Expanding businesses into new markets brings with it a slew of new factors to consider: globalization, digitization, and company culture, to name a few. Recognizing these obstacles, the American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CIMA) have released Chartered Global Management Accountant (CGMA) research reports entitled Rethinking the Value Chain, a series designed to help businesses reevaluate opportunities in emerging markets and strengthen their value chains.
“Today’s fast-paced environment demands that business leaders act quickly to capitalize on the opportunities available to them, including potential partnerships," said Arleen Thomas, senior vice president of management accounting and global markets at the AICPA, in a statement. "However, they cannot take an out of sight, out of mind’ approach to managing the dependencies created by their extended value chains. Rather, the more far-reaching the value chain is, the more important performing the necessary oversight becomes.”
The reports include advice on how leaders can best manage extended value chains. Key points include:
- Widen the focus from traditional supply chain analysis to include customer demand to the same extent.
- Learn to embrace dependency and be able to relinquish a degree of independence in favor of shared goals when forming business alliances.
- Review data flows and implement efficient and reliable information exchange throughout the extended value chain.
- Collect, analyze and communicate future-looking information about business activity and the external environment.
- Recognize the external context and understand the regulatory, social system and infrastructure requirements necessary to support operations across the value chain.
- Align key performance indicators and articulate what criteria will be used to define "value."
- Develop collaborative business partnerships to gain competitive advantage which extends across the entire value chain, while ensuring alignment between the supply chain, the business and corporate strategy.
The series of reports includes: The Extended Value Chain; Accounting for Natural Capital in the Value Chain; Ethics, Risk and Governance through the Extended Value Chain, and Combating Corruption Across the Value Chain, as well as two case studies: Kimberly-Clark Managing Natural Capital in the Value Chain, and Ethical Culture Change at Siemens.
For the full reports and more info on CGMA, head to CGMA.org.