“This book consists of 13 chapters and three appendices:Chapter 1 describes why activity-based cost management has become so relevant for the public sector and government organizations.Chapters 2, 3, and 4 describe why managerial accounting has evolved from reporting budget and spending information to calculating the costs of outputs of all forms. These chapters describe how activity-based cost systems are constructed and designed. They also provide insight into why misconceptions cause some ABC/M implementation projects to fall short of expectations.Chapter 5 describes a bonus that comes with ABC/M: attributes. Attributes provide an additional dimension to the cost data to tag and score various types of costs. For example, the organization can view its cost structure based on where it is adding greater or less value. Another example describes how quality management efforts can be quantified in financial terms.Chapter 6 addresses the topic of performance measurements and how ABC/M supports strategy mapping and balanced scorecard principles.Chapter 7 advances the use of ABC/M for predictive planning purposes. Here we discuss not only reforms to budgeting, but the broader uses of predictive accounting as well.Chapter 8 introduces the concept of risk management and why there is an increasing need to develop a comprehensive framework for balancing and integrating cost, performance, and risk management.Chapter 9 describes how ABC/M can be implemented quickly using rapid prototyping techniques. This method is in stark contrast to the traditional approach of taking years to construct massive, detailed ABC/M systems while postponing results.Chapter 10 presents a series of examples of public sector organizations that have implemented ABC/M.Chapter 11 describes critical success factors for implementing ABC/M and what pitfalls to avoid.Chapter 12 touches on information technology systems integration issues related to ABC/M.Chapter 13 concludes the book with a crystal ball description as to where ABC/M is likely to evolve. It summarizes the book’s central theme that managerial accounting will become the managerial economics for better decision making. In 1995, the Financial Accounting Standards Board (FASAB) issued Statements of Federal Financial Accounting Standards No. 4 (SFFAS No. 4), Managerial Cost Accounting Concepts and Standards. SFFAS No. 4 mandated the use of managerial cost accounting by federal entities. Activity-based costing/management (ABC/M) is one of several forms of managerial cost accounting mentioned in SSFAS No. 4, and the FASAB “…encourages government entities to study its potential within their own operations.” Over the years, ABC/M has become the most frequently used formal managerial cost accounting method in the federal government. Activity-based costing (ABC) is a costing method that assigns indirect costs to activities and to the products based on each product’s use of activities. Activity-based costing is based on the premise: Products consume activities; activities consume resources. Activity-based management (ABM) is a method of identifying and evaluating activities that a business performs, using activity-based costing to carry out a value chain analysis/re-engineering initiative to improve strategic and operational decisions in an organization”–
Provides step-by-step guidance on implementing and using a value-based management system within the government
Countless books on proposed management practices have been written and published over the past century. Some of these have focused on specific management practices for government. In more recent decades, the topics of strategic planning, performance management, cost management and risk management have been extensively covered. However, little has been offered as an approach to integrate these and numerous other management methods and practices in a manner that maximizes the delivery of value to the organization’s key stakeholders. A general management framework is presented in this book in a manner particularly applicable to government organizations.
Value-Based Management in Government introduces a new, integrating framework for management practices that optimizes the balancing of results sought; resources supplied and allocated; and risks accepted. These considerations are all balanced for the purpose of delivering maximum stakeholder value. The book offers guidance on how strategic planning, performance management, cost/resource management, and risk management must all be integrated as part of a portfolio management framework across the organization. The book also discusses the role of information technology (IT) in providing data for insights and decision-making, and the importance of organizational change management to implement the needed organizational and behavioral changes.
Beginning by explaining the concept of Value-Based Management for the public sector and government, the text goes on to explore topics such as the evolutionary stages of maturity of management accounting, the benefit of attributes (e.g., value-add versus nonvalue-add) in cost data, predictive planning with expense projections, risk management, and various performance measurements (e.g., key performance indicators [KPIs] ). This authoritative book:
- Discusses a framework for balancing and integrating cost, performance, and risk
- Explains IT systems integration issues related to activity-based cost management (ABC/M)
- Addresses why some ABC/M implementation projects fail to meet expectations
- Describes how quality management efforts can be measured in financial terms
- Explores the wider uses of predictive accounting (e.g., driver-based budgeting, what-if scenario analysis)
- Provides organizational change management insights and recommendations needed to achieve the required changes in management decision-making.
Value-Based Management in Government is an important source of information for leaders, executives, managers, and employee teams working within or with government organizations.
Author: Douglas W. Webster,Gary Cokins
Publisher: John Wiley & Sons
Genre: Business & Economics / Accounting / Managerial
Date Published: 2020-01-29
Preview Link: Google Preview Link
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