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.