MAC4863/501/0/2021

Tutorial Letter 501/0/2021

Enterprise Strategy
MAC4863

Year module

Department of Management Accounting

IMPORTANT INFORMATION
Please register on myUnisa, activate your myLife email address
and make sure that you have regular access to the
myUnisa module website for MAC4863-21-Y1.

Note: This is a fully online module and therefore it is only available on myUnisa.

BARCODE
 CONTENTS

Page

1 INTRODUCTION .......................................................................................................................... 3
2 BRIEF OVERVIEW OF SOME TOPICS IN E1 AND E2 WHICH MAY NOT HAVE BEEN
COVERED IN YOUR UNDERGRADUATE STUDIES. ................................................................. 4
2.1 ROLE OF THE FINANCE FUNCTION .......................................................................................... 4
2.1.1 The finance function plays three key roles: ................................................................................... 4
2.1.2 The role of ethics in the role of the finance function ...................................................................... 4
2.2 THE ACTIVITIES PERFORMED BY FINANCE PROFESSIONALS TO FULFIL THE ROLES ...... 5
2.2.1 Finance activities from information to impact................................................................................. 5
2.2.2 How finance connects the different activities in the organisation ................................................... 6
2.3 THE STRUCTURE AND SHAPE OF THE FINANCE FUNCTION ................................................. 6
2.4 BUSINESS MODELS AND VALUE CREATION ........................................................................... 6
2.4.1 The concept of business ecosystems............................................................................................ 6
2.4.2 Alternative approaches to business models .................................................................................. 7
2.4.2 Business models in digital ecosystems ......................................................................................... 9
3 CONCLUSION............................................................................................................................ 10
4 REFERENCES ........................................................................................................................... 10

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1 INTRODUCTION
Welcome MAC4863 students. This module is based on CIMA’s 2019 syllabus. CIMA did rigours
research on developing the new syllabus, they conducted face-to-face interviews, roundtables
and conducted a global survey including more than 5500 finance professionals from over 2000
organisation in over 150 countries. CIMA did this in order to acquire an understanding of the
management community’s needs in a digital world. “Re-inventing Finance for a Digital World”.
Go to the link below to read up more on this important topic.

https://www.cimaglobal.com/Documents/Future%20of%20Finance/future-re-inventing-finance-
for-a-digital-world.pdf

Assignment 1 is always based on your prior knowledge being your undergraduate studies
however, you need to be introduced to the new topics that are now included in the Operational
(E1) and Managerial levels (E2) of CIMA.

E1 Managing Finance in a Digital World

Content Where to be covered

A Role of the finance function Brief outline in this Tut 501. Will be covered
in undergrad module in the future.

B Technology in a digital world This topic which will be covered in

MAC4866

C Data and information in a digital world This topic which will be covered in
MAC4866

D Shape and structure of the finance function This topic which will be covered in
MAC4866. Briefly covered in this Tut 501

E Finance interacting with the organisation Will be covered in undergrad module in the
future.

E2 Managing Performance

Content Where to be covered

A Business models and value creation Brief outline in this Tut 501. Will be covered
in more detail in undergrad module in the
future.

B Managing people performance Many areas covered in your undergraduate

modules MNB1501 & MNB1601

C Managing projects Covered in MAC3703 & MNG2602

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2 BRIEF OVERVIEW OF SOME TOPICS IN E1 AND E2 WHICH MAY NOT
HAVE BEEN COVERED IN YOUR UNDERGRADUATE STUDIES.
Info from CIMA text book “Managing Finance in a Digital World” (E1) – Kaplan Publishing
2.1 ROLE OF THE FINANCE FUNCTION
The lead outcome: Explain the roles of the finance function in organisations.
Components: Enables organisations to create and preserve value, shapes how organisations
create and preserve value and narrates how organisations create and preserve value.
This section answers the question: what do finance professionals do and why? It examines the
roles and activities that finance professionals perform to fulfil these roles.
Change the new norm: You need to be aware that the fast pace of change presents both risks
and opportunities for an organisation and the finance function. That technology is considered
the key driver of change.
2.1.1 The finance function plays three key roles:

Enables organisations to create and preserve value by:

 Planning

 Forecasting

 Resource allocation
Shapes how organisations create and preserve value by:

 Performance management

 Control
Narrates how organisations create and preserve value by:

 Corporate reporting

2.1.2 The role of ethics in the role of the finance function

CIMA has a new code of ethics from 2020, please go to the link below and read up on it.
https://www.cimaglobal.com/Professionalism/Ethics/CIMA-code-of-ethics-for-professional-
accountants/
Ethics is covered again in MAC4863 as it is a very important topic.
Please note that the CIMA Code of Ethics is for CIMA members and registered CIMA students,
it is not to be used as an answer for every ethics question that you are asked in MAC4863.
Read the questions carefully before answering. Past students were under the impression that
the CIMA Code is the answer to every question relating to ethics, this is not the case. Each
professional body and company has its own code of ethics.

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2.1.3 Corporate Social Responsibility and Corporate Governance

These two topics you would have covered in your undergraduate work, they are also covered
again in MAC4863. They are important topics so make sure you know them.

2.2 THE ACTIVITIES PERFORMED BY FINANCE PROFESSIONALS TO FULFIL THE

ROLES
The lead outcome: What are the activities that finance professional perform to fulfil the roles.
Components of this are:

2.2.1 Finance activities from information to impact

The basic activities which are the backbone of all the work performed by finance professionals
are summarised by CIMA by using the ‘information to impact framework’. The new finance
function will have to allocate more of its resources to the advising, and applying/executing
activities on the framework.

Source: Managing Finance in a Digital World E1 Kaplan Publishing

Read up more on the role of the finance professional at the link below:
https://www.cgma.org/content/dam/cgma/resources/tools/downloadabledocuments/cgma-
competency-framework-2019-edition.pdf

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2.2.2 How finance connects the different activities in the organisation

Remember that the finance function does no work in isolation, it works with and alongside the
other functions of the organisation.

2.3 THE STRUCTURE AND SHAPE OF THE FINANCE FUNCTION

The lead outcome: The structure and shape of the finance function
Components: the evolution of the shape of the finance function and the shape of the finance
function in the digital era.
Organisational structures was covered in your undergraduate work (MNG3702).
However, there is a section called “Contemporary transformation of finance function”.
When looking at the ‘information to impact framework’ above, the basic activities of the finance
function are still relevant however, there has been a shift in emphasis regarding the importance
of each of the activities. Machines are now capable of monitoring operational costs and patterns
of organisational efficiency which historically was the overall mandate of the finance function.
Technology allows the finance function to focus its attention more on revenue and value
creation. The finance function will have to work more closely with other areas of the
organisation to create shareholder value. This shift of the finance function will be discussed in
more depth in MAC4866.
Info from CIMA text book “Managing Performance” (E2) Kaplan Publishing
2.4 BUSINESS MODELS AND VALUE CREATION
2.4.1 The concept of business ecosystems

The lead outcome: Explain the ecosystems of organisations.

Components: Markets and competition and society and regulation.
“The digital world is characterised by disruptions to business models by new entrants and
incumbents who seek superior performance and competitive advantage”(Global CGMA Center
of Excellence).
This section covers the fundamentals of business models and how new business and operating
models can be developed to improve the performance of organisations.
“Business Ecosystems” this is a new term in the 2019 CIMA syllabus. See E3 Chapter 1 pg. 2
for the definition of the term “ecosystems”.
Important element is that these ecosystems need to be regulated.
Traditionally the business environment has been analysed by the use of PESTEL, Porter’s Five
Forces and Porter’s Generic Strategies.

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However, technology is having an impact on these traditional markets, areas of change include:

 Rapid changes in customer expectations

 New types of products and services

 New business models

 Market disruptions
Emerging technologies are creating an environment that is:

 Connected and open

 Simple and intelligent

 Fast and scalable (transactions increase in both number and frequency)

Drivers of the digital revolution:

 Mobile and internet

 Connected devices

 Data analytics and cloud (Social networks, apps)

 User interfaces (voice recognition/tracking systems)

 Global accessibility

 Increasing urbanisation

2.4.2 Alternative approaches to business models

The lead outcome: Explain the elements of business models

Components: Concept of value and the business model, defining value, creating value,
delivering value, capturing, and sharing value.
Firstly, what is a business model?
‘According to KPMG any description of a business model must include how the firm is
structured, the markets in which it operates, how it engages with those markets, its main
products and services, its main categories of customers, and its main distribution methods’.

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The traditional business model has four aspects, define value, create value, deliver value, and
capture value.

Source: CGMA Business Model Framework: Global consultation paper 2017

https://www.cgma.org/content/dam/cgma/resources/reports/downloadabledocuments/cgma-bus-model-consult-
paper-051917.pdf

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According to the global consultation paper of 2017 the traditional business model has been
greatly impacted by changes in technology, the operating environment of the organisation and,
as a result the strategy that the organisation should adopt.
The paper goes on to say that it is key that the different parts should connect to and align, both
with each other and to the operating environment. This new approach is illustrated below.
The CIMA Business Model

Source: CGMA Business Model Framework: Global consultation paper 2017

https://www.cgma.org/content/dam/cgma/resources/reports/downloadabledocuments/cgma-bus-model-consult-
paper-051917.pdf

2.4.2 Business models in digital ecosystems

The lead outcome: Analyse new business models in digital models in digital ecosystems
Components: Analyse digital business models and their related operating models
This will be covered in MAC4866.

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3 CONCLUSION
Being a postgrad student requires you to not only study your prescribed book, but to also keep
up-to-date with what is happening in South Africa and Globally. You need to read business
related articles. Please check the announcements on myUnisa I will load video tutorials and
links to articles that I think are important for you to know which will be in addition to what you
source yourself.
In Tutorial 502, we will start discussing the MAC4863 syllabus content. Please do not wait for
the Tutorial 502 to be loaded on myUnisa you can already start studying as everything is to be
studied in the prescribed textbook, nothing will be left out. Your assignment questions will be
loaded six weeks before the due date.
All the best with your studies in 2021.
Kind regards
Ms Nomzamo Maponya

4 REFERENCES
CGMA. Business Model Framework: Global consultation paper 2017. [Online] Available from
https://www.cgma.org/content/dam/cgma/resources/reports/downloadabledocuments/cgma-bus-
model-consult-paper-051917.pdf [Accessed: 2020-01-29].
CIMA. 2019. Managing Finance in a Digital World. Operational level E1. CIMA official study text.
United Kingdom: Kaplan Publishing.
CIMA. 2019. Managing Performance. Management level E2. CIMA official study text. United
Kingdom: Kaplan Publishing.

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