Chapter 17
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Transcript of Chapter 17
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
Chapter 17
Success Factors and Management Information Needs
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
Objectives
After studying this topic you should be able to: Understand management information
needs; Explain the principles of CSFs; Know how to conduct CSF identification and
practical uses; and Appreciate industry research into CSFs and
industry-wide CSFs.
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
Management information needs
To function effectively managers’ need to have facts (information) to make informed decisions. In modern businesses there is ample raw data – every bill, invoice, bill, email, letter provides raw data, but the important factor is how this is turned into information that is of use to managers.
Raw data = raw, isolated, unordered facts
Management Information = data that has been processed into a form that is meaningful or relevant to the receiver and aids management decision making
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
Criteria for good quality information
Appropriate volume Relevant to the decision being made Understood by the user Arrive on time Be accurate Be complete Frequency to meet needs
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
Designing management information systems (MIS)
The starting point can be led by: Accountants Computing system Head office management Operational managementBest to focus on needs of the specific management role
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
Defining Critical Success Factors (CSFs)
Originates from the 1970s It starts by defining an
organisation's strategy, goals, critical success factors and measures and has a number of uses.
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
Corporate CSFs Framework
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
Goals, CSF and Measures
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
An explanation of CSF terms, using an airline
Term Definition ExampleStrategy What business are we in? Regional airline transportationObjectives General statement of direction General profitable air route
structure Change to a more efficient air fleet
Goals Specific targets for a period of time
Withdraw from all routes with less than n% seat usage
By year end replace ‘X’ plane stock with new ‘Y’ planes
Achieve an annual ROCE of 8%CSFs Areas where things must go
right in order to achieve stated objectives & goals
Receive/maintain approval for higher density routes
Receive bank support for capital investment in new plane stock
Measures A quantifiable target that aids monitoring progress towards CSFs, performance against target
Average % seat capacity usage % of loan funding secured from
bank
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
The use of CSFs in an organisation
A tool for identifying management information needs
For organisational planning purposes, both operational and strategic
To aid the planning of an organisation management information system
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
A tool for identifying management information
needs A number of research projects have
consider this – see references in the textbook
Finding show goals are often implicit and this make them explicit
Aided management in understanding own role and matching management information to their needs
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
For organisational planning purposes, both operational
and strategic Can aid developing strategic
direction Ensures resources follow areas
critical to success – targeted resource allocation to ensure CSFs are met
Sector specific studies can aid in understanding the external market
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
To aid the planning of an organisation management
information system Allows a system to be built that
relates to specific CSFs MIS directly matched to strategic
goals and needs of managers It provides the inputs required,
alongside the output reports needs (reported measures)
© 2012 Jones et al: Strategic Managerial Accounting: Hospitality, Tourism & Events Applications 6thedition, Goodfellow Publishers
Summary
Management need good quality information to make fully informed decisions.
Designing MIS’s can be fraught with issues and need careful planning.
CSFs can aid an organisation in a number of ways. CSFs are the few key areas where things ‘must go
right to meet organisational objectives. CSFs can change with time and by management
role or function.