Chapter 11 Introduction

The purpose of this chapter is to provide some critical observations on two fundamental aspects of managing businesses: the accounting and finance function’s contribution in terms of data provision, processes, controls and insights; and the measures of performance used by companies. The observations reflect an operations executive’s perspective and hence they may be seen as provocative when examined by others in an organization. If this causes debate between operations and the rest of the business, the purpose of the chapter has been well served.

With operations invariably tasked with meeting many of the financial targets and performance measures within organizations (and understandably so as it accounts for so much of the costs and investments), it is essential that the premise on which these targets and measures are built and the data used to calculate them are sound. Where this is not so, the extent of the potential inaccuracy (both data processes and insights) remains unexposed and is then built into corporate expectations. Being unaware, companies set aside these inherent deficiencies, base targets and measures on available data and consequently fail to evaluate performance on reality.

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