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the shareholders and customers. It results in the organization being best positioned to deliver the
best value to all of its stakeholders by ensuring that the organization's strategies, processes, and
capabilities are aligned and integrated with each other.
On the other hand, the Performance Prism also recognizes the fact that organizations are
becoming increasingly demanding of their stakeholders too. The following are examples:
◾
Investors
: Capital for growth, greater risk-taking, long-term support
◾
Customers
: Profitability, retention, loyalty, advocacy, feedback
◾
Employees
: Flexibility, multiskilling, cross-training
◾
Suppliers
: More outsourcing, fewer vendors, integration
◾
Alliance Partners
: Cross-selling, co-development, cost sharing
◾
Regulators
: Cross-border consistency, early involvement
The Performance Prism consists of five interrelated perspectives on performance that pose specific
vital questions:
◾
Stakeholder Satisfaction
: Who are the key stakeholders and what do they want or need?
◾
Stakeholder Contribution
: What does the enterprise want and need from the stakeholders on
a reciprocal basis?
◾
Strategies
: What strategies are needed to satisfy the wants and needs of the stakeholders
while satisfying the requirements of the enterprise too?
◾
Processes
: What processes need to be in place to enable the enterprise to execute its strategies?
◾
Capabilities
: What capabilities need to put in place to allow the enterprise to operate its
processes?
15.7 Customer-Centric Activity-Based
Revenue Accounting (ABRA)
As indicated in Chapter 7's note “Theory of Constraints (TOC),” a singular drive to minimize
costs to the exclusion of all other factors underlies many disastrous managerial decisions. In anal-
ogy with ABC, one can conceive of ABRA that involves assigning revenues and costs explicitly
to
both
individual customers and processes or activities. Like ABC, ABRA also envisages the
enterprise as a collective whole of activities. ABRA would engender the firm to be designed around
customer-facing units where activities, costs, and revenues converge on the customer. ABRA would
enable the fundamental shift from the enterprise to the customer by shifting the focus from the
performance of the
enterprise
as a whole to the
activities
performed by the enterprise (along with
their associated costs and revenues).
ABRA is based on the following:
◾
Activities of the enterprise
◾
Activity costs
◾
Revenues resulting from activities
◾
Measure of performances as the revenues resulting from activities less the cost of performing
them
Like ABC, ABRA also identifies activities, activity revenues, revenue drivers, and revenue objects.
Because value added for the customer cannot be observed directly, the contribution of activities
