Sep 13 - 19, 2004





The Accounting Profession has been rendering excellent services in the past. Primarily the focus was on attest function, services in the area of taxation and management consulting.

Accounting cycle has been taken over by Computers. The world is becoming very competitive. Diversified services are being rendered by Accountants at various levels namely, global, regional, macro, micro and enterprise.

However, this piece looks at emerging new avenues and opportunities which our accounting profession should accept as challenges in comprehensive terms. Suggested ones are as under:

1) Business Process Outsourcing (BPO)
2) Innovation
3) Turned on Organization
4) Management Audit
5) Role in Reengineering

These are now briefly explained below.


Based on Oxford Advanced Learner's Dictionary (6th Edition — 8th Impression 2002), concepts underlining the following are explained below:


"A choice or way of making progress".


"A time when a particular situation makes it possible to do or achieve".


"A type of job that needs special training or skill, specially one that needs a high level of education".


So far there have been five generations of Computers. Table 1 captures these generations.






1953 - 1958

Applications - Simple, well defined for formal systems.
Scope - Payroll, Billing and Accounting.


1958 - 1966

Related to well understood tasks and procedures and control of batch processing.
On-line inquiring systems.


1966 - 1974

Development of remote control terminals to connect geographically separated units with Central Computers.
Time sharing developed.


1974 - 2000

Evolution of application of dependent data basis.
An organization has a single computerized data based system accessible to a variety of users for a wide range of purposes.


2001 . . .

This generation is known as Blue Tooth technology and through experimentation it is developing in its scope and applications.



The real emerging opportunities for accounting profession are to extend services in the area of Business Process Outsourcing (BPO). The Institute of Chartered Accountants of India, New Delhi deserves special congratulations and appreciation for popularizing and advocating BPO as a new emerging opportunity for the profession. They are regularly printing an excellent journal entitled "IT Harmony". In this journal special focus has been given to Finance and Accounting (F&A) Process Outsourcing. Based on extensive material available, the scribe has developed the enclosed PowerPoint Presentation on the following topics:

1) Trends in Finance and Accounting Outsourcing
2) Finance and Accounting Job
3) Strategy
4) Business Process Management
5) Transaction Management
6) Creating a Successful Outsourcing Relationships
7) Combination of Finance and Accounting Outsourcing Relationships
8) Perceived Potential Risks
9) Barriers to Outsourcing

It is hoped that the accounting professionals will take cue from the enclosed presentation and extend their services to the clients.


At present "business as usual" is continuing. Accordingly there is a crying need to develop economy, efficiency and effectiveness. The real challenge is that our Accounting Profession should get into innovation, become business consultants and help the business and industry to become innovative. In this respect, while there is a need to thoroughly study books written on 100 great innovators and 100 great innovations, the following checklist will be helpful in initiating and translating new avenues of emerging services:

1. How do you innovate? What part of the business contributes a flow of ideas? Should new technologies be brought in from outside the organization?

2. Are your innovative efforts sufficient to retain and expand your customer base given changes in their needs and competitors moves?

3. Is innovated development planned as part of the business's strategy?



4. Do you have a series of innovative developments in the pipeline? Will the results need legal protection?

5. What is the margin of error associated with each project? In which specific factor is the project most sensitive?

6. What is the impact on the cash flow of the whole business as a result of taking on the project?

7. Should the project fail do you have the ability to carry on? Has a contingency plan been negotiated?

8. How do you attempt to manage innovation and how effective is that?

9. Are there adequate systems within the organization for monitoring and controlling the project effectively?

10. Does the business have the capabilities to exploit a successful project, for instance:

a) technical, production and marketing skills?

b) sufficient knowledge of the final market for the product?

c) Financial resources (which may include government grants or other external funding)?

If resources are not available in-house should you buy in skills, collaborate with other producers, license out the final product, or arrange for another organization to manufacture the product?


Another managerial role which the accounting profession concentrate is to develop turned on organizations. The following figure lists the constituents of the roles and a checklist of eight points in this respect is suggested below:

1) Building a strong Foundation
2) Make every customer feel special
3) Have the courage to set bold goals
4) Simplify, Simplify, Simplify
5) Make technology your servant
6) Measure well, Act fast
7) Unleash the power of people
8) Lead with care


Time has come that Accounting Profession should also extend its services to Management Audit. In this respect while available literature is very extensive, two models are suggested for guidance. These are briefly listed below:


General Electric Corporation (GEC) has highlighted the following eight areas for evaluation as part of overall performance appraisal:

a) Profitability
b) Marketing Position
c) Productivity
d) Product Leadership
e) Personnel Development
f) Employees Attitudes
g) Public Responsibility
h) Balance between short and long terms goals


Jackson Martindell, founder of the American Institute of Management in 1948, developed the concept of Management Audit. His model consists of 10,000 points. Point weightage is as under:






Executive Evaluation2200


Directorate Analysis1300


Sales Vigor1100


Economic Function1000
Maximum Points: 10,000


Fiscal Function1000
Excellent Rating: 7,500


Production/Service efficiency800




Service to Owners700


Health of Earnings600


Corporate Structure500


During several past decades, several buzzwords were in currency. During 1980s TQM (Total Quality Management) was the buzzword. Reengineering was the buzzword for 1990s. Moreover, in Management literature a new chapter has been added namely, Inventing and Reinventing organizations. This chapter specially focuses its attention on Reengineering. Every person studying a basic course on management stands inspired and motivated towards introducing reengineering in business, commerce, manufacturing, agriculture and even in day to day activities.

The Pioneers


The first book appeared in the world was entitled "Reengineering the Corporation: A Manifesto for Business Revolution". This was jointly authored by Michael Hammer and James Champy and was published in 1993. Later in 1996, Michael Hammer and Steven A. Stanton authored another book entitled. The Reengineering Revolution Handbook. This contain experiences shared in implementing Reengineering. Problems faced were identified. Share of failures was also stated. The role of consultants in respect of the above management tool was reviewed. Indeed this presents an interesting reading.


The book entitled "Reengineering the Corporation: A Manifesto for Business Revolution" was a hot seller and 1.7 million copies of the book were sold out. Three quarter of a million were sold in United States and one quarter of a million were sold in Japan. The remaining copies were sold out in Europe, Asia, Africa and Oceania. The popularity of the book can be gauged from the fact that it was translated in nineteen languages including Thai, Hebrew and Finnis.

The "Big Six" Accounting firms of the world also addressed the issues raised in reengineering and found the same as workable and they separately conducted studies in 1994 and confirmed the conclusions.

Motivated by the foregoing, 75% to 80% of US largest companies began reengineering. During 1994, a sum of US $ 7 billion was spent by United States Corporations. This investment represented only personnel and consulting services. If technology cost is reduced, the investment represented $ 30 billion. During 1995 to 1999, twenty percent growth per annum was registered.

Reengineering: Driving Forces

Based on the above two books, various driving forces relating to reengineering are now listed below. Page numbers indicated related to the first book written in 1993 by Michael Hammer and James Champy.

1) Reengineering involves a significant reassessment of what a particular organization is all about. (P.67)

2) The Manager must ask a very basic question about what they do:

"If I were re-creating this company today, given what I know and given current technology, what would it look like". (Page 31)



3) Organizations tend to stagnate when organizational members focus on their immediate neighborhoods e.g. jobs and departments rather than on the larger patterns of relationships in which they work and influence the lives of others.

4) Reengineering thus involves redefining processes as patterns of relationships connecting organizational members with people outside the organizations

5) Example:

Processing a customers order (weeks, months ....Now quick)

6) Reengineering means radically rethinking and redesigning those processes by which we create value (for customers) and do work.

7) Issues to be addressed:

•Quality of Service
•Overhead costs

8) No permanently winning formula

9) Hallmark of reengineering


10) Adding value for the customers

•Improving service
•Raising quality
•Lowering costs

11) Process Innovation


Managers should imagine that they are starting with a "clean piece of paper". [Thomas A. Stewart, "Reengineering: The Hot new Managing Tool", Fortune, (August 23, 1993), P.41].


Nothing succeeds like success. The users of a management tool are convinced if they learn of success stories. For selected success stories see table 2.

Table No. 2





American Express

Reduction in annual cost by over $ 1 billion.


AT&T Global Business Communications System Unit

Nine-figures loss into nine-figure profit areas:
i) Manufacturing
ii) Servicing
iii) Order fulfillment


Semiconductor Group of Texas Instruments

Reduced Cycle time of its order fulfillment process for integrated circuits by more than half. Achieved record results.


Progressive Insurance

Reduced Cycle Time of its claims process from weeks to days.
i) Improved Customer Satisfaction
ii) Costs, reduced fraud and litigation
iii) Revenue per employees increased by 70%


While Accountants have been doing excellent work in the past, it is high time that they should develop expertise in reengineering and use it as a niche for their innovative and creative role in the 21st Century. All sectors of our economy needs tangible steps to be taken to operationalize reengineering to achieve productive results. Given the expertise, the Accountants are well positioned to deliver the goods.


For emergence of new avenues and opportunities to profession, sky is the limit. It is high time that we in SAARC region should ornament ourselves with the glorious work which is being done in IFAC, CAPA and by various professional Institutes of Chartered Accountants, Certified Public Accountants, Certified General Accountants and Cost and Management Accountants throughout the world. Indeed our interface with these Institutes, with literature produced by these Institutes and the enlightened and modern role played by professional accountants can equip us to identify new heights and meet the challenge of the topic "Emergence of new avenues and opportunities to profession".

*Principal, Hailey College of Banking & Finance, Constituent College of University of the Punjab, Lahore. Member Governing Council, International Federation of Accountants (IFAC) (1997-2000). President, South Asian Federation of Accountants (SAFA) (1997). President, Institute of Cost and Management Accountants of Pakistan (1997-2000). President, Association of Management Development Institutions of South Asia (AMDISA) (1993-96). Pro Vice-Chancellor, University of the Punjab, Lahore (1994-1996). Founder Director, Institute of Business Administration (IBA), University of the Punjab, Lahore (1973-1996).