Managing complexity through performance measurement
Article Abstract:
Corporate performance reporting systems usually do not manage the complexity resulting from the growth being experienced by the company. As a result, decisions become exclusively intuitive instead of being based on reliable performance analysis. Given that complexity factors are the greatest driver of cost, accountants would do well to find a way to manage complexity through performance measurement. To measure complexity, accountants should not only examine the results of complexity-driven problems but also look at the root causes and then measure them using precedent measures that are proactive, future-oriented and sensitive to issues such as business development, product/service delivery, information management and organization dynamics. Activity-based costing is a highly recommendable approach in accomplishing this task.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1996
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An advanced cost management system for the factory of the future
Article Abstract:
The US Air force has developed an advanced cost management system (ACMS) that helps companies with newly automated factory environments handle cost system problems. ACMS addresses cost questions at several organizational levels. Features address prospective costs, process orientation, and treatment of automation software. ACMS also promotes a new cost management model that computes product costs based on conversion: elements required to change raw elements into finished product rather than the sum of direct labor, material, and overhead. ACMS relies on managerial estimate of costs in the future and monitors actual results against product, departmental, and organizational plans. The system will ultimately help US companies become more globally competitive.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1988
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Are your performance measures obsolete?
Article Abstract:
Companies should reevaluate their performance measures to assure that they are relevant and accurate. There are several points that must be considered when evaluating performance measures such as: verifying that performance measures are derived directly from company strategy; verifying that performance measures are integrated among different functions; and making sure that there are not too many different measures. Effective performance measures are also grounded on cost behavior and relationships, and are designed to avoid reporting extraneous material.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1989
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