CONTENTS
PART 1: OVERVIEW OF ENTERPRISE PERFORMANCE MANAGEMENT
Accountants’ Problem of Denial
2 ENTERPRISE PERFORMANCE MANAGEMENT: MYTH OR REALITY?
Executive Pain—A Major Force Creating Interest in Performance Management
What Has Caused Interest in EPM?
The EPM Framework for Value Creation
Where Does Managerial Accounting Fit In?
EPM Unleashes the ROI From Information
Management’s Quest for a Complete Solution
3 DO ACCOUNTANTS LEAD OR MISLEAD?
The Perils of Poor Navigation Equipment
The Perils of Poor Managerial Accounting
The Accountant as a Bad Navigator
4 A TAXONOMY OF ACCOUNTING AND COSTING METHODS
Confusion About Accounting Methods
A Historical Evolution of Managerial Accounting
An Accounting Framework and Taxonomy
Asking What? So What? Then What?
Predictive Versus Descriptive Accounting
Co-existing Cost Accounting Methods
5 MANAGERIAL ACCOUNTING DESIGN COMPLYING WITH THE CAUSALITY PRINCIPLE
Removing the Blindfold With ABC/M
Overhead Expenses Are Displacing Direct Expenses
Impact of Diversity in Products, Service Lines, Channels and Customers
Growing Discontent With Traditional Calculation of Costs
Activities Are Expressed With Action Verbs
Drivers Trigger the Workload Costs
Strategic Versus Operational ABC/M
6 STRATEGIC COST MANAGEMENT FOR PRODUCT PROFITABILITY ANALYSIS
ABC/M Is a Multi-Level Cost Re-assignment Network
Drivers: Resource, Cost, Activity and Cost Object Drivers
Business and Organisational Sustaining Costs
The Two Views of Costs: The Assignment View Versus the Process View
How Does Activity-Based Costing Compute Better Accuracies?
Activity-Based Management Rapid Prototyping: Getting Quick and Accurate Results
Product Profitability Analysis
Two Alternative Equations for Costing Activities and Cost Objects
7 THE PROMISE AND PERILS OF THE BALANCED SCORECARD
Balanced Scorecards Are Companions to Strategy Maps
Measurements Are More of a Social System Than a Technical One
Scorecard or Report Card? The Impact of Senior Management’s Attitude
GPS Navigators for an Organisation
How Are Balanced Scorecards and Dashboards Different?
Scorecards and Dashboards Serve Different Purposes
Scorecards Link the Executives’ Strategy to Operations and the Budget
Dashboards Move the Scorecard’s Dials
Strategy Is More Than Performing Better
8 DESIGNING A STRATEGY MAP AND BALANCED SCORECARD
Eight Steps to Create a Strategy Map
Scorecards and Strategy Maps: The Enabler for EPM
PART 4: PLANNING, BUDGETING AND FORECASTING
9 PREDICTIVE ACCOUNTING AND BUDGETING WITH MARGINAL EXPENSE ANALYSIS
What Is the Purpose of Management Accounting?
What Types of Decisions Are Made With Managerial Accounting Information?
Make Versus Buy, and General Outsourcing Decisions
Process and Productivity Improvement
Activity-Based Cost Management as a Foundation for Predictive Accounting
Major Clue: Capacity Only Exists as a Resource
Predictive Accounting Involves Marginal Expense Calculations
Decomposing the Information Flows Figure
Framework to Compare and Contrast Expense Estimating Methods
Predictive Costing Is Modelling
10 WHAT’S BROKEN ABOUT BUDGETING?
The Evolutionary History of Budgets
A Sea Change in Accounting and Finance
The Financial Management Integrated Information Delivery Portal
11 PUT YOUR MONEY WHERE YOUR STRATEGY IS
Value Is Created From Projects and Initiatives, Not Strategic Objectives
Driver-Based Resource Capacity and Spending Planning
Including Risk Mitigation With a Risk Assessment Grid
Four Types of Budget Spending: Operational, Capital, Strategic and Risk
From a Static Annual Budget to Rolling Financial Forecasts
Managing Strategy Is Learnable
PART 5: INTEGRATING ENTERPRISE RISK MANAGEMENT AND ENTERPRISE PERFORMANCE MANAGEMENT
12 THE INTEGRATION OF ENTERPRISE RISK AND ENTERPRISE PERFORMANCE MANAGEMENT
How Do ERM and EPM Fit Together?
Is Risk an Opportunity or Hazard?
Problems Quantifying Risk and Its Consequences
Risk Managers: Friend or Foe of Profit Growth?
Invulnerable Today but Aimless Tomorrow
PART 6: BUSINESS ANALYTICS FOR ACCOUNTING AND FINANCE
13 WHAT WILL BE THE NEXT NEW MANAGEMENT BREAKTHROUGH?
The History of Management Breakthroughs
Will Business Analytics Be the Next Breakthrough?
Analytics as the Only Sustainable Competitive Advantage
Resistance to Change and Presumptions of Existing Capabilities
Evidence of Deficient Use of Business Analytics in Finance and Accounting
Sobering Indication of the Advances Still Needed by the CFO Function
Moving From Aspirations to Practice With Analytics
Customer Profitability Analysis to Take Actions
Rationalising and Validating Key Performance Indicators in a Strategy Map and Balanced Scorecard
Moving From Possibilities to Probabilities With Analytics
Fill in the Blanks: Which X Is Most Likely to Y?
Increased Customer Profitability
Increased Product Shelf Opportunity
The CFO Function Needs to Push the Envelope
PART 7: HOW TO BEGIN IMPLEMENTING ENTERPRISE PERFORMANCE MANAGEMENT
16 WHERE DO YOU BEGIN IMPLEMENTING ANALYTICS-BASED PERFORMANCE MANAGEMENT?
Accept That Analytics-Based EPM Is About Integration and Speed
Assuming an Enlightened Leadership Team, Then What?
Embrace Uncertainty With Predictive Analytics
17 A CALL TO ACTION—BUILDING A BUSINESS CASE
The Obsession With ROI Justifications
Management and the IT Function Can Be Obstacles
Balancing a Smart, as Well as a Healthy, Organization