Perhaps the most common aspect of our lives today is the need to change.  It hardly seems necessary to provide yet another list of all of the huge things that occurred in the world over the past few years that are shaping our future.  Yet we all know that change is critical to our survival.  Focused Management Inc. operates in the world of organization cost and performance management. In many ways that world is highly sensitive to changes elsewhere because internal operations of organizations have to adjust to new circumstances such as levels of business, new technologies, competitive challenges and management style.  Of great interest has been the massive effect of new technology.  Webification of software for many business applications and the deployment of ERP systems has simplified and routinised many aspects of organization performance to the degree that emphasis has moved full circle from how to manage in a better way to more critical and central business concerns such as customer satisfaction, supply chain management, resource prioritization. Only know the table stakes are higher for the big players, the level of sophistication is immensely greater than ever before and the need for professionalism is critical.

 Along with our systems capabilities and levels of operating sophistication came a higher degree of centralized power. The big corporate failures of Tyco, Enron and MCI WorldCom demonstrated how a few senior people have the potential to drive huge and inappropriate actions.  Changes in corporate governance required by Sarbanes Oxley (SOX) officially acknowledge that accountability resides in the hands of the senior executives.   The combination of highly effective systems, operational capability and clarity around accountability demands that administrative methods also need to be updated. Central to this is a strong management accounting profession

Change in the accounting world is necessary. The weight of legislation and the sheer numbers of people involved in financial reporting, auditing, compliance and governance is holding it back development of the accounting profession.  Organization performance demands well and broadly educated, informed professional management accountants whose methodologies, integrity and values dominate the scene from inside. Their role is to maintain good practice and governance from within our organizations, for them to provide the structure and discipline that underpins the accountability required by SOX of CFO’s and CEO’s. Enough of checking the checkers, external audit practices clearly are ineffective.  The technology exists right now to drive highly effective and efficient business processes.  ERP systems coupled with effective human performance systems linked to properly formulated strategy are absolutely feasible.  Risk management technologies exist to bring order and eliminate the kind of actions that destroyed Barings Bank.

It is time to move the boundaries within the world of organization performance, management and accounting.

In this edition of Focus Magazine we present ideas for management practitioners beyond their typical boundaries. We offer interesting ideas about Supply Chain cost management from Gary Cokins, a highly respected specialist and author in the field of cost management.  Hank Bird and associates describe how Target Costing worked for Lucent.  Sarah Kennedy offers new insight on customer satisfaction and how satisfied employees can influence it. Rehn Nelson reminds us how basic good management practices will yield significant improvement in performance and profits.

Your readership and continued interest in our magazine and the work that we do is appreciated.  Please feel free to make comments and suggestions or to submit articles and ideas you think we should pursue to
psharman@focusedmanagement.com.

 

Paul Sharman