Revenue Management - Where to Start?

Deacuerdo con Raef Lawson del IMA; los profesionales en contabilidad gerencial deben tener un papel mas preponderante en la Gestión del Ingreso, con el objeto de preparar información útil para los tomadores de decisiones en las áreas de márketing y ventas.

Es en éstos momentos, en que la utilización de modelos robustos de Gestión de Ingresos presentan una oportunidad competitiva para alinar las iniciativas a lo ancho y largo de la organización para apalancar la creación de valor en tienpos de crisis. Por esto es necesario contar con sistema apropiado de gestión de ingresos que contemple como mínimo éstos pasos:

1. Realiza una evaluación rápida del uso que hace la organización de las cuatro palancas de gestión de ingresos.

2. Revisa los niveles de detalles de la gestión de ingresos para determinar la práctica actual y comprender las diferentes intensidades de práctica.

3. Analiza la estrategia empresarial y el entorno empresarial de la organización para encontrar problemas que puedan ayudar o dificultar la mejora de la gestión de ingresos.

4. Evalua la importancia del generador de ingresos y costos en la estrategia de la organización e identifica brechas en la atención actual de gestión y contabilidad.

5. Diseña el nivel apropiado de gestión de ingresos y genera atención para la organización, de acuerdo con su estrategia.

6. Establece un equipo multifuncional para implementar nuevas prácticas de gestión de ingresos, respaldado por habilidades y herramientas de contabilidad de gestión.

PACE publicará pronto una monografía que describirá este proceso con más detalle. ¡Mantente al tanto!

Revenue management fundamental : Comments

It was with great interest that I discovered the production of the team of professor-researchers at the University of Auckand..

It seems to me that this is the first time I have read in a document promoted by the IMA that the cost system must be coupled with value analysis.

My colleagues in Auckland develop in 2020 the recommendations that myself, Michel Lebas and Philippe Lorino made in 1990s. But our works were in French, which inevitably limited the dissemination of our ideas!

But in 1994 my article ABC call for a French approach received the first prize awarded by the FMAC in its annual selection of Article of Merits. In this article I wrote "it is important to note that non-accounting-based performance measures are likely to contribute at the same time to cost reduction, as in the example given above, as well as to value creation where these measures cover quality, timelines, innovation and so forth.

This article also highlighted the complementarity of the monetary cost driver and non-monetary performance indicators

In this article I pointed out "the fruitless pursuit of accuracy" Since then I developed these in many articles and books

IFAC published a few years (1999) later a booklet dedicated to« Role of managment accounting in creating value »  In it there is an article I co-authored with Michel Lebas « Simultaneously managing Cost and Value : the Challenge » We underlined in particular that the ABC systems were characterized by« their originality (which) may lie more in an enhanced capacity for simulating the process of construction of the value perceived by the customer, than in a search for “exact » product cost”

What is important is that once we accept the idea that cost must be articulated with value one has an explanation for the dynamics of cost systems. The latter remained structured by direct labour until the 1980s. If the quality of cost systems had been measured by accuracy, these systems should have changed in the late 1950s and perhaps even before. If they were not changed it was because there was a social consensus on the value medium: work. And since we were still in an industrial economy and not of service, it seemed natural for everyone to link value to the content of direct labor and to use this base for the allocation of all other burdens. Direct labor was simultaneously a cost and a value driver.

The advent of delivery time and quality would make this model explode in the 1960s and 1970s. The result will of course be the ABC movement but also a multitude of other systems. In my 2005 book I listed 19cost systems but since then there have been others. Each claiming to answer the only question that interest leaders in a relevant way: how can my cost system help me improve my profit?

It is this question that which is at the heart of the approach developed by my colleagues by proposing to link cost drivers to value attributes.

For the cost system they take up the conceptual framework proposed by the IMA, but they do not specify their epistemological positioning. This forgetting seems to me to be symptomatic of the unfulfilled break with the conceptual framework of the IMA. The latter claims the "Truth correspondence" and thus the adherence to the positivist current. Once the problem of value is introduced into the model, this epistemological positioning is no longer tenable. The value is subjective and relative to each customer. It is not objectivable but it is possible to apply for it from various indices. The authors of the article give an example with unused capacity that can be seen as a waste or a valuable opportunity. The same is true of stocks that have no value if customers are willing to wait for the duration of the production cycle to be served Otherwise stock availability is at very high value.

What is missing in the document are how their system is operationalized. How do you build a cost system that simultaneously illuminates costs and value? Linked to the context of the appearance of the ABC, an initial response was proposed by P. Turney in Common Cents in 1991. It consisted of identifying all activities contributing to a value attribute in a single process such as packaging, quality assurance, quality control, etc. The problem with this modelling is that quality attributes are not additive. As my colleagues in Auckland rightly point out  "resources and activities that combine to create value attributes"  So it is not on the grouping of activities or resources performing the same functionality that you have to build your cost system if you want it to simultaneously inform you about cost and value. The only solution to a meaningful system, that is, intelligible to a non-accountant, is to use processes as the basis for cost calculations. These processes will be combinations of activities that deliver an attribute or more generally a bunch of value attributes. For the customer, the product and the quality are inseparable, so it is a mistake to evaluate them separately.

Another point put forward by the authors is that of context. But beyond the context the important thing is the ability of models to evolve. I am not alone in preaching for a long time the need for maintenance of management tools as is naturally done for technical tools. This adaptation is, in my opinion, hampered by the computational device that accompanies each method of costing. Changing methods or even simply adapting it requires mobilizing IT and personnel resources at the expense of thinking about the relevance of the new system. It was in an attempt to break this lock that I proposed in my last book a universal computing machine, usable whatever the system. This machine is based on an ontology of cost systems. By freeing the staff from the effort on the computational part, this approach makes it possible to focus the work of these staff on what provides its added value: the relevance of the new system.

Most of my articles and my latest book are available in English, free of charge on my account on the Research gate website. I would be happy to make it available to the participants of profitability-analytics.org.. If you think it will help.

Very interesting insights. Please send me a link to a good location on Research Gate to see your material. Perhaps you could suggest what to read first. I would also like to send you a document that has disappeared from the IMA website - The Task Force Report on the Conceptual Framework for Managerial Costing - it has a section that deals specifically with "Truth" as it relates to costing for internal decision support. You may find it interesting. My Email is lwhite@rcainstitute.org.