This second instalment of a five-part series looks at the stories of management accounts who have added significant value to their companies’ mergers and operational excellence initiatives by utilising the management accounting tools and techniques learned from CIMA.

The story of the takeover of UK catalogue retailer Argos by Great Universal Stores (GUS) in 1998 is an excellent case study of value creation. The deal was instrumental in turning around the fortunes of home-shopping giant.

By using management accounting tools and techniques, David Tyler and his team were able to narrow down a list of potential targets for acquisition, which culminated in the successful takeover of Argos.

The business models of large energy suppliers have traditionally concentrated on selling greater amounts of energy to an increasing number of customers, yet in the past few years, growing costs and legislative demands have ensured that the purchasing, selling and use of energy must be strategically managed in order to gain rewards.

Royal Dutch Shell, driven by group chief financial officer Simon Henry, is a prime example of this new thinking, and has implemented a system that enables them to define strategies for asset groups and report clearly on risk profiles and likely returns, Shell’s net present value has grown by over 15%.

Meanwhile, Alex Buckthorp, site finance director for Procter & Gamble, has succeeded in creating a higher-performing and agile business culture at the manufacturing plant by applying management accounting tools and techniques in combination with the closer integration of managers and production line staff.   For Capgemini Consulting UK, the decision-making process was considerably enhanced when the finance team was able to provide targeted, real-time information for each individual and business unit, rather than blanket reports that did not get to the heart of the issue. This enabled clear accountability on sales, cash management and revenue, which largely impacted the bottom line.

Armed with the tools and techniques gained from CIMA, these four management accountants were equipped with the skills to make key decisions and spearhead strategic planning initiatives, which enabled their companies to excel.  

GUS-Argos takeover

The £1.7bn deal was conducted after extensive analysis of the UK’s retail sector, carried out by then finance director David Tyler, FCMA, and a team of finance professionals. Many of them, like Tyler himself, were CIMA qualified. Although GUS was cash rich, its board was concerned that its home-shopping businesses were in decline. The management team was looking for a new business to help secure growth.

‘I think CIMA people are very interested in business itself: the excitement of how to run a commercial organisation; understanding the market and the competition and responding to it in a dynamic way,’ says Tyler.