24 September 2003
In recent years, customer, supplier and partner demands have changed dramatically. As a result, organizations can no longer run solely financial ratios.
It used to be said of organizations that they never had enough data. Today however, practically all organizations have this problem solved. “Data exist, and we’ve got them!” they boast (in marketing campaigns, targets, sales forecast or expenditure control).
One problem yet remains: the lack of time available to assess and analyze these data the way we would like to. We end up not knowing if our organization’s performance is really optimum.
If you face this dilemma, you’re probably not the only person in your company doing so. Directors and middle management receive a large number of reports every day, which - due to the nature of their jobs - they’re unable to assimilate. Yet they’re expected to run company management.
Corporate Performance Management (CPM) is aimed at intelligently handling large amounts of information, and at integrating itself in current organization systems, using processes defined through knowledge and experience. Data are transformed into intelligence, to be understood and acted upon. This makes information your ally, not your foe.
The term Corporate Performance Management (CPM) was chosen by Gartner to define applications that cover all cycles of corporate management. Several synonyms for it exist on the market, such as Enterprise Performance Management (EPM), and Business Performance Management (BPM, adopted by META).
CPM is designed to cover the needs of different business units. It integrates organizational information systems with tools for selecting priorities, visualization and analysis.
Thus directors, middle management and business units follow the same strategy and speak the same language.
CPM is not so much a revolution as an evolution of the strategy concept, an evolution of the traditional management structure.
Information Builders has worked over the past 27 years innovating IT, developing into a large business-intelligence company. Today it has offices in Europe and the Americas.
Strategic vision alignment within the organization
One problem faced by organizations on implementing a model to define Integral Management Structure (IMS) strategy is converting that strategy into activities. A further hurdle is its comprehension by all company members. Measurement of these activities leads to strategy monitorization, control and implementation.
IMS is based on the concept developed by Robert Kaplan and David Norton (BSC, Balanced Scorecard), and summarized in an application simulating an operations center which centralizes and filters all information. To provide easy locating, this information is grouped according to sector, similar to an aircraft instrument panel. The organization’s targets and action plans are aligned strategically.
q Marketing is aligned with customer-resource management;
q Production is aligned with supply-chain management;
q Invoicing and orders are analyzed via inventory and sales control.
Business vision and strategy dictate the route in which a company’s individual and group efforts should be directed. Definition of these strategies is complicated; nonetheless, implementation is often the major obstacle. The challenge is to accurately identify what needs to be monitored for communication on all levels of the organization, if strategies are being attained via specific actions.
The Balanced Scorecard is a top-level management system channelling people’s energies, skills and knowledge through the organization to attain long-term strategic targets.
WebFOCUS BSC: Balanced Scorecard Solution: open and flexible, helping companies take advantage of straightforward, efficient implementation throughout the organization.
Many applications and technologies support and complement this management model, letting executives get maximum business value of CPM:
- Analytic applications facilitate short-time creation of multidimensional data warehouses and data marts, guaranteeing data analysis from different sources, departments and environments, according to the business vision.
- Administrative applications, built on demand, support the company’s major applications. They give only the functionality the company needs in a certain moment (commercial schedules, customer file, management by objectives), and integrate it with existing systems.
- A powerful and reliable applications server, related to the business-management cycle, connects information, people, decisions and customers to a CPM-based management.
- Business integration applications today help integrate any kind of tool, application and process, so executives can analyze and evaluate corporate revenue through CPM.