Gain strategic insight into your business

Not many companies can monitor how business processes impact their profit and cash flows. SAP's Business Intelligence (BI) tools make this possible; it provides executives with real-time, 360-degree insight into all their business processes and is the ultimate solution to all their reporting challenges.

SCT Services CEO Victor van der Watt says the barriers preventing companies from optimising the performance of their business processes include disconnect between strategy and execution, lack of balance between risk and opportunity, and lack of visibility throughout the entire business cycle.

“In most companies, the two worlds of strategy and execution don't talk. The execution is out of line with the strategy because the strategy never really gets effectively pushed down into the operations. We've all been in meetings where we hear about a new initiative or change in the way we're going to do business. Then we all go back to our desks, and what do we do? The same thing we've always done before.

“That's because we are lacking the translation of how the new strategy affects what we do and how we need to change our behaviour to ensure execution is aligned to strategy. When you solve this problem, when what you say you will do is the same as what you actually do, then you have strategic alignment. Instead of just executing efficiently, you are now able to execute effectively,” he explains.

Organisations are always looking for new opportunities to gain increased profit, improved market share, or enhanced brand reputation. However, opportunities are typically accompanied by challenges or risks. They have to understand, balance, and manage those risks, making sure the trade-off is in the interests of the key stakeholders. The important thing is to strike a balance between managing the risks and pursuing the right opportunities.

Focus solely on opportunities, and one can wind up burning out like some of the failed financial companies in 2008. Focus solely on risks, and one is unable to grow, and one stagnates or fails. Finding the right balance between risks and opportunities allows you to deliver predictable performance.

“The first step toward gaining strategic alignment is ensuring that the information you have is accurate and that it and management believe that to be the case. You need a single, trusted environment for the collection, movement, and distribution of data. Most organisations have a variety of data locked in various internal silos but also rely on key data that exists outside the organisation's walls. You must establish a unified, certified view across these disparate sources to enable confident, quality decisions, he explains.

Van der Watt asks: “Can your COO know with certainty the report he or she is looking at accurately reflects customer activity? Can your CFO certify financial statements with complete confidence that there are no material weaknesses? Can your CEO confidently provide guidance during an earnings call on performance and risks?”

“You can use your strategy setting process to help you prioritise opportunities. You can also ensure these opportunities are clearly communicated so the execution of the organisation becomes aligned. As the organisation executes, you take risks into account as they come up, a process that then feeds back into your strategic process, allowing you to adapt to changing business conditions. As you facilitate this cycle, you are now enabling everyone in the organisation to make confident decisions rather than rely on gut feelings,” he says.

He points to SAP BusinessObjects as a solution that enables companies realise these benefits. “Based on a set of best practices collected from our extensive customer base, the SAP BusinessObjects portfolio supports companies in taking three key actions to achieve strategic alignment, gain predictable performance, and make confident decisions. This helps them close the gap between strategy and execution. All three of these actions are required to fully realise the benefits.”

The SAP BusinessObjects portfolio can provide clarity for business in its strategy and execution. The holistic approach brings together solutions for business intelligence (BI); information management (IM); enterprise performance management (EPM); and governance, risk, and compliance (GRC). Together, the solutions help achieve strategic alignment, gain predictable performance, and make confident decisions regardless of the underlying applications.

He says it isn't enough to simplify the process of collecting and consolidating information in a business process. “To get to the root cause of unpredictability, you need to ensure you're running risk-adjusted business processes throughout the organisation. As you define strategies, you are prioritising and making decisions in the context of how risks impact strategy.

“As you plan and forecast, you need to see risk-adjusted views to ensure you fully understand the potential impact of risk to your plan. As you execute, you must ensure you are putting appropriate controls in place to mitigate risks.”

To close the gap between strategy and execution, companies must have discipline around their key processes that ensure integrity, inspire confidence, and ultimately lead to predictable outcomes. The only way to become predictable is by considering and managing all variables, including enterprise risk.

Ultimately, people in the organisation use the data and outcomes of processes to make decisions. While different employees may prefer different methods of visualising data, the key is to ensure employees understand the information in the context of the bigger picture. How does the decision a credit manager is about to make to extend longer payment terms impact the goal to reduce days payable outstanding?

“How can you stop this action if the impact is above a defined threshold?” he asks. “How can you leverage best practices from one division across the organisation to develop a competitive advantage? When you create enterprise visibility, you can respond to changing business requirements, help ensure alignment at all levels within the organisation, instil confidence in people making decisions, and consistently deliver predictable results.”

“The SAP BusinessObjects portfolio provides solutions that help enable you to break down the barriers to optimised performance. Companies can gain true insight and use it to devise a well-aligned strategy. They can then flow that strategy into operational decisions ready for execution,” he concludes.