Value-based management in government

Cover......Page 1
Title Page......Page 5
Copyright......Page 6
Contents......Page 7
About the Authors......Page 9
Acknowledgments......Page 11
Foreword......Page 13
 History and the Authors’ Broader View of VBM......Page 15
 Some Thoughts About “Value”......Page 16
 Overview of the Book......Page 17
 Balanced VBM but an Unbalanced Book......Page 18
 Concluding Remarks......Page 19
Part 1: Value-Based Management in Government Concepts and Components......Page 21
 Chapter 1 Challenges and Solutions to Address Dissatisfaction of Citizens and Taxpayers......Page 23
  The us’s Accountable Government Initiative......Page 24
  From Performance-Based Management to Value-Based Management......Page 25
  What Do Governments Hope to Gain from VBM?......Page 27
 Chapter 2 Generating Value in a World of Uncertainty......Page 29
  Defining Value......Page 31
  Maximizing Value......Page 32
  Building an Organizational Strategy to Deliver Value......Page 36
  Building upon a Strategy......Page 38
  Providing Required Data for Appropriate Decision-Making......Page 40
  Managing the Organizational Change......Page 41
  Putting it all Together......Page 42
Part 2: Strategy Management and Governance......Page 47
  Managing Change as A Prerequisite to Managing Value......Page 49
  Playing to Where the Puck is Going to Be......Page 52
  Strategic Planning: An Essential Element of Navigating Change......Page 54
  Linking Strategic and Operational Planning......Page 55
  The Quest to Optimize Stakeholder Value......Page 57
 Chapter 4 The Strategy Map and Its Balanced Scorecard......Page 59
  Lack of Consensus......Page 60
  Implementing Too Fast and Skipping Key Steps......Page 62
  Measurements are both Social and Technical......Page 65
  Scorecard or Report Card? The Impact of Senior Management’s Attitude......Page 67
  A Difference Between VBM and the Balanced Scorecard......Page 68
  Why not an Automobile GPS Navigator for an Organization?......Page 69
  Failures due to Arrogance, Ignorance, or Inexperience?......Page 70
  How are Balanced Scorecards and Dashboards Different?......Page 71
  Scorecards and Dashboards Serve Different Purposes......Page 72
  Dashboards Move the Scorecard’s Dials......Page 76
  Getting Past the Speed Bumps......Page 77
Part 3: Enterprise Performance Management......Page 79
 Chapter 5 Exceptional EPM Systems Are an Exception......Page 81
  Managements’ Delusion that they have EPM Methods......Page 82
  EPM Methods are Like Musical Instruments in an Orchestra......Page 85
  Enterprise Performance Management (EPM) Methods in Government......Page 87
  Seamless Integration of EPM Methods and it Systems as an Aspiration......Page 88
  The Three Rs of VBM......Page 89
Part 4: The Three Rs: Risk, Results, and Resources......Page 91
 Chapter 6 Risk Management......Page 93
  The Evolution of Risk Management......Page 95
  The Risk Management Process......Page 97
  The Role of Internal Controls......Page 105
  The Evolution of Enterprise Risk Management......Page 106
  Principles and Practices of Enterprise Risk Management......Page 108
  Risk and More......Page 111
 Chapter 7 Results Management......Page 113
  Managing Results within EPM......Page 115
  From Proposed Results to Results Accomplished......Page 116
  Optimizing Results in Value-Based Management......Page 117
  Process Improvement: A Result Sought or Part of Results Management?......Page 118
  Lean, Quality, and Business Process Management......Page 119
 Chapter 8 Resource and Cost Management......Page 121
  Compliance with Costing’s “Causality Principle”......Page 122
  Project Accounting and Work Orders......Page 123
  Activity-Based Cost Management (ABC/M)......Page 124
  The Utility and Benefits From ABC/M in Government......Page 125
  Political Pressures tTo Hold Down Costs......Page 126
  An Excessive Focus on Functions......Page 127
  The Evolution of Annual Budgets......Page 128
  Removing the Blindfold: Outputs, Not Just Resource Expenses......Page 131
  But our Department Does Not Have Outputs......Page 135
  ABC/M Uses (And Some Pitfalls)......Page 137
  Dealing with the Dark Side: Downsizing Public Sector Employees......Page 139
  Why Change Now......Page 141
Part 5: Management Accounting in Government......Page 143
  The Need for More Quantitative and Fact-Based Financial Information......Page 145
  What is ABC/M?......Page 146
  What ABC/M is Not......Page 150
  Let the “How” and “Why” Drive the Effort......Page 151
  Commercial Businesses Versus Government Entities......Page 153
  Service-Based Versus Product-Based Organizations......Page 154
  So, What is the Big Problem?......Page 157
  How do Cost Drivers Work?......Page 161
  What are Costs?......Page 162
  How Does ABC/M Intersect with Traditional Cost Accounting?......Page 163
  Why the Increased Interest in ABC/M?......Page 165
  How does ABC/M Yield more Accuracy?......Page 167
  What are Drivers?......Page 170
  Why is Minimizing The Size of the ABC/M System Important?......Page 172
  Expanding the Two-Stage ABC/M Cross Model......Page 175
  Identification and Treatment of Organizational Sustaining Costs......Page 179
  The two Views of Cost: Cost Object and Process Views......Page 181
  Leveling or Disaggregation Brings about A Three-Dimensional ABC Cross......Page 184
  The Impact of the Repeatability of Work......Page 185
 Chapter 12 Using ABC/M Attributes to Assess Qualityand Value-Add......Page 187
  The Analyst’s Dream......Page 188
  A Popular Attribute......Page 189
  ABC/M Reveals the Cost of Quality (COQ)......Page 192
  Cost of Quality Classification Scheme......Page 193
  How do you Categorize Different Quality Costs?......Page 194
  Decomposing COQ Categories......Page 196
  COQ: Both Good And Poor Quality......Page 197
  Goals and Uses for the COQ Information......Page 198
  COQ Measurement System......Page 200
 Chapter 13 Driver-Based Budgeting and RollingFinancial Forecasts......Page 203
  Budgeting: User Discontent and Rebellion......Page 204
  What’s Broken about Budgeting?......Page 207
  The Financial Management Integrated Information Delivery Portal......Page 209
  Predictive Accounting and Budgeting with Marginal Expense Analysis......Page 210
  What is the Purpose of Management Accounting?......Page 211
  Descriptive Versus Predictive Accounting......Page 213
  What types of Decisions are Made with Managerial Accounting Information?......Page 215
  Activity-Based Cost Management as a Foundation for Predictive Accounting......Page 217
  Major Clue: Capacity only Exists as a Resource......Page 218
  Predictive Accounting Involves Marginal Expense Calculations......Page 219
  A Sea Change in Accounting and Finance......Page 222
  A Problem with Budgeting......Page 224
  Value is Created From Projects and Initiatives, Not the Strategic Objectives......Page 225
  Driver-Based Resource Capacity and Spending Planning......Page 226
  Including Risk Mitigation with A Risk Assessment Grid......Page 228
  Four Types of Budget Spending: Operational, Capital, Strategic, and Risk......Page 229
  From a Static Annual Budget to Rolling Financial Forecasts......Page 231
  Managing Strategy is Learnable......Page 232
 Chapter 14 Implementing ABC/M with Rapid Prototyping......Page 233
  After Model 0......Page 234
  Iterative ABC/M Modeling......Page 235
  Rapid Prototyping: Eighteen Holes of Golf on A Polo Horse......Page 237
  Building the First ABC/M Model 0: Tap Dance Now, Waltz Later......Page 238
  Cost Object Profiling: A Key to Getting Desired Results......Page 240
  Teach them to Fish, And they can Fish on their Own......Page 242
  Constructing and Populating ABC/M Model 0: The Starting Point......Page 243
  Analyzing Model 0 to Get Buy-In......Page 245
  Securing and Propagating the Learning: A Communication Plan......Page 246
  Time-Phasing ABC Into ABM......Page 248
  How about the Future of ABC/M?......Page 249
Part 6: How Information Technology Impacts VBM......Page 251
  Information Technology to Achieve Results......Page 253
  Data Management......Page 254
  Business Intelligence and Analytics......Page 255
Part 7: Influencing Behavior for VBM......Page 257
  Cultural Resistance to Change......Page 259
  Great Leadership Versus Good Management......Page 260
  How to Accelerate the Adoption Rate of VBM......Page 261
  What are Barriers that Slow the Adoption of New Ideas Like VBM?......Page 262
  Early Adopters and Laggards......Page 263
  Where to Begin?......Page 264
  How to Move Forward?......Page 265
  Moving Forward......Page 268
Part 8: The Future......Page 269
  A Potential Future for VBM......Page 271
  Moving Forward......Page 273
  A Final Thought......Page 274
Index......Page 277
EULA......Page 291