools use (secor)

Manufacturing Service Professional

services

Financial

services

Public and

education

Other

36

34

32

30

28

26

24

22

20

8.4 Curre issues or respoes

Rsponnts wr sk Wht r th min isss crrnt conrontin th mnmnt ccontinnction in or ornistion? 199 rsponnts rpi (45% o th smp); n th isss which mostconcrn thm r:

sotwr isss sch s ott, inxib or poor intrt sstms (rqirin mnrconciitions or othr intrvntions to crt rports) or ck o strtic vision or IT

spcts ctin th qit o inormtion th provi srs mns or bttr or mor tim

inormtion, or bspok or mor stnris inormtion short o rsorcs both th ck o sitbiit qi nnc prsonn in nnc n othr

prtmnts, n ck o invstmnt in nnc ck o nrstnin bot th contribtion possib rom mnmnt ccontnts, both rom

th ccontnts thmsvs (mittin to inqt know o toos) or ck o co-oprtionn pprcition rom srs.

Th srv its prov to b hp too. Svr rsponnts commnt tht it ws s to brmin o (or in som css introc to) th toos vib or prticr prposs. Whnrsponnts rciv th ti rsts, th wi b b to bnchmrk thir prctics inst thirprs; n consir whthr th r sin th bst st o toos or thir ns.

frthr rports on th srv t wi ocs on rion, siz n sctor vritions; n th trvopmnt o th nnc nction.



Reereces

Qit dist Srv (2003) Six Sim Srv.qualiyiges.com/eb03/aricles/01_aricle.shml


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noes


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CIMA Tools and Techniques 30-11-09 PDF