In any organisation, strategy is of paramount importance and is senior management's number one responsibility. But more importantly, executives and employee teams need to be able to see through the fog and complexity in order to manage and execute that strategy. The problem is usually not executives formulating a good strategy - they are good at that - but rather their failure to successfully implement it.
"Corporate performance management (CPM) is the answer," says Gary Cokins, strategist for performance management solutions at SAS, leader in business and analytical intelligence.
"CPM is not new. What is new is the integration and assemblage of existing methodologies that most organisations are already familiar with, and have been implementing in isolation from each other. The real opportunity lies is obtaining synergy by integrating them."
CPM is the process of managing an organisation's strategy. It is how plans are translated into results - execution. Managers and employees often do not know their organisation's strategy, which means they may not know how what they do contributes to accomplishing it. CPM communicates the executives' strategy to managers and employees in a way they can understand them. And it identifies key measures that drive the right behaviour. After all, you get what you measure.
"Think of corporate performance management as an umbrella concept that integrates the business improvement methodologies managers are already familiar with," says Cokins.
Many organisations seem to jump from one improvement programme to another hoping that each one will provide that big yet elusive competitive-edge. Most managers, however, would acknowledge that pulling one lever for improvement rarely results in a substantial change - particularly a long-term, sustained change.
"The key to improvement lies in integrating and balancing multiple improvement methodologies," says Cokins.
"You cannot simply implement an improvement programme and exclude the other programmes and initiatives. It would be nice to have a management cockpit with one dial and a simple steering mechanism, but it's just not that easy. Similarly, managing an organisation, or a process, or a function, is also not that easy."
The main thrust of CPM is to make better decisions as evidenced and ultimately measured by outputs and outcomes. Commercial software plays an important enabling role in corporate performance management to deliver an entire Web-based and closed-loop process from strategic planning, budgeting, forecasting, balanced scorecards, costing, financial consolidations, reporting and analysis.
CPM also includes linkages to business needs such as customer relationship management (CRM), supply chain management and human capital management (which is much more than just a personnel and payroll system). Commercial software from leading vendors of statistics-supported analytics and business intelligence (BI), like SAS, provide powerful forecasting and what-if scenario planning tools.
"The appeal of CPM is that it realises that there is no sun around which lesser improvement programmes, management methodologies, or core processes, orbit.
"CPM is about sense-and-respond balancing of trade-offs, and it is always striving for better organisational direction, traction and speed. It involves constructing powerful combinations linking software, such as business intelligence analytics, with core business processes enhanced by improvement initiatives, like Six Sigma, to prioritise efforts and align an organisation's work activities with its corporate strategy," concludes Cokins.
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