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Emerald Group Publishing Limited
Copyright © 2004, Emerald Group Publishing Limited
Mike Kennerleyis with the Centre for Business Performance at Cranfield School of Management.
Mike Bourneis with the Centre for Business Performance at Cranfield School of Management. Pippa Bournemanages the East England region of the Institute of Chartered Accountants in England and Wales.
The last issue of Measuring Business Excellence focused on the measurement and management of organisations' intangible assets. In this issue greater focus is given to the measurement of financial performance although most of the papers link financial performance to business drivers.
Financial performance has traditionally been reported through the annual report but in recent years there has been a trend towards more frequent reporting, such as the use of quarterly financial reporting. Despite the importance placed on the reporting of financial results they are simply the outcome of all the business activity that takes place and, as a result, there is an increasing desire by financial analysts to understand more and more about the non-financial aspects of the business. Shell's recent announcement about oil reserves just serves to remind us all how much share price can be affected by non-financial information.
It is probably not surprising, therefore, that many of the papers in this issue consider the need for external reporting, the requirements of multiple stakeholders and the relationship between financial outcomes and real business drivers and processes.
We start with an article by David Illingworth, the president of the Institute of Chartered Accountants in England and Wales. In his article he debates the very current issues behind financial reporting in the wake of Enron and Worldcom.
This is followed by Richard Barrett's article on corporate performance management. In his article he looks at the requirements of planning and measuring performance effectively and gives two case examples where companies have reaped the benefits of linking financial projections to non-financial performance drivers.
Jim Brimson then follows with an article on managing performance through business processes. He uses the phrase "cane dancing" to highlight how we so often mis-manage problems and proposes that we adopt a more process focused approach to performance management.
Chris Adams, Mike Bourne and Andy Neely then report on the state of the art in capital investment appraisal. Their survey results provide insight into current practice and they propose a framework for best practice based on these findings and the literature.
Jo Calandro and Scott Lane in their paper argue the need for a new metric for the insurance industry.
Trevor Turner, Stephen Creighton, Sai Nudurupati and Umit Bititci provide an insight into the requirements for a Web based performance measurement system and illustrate the concept and its implications from their experiences in developing such a system in Alcan.
Finally, Fang Zhao reports a study of the approach taken by Siemens to deliver economic performance whilst also addressing the issue of sustainable development and draws conclusions on how problems with such approaches can be addressed.