Click here to read Part 1.

Click here to read Part 2.

This is part three of my updated series on real companies enjoying the benefits of business performance management (BPM). This month I am going to focus specifically on BPM in the midmarket. What do midsized to smaller companies hope to get out of BPM, and what results do they actually achieve? Are their BPM initiatives that different from those of larger enterprises?

Business Use Cases

Shur-Co., a 50-year-old family-owned manufacturing business based in South Dakota, started its road to performance management when it identified a need for a budgeting solution. They have nine locations and six business units, so they were looking for software that could handle multiple locations, units and divisions. Shur-Co. found what they needed in a BPM solution from PROPHIX. Part of the goal was to be able to run reports at month end comparing actual versus budget, showing units by location. To accomplish the required reporting, they needed to pull data from their enterprise resource planning (ERP) system, Visual Manufacturing by Infor. It turned out to be a simple matter to move data between the two systems. Infor data is exported to Excel; they change two fields and easily import their financials into PROPHIX.

With the new BPM system in place, budgeting is now a much quicker process. Previously, they had to deal with 30 to 40 linked spreadsheets. Now all the information is in one repository, with all the calculations embedded. Financial reporting is also faster. Prior to the new system, the finance team needed three to four days to tie together approximately 35 spreadsheets and verify that all the formulas synced up and were working correctly. Now exporting the data, running the calculations and reports can be done in a single day. It is also much easier to create new reports on the fly as information needs change.

Shur-Co. was looking to BPM to save time and resources in their budgeting and financial reporting processes. They have accomplished that. Now they are ready to move on to some of the more advanced aspects of performance management. They are planning to develop a four-dimensional sales model that will be updated weekly, and possibly daily. The salespeople are anxious to be able to see customer-by-customer demand information. They will be able to analyze this data by customer, by product and compare historical data to targets. Beyond that, Shur-Co. plans to use the BPM system for more detailed personnel planning and cost analysis as well as to eventually provide reports to the marketing group. All of this functionality was purchased at a price well within the budget of a company of this size, proving that BPM is not just for the big guys.

When a new controller joined SourceForge in 2006, he found an Oracle Financials environment supplemented by many spreadsheets that constituted the company’s financial reporting system. He found it quite cumbersome. In addition, the developer of the spreadsheet models had left the company, making maintenance difficult. Also, some outdated practices were built into the model and therefore were being perpetuated. It was evident that the spreadsheet aspects of the system were neither scalable nor flexible, and the time spent manually updating them each month was significant. The decision was made to find a BPM system to address their financial reporting and analysis needs.

After looking at several vendors, Adaptive Planning was selected for its scalability and ease of use. SourceForge handed off their spreadsheet mess to the vendor, looking for a turnkey solution. What they got back was exactly what they wanted. Now they were able to focus on improving some procedures, such as cost allocations and tracking of stock compensations expenses. In addition, statistical headcount data was now included in the plan.

While the new BPM system addressed their spreadsheet challenges, it also enabled them to share more information with more employees than ever before. Under the previous approach, department managers were blind to where they were operating in relation to their budgets. There were security concerns about sending out Excel files, since some had salary information. Now they can let department managers see reports without salaries revealed. IT managers who are responsible for large sums of money can now see their status immediately and provide feedback to their supervisors.

The CFO can use the system to look at the whole picture and drill down to see which units need more help or investment or which marketing programs have paid off. The information in the system is coming from the “right” people who manage sales, marketing and engineering. This creates ownership and accountability. It also lets SourceForge look at business decisions in a new light, going all the way from investment to return.

While they continue to focus on adding more standard reports, the company is looking forward to adding dashboards to the mix and also using the system for long-range planning. Just based on the labor savings compared to the prior approach, SourceForge is seeing a high ROI from their new BPM system.

Two more companies benefit from BPM in different ways. Both have implemented relatively inexpensive solutions targeted at their market segment that still encompass many of the components found in larger enterprise solutions. Business performance management really is for everyone.

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