In this installment, I'll address the question of how to go about assembling those components into a total CPM solution. But before I proceed, an important disclaimer: There is, to be sure, no such thing as a universal, one-size-fits-all approach that applies equally to all companies in all industries. Establishing or promoting such is not the aim of this column. Rather, we will explore some broad criteria, by which individual practitioners can apply their own rationale to parse out the issues relative to their environments and determine the approach that is best suited to their organization.
Figure 1
Assuming that a total CPM solution will typically be implemented as some sort of enterprise project or program, let's apply some key principles of project/program management to help determine how to sequence and attack the implementation of the constituent components. There are three important criteria that should be considered in deciding how to proceed: risk, return and dependencies.
By risk, I mean implementation risks - including the cost of implementation, the likelihood of project overruns ranging even to complete project failure and the likelihood of hampering or disrupting the business somehow by the attempted implementation, rather than helping it. By return, I mean the measurable business benefits expected to be realized as a result of the implementation or, on the flip side, the business threats to be mitigated or avoided. By dependencies, I mean simply the natural contingencies that exist between the various components that comprise the CPM solution, or even other components or factors outside the boundaries of the CPM solution that either must precede or proceed from the implemented CPM components.
Keeping these three criteria in mind clarifies the decision-making process around what to implement and in what sequence. Components of the CPM solution that could be classified as high risk, with questionable return and that are highly dependent on the completion of other components, should rightfully fall down on the list of priorities. Components that are high return, with low-to-moderate risk and upon which many other pieces depend are obvious candidates to attack first. The art and judgment, of course, is in figuring out how and in what order to attack everything that falls in the middle, but these three criteria should govern the decision. (And by way of experience, the stuff in the middle, the second steps, often present themselves only after the first and most obvious steps have already been taken.)
Moving around the diagram above, it is helpful to consider how these three criteria - risk, return and dependencies - interplay with the three axes shown - level of control, time scope and degree of assistance. That is to say, are there some general observations we can make about the riskiness, expected return and/or degree of dependency, based on where the component falls on Figure 1, and if so, how does this inform the CPM implementation strategy? This will be the topic of discussion in the next installment.
Jay Foulkrod is president and principal of Foulkrod Enterprises, LLC, a firm that provides training and catalytic consulting for Value-Driven Data Warehousing, a hybrid of activity-based costing and dimensional design that forms the content foundation for corporate performance management. Foulkrod has built, supported and decommissioned enterprise data warehouse and BI solutions for large clients up and down the consumer/industrial goods value chain (manufacturing, distribution and retail), including construction of an activity-based costing/EDW hybrid that is possibly one of the largest, most sophisticated ABC/OLAP implementations in operation anywhere. He welcomes your feedback and can be reached at Jay.Foulkrod@FoulkrodEnterprises.com.
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