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Companies now paying more attention to customer service, productivity; less focus on employee turnover. (AICPA).

Forty-six financial executives and managers attending this summer's AICPA Performance Management Conference were asked if they are still measuring the same company performance factors they were a year ago. Surprisingly, dramatic shifts surfaced.

Virtually all of the companies with rigorous performance measurement systems are now assessing customer service. Only two-thirds did last year. There also is a renewed focus on productivity: two-thirds now focus on productivity measurement while only one-third did last year.

The depressed economy is seen as the reason why companies are paying renewed attention to their customers and productivity. "Companies are looking for ways to create added value," said AICPA Vice President-New Finance John Morrow. "Many are resurrecting Total Quality tools and processes to reinvigorate their focus on the customer, quality and efficiency."

Traditional financial indicators remain important, however: Net operating income and revenue/sales are still top priorities. A financial indicator stimulating much more interest this year is return on investment. As would be expected in near-recessionary times, less attention is being paid to quantifying and reducing employee turnover.

Other findings from the survey are:

* Scores on performance management indicators are used mainly as input for reward/recognition programs and for day-to-day decision making--less so as information for investors.

* Companies with established performance management systems are much more likely to communicate results to all employees.

* Satisfaction with the tools of the performance management trade is mixed: almost one-half of respondents say they are "sort of" satisfied with tools such as balanced scorecard, activity-based costing, activity-based management and target costing. The concern most frequently mentioned: tools do not link operations to strategy.

Survey respondents were predominantly chief financial officers and financial officers. They represent a wide range of industries, from financial services to manufacturing and construction.
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Publication:CPA Letter
Date:Nov 1, 2002
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