Cisco Systems and Alcoa are on the leading edge of their industries and real-time management accounting is one of the keys to their success. Managers at these companies can drill down into the company’s management accounting system to find the latest data on revenues, margins, order backlogs, expenses, and other data, by region, by business unit, by distribution channel, by salesperson, and so on. The Chief Financial Officer of Cisco, Larry Carter, says that with this kind of live information “you can empower all your management team to improve decision making.” Richard Kelson, the Chief Financial Officer of Alcoa, says: “The earlier you get information, the easier it is to fix a problem.” For example, with up-to-date data, managers at Alcoa saw a downturn in aerospace markets early enough to shift production from hard alloys that are used in aircraft to other products. John Chambers, the CEO of Cisco, says: “At any time in the quarter, first-line managers can look at margins and products and know exactly what the effect of their decisions will be.”n

Source: Thomas A. Stewart, “Making Decisions in Real Time,” Fortune, June 26, 2000, pp. 332–333.