Business and IS Performance ( IS 6010 ). MBS BIS 2010 / 2011 14 th October 2010. Fergal Carton ([email protected]) Accounting Finance and Information Systems. Last week 1. Credit Suisse performance parameters Return on investment (customer), bonus (fund manager)
Credit Suisse performance parameters
Return on investment (customer), bonus (fund manager)
What would be considered reasonable ROI from a customer perspective? Is this the same for a fund manager?
Return is related to level of risk taken
Overall corporate performance objective is broken down into sub-objectives for managers
This process of splitting objectives to individual managers is what Mason and Swanson (1979) are investigating
Feedback on Mason and Swanson (CMR, 1979)
Scientific Measurement not enough for management decision support (softer information required)
Not “user specific“
Metrics depend on your position (manager, customer, shareholder, employee, …)
Managers have to make decisions regarding solutions to performance issues
These decisions necessarily engage the resources of the firm
Measurement systems do not support this level of decision making
Class exercise: mobile phone sales down 25% with respect to target for quarter, what kind of decisions required
Knowledge of overall market performance might explain poor performance
Change targets? Try telling your boss that!
Act on demand by using discounts, bundles, promotion, marketing
In any case solutions involve committing resources (money, people, …)
What type of information support would a manager require to make such decisions?
Collaboration / conflict arises: Sales versus Finance view
Apple reporting exercise
Steve Jobs about to report results
You are asked to provide gift card revenue figures for Cork
Channels used to sell gift cards eg. HMV
Denominations sold (pre-set values or user definable?)
Do retailers pay for cards up front?
At what point are Apple able to recognise revenue from sale?
What is the impact for sales reporting?
Make up of actual spend of gift card by product not known
Inventory impact versus non-inventory?
An increasing range of channels
Apple stores (eg. ATMac, Penrose Wharf)
Major accounts (Dixons, Curry’s, Fnac, HMV, Virgin, …)
Retailer (Tesco, O2 stores, Argos, …)
Indirect distributor (Russian market?)
An increasing range of products
iTunes gift cards
Accessories for all media players and phones
In theory, it’s simple
But, in real life, there are many contingencies:
Performance controlIntegration framework