In this Industry Insight, the second to last in the series on corporate performance management (CPM), I intend to focus on the complex concept of understanding.
In a game of chess, understanding the rules and how each piece on the board moves is a good starting point, but if one does not understand strategy and how to advance or retreat, attack or defend effectively, there is scant chance of winning the game. Likewise, in a corporate performance management environment, getting the pieces in place and functioning effectively is critical, but it is the understanding of what they deliver that gives you the edge.
Corporate decision-makers need to proceed from plans to metrics to details that underpin results in order to understand how their organisation is performing.
David McWilliam, MD, Cognos South Africa
Up to now, we have stepped through the management cycle as a series of building blocks (modelling, planning, budgeting, consolidation and monitoring) that assist corporations in implementing structures and processes that can more easily be managed on the macro and micro scale according to measurable performance indicators.
Therefore, setting your CPM project up and getting all the management details in place is only the precursor to presenting it to users in an easy-to-understand form.
Corporate decision-makers need to proceed from plans to metrics to details that underpin results in order to understand how their organisation is performing. Reporting and analysis provide this level of detail within the context of the company`s overall strategy.
Through the reporting and analysis phase, executives can turn the organisation`s investment in data assets into meaningful information that people can use to make decisions. Executives will need a broad high-level overview covering the whole business, but line managers only require limited view of their specific areas of concern.
However, since all the data is taken from the same source, the reporting and analysis function communicates a common version of truth to everyone in the organisation. With everyone on the same page, going forward in unison is simpler.
When leaders need to plan and align their businesses for the future, reporting and analysis informs them where they are - according to the model developed earlier in the management cycle. Then, coupled with a common sense of priority from the scorecarding phase, as well as a common purpose through the plans drawn up at the start of the management cycle, reporting and analysis can clearly point out where the company is off track and what should be realigned or even terminated.
Current technology permits us to deliver these reports in formats better suited to the needs of business than the reams of paper managers had to trawl through in the past. For example, line managers can be presented with a URL where they can always find the latest information pertinent to them in an easy-to-read intranet page.
Executives, on the other hand, need access to more information covering a wider spectrum of the organisation and they may need to investigate certain facts and figures further.
Making use of digital dashboards to monitor and control the organisation at the click of a mouse is therefore an effective, productive option for them. An important part of understanding the business is the ability to see a figure (as represented in a table or graphically) and drill down to determine the what, why and how.
The better tools on the market will assist in this by making the reporting and analysis process as simple as possible while permitting users to drill down in a seamless and intuitive manner. After all the work that has been put into CPM to this stage, intricate analysis tools would hamstring the whole process because staff members avoid using them - which defeats the object of the entire exercise.
But analysis and reporting is not the end of the cycle. On the contrary, as soon as the CPM process has delivered its first reports and management has had the opportunity to analyse them, there are sure to be multiple changes, from little tweaks to major realignments in divisions or even the company as a whole. And so it begins again. CPM is not a "put in the CD-ROM and click install" solution, but an ongoing process of measuring and improving the business ... and that will be the topic for the last Industry Insight in the series.
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