© 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, , 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 management Best 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 TermDefinitionExample StrategyWhat business are we in?Regional airline transportation ObjectivesGeneral 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 MeasuresA 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.