Seminar OutlineDay 1
The need for a forward-looking financial management
system
- Predictive accounting concepts
- Use of process data to provide objective and
verifiable forward-looking information
- A Process Performance Statement
Gaining a competitive advantage with predictive
accounting
- What is your anticipated upcoming performance?
- What are your desired process outcomes?
- How close is your actual performance to targeted
outcomes?
- How much value are your processes creating?
- What limits your value creation potential?
- How stable are your processes?
- Is your process capacity well matched to future
requirements?
Translate your strategic plan into a format that
can be deployed to the predictive accounting system
Your financial management process will never truly
reflect your corporate strategy until you are able to
translate your strategic data into a consistent
framework that can then be incorporated into your
management process. Explore how to effectively bring
together the qualitative and quantitative information
from your market intelligence into your predictive
accounting framework.
- Creating strategic outcome statements;
- Creating customer market segments;
- Customizing outcome statements to market segments;
- Building product features from customer market
segments.
Day 2
Create a process framework
This module presents a template for creating a
process framework that is the foundation of a
state-of-the-art management system. The template uses a
spreadsheet to define macro processes and activities for
every organizational unit. The spreadsheet traces cost
from the general ledger to the activities to create a
process standard.
- Define the organization’s macro processes;
- Define the activities for a selected
organizational unit;
- Define the activity outputs;
- Trace GL cost to activities;
- Calculate a standard process unit cost.
Incorporate performance measures into the
predictive accounting process
Learn how to seamlessly link your performance
measurement system with strategy and the financial
management system. Explore how to identify performance
targets from the outcome statement.
Day 3
Implement a performance based budgeting process to
link to strategic plans
This module will provide an introduction to the
concept of linking a budget to strategy to enhance
performance. The performance based budgeting process
will be transformed from a number crunching exercise to
a business alignment and transformation process.
- Assess your current budgeting process
effectiveness by benchmarking your budget
effectiveness to international standards;
- An overview of performance based budgeting;
- An overview of a process framework that links the
budget, strategic planning, performance measures and
target costs.
Integrate key cost and performance indicators into
a performance based budget
Set cost and performance targets and apply a
budget-directed continuous improvement program to
achieve targeted performance.
- Setting performance targets using a Target Costing
methodology;
- Creating a continuous improvement program from a
performance based budget.
Ensure continuous alignment of your long-term
strategic plan with your short-term budget cycle
With a strategic plan generally being five to ten
years, and a budget being a yearly exercise, it is
common to lose sight of the ‘big picture’ thus
compromising the strategic thrust of the budget. Examine
how to ensure continuous alignment of short and long
term objectives to ensure that the two plans remain
synchronized.
- Balancing short-term results while achieving
long-term strategic objectives;
- Rolling budgets;
- Dynamic budgeting contrasted with static budgeting
Create a dynamic budgeting framework that can
adapt to external factors to improve budget achievement
Changes to the external business environment affect
your budget projections. Budgets need to be dynamic and
adapt to changes in critical external forces with
minimal impact on projected budgeted performance.
- Adapting a performance based budget to critical
changes in the business environment;
- Identifying, quantifying and minimizing budget
sensitivity to key events
- Integrate ISO and SPC to strengthen internal
controls and stabilize process performance.
Day 4
Measuring value creation
- What is value creation
- Accounting for value—a process approach
- Measuring and reporting intangibles
- How organizations create value
- Creating future value
Process variation and cause-and-effect analysis
- Process variation analysis
- Root cause analysis
- Use of Statistical Process Control (SPC)
Day 5
Implementation steps
- A six step approach to implementing a predictive
accounting system
- Assembling an implementation team
- Setting up an executive management team
Steps for operating the predictive accounting
system
- Tracking actual workload
- Earned value reporting
- Use of SPC
- Line management reporting
- Executive management reporting
Achieve management buy in and drive your budget
through effective change management
Using an advanced budgeting process to achieve a
sustainable competitive advantage requires
organizational buy in. Experts estimate that 50 to 80
percent of the companies that attempt to adopt a new
management process are not successful. This is generally
due to a lack of consideration of how the new system is
implemented and the organization’s culture. This module
will cover proven strategies to successfully integrate
the performance budgeting framework into your unique
business structure. It covers key change management
considerations of implementing a performance based
budget.
- Introducing multi-dimensional thinking into an
organization;
- A phased budgeting implementation;
- Executing the budgeting framework seamlessly into
your organization’s budgeting process;
- Ensuring statutory compliance with process
controls;
- Earned value reporting;
- What will performance based budgeting look like?
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