BUSS8030: Strategic Management Account Proposal for IMA Ltd Report

This report analyzes the strategic management accounting proposal for IMA Ltd, a data processing and materials data management company specializing in ERP solutions. The report begins with an executive summary and table of contents, followed by an introduction explaining the importance of strategic management accounting for IMA Ltd's competitiveness. It includes a new market analysis identifying potential customers and competitors like SAP and Oracle. Competitive analysis evaluates the current sales structures of competitors. The report identifies strategic accounts within the fast-moving consumer goods sector, which represent a significant revenue source for IMA Ltd. It also points out potential weaknesses in the company's sales structure and proposes preferred sales strategies for the new market, recommending an integrated ERP system. The report concludes with references.

Running head: STRATEGIC MANAGEMENT ACCOUNT PROPOSAL
Strategic Management Account Proposal
Name of the Student:
Name of the University:
Author’s Note:

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Executive Summary:
This report has been prepared to analyse and understand the management accounting process
of the IMA Ltd, to identify the need of strategic management account and to analyse the
importance of the strategic management account. Strategic management account is the
process of estimations, forecasting and evaluation of cost and management data to help the
management in making various business decisions. Based on the needs and importance of the
strategic management accounting, a model of the strategic management account has been
proposed for the IMA Ltd.

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Table of Contents
Introduction................................................................................................................................3
New market analysis..................................................................................................................3
Competitive analysis..................................................................................................................4
Strategic account identification..................................................................................................5
Potential weakness with sales structure.....................................................................................5
Sales structure option for the new market..................................................................................5
Preferred sales structure.............................................................................................................6
References and bibliography......................................................................................................7

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Introduction
Strategic management accounting is the process of evaluation of management
information and competitors for helping managers of a business to formulate strategies in
order to remain competitive in the market and to achieve the overall organisational goals of
the business. IMA Ltd is a data processing and materials data management company,
provides various integrated and complex accounting information system and ERP solutions to
the large scale manufacturers (Ojua 2016). There are various other companies in the market
who are also selling like products and services. Therefore, to make a competitive strategy and
to remain competitive in the market, the application of strategic management accounting is
important for the IMA Ltd. In the following parts of this report, some of such analysis has
been made (Abdullah & Said 2015).
New market analysis
IMA Ltd provides data processing solutions and complex accounting information
systems for large manufacturing companies and mass producers of goods. Therefore, the
customer base of the company mainly consists of the big manufacturing companies. Some of
the existing customers of the company include Honda and Pepsi. New customer of the
company will be targeted to some big manufacturing houses such as Coca Cola, Ford Motors
and so on (Ojua 2016). Some big manufacturing houses who do not have any reliable
accounting information system to manage their assets and inventories will be the new and
target customer of the IMA Ltd.
IMA Ltd is known as the materials master data processing solutions, provides the
assets management and accounting information tools. It is provided in the form of an ERP
system for the organisation. Sometimes, the company take the responsibility of data

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management and maintenance of the ERP system for their clients. There are various other
companies such as SAP, Oracle, Intuit Inc. and FIS Global, these are the companies who are
also providing ERP solutions and accounting information systems to the companies
internationally (Ojua 2016). Hence, these companies can be considered as the competitors of
the IMA Ltd. SAP can be considered as the biggest competitor of the IMA Ltd as they are
one of the largest and well established brands in this market.
To sell the newly developed SAAS based ERP system by the IMA Ltd; at least 10
customers are required to reach at the break even. Most of the customers are located in
international market or in foreign countries (Pavlatos & Kostakis 2015).
Competitive analysis
In this target market the IMA Ltd is competing with the ERP system provided by the
SAP and Oracle. Hence, they have to develop their products in such a way so that it becomes
more attractive and competitive to the product and service offerings of their competitors.
Analysis of the current sales structure of the competitive brands is an important part
of the strategic management accounting. Most of the companies provide a complete set of
ERP system for the organisations and those systems are mainly generalise in nature which
can be used in all the business (Ojua 2016). The SAP sells the ERP system which is being
used in all the department and sectors of the company with some customisations as per the
company requirements. Hence, the biggest challenge for the IMA Ltd to sell their product
which is only focused on assets management and inventory management (Abdullah & Said
2015).

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Strategic account identification
Big manufacturing companies in the fast moving consumer goods may be the new
customer group which can be identified as the strategic account for earning revenue for the
IMA Ltd.
This customer group represent almost 20% of the total revenue of the IMA Ltd. The
company earns revenue by providing ERP products and data management services to the
companies, and the large scale manufacturing units gives the 80% of the total revenue. The
newly target market consisting of the fast moving consumer goods manufacturer may give
almost 20% of the total revenue of the IMA Ltd (Pavlatos & Kostakis 2015).
The IMA Ltd is mainly dealing with the SAP which provides integrated accounting
information system and ERP system. Companies in the target market mainly use the software
and information system provided by Oracle and SAP.
Most of the company provides subscription based software and they are being
managed supported by the technical team of the vendor company (Ojua 2016).
Potential weakness with sales structure
The IMA Ltd mainly focuses on the assets management solutions and inventory
management software. Therefore, the main weakness of the company is the selective and
focused product offering which might not be suitable for all the companies and it restrict the
market span of the IMA Ltd (Pavlatos & Kostakis 2015).
Sales structure option for the new market
The new market consists of mainly the large scale manufactures in the fast moving
consumer goods. Hence, they have a requirement of inventory management software, assets

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management as well as accounting software (Pavlatos & Kostakis 2015). Therefore, the sales
structure in the new market could be to sell only the accounting software, only the inventory
management software, only the assets management software or to sell an integrated ERP
system which covers all the data processing and provides all the information needs of the
company (Abdullah & Said 2015).
Preferred sales structure
In the new market, the preferred sales structure would be to sell an integrated ERP
system which will be processing all the data and provide with all the information needs of the
management. It will help the IMA Ltd to remain competitive in the market and to capture a
significant market share in the respective industry (Abdullah & Said 2015).

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References and bibliography
Abdullah, N. H. N., & Said, J. (2015). Enhancing the governance of government linked
companies via strategic management accounting practices and value
creation. Procedia Economics and Finance, 28, 222-229.
Carlsson-Wall, M., Kraus, K., & Lind, J. (2015). Strategic management accounting in close
inter-organisational relationships. Accounting and Business Research, 45(1), 27-54.
Doktoralina, C., & Apollo, A. (2019). The contribution of strategic management accounting
in supply chain outcomes and logistic firm profitability. Uncertain Supply Chain
Management, 7(2), 145-156.
Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2014). Lean manufacturing and firm
performance: The incremental contribution of lean management accounting
practices. Journal of Operations Management, 32(7-8), 414-428.
Ojua, M. O. (2016). Strategic management accounting practices among indigenous Nigerian
manufacturing enterprises. Open Science Journal, 1(2).
Pavlatos, O., & Kostakis, H. (2015). Management accounting practices before and during
economic crisis: Evidence from Greece. Advances in accounting, 31(1), 150-164.
Sunarni, C. W. (2015). Management accounting practices at hospitality business in
Yogyakarta, Indonesia. Review of Integrative Business and Economics
Research, 4(1), 380.
Tappura, S., Sievänen, M., Heikkilä, J., Jussila, A., & Nenonen, N. (2015). A management
accounting perspective on safety. Safety science, 71, 151-159.