Businesses today demand more from IT, expecting it to deliver tighter control over all aspects of the organisation with less money and resources available than ever before.
The typical scenario IT leaders face is commonly known as a silo architecture. Every division, and sometimes even department, has its own needs and IT solutions which might work for the individual entities, but fail miserably when trying to tie them together to paint a single picture of the organisation as a whole.
And this single picture is exactly what management wants and needs these days. The balanced scorecard was supposed to make this all possible, but as anyone who reads Dilbert knows, it had a few flaws.
In my last Industry Insight, I discussed seven simple steps CIOs could follow in their efforts to be out of a job in record time. Each of the points mentioned is a building block or starting point in the effort to create a corporate-wide performance and management tool that allows management to focus on the organisation as a whole. This includes a single task and its progress, as well as the headway of the entire operation - call it the management cycle.
The reality is that companies have operational plans that involve a huge set of disconnected business models that lack critical intersections of data from all the various parts of the organisation.
David McWilliam, MD of Cognos South Africa
This management cycle is the new scorecard approach, and it provides the means to keep an eye on the organisation and its parts, and to alter any segment of the business - or the whole entity - in real-time. It also permits management to test new processes or plans virtually before setting any idea into motion. In the next few Industry Insights, I will focus on the critical aspects of this management cycle.
Taking the first step
The first step to corporate performance management is modelling. Historically, most if not all business models are painstakingly designed to include all the information anyone would ever need to understand and run the organisation effectively. Everything that is, except the detail and integration data necessary to create enterprise-wide operating plans that balance all of the resources and initiatives of the organisation towards a single goal.
For a small company, these plans are generally sufficient, but when dealing with larger enterprises that need to be in control and may need to change quickly to meet new market demands or challenges, they fail. Mergers and acquisitions that force different bits and pieces from different organisations to merge, work together and focus on the same corporate goals only exacerbate this problem.
The reality is that companies have operational plans that involve a huge set of disconnected business models that lack critical intersections of data from all the various parts of the organisation. It seems that enterprise management develops a generic corporate direction, and departments and divisions then create their own procedures and plans to enable them to travel in the same direction.
Effective global oversight will only be possible once the company has developed a working model that can create, compare and assess different business scenarios, conditions and assumptions. Using this model, decision-makers can reduce risk by determining the true costs and benefits of decisions - before they are made.
The trick is that models must be able to link the various segments of the business in an interconnected system that will demonstrate all the effects and side-effects of an action performed in one place, on all other facets of the business. In tough times, a CEO needs to know how a reduced number of customer support staff will affect the organisation`s revenues, for example.
Properly done, modelling accelerates the development of scenarios that reflect the nuances of the business. A flexible model lets you change your business logic and see the impact in real-time, and makes it simple to import data definitions from other systems to further accelerate the process and refine the model.
The modelling phase is only the first step in the full management cycle. While it may require some work and effort to get it right, doing it correctly will ensure the company`s plans are focused on the correct outcomes. Just as critically, the people responsible for executing the plans will be able to understand the implications and impact of their decisions and actions.
Share