Over the past thirty years, private and public sector organizations have spent billions of dollars implementing a wide range of management tools and practices in efforts to improve their performance. The benefits of this massive investment were not usually fully realized, and many initiatives failed. Surveys by both Bain & Co. and McKinsey estimate that only 25 to 30 percent of all change programs succeed. Reasons for project failure include ineffective leadership, lack of commitment, and poor implementation.

Many firms rush to purchase and implement performance management tools without considering a fundamental question – which problem are we trying to solve? The purpose of this course is to provide an overview of the key building blocks of a robust performance management process, and includes takeaways that can be used at work.

The course starts with an overview of the organizational levels where performance should be measured, and includes an explanation of how the levels fit into a hierarchy. Transfer pricing techniques are then explored, followed by how to implement internal profitability. Return on investment is reviewed, including a discussion of how residual income can compare the impacts of project of different sizes.

The course concludes with an overview of the balanced scorecard, which focuses on the interaction of customer, internal processes, innovation and financial perspectives. The course content covers performance management topics tested in the Certified Management Accountant (CMA) Part 1 examination.

Topics include:
• Responsibility Centers.
• Transfer Pricing.
• Internal Profitability Analysis.
• Return on Investment and Residual Income.
• The Balanced Scorecard.

Course Key Concepts: Balanced scorecard, business unit analysis, contribution margin, controllable fixed costs, cost plus transfer pricing method, dual rate transfer pricing method, full cost transfer pricing method, goal congruence, key performance indicators (KPI’S) , market price transfer pricing method, negotiated price transfer pricing method, non-controllable allocated fixed costs, non-controllable fixed Costs, residual income, return on investment (ROI), transfer pricing, variable cost transfer pricing method.

Other Performance Management topics tested in the Certified Management Accountant (CMA) Part 1 Examination courses by Tom Coghlan.
Standard Cost and Variance Analysis