Johannesburg, 24 Jun 2008
In order for businesses to move successfully into a new era of collaboration, it is crucial they progress beyond business intelligence (BI) to including components from the performance management (PM) agenda.
This delivers a magnifying glass with which they can look into the current performance of a company, and a 'crystal ball' that allows them to glimpse the future more accurately. PM is about enabling organisations to repeatably drive confident, sound decisions at every level and across every function of the business.
This is the word from David McWilliam, managing director of Cognos South Africa - an IBM company. He says: "Businesses are beginning to acknowledge the importance of progressing beyond BI to PM which is in turn, giving rise to the PM maturity model."
According to Gartner, the fastest IT growth opportunities during the next 10 years will come from a vast array of newly emerging business and society trends and demands. Simply interpreted, business will need to agilely adapt to business, market, political and cultural changes. In order to do so successfully, PM is a key requirement.
Notes McWilliam: "If we look at further research conducted by Gartner (Challenges and trends in 2007), the top goals or priorities of the CIO are aligning IT and business and, from a technology perspective, implementing BI. Hindering these burning issues are complex infrastructures and flat budgets. However, BI and PM standardisation are on the rise and these hot technologies are changing the landscape of businesses."
PM is all about answering the three key questions that businesses should be asking: how are we doing, what should we be doing, and why? Performance is central to financial, expense, revenue and long-term asset management.
According to AMR Research, the maturity model of PM incorporates not only technology but people and processes. The model follows a four-stage progression that all companies follow as they deploy BI and PM capabilities across the organisation.
Step one is: where have we been? In this step, the focus is on obtaining a historical view of the organisation and is typically categorised by reacting to what has happened or a rear-view mirror perspective? McWilliam adds: "Business takes a project-based departmental approach that usually results in a BI solution chosen specifically to suit the particular requirements of that department. The focus is on data access at this point, reducing the report cycle time and viewing the last business cycle. However, this is no longer sufficient in today's requirements for real-time information and decisions."
Step two is anticipating. Where are we now? Projects have become more strategic and visible across departments while functional are still largely siloed. The model of VP accountability still dominates and tools and business processes feature more predominantly (ie, dashboards). In addition, there is more focus on bottom line performance which equates to cost savings, and the need for a current status view rather than a historical view.
"In this step, the organisation moves from reacting to anticipating and the information provides a current business status that allows organisations to answer the 'where are we now' question," explains McWilliam. "Step one projects are revised and as they evolve from tactical to strategic, they spread across departments with function-level sponsors, although there are still departmental silos. Existing processes are codified with a focus on bottom line performance. There is an investment in capabilities and tools to "spread the BI/PM gospel". Also, dashboards are the primary information tool in this step and reflect existing business processes."
Step three is collaborating. Where are we going? This evolves to collaborating across functions, characterised by the ability to understand the question 'where are we going'. Businesses now access information across silos spanning multiple departments, operational and financial metrics. Integrated planning aligns resources across groups with a focus on performance improvement. Getting the picture now?
Step four is orchestrating. Are we all on the same page? At this level of maturity, the performance culture now exists and there is top-down executive buy in. A single consistent view of the enterprise is required and goal setting cascades through operational areas. In addition, there is integration with service-level agreements.
It must be noted that few companies have reached step four in the PM maturity model. At Cognos' recent international Cognos Forum event, the company surveyed 3 000 attendees and requested they identify the step that characterised their current deployment. Of these, 35% were at step one, 55% at step two and only 7% and 3% were at step three and four respectively.
This highlights the long-term goal to bring as many parts of the business to a consistent level of maturity. However, there is value and payback at every stage. You don't have to be at step four to realise benefits. There is still a lot to be gained at step one and two.
McWilliam concludes: "PM is undoubtedly driving business forward and delivers the ability to make decisions with confidence - and confidence is what you get when your high performance organisation is enabled by a system for PM like Cognos."
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