What is Kouji Shinko Kijun?

While in Japan recently, I learned a few important Japanese phrases:
Yoroshiku onegaishimasu - Something to the order of I'm your humble servant, please take my business card
Ita daki masu - Saying thanks for anything - especially food
kouji shinko kijun - New accounting rule going live as of April 1, 2009 in Japan. This rule states that SI's in Japan need to recognize project revenue as well as expense ratably during the project.

Much discussion has happened concerning the best way to achieve compliance with kouji shinko kijun. Organizations who used to use Excel to figure out status on project plans now need a more reliable method for recognizing project revenues during the execution of the project. Key components of compliance include Enterprise Project Management, WBS, and EVM.

WBS, or Work Breakdown Structure, is a tree structure which sums a project's components upward. Progress recorded at the lowest levels of a project's WBS is reflected in the overall project data.

EVM, or Earned Value Management, is a way to normalize schedule and cost progress in an objective way (See http://en.wikipedia.org/wiki/Earned_value_management). Earned Value allows an SI to know at any time during an engagement how much work has been completed toward the full contract as a ratio. Using EVM, I can easily compare many different projects of differing scopes across a standard measurement. With EVM, I can depict in a single number the degree of variance at any point in time a project is experiencing in terms of cost and schedule. These numbers play into anticipated revenue from labor on those projects.

Enterprise Project Management gives SI's the ability to look across all projects and pro-rate the expected revenue from those projects according to the EVM data and the WBS projections. Compliance with kouji shinko kijun requires this level of understanding across the organization.

A series of articles on this topic are emerging from thought-leaders in Japan. One of the first of these can be found on page 54 of November issue of Nikkei Systems publication (http://ec.nikkeibp.co.jp/item/backno/OS0187.html). This article covers solutions that address Kouji Shinko Kijun requirements. The article mentions Artemis, HP PPM, Primavera P76 and @task. The article devotes an entire page to @task and conducts a case-study with Toyo Business Engineering, and @task customer.

One of the quotes I liked from the case study was, "All team members now can see the overall schedules of the project in realtime and can see the results of their contributions and this has
been a great motivator” (Miyazaki-san, Division Manager, Toyo Business Engineering).