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The Benefits of Corporate Performance Management

Published
  • November 01 2003, 1:00am EST
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Organizations today face similar challenges –­ enhance price performance, increase customer satisfaction and retention, and improve productivity and efficiency, while streamlining business processes and driving bottom-line growth –­ a tall order, indeed! Rather than slow down to examine every nook and cranny of the business through a microscope, progressive organizations are taking a more holistic approach by focusing on execution from top to bottom, with clearly defined goals, strategies and metrics. Corporate performance management (CPM) is a process that aligns goals, metrics, people and technology in order to improve performance across the entire organization. Let's examine some of the key benefits that can be achieved through CPM implementation from both the business and technology perspectives, and how digital dashboards produce a view into measuring and monitoring action and results.

Business Benefits

Goal alignment replaces fragmented, discontiguous top-down planning with a seamless, collaborative planning process that closes the loop between business strategies, business measures such as key performance indicators (KPIs) and business actions. The CPM dashboard illustrates how alignment of an organization's resources –­ people, information, decision-making process and IT technologies –­ ensures individual performance targets can be proactively measured and tracked to meet value expectations of multiple stakeholders (shareholders, employees, business partners and regulatory agencies).

Increased business agility provides decision-makers with immediate access to mission-critical information to capitalize on the changing dynamics of the global competitive marketplace. The CPM dashboard identifies areas of opportunity and allows alternative business scenarios to be evaluated quickly by leveraging what-if, goal seeking, risk mitigation and optimization methodologies.

Comprehensive regulatory compliance empowers organizations to meet new stringent legal and statutory regulations (Sarbanes-Oxley, Basel II Accord, USA Patriot Act) that require new standards of disclosure, transparency and accountability. The CPM dashboard links operational statements to dynamic business plans, streamlines verification processes, highlights anomalies, provides audit trails and performs due diligence analysis.

Improved consolidation process accesses and combines all corporate data regardless of source for an enterprise-wide snapshot of performance across multiple departments and business units, and reduces the budgeting cycle by eliminating spreadsheet management, data transfer errors, manual reconciliation and version control issues. The CPM dashboard incorporates bottom-up data aggregation algorithms to facilitate drill-through to multiple organization levels (i.e., line of business, marketing division, sales district and product segment).

Streamlined reporting minimizes problems associated with reporting detailed financial and operational data (formatted hard copy and ad hoc queries) from multiple applications, databases and legacy systems. The CPM dashboard provides KPIs, proactive alerts, anomaly detection and drill-through information for multiple constituents: executives –­ providing a strategic focus with high level summaries; management ­– a tactical focus with business entity-specific information; and individuals –­ an operational focus with process-level information.

Collaborative management synchronizes communication of goals, strategies and metrics across broad geographic areas and allows users to view, update, share and work simultaneously on common information. The CPM dashboard allows individuals to collaborate on information prior to action and coordinates decisions at the strategic, tactical and operational levels to ensure enterprise-wide resource optimization.

Technology Benefits

One source of truth integrates key management processes such as planning, budgeting, forecasting, consolidation, reporting and analysis on a single IT platform in a closed-loop environment. Changes are replicated automatically throughout the system. The CPM dashboard ensures that the entire organization is referencing the same data and business rules, and eliminates alternative versioning and data integrity issues.

Enterprise-wide analytics leverages a variety of statistical forecasting methodologies (regression, ARIMA, factor analysis), data mining techniques (CHAID, CART, neural nets) and optimization approaches (simulation, linear programming) to support marketing, sales, planning and operational activities. The CPM dashboard can incorporate KPIs and cascading analytics to identify root causes of performance issues, analyze emerging trends, highlight process bottlenecks and track analytics for core business solutions such as customer relationship management (CRM), supply chain management (SCM) and enterprise resource planning (ERP).

Enhanced data visualization enhances an organization's ability to separate critical "information nuggets" from extensive (and exponentially growing) "mounds of data." The CPM dashboard provides a visual assortment of gauges, charts, graphs, stoplights, alerts and maps to display multiple measures simultaneously, allowing business users to zero in on important business issues and navigate the information at the speed of thought.

Real-time data availability empowers organizations to make faster, smarter decisions in real time by capturing and transforming data from operational back-end legacy systems and customer-facing front-end systems into a real-time (or near real-time) data store. The CPM dashboard can then leverage the analysis engine to generate actionable KPIs (and analytics) and employ a rules-driven decision engine to make business recommendations using triggers and alerts.

Web-based portal provides a single, Web-based access point that can be tailored to meet the unique needs of individual business users and allows users to publish reports, analyses, queries and charts. The CPM dashboard portal leverages zero footprint to minimize maintenance costs while providing extensive hierarchical drill-down and analysis capabilities.

These tangible benefits of CPM and the CPM dashboard reflect just the tip of the iceberg. As CPM and the CPM dashboard evolve, they will replace misaligned and disjointed decision making to emerge as the new "central command" for the 21st century. Once the infrastructure is developed to support CPM, it can be leveraged and reused across the organization many times.

Next month we'll focus on how CPM and Six Sigma complement each other. They have more in common than you may think.

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