By Kazim Alam, The Express Tribune
KARACHI: Cost and management accountants should manage processes, instead of managing budgets, to optimise organisational performance, Getz Pharma Supply Chain Director Hanif Ajari said on Wednesday.
Taking part in the first video conference organised jointly by the Institute of Cost and Management Accountants of Pakistan (ICMAP) and the Institute of Chartered Accountants of India (ICAI) on “Management Accounting: Trends in the Subcontinent” at the Karachi Branch Council of the ICMAP, Ajari said that members of the ICMAP and the ICAI should be recognised across the region and allowed to practise in both Pakistan and India.
“If artists can move across the border freely, why can’t management accountants?” he said.
Citing a McKinsey and Company study, Ajari said that 90% of companies failed to sustain cost reduction programmes because of inefficient processes and change management.
Traditionally, management accountants may have been cost advisers, but their role has undergone a transformation in recent years, as they are now involved in process improvements, redesigning performance matrix, process automation and outsourcing, Ajari said.
Global supply chains with longer lead times, increase in the costs of logistics, and unprecedented volatility in commodity prices are some of the major challenges that a management accountant faces today, Ajari added.
Addressing the ceremony, American Business Council of Pakistan President Saad Amanullah Khan said that Pakistan was ranked 22nd among the top 30 economies of the world based on purchasing power parity, yet it was the only economy where agriculture accounted for more than 20% of its gross domestic product (GDP).
“This split highlights the fact that our industry and services sectors are significantly underdeveloped. In an overwhelming majority of these economies, the industry and services sectors account for over 90% of the GDP. To make sure that our industry and services sectors account for 90% of GDP, it must grow by 2.5 times its current rate,” Khan said.
He said that the market capitalisation in Pakistan as a percentage of GDP was only 22%. This is in contrast with Malaysia and Singapore where market capitalisation in terms of a percentage of GDP was 173% and 166%, respectively, he added.
“Instead of an increase in the number of listed companies, what we’re witnessing in Pakistan is a wave of de-corporatisation,” he said, while referring to the companies listed on the Karachi Stock Exchange, which were 637 in 2011, down from 762 in 2000.
Published in The Express Tribune, July 19, 2012.