CASE SEVEN Wisapaper: the role of management accounting in managing customer relationships! Vesa Partanen Marko Jarvenpaa Tero-Seppo Tuomela once Tot pope sea thi snp tough As eo he fons Introduction? UPMKymmene Group In th sary 190s, ania frst an paper companion eed ob i rable ‘Thar was» al inate betwen heii of heey inverter [ptt the 1a andthe gl cnn devin ath Fgloning ofthe long ‘ica, which it land epetally bard Tho pape usy made lee ‘inde of mills of aro ev thigh bo comeesbl evaantony of he Fonah Man were tant lat node fo ee the dificate bog eer ‘tend by Freeh compo sper in the et nds. "At the mane tine, competion ax homing more and may intense. Athough fom + Banish point of vw, te kes induty had amon of ‘he most open ser ofthe nish wean er he Seed World Wi ox 7 Wepopr| im bslcion of exmpatin st nw chslage, Wil he cst fciency ofthe ‘Finish ores industy has waitonally bon considered ery sods te ee eg" sulci Oder metho improving proftabty wun Milo snpinicatons wove considered tobe an ayo Todor the excess e2quiy and to rspond to the compete ckalangs, The snncuncaront ots ‘es btn Und Paper Mile (UPN) and Kymmene fats ee a ‘he Bigs forest industry eaters a zope, Atte and of the Jt LUPMeRymene Group had a ol of 814 employe, ‘The company’s turaver in 1047 wat wl we 8 bon Ero (USO Bon, ‘ne Gop makes papers rg Ke een akg cto al eon per products ar sd manly thong de Gps lesson ‘UPNKymens a aiming a sold proftabity td mong blanc het over ‘he next ew ets The angutet of UPM-AYatone ha et ong sbiy tart of 5% tam on etl empaye by the dione nn tel te “This t vngoeturn om culty wich oxo sk ern by ne agin. The Grp hast age fr et to sas ato test ae Pe nS ga th et tre ou sess whi a er impact onthe company's hae pies, According fb Natl roe ‘GED of UPM-Aymiene, ho company wl Heeghn Ils mt pton Ath Xskeudy hs strong postin In Burp ann HU marca, Bee isaieu or Urs-Kymeae tac rt shoots Europe heed to move beyond turope and ai signienntsoqustions and abet fone ‘estes onan ih Unie tt 1097-rNcet fre se, a ay rn hig compton within theft nda. eee amtbferctaoc! dmi a Wnopaper {aye sour busin wot Pas sl te o te wt au of Fan «el (Water pall (Wop ape ant mil and paper mal (Wasps Pe ese ar sl alo Weopaer a operon mo ndpent gn cat OR ett ig tla pes a8 pnd ‘The vl china Petar compress pulp mil which an important ‘spp of tow sata o Wisspaper al an need operenoery ml wie portant tome f Ways (oe Fae 42h Wee ‘ets pacing teal fr bo ven an tr inde the ‘ln prc hing whe ac, Bown ih, we lau and Taa ont reget oxart oe tpt vo eestor Seas = a wane | ar 7.) The comer of ae a fr el at tO Patra i of Cigna rane, proc rcalomied according cose neds, Compre ting aod tng payors, domund ad piss have wn stab, abou hee to sgt dillerencr between oidul product During rst rs th Imutat for packaging materi har grown soy and thin pt and i ‘pected to canine sing tho 100s te prota of Wispaper vari considerably. 008 wat 1 too ou dhe pe ofp extreme igh In 905th pia pap Wet dow, whic allowed ssn ext inthe pacing goley of papa. Hater eftony in tons af iproveditleaton of spy cult ot hs high demand, with the whole pachaing mater uvtson operating st 9% capaci Since the veal een was very good at Wipes, return on ‘ait employed ono over 40%, well sve the long 16% trp the ‘Group. Sec ars allow company managers clam tit Wha ly ‘he bigot atthe mot poo ka pps il oa gh ‘Cray; manage at spate ae thet i ede ont ficiency in Europa. A pee stage tre or flrs yee Yo aia ttn we one potion, However the sanapeen! of cstre latonsp a the ‘amen perp evn or portant thn ot fn. The elle ho ‘ital sero fac and i late pte ta eben Mente by ‘Wospuper mana gre 12 Tre cre roe ont eficoney 35% aati 3% Tae io (ht fciency and cantar srvon a ls inne. For eam io he ‘stun of 1, paper machin wil be rie mad Whe one ecto flats to Improving eficioney, anther aim tet ecbenon quality and esl geo oa oie fect onthe way ctor pce th oman aed i podate al mtn in mation, pao fin int i ah ime ane poe meen ent oe pcan ua sn hy isn it ts ny ine ne ‘oe moderation of proton machinery inal «sop in potion, Tas ‘oak lating fr sever! enka, Impose tallnge tn footer toshno Cae a meget cen ‘aoagement. Customer shold serve aecoing lang erm gent evn though production vane nsf. Soi bt ste tpeaties an ‘porting reste that mo tcl canoe relish anagenet Ky ‘cae or forth company. “The management of customer relationships The end of joint morketing ‘in hebagianing ofthe 10a Finnish paper predate were matte hough ‘ho Planish paper making sociation, Flnpap found tn 1016 te Font mamkcng of Ps pape Hosene tbe kon compat sittin a te "tht placa mae some Fath paper compani quien thy mi of belong {agi jin markt rpaniation. While Frassh companies bd neon ot rot range th tl for markt shu had ocr rately In 190) jms Io Flanpap and sre to race own prod The sin west Dd tw makes wa to adios» parca ure folie Wepape, pt of the Kynmene Group at fro Io ule fend iar st Eutomer and to mk dct coca with then. Wile he oaion af estos Id ales gine sre mores a Wiapeper he elation rom Panay os the fina motte ta adapt re castor fons Sen Ste, Martin nyc ase a tw itd bat ‘ean si cps Tile ee la ino sch file oe tse company the cua and roy ay tore ening mao al The marketing partment of Whippet opts bi iy wth asomars nd ‘hough spatte county o rerspete slr ane Sale fons lost ‘wld sling pds rom toe whole Groep and providing ston se {nth rao, On th oe hand the calor loa ‘ha thy prvi xslt comer sion oso cat ng ton ‘vit cantare of sata ngtance On the tes hen, iis crcl oe Tafomaton about custmer om ser een and to dba tought auton n sorch of customer focus: TQM and process monagement ‘Aste yous be gone by, ne munagement eso ve bn itd ht fave it nk ecco en otal quay manager TOM) Hone ia Dine TR oii RULER oe 7 Weer 1 Tatar enone seve Tore Tora Tape Tae Teddeawor —*Guc dan See wiring Sonertatner wang cody sete, pis ee 95 Resor one Sinton “ane PIA ag omotitesitn hastoy ite ieee par Toerenaand —SGCW1MI986 Te have bun promot. Within this teolgy the need to die quality fon the ister perspetve has bcs promin. nade sds algal tue ‘St rns, dle kind asad and acon plans hare eet oe Thin 7) Some yur ap of ea o TOM. elt as si onpower employe Oy ebbing tata pple, ne ‘Wit projet fled o tre npn a eam ot working ths os Nr by fatal organ sauce ‘Wl srelng wih pros of TOM atc led managwnnt ely ‘nad ieesing tention ofa waste Wintour tt gh Ud the end top procsted aking Th Cust Manag a Nosjpe Cl msi ‘non tht only by focasng ope cl quot be uly pred Sen ‘its this rote naent eco ust e ot ey inporanes A Presse ater ier intra exalts meet sn ‘dred ob ny ali ota tl guy inking wt Wipe "Ba manage cone and wae Co ‘he impementston of proces uname pecples speeding “inl by ite Cre procs ave ws tied wad wes oes es ‘ethan st. Ponce have un lsd nlc prosei nt meget ning “arene praising Ware pt on oe ‘the soe Sil anton bears Te is a te tts change the way fing (to prove wring the fn tims and prove oh i amp an hs Hage ou fer ft pci and In atone Th nnd to doy proceed ay ‘ih ht tbe mc elt ear ‘gunn. Mr Wontan consider ery Inporant fo ald lncrpoting Unrasobleexpcatns among employe, exp wher he Ea of te ‘stam poe lel hn th ett these estan vd top manages el ht projets ay expand to ft a 00 widely en stents py ay role "Th slog of yee oes Is eel a in the implemen of prec be thining Tp. top manages tho fener ave {loo een put incr of proces, Who seme managers ove ited th co er about nitingindifleent mec mead 9 al dag wha ty Should do the dsign of pcan manag! inplemetaton i yf he had of the cae ep a,x theo Me Wena, ality Manns oft rm, hexane Suess option af tal gusty princi inguin the fictive use of pr ferme sures. nodes to eth ¢ tal quality entity, prance sani should abo eae poco Mr Weviman seas aca (Glaty managman mie perbnmance mes hak at ly my ‘el ra pa, as inl ‘hen tigen npn er a ne pa he en lh ih et sins em ny ie St sk tama ‘Aho process of Wiaplp and Wiper ti ineeonnend and tea Unk lk have same commen proces — ages Wiepulp snd Whey ce 7 paper bn ae davloped press managment psp tgehor Managinet acount pb ay tle in the dolopmnt of perf esas wn pics out. fohan Hopubbe, the Vierpesdent of incre. and Inert ‘Mnoement hw dfn lane! serch ebro a he tee lnestre: owes moma, customers asin atl personel mess casita wich a peforance mensrent sinew eal igh Pes {ainsi total quality ahd prcsace wihin, Meare te seas ean dined andthe austin moat ase bogus sun a ee ‘te. ‘Owes measures ar calculated monty, ining sb-ROCE: en, on capil employed gus forthe two core poss marketing tl proton Ta ftps sto inion which component he RAC Rees Se ogee tate, The inact off the procs ners pit iw) uncoeibe Sdrmponents athe ROCE meat slminteds The io sata te oa lable art an ve ends of dovelopment within atom startin Ings sepiding Hoh predrts and seen ave bn chs tr epeset the casey rspctvf ih marketing poco Fre pot eens cutee ners ‘esa tl undid Prroane ever wl a be te ny tn otto elelate parson ose for butte cow pct, Die ‘as fo eommon proce hae lobe The develope af putamen eat a ay sk wet ont ‘Mr tiga os wit Me Ws i th fap of potash akg us. tall promo sly Bt heey soe diferent "eect the earn rg ve ROLE she sn i ee a ‘i ny hp En gh ea sh HO hy a hey at Wate, uly Mana) Customer segmentation ‘lth same tne (ta quality lated ea hin namentun tue ‘urd approche en adopted inthe maagrnent fasta elton (te of the most vlsble fmewers in stabishing susomoraremel kg tne tev thn avin of ester nto Bie soup Par ey etm Spell Hulk and Otis. Castor speattion tas bo mai wih nd "stmer stele importance. For example cscs tn at sel ingrtnt, bat are needed to geome sot pesducton vole ae nile Bless (further dtl a Table 72).asi RERTUD eens noses asdiiddnrainArARliteOTTE meinem 14 oes m menage acting Cone 7 Waar bs 72a mene fn proce ie 13 Ore camer ene Wiper per Ooh ea Terma even taro! me er ae = = a Fire ROCE win eral anes Une naa Bao ee Soe one meh poset ren, nee Some geomet wong Meat” Sa, (crayon ‘ipod Snel woe Soom stan viens ROCE wena Cato ton gy a mae pede aoe ir ce see) recon pads pre een, ence fo ence ncet yee) fre) pay flak ronnegive —medtraih spe Rivne OCE nthe ince Caoner nerves oe prof ebue ot joe hme pein wth cago Atvvmted flowy ated mena) forte tte presen mprdia Selgin ‘Sree sera) ress Bitjery nome che pe lye AOE ona ance hay rest_init on tenet Sa ae ‘ion inind Gore fte soteknr eso meres ens Tey ee Wh dene Tepsiy We ih eve ho ‘erates eces mena) Bry etwetigee are femnte wendegio” atechainds aeyrteta” mcg (creamery ‘atte douop™ lena tny oven mate show Se ae Sectiee te, Roma monty rt ey yo —_ i reed ote pros (cee (ore "omer hs waeton dow also hav an ipa om seme spe tos. a (Scene) "lng un, Othe wl be stad ih teas of rng nd Fimnce Cain ottow pence! gay refcy gy td rfl. On specie oceasons, whan dem nce caper protson Sit mene ‘iy nd sete prt et {age o Pate ey casioners and Spel este, whe ak rstomer me ase edt prom onesps) (oes ‘pally aw not provided with ll oe gues ty woul Soares rs Ste poo om = [theo of ecm bg and opel when ht nh dad, Teta Con aro nr eames yd on ‘yf tang on lange ay at Powe wh cet me ee ‘Som win oa ot pricy tte acinar Foaua(eaesyes) freee ‘an pedson bs phen wee se mig wv nuey One deceeny andi ay wat ny on wo we on ssp tat woe eas afr rates ae Fredwcon Sates canmectanptes ocean) fence a ‘nt ith group Ctl ea pie Cee oerdre cr nco (ere rvtuine_poucn (cena) Siren Slt, the Maretng Dic, dsb the mang of cstome eget ‘im clit ay tft ong hang {nh ea feces capt ther areal teins pro can be sold thao Others the pepr ml as bo ppd ia dys Both othe ern Shave bon ed i scent yar The Saeco fife sons tie twin our Soon St ues the ales snags gt st ey ‘hgh th it astomer by cstmer and decide wht ech usr ‘Arosa for custome tetany leo em um tho eed fra pes In erin reg Counties. Ths re counter wehich ll eaters af any10 co 9 engenetcng srg oa yc tu gts ue Bt een ote hil ey Rs Curent. then tmp combine rent sores of coe infomation int my warnings ston Tho major oto this sealed ‘byw nip rhe an to aa andl normaton sn hn i a ptr a tr rr iy merging tea hangs th mt pace, Art cbltv to nly ‘Stomp tds mcg ctr ho a td ney by he semen apa i ein mesa ‘hing srodg ta arn contac eg peyimuns sr contenant Wh the overall rapoity fr devlopeat inte hand of markt Drool, he rl ef matogerent scoorants so acrporte atl aspects strc elton thiol ye, ten soe fs shold ‘ime tfew he od he, Managing customer relationships: customer profitability information| elo of css yen a sion ‘Wsapopehoweer the nod fr eprned slaty and cerecy of ser profit iiorwatn bar ements th pon caroner usar Ey syteme of ester pot ifraton provided only cru and soma dsorid infsmation.The esrytaplmotte acy Std ml prover moe scuneinlrnto shor Cater otablly to Sate Netgear Wiespapr top tnnager Sales fies resented treater pri Foe il poesia of Thess wil be and ‘then ied customer poftty iron, sed on acty-bd conng Hincples ie cieuedo nivel lean thoughout ews oananton arte stems for customer profitability enalyst ‘sth propation of tries th adit igh for many yes i sre appropri to wo oly direct cvs fo champ asain ‘Tir ntral emp on stil cot erent inte lative at stort ‘Wisapape wich canbe esrb in treo ou ot cage? aw matecne os Dect and indict production conte 305, See a Eee eee eee cae Weapon by Sah and Gens Admins (886) 6% Ponah me, ‘te beginning ofthe 19806 only det mtr cnt and ght cost wee {ced tiated andcheeby ta ifn ctr, Cees cea sukcing cose and anise cot were tt renga by tls yee, iw vale conig stom crated mat of ho ts Weer nd In 190 the caster profit clstion was chugs that production sai adsinsrativa overnads wer lacie to urdersomets scendig ‘machine hours, Machine hours wer considered a appropiate ct dey [eau thy ae he crcl une which areal cases Sg (Gnd making cts wae aot. howe act a ato ek ane ‘ws chage for wey dr to cove salar costs, Came profitably ted ae ‘is fall eoting sytem wan repre on a quan ec wet oven vised epeting yao caused doubt beans manage et ‘hat om sme serasios 1 produ al whith wae nt ane wih cree ‘esse hiking In eal odes th manfcsuring Vie oe ton I lately oy ‘hea sp ime which meas ht tect som sl beh Thee tt refected in th anda enting yt aon tot the atively age [Snountof fot pt by sles pop nt geting sal orders could tut be ea ‘nthe ena pf ifonston Minag athe pesson tt hs ‘seth an inevinle of ro, coment they conser ual ‘Stones tobe es prota dan show te pb tpn In then eter syste, caster prot ropors Were mally ‘ated aloes, sine eo ropa indented nly eo l peti nid cst, As the aoe cates oper in diferent cots with ‘ocala fens, stoner profit nfraton coun level a ier ‘sta lcs wasn Ia these Origins of ABC-odoption Johan Mogi, the ice presidnt of asa and afarmation Managemen, becioe wry nerese inher des a nt crntig sn cot manage ‘he tnning of tho 109s He Bal ol sia ok rete a ‘etsy eating (such ae Johnson td Kaplan, 947, Reeve on) and woul hv ed to ntoduce ABC ot Pataca ite. Ces mange, however, ‘pied that wits castng ves perhaps appiable In sompenta Ths nan or Kath bt nt in te fret ay bens of th low pep of etd cnt and tho elt low potas sd poet vey. Tepe tao tr investigations and found out ht Comite A war ung ABC ‘ome nas nits. Hegnabb cota th company ad eave fe ine ‘loo Halve rontac'« couple af wil kno ABC constant a aidShem onus ABC. The pups mt emia eher manag he Monn of AN pc na Hewat sl iach meg at Wr sl Petar wa a wh ‘fan edt aun ds naa cme spec In ‘hecamarcon indy At tin Wor was chon ns lt se eater “The ABC tn ot Witt ws ged mai by MS Tach) ae, ‘Ma Wao pao i Maes thes mpovents th eon Crs ruling oe ee AC Ifanion wee emmdetisFin ae {reduce wer bund ots pete npn weet dev pe Stren r es ati bg ued wn ral ern oR Scand. two prfton stg mete storied Snare he man ‘Sig poser free pns eeie en th robe ees Spotrnnd Fn he py oe ing pwede ae ‘agen eto tose : Winner th npn of cv cot ld posi tcl cola corn soon ray mening wy wes and ot at those nar wh wee pun ats ps NH le ed Sul ery ri tie cs byig our hte vol ‘eon npc: Co poy ws acy hae ‘Erna of comms so whe tiny were domenica, Toe rc fel canter quotable in end ese of Fs Mita eatemer ee Spey wry pb, we mae ine sere ou anon gener Wie aan apne cnt [lpatiny o Wester two te eet damon esos oe Slaton Sal nl gue tre wet son et mos pera ‘ig cr oligos oy Coat wi tse ap Pans Comes wre soso nm pt aan! i AB seats wee angus hw nto opera eds ilo om ho oa py Al th sto tk as Orewa prc wch Was war gdh et {bison nthe Gop hn of wet cna Me apa Nate tnocton of ABC wo a elt ne of Wipe “The introduction of AB for customer proitablty analyse Inte ste planning pros fr the ae 888-199 Wiper, the adoption ‘fact sa eting watoccptd aon pats aieten isting wa taken by Me Higa who wa ral wourage by the aie seca of ADE ‘Whatimter rarest an ADE dolopnnt pet wns enced In Foe ‘oan taf desing tho patel lation wana, cpt tM Vist, who hd by then boo proms to Manager of Financial Maing ‘Acanuting at Winpaper Te plan wast lbh nae cating seer em 7 Wop ut sudan ot cust county a product evel analyses to eek tho cores ‘timpresions about th ate proty eee he st sop wes to eat diffrent sine ou he company, ‘ety This ideation ade po teat matte prot tine» et pte tnd opr posing in in tlocang ea Feta fend sins cont th sale an rhting function, the sty ease ea tht he tase ve dfn tines er ning 1 wong at ier! cso th ates naga aifrent wap es ‘ee lon aati eat fit Kinde a atone ose igunongteenrane ‘rise end satya, Wile the poo sen of Custer rosy The roe of the improved customer profitability informetion AN Bat ghee, the ushbos of rang customer profil ifemation ‘wth ABC princes may on to bo Ici Mal Vth gore(arena oth rece tr fe sys, himself questions the ws f ABC for tuning the angen of cas In th same en, he ars feasts potty aration ee the pat of the sta spt gio mg us ite oy. Aa he raat pif cna oe 7 Weapaper rs sly he each ha Yo be apt pie te we ave pies on nts ih pe Poy ol er Sae Mag Dose ‘cuter profit infematon serves, bowers, buh state and optional prs Iie tao fs of occas when, br exaeple mpwestig ne ‘isu Noman ustxnrs th por profty ae ely be alld ‘ther The csioatin of easton ct homer sly dcated by poe ‘ly Lange cstomors wits moderate potty lle pagent es {npartant shee they seo rake and ve peat in Comat, Te fase tis tikon no contro: om unproftte s could be tliten Sere ‘thy might tara ont to be very praia in he fate bn of ew tna tons Nowra, customer roti infra eres an ana ats ferevch sondern "tho opens ee of casa proibilty Inormalion i also portant ‘onus vals companios ar Infrmed aout ‘t estones” rail Lowen ester proohliy eign lcsions ih he slog Company ston, oun To eatons ith the cle sou! pie oly tr (Guatitis an feueey of sing oders scaring a nerctone ele tie muting dpatmert ftv company fe however, ot posi to are ‘ny upward fie changes by «eno cso, snes tn emptor mptive songs ae eltvely en tad ear mt lds The ‘hangs in quinten and fequency of daerioe tor example hy profi Iontiy onl ne bt isto of two) ae thar seo gl pono improving {hprottable caster reaonshipe eine cst roi nemtion i een etal ob us in preparing far te tus qt kl ht tho importance of acon seen lnevan a Wispoper mows town nddesig th el ort cstmers The atv based sytem a ley sme In ning sone casts oe ‘ator tesa aditantothi hn ty oe yt expe hake it possible liginze pennant endef spre caterer Sofa, decisons with such rata congequeness haven bn mae ba In no ‘eine suc dchon it trey tobane lal spurt erat oar make pee fl hat cng ell aunting rs sl be ‘paiva re enna ‘hci, ihn sr, Maas amin [Mr igntin sie the implementation and se of activity tase esting oan Imparot ol uestonng heer sao ptons ‘aor t Hagb, Me Piet of ane ren Magan EEE EE EES Uae EE TEETER ORES EEE‘utaiy iron The cy sew bl alo we {Shun of cuter grftabliylfomation (ould be a Atte we to ‘healer oes) hich nt nce th ait of specie atone yin of en ce i Endnotes ‘nnd one Heuston sl ie Sey la ney out haat ther wl esa se ‘rt nse oh ching ee wpa A 108, Ay mg “Itc rir ha riya ne tin Nea |. Enhat de conection betwen TQM. process mangement 2 cater Ess SgEs ete eEOOTCen TOT enTO Oven OveaTTCr TOPE Ter veer Terre TT aeeceee nee ooo oe 7 pepe us a ‘The management of ustomer fo focus Od te popular mragenent "aeloga’ npr each weer ise? Desc the to sted at Wiper or manag isomer ratory, Hom were thes fol wed andor what pupa. wae these toolset ‘a orer to etancecstemeroferaton or canal tome oa or Soa Customer profablity anes ad active based costing: reasons {or adoption Do you thik hat he creumsanes in wich Wiper oper el ‘ant or ABS spon! Wy scones profily reporting rin with sci aed om: ont What do you thnk stout Maal Wiens opnc th ater rls shouldnt be inst oe ses? Cusomer profitable analysis and atvey-based costing the new sys Hom doe See way of aeting castor priya exch tn! Why di he prot fies of cutoners A Bad © cage nt ‘rene way Ge the ped ‘aa te prot and car ofthe form of cuamer pea rai, How shoulé Winpiper marge ie ctr poy formation? ‘Win shoud hy do wih camer Bnd € (se Ape? “The role of management accountants How mporar sth ol of mangenn acount n maa ester focus Waspape? ‘Wat do you thik stove magnet secur in 0 became eve ‘anes pares! What ie equre om maagenan coum othe ‘rpntaon! sarin oder sche arg!