Shareholder Value John Ballow

1Copyright © 2004 Accenture. Patent Pending. All Rights Reserved. Copyright © 2004 AssetEconomics. Patent Pending. All Rights Reserved.

Source: October 2002 survey of 245 companies - CFO Research Services

Common Capability GapsEPM Capability Satisfaction Rate

1. Alignment between company strategy and their planning process (40%)

2. Focus on key business drivers (24%)

3. Amount of time required to create the annual plan (47%)

4. Speed and accuracy of the forecasting processes (48%)

5. Ability to produce business models and test impact of proposed changes (31%)

6. Speed and accuracy of the monthly financial reporting (63%)

7. Reporting of non-financial measures (28%)

8. Ability of business users to view and analyze performance reports at will (25%)

9. Integrated IT systems to collect and manage the information (41%)

10. Visibility into current results (29%)

11. Understanding of future performance trends (30%)

Research shows that corporate executives are deeply dissatisfied with their current Enterprise Performance Management (EPM) capabilities.

0% 20% 40% 60% 80% 100%

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2

3

4

5

6

7

8

9

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11


Future Value affects all industries, with most companies in a management space somewhere between eBay and a coal mine.

“Intangibles” $ (MV-IC+GW)

Fu

ture

Val

ue

$

The solution? Future systems focus on current and future value from all assets with an integrated solution driving sustainable high performance.

The problem? Current systems focus on current value and tangible assets with point solutions and traditional measures of financial performance.

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10

100

1000

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1000000

1 10 100 1000 10000 100000 1000000


Why? The asset base has changed dramatically: accounting management systems ignore and under-manage value creating assets.

Statutory Reporting vs. Performance Reporting Information Requirements

Tracking by accounting systems

Not tracked by accounting systems

Source: AssetEconomics Holdings Inc


Intellectual and Intangibles Assets behave very differently and need to be managed very differently than traditional accounting assets


Changing Economies, Business Models, and Value Drivers

Monetary Physical Relational Organizational Human

Value Chain

Value Network

Value Shop

1 These asset classifications will be further defined in the upcoming slides.

Value Chain

Key Asset Value Drivers1

Business Models

Knowledge EconomyIndustrial EconomyType of Economy

PresentPast

Additionally, the economy has changed bringing along new business models and different value drivers.


Current systems do not do a good job at helping you plan for what may occur and track the key drivers to enable decision making.

Note that all totals do not sum to 100% due to rounding

33%We do not

measure their performance

41%We apply some measures but

mainly informal or qualitative

20%We apply

some measures but

it’s not organized

5%We have a

robust system

This is surprising given that these same executives admitted that intangibles were critical for their future success in creating shareholder value.

Does your company measure the performance of Its intangible assets?

Compare how your ideal company would measure, manage, or disclose intangibles to your own company.

Accenture/Economist Intelligence Unit (EIU) Survey 2003

85%

59%Gap

53%Gap

Measurement Management Disclosure

26%

59%Gap

Ideal Company | My Company Ideal Company | My Company Ideal Company | My Company

90%

31%

71%

18%