Performance management,business intelligence,enterprise resource planning system,finance function,

Performance Management & Business Intelligence (Text version)

IBM Cognos - Performance Management & Business Intelligence

Stephen Brook from IBM Cognos Innovation Center explains in detail how Performance-Management and Business-Intelligence can work for business.

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What are Business Intelligence and Performance Management? (view video)

Performance-Management and Business-Intelligence is really concerned with providing the tools and processes to help you make better business decisions. We tend to characterize it in terms of being able to answer three critical questions, the first is, how is my business performing? Secondly is, why is that so? So understanding the driver behind your business and thirdly being able to say in the light of that, what should I be doing next? Answering the how question is usually done with tools like dashboard, score cards, understanding why you're getting the results you are, is something you typically do with reporting and analysis tools, finally understanding what you should be doing next is with planning and forecasting.

 

What is the difference between Business Intelligence and Performance Management? (view video)

Business intelligence is sometimes characterized as having an effective corporate memory, it's about being able to take the data you have in your organisation and turn it into useful information that people can use.

Performance management is an umbrella term that extends that concept, and talks both about understanding that process, the drivers in your business, pulling that information together then also using that to take forward decisions like budgeting to forecasting.

 

Why is Performance Management important to growing companies? (view video)

As companies grow the amount of data they have to manage tends also to grow, and the complexities of their processes, planning, budgeting and forecasting also increases and what companies find is the task of managing these processes with the tools that they often use, for example, spread sheets for performing planning, just becomes unyielding. So what a performance management system does is bring a great deal more cohesion and structure towards those processes to make them simpler to manage.

 

Who needs Performance Management? (view video)

Performance management is relevant to all types of organisations whether they're commercial organisations, not for profit organisations, or in the public sector. It's also equally applicable to organisations whether they're large or small so scale isn't really an issue, every organisation faces the challenges of having to constantly appraise the external business environment look at how their business is performing look at the impact of competitors for instance and then decide how they're going to approach their own business so it's relevant for everybody. 

 

Can I justify investing in Performance Management during difficult economic climates? (view video)

In difficult economic times, resources in organisations are likely to be scarce, and in volatile times you'll find it's more important then ever to be able to understand who your most valuable customers are, which are your profitable products and which are your loss making products and to be able to quickly respond in response to what's going on in the world around you. So I would argue that investing in an effective performance management system that allows you to appraise all those and take accurate business decisions quickly is more critical than ever so I think so I think those are the things you would use to justify your investment in performance management systems.

 

What benefits would I see from Performance Management? (view video)

In essence what you will see is improved business performance, and the ability to make better business decisions faster, so that's about being able to identify the key risks facing your business, and understanding how to mitigate them, and also about being able to identify opportunities, and very quickly put action plans in place to capture those opportunities, in practical terms it's about avoiding situations where people in your organisation are arguing or debating whose numbers are correct and which data is correct because they will have the correct single version of the data at their fingertips if you have a performance management system in place.

 

How do you start adopting a Performance Management solution? (view video)

There's no fixed formula but I think the key thing that a successful organisations do is identify the area where it is they want to start so they would typically start small and they'll identify an area of most pressing need whether it's the ability to provide accurate and timely information to the sales force or whether it's the need to streamline the processes used in finance for budgeting it's about identifying a key area where there's a pressing business need and where you can put a performance management system in place and very quickly demonstrate business benefits to get further traction to roll the solution out more widely.

 

What role does Performance Management play compared to applications like my Enterprise Resource Planning system? (view video)

Performance management solution really will complement any existing business applications, your ELP, you general ledger or maybe a customer relationship management system, what a performance management system will do is unlock the value of the data held within those systems so that you can use it and access it much more effectively and again use it to make forward looking business decisions.

 

What resources are there to help me implement a Performance Management system? (view video)

Depending on the nature and the scale of implementation your undertaking you'll probably want to look for an implementation partner that can provide the mixture of technical skills, consultative and softer skills to help with a change management aspects and also access to some of the performance management best practices and maybe a library of pre-configured solution you can use to accelerate your implementation.

 

What are the symptoms of organisations with poor Performance Management systems? (view video)

Those organisations would typically be characterised as being less responsive than leading organisations, so very often those organisations that struggle will find it harder to source data, and when they find data they'll often be discussion about which are the correct data, do people trust the numbers? In areas typically like finance you'll find that a huge amount of effort and inefficiency is involved in collecting data from different data sources, collecting information from the business when it comes to performing things like budgeting exercises.

 

Is Performance Management just for the Finance function? (view video)

The finance team are often the owners of some of the critical business applications like the general ledger and they typically are responsible for running processes like the annual planning exercise or the planning and budgeting exercises, but the real value of performance management is about broadening out and involving people in sales and operations, marketing and HR, and having them contribute towards the management or the business, with finance maybe playing the role as the hub that brings all of that information together and turns it into the financial projections and outcomes so it's not just about finance it's much broader than that.

 

Does Performance Management mean replacing some of my existing business applications? (view video)

No, that's not really the intent, what a performance management system will do is complement those existing transactional systems like the general ledger and ordering processing systems that are for example running the operational activity in your business what a performance management system is doing is sitting at a level above those allowing you to make sense of all the data held in those systems and understand what it's telling you. You can use a performance management systems to monitor some of those key operational functions on a very short term basis and you can also use the data in those systems to see what's going on, examine trend and then make longer term forecasts about what you want to do and where you want to take your business.

 

How difficult is it to implement a Performance Management Solution? (view video)

Implementing a performance management solution has quite different characteristics to implementing a transactional system like an ERP systems, typically what companies do is they start with a small tightly focused project lasting in duration only days or weeks rather than months or years, and they'll do that in one particular department for instance finance where there's the greatest need it's then typical for companies to appraise benefits of that initial pilot project and then roll it out more widely into other areas like sales or manufacturing.

 

Aren't Performance Management systems aimed at large organisations? (view video)

It's true that performance management solutions scale out to serve the needs of large organisations but many of the performance management challenges faced by companies today are really irrespective of the size of the organisations and those challenges relate to complexity for example a small company may still face significant challenges in forecasting sales fore instance to many hundreds of customers across dozens and dozens of products lines challenges that are very difficult to manage in traditional tools like spread sheets 

 

What does Performance Management mean in practice? (view video)

Lets take an example using the frame work of answering the critical questions like how is the business doing, why is that so and then what is should be doing. Imagine I'm an executive looking at a dashboard online that tells me the current performance of my business, and I can see that sales are below target, that's the initial catalyst for an investigation, I do some analysis and I find that although the deals and the contracts I'm signing are ok in terms of their size the number of deals I have in my pipeline is below my target I may then decide the way I need to mitigate that is to divert funds from else where into my marketing budget to raise the profile of my product to my customer base.

 

How would Business Intelligence and Performance Management systems handle frequent business change? (view video)

Whereas some business application software is often quite ridged and requires some effort to change, performance management solutions are usually much more flexible and example or a merger or acquisition for instance a performance management solution can often be adapted very quickly to provide an overview of the newly enlarged business, whereas it maybe many months or years before the underlying transactional systems are realized.

 

How would I make the business case for Performance Management? (view video)

You would typically justify your investment in performance management by looking at two areas, you would look at effectiveness, so typically you undertake such a project to make your business more effective to make better operational and strategic decisions that ultimately lead to better financial returns, but ultimately those are hard to measure sometimes especially in the short term so you can also look at measures of efficiency, using these kinds of tools, can I run my budgeting and forecasting tools faster to make them responsive and can I fee up some of my staff time so rather than hunting around and looking for data, they have it available at their finger tips so it's about combining measures of efficiency and effectiveness.