TVM
TVM material to be repositioned 180715
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TO DO ... update images to be more relevant to the subject matter
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PROCESS IS EVERYWHERE
The efficiency of PROCESS will determine how well the WORLD works
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PROCESS IS EVERYWHERE ...
NOTE: The PROCESS is equivalent to the NODE in context / entity / relationship diagrams. PROCESS is the NODE that is at the center of all person built activities
PROCESS uses inputs (labor, materials, energy, knowhow, natural resources, etc.) and in the process degrades the environment;
PROCESS produces PRODUCTS (goods and services) ... outputs ... that enable good quality of life and living standards.
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EFFICIENCY AND EFFECTIVENESS OF A PROCESS
This is more than PROFIT ... it incorporates also impact on PEOPLE and PLANET
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The EFFICIENCY of the PROCESS determines the IMPACT on PEOPLE and PLANET.
EFFICIENCY is not only the PROFITABILTY of the PROCESS …
… but also how much GOOD IMPACT there is for PEOPLE …
… and how little BAD IMPACT for SOCIETY and the ENVIRONMENT.
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CONVENTIONAL MONEY ACCOUNTING IS VERY POWERFUL
HOWEVER ... these accounts ONLY describe economic activity in financial or money terms while completely ignoring impact on everything else.
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This graphic shows the relationship between the Balance Sheet at the beginning of the period (BOP) and the Balance Sheet at the end of the period (EOP) and the Profit and Loss Account (P&L Account) for the peiod.
A core feature of double entry accounting is that the change in the balance sheet from the BOP to the EOP is the same as the profit for the period shown by the P&L Account
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AUGMENTING CONVENTIONAL ACCOUNTING TO ADD IMPACT
How the TVA data architecture adds IMPACT of the PROCESS in an easy and rigorous manner
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Add the GOOD impacts to the accounting, analysis and reporting
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Deduct the BAD impacts to the accounting, analysis and reporting
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Have GOOD and BAD impacts together
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TVA FOR THE SUPPLY CHAIN
How the TVA data architecture adds IMPACT of the performance analysis in the SUPLY CHAIN
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PRODUCT AND SUPPLY CHAIN
… The MONEY dimension of the supply chain is routine; however
… The IMPACT of the supply chain on SOCIETY (PEOPLE) and ENVIRONMENT (PLANET) are rarely implemented in a coherent manner.
… This is very big next step!
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NEW SECTION
Sub heading
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The next slide shows …
… how the money P&L report describes the impact of the money transactions on the money balance sheet of the operation …
… while the IMPACTS of the operations on society and the environment are ignored because they are outside the reporting envelope.
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A better framework for reporting would be this …
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So think of all this miniaturized:
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TO DO ... CHANGE IMAGES TO REFLECT PROCESS / TECHNOLOGY
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NEW SECTION
Sub heading
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So think of all this miniaturized:
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SOME CONCLUDING OBSERVATIONS
Sub heading
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CONCLUDING OBSERVATION ...
… more than anything else improving the EFFICIENCY of PROCESS will change the trajectory of global socio-enviro-economic performance;
… in the past efficiency has simply been about less COSTS and more PROFIT;
… in the future EFFICIENCY has to be about better QUALITY OF LIFE for PEOPLE with very little of no damage to the ENIRONMENT (PLANET)
INTEGRATED FINANCIAL AND IMPACT ACCOUNTING ...
… integration of financial and impact accounting will make it possible for very much better decisions to be made.
… high efficiency can be rewarded and there can be social accountability for bad practices and low efficiency.
CHIEF PERFORMANCE OFFICER
Maybe in the near future it will be possible to rename the CFO (Chief Financial Officer) to be the CPO … the Chief Performance Officer, a C-level position that integrates financial performancewith impact on society (people) and impact on the environment (planet).
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