closing the corporate performance management loop

Welcome : 

Welcome

Agenda : 

Agenda Introductions and Opening Remarks Joel Freedman IDC Presentation Nigel Wallis TGO Consulting Presentation Alan Whitehouse Wrap Up

IDC : 

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. Nigel Wallis is a thought leader and trusted advisor to leading technology vendors in Canada. With over a decade of experience in research, Nigel regularly delivers corporate and product strategy projects to senior executives at major Canadian and international technology firms. IDC

TGO : 

For over 22 years, TGO Consulting has been helping organizations streamline and improve their businesses through the use of leading-edge technologies. Although best known for their ERP expertise, Microsoft also considers TGO one of its top BI partners. Alan Whitehouse is the BI Practice Manager for TGO Consulting. He has over 16 years of experience helping organizations implement technology-based solutions that help solve their business pains. He is a Microsoft MVP and Virtual Technology Specialist. TGO

Nigel WAllis : 

Nigel WAllis IDC

Closing the Corporate Performance Management Loop : 

Closing the Corporate Performance Management Loop Nigel Wallis

The Economy:What’s your favorite letter? : 

The Economy:What’s your favorite letter? 7 V U W L

How Bad Was It (in Canada)?All Things Considered, Not That Bad… : 

How Bad Was It (in Canada)?All Things Considered, Not That Bad… Reaction from corporations has accelerated since previous downturns. Rapid response in labour (unemployment), inventories – leading to productivity uptick & sustained corporate profits http://www.statcan.gc.ca/pub/11-010-x/2010005/part-partie3-eng.htm

…But We Live in Volatile Times… : 

…But We Live in Volatile Times…

…And Volatility Matters… : 

…And Volatility Matters… Impact of 5% Appreciation on C$

Trends Driving the Intelligent Economy : 

Trends Driving the Intelligent Economy 11

Ever-Growing Pressure on Executives : 

Ever-Growing Pressure on Executives Pervasive & Predictive Real-Time & Informed Collaborativeorautomated? Ubiquitous&Uninterrupted

Slide 13: 

“You don’t ever want a crisis to go to waste; it’s an opportunity to do important things that you would otherwise avoid.” Rahm Emanuel - White House Chief of Staff

Slide 14: 

The debate between intuition and empiricism is as old as Plato, who thought that knowledge came from intuitive reasoning, and Aristotle, who preferred observation. These days Aristotle’s winning…

Rising Interest in Analytics Isn’t New : 

Rising Interest in Analytics Isn’t New Published in 2003 Launched in 2008 Published in 2005 Published in 2004

Longitudinal History of BI Adoption : 

Longitudinal History of BI Adoption

Slide 17: 

17 Status of Business Intelligence and Analytics Solutions N=215 : QI01. What is the status of your organization's Business Intelligence and Analytics (BI) solutions for the next 12 months? 69% 64% 58% 64% 51%

Performance Management Defined : 

Performance Management Defined Corporate performance management processes include: Strategy planning Budgeting and operational planning Forecasting Management reporting Profitability and cost management Risk management Integration among these processes enables risk-adjusted closed-loop performance management 18

Performance Management : 

Performance Management Theory Requirements

Why Are They Adopting? : 

Why Are They Adopting? …and why aren’t they?

Drivers for Performance Management : 

Drivers for Performance Management Several starting points: Automating planning & budgeting processes that are disconnected & spreadsheet driven Achieving consistency in financial & management reporting across disparate systems using financial consolidation solutions Formalizing KPIs for consistency & providing performance visibility on a regular basis Reporting on profitability by customer, product, or other dimension 21 Visibility into our business at levels previously not possible lets us make better decisions about how we spend resources to meet short-term goals that accumulate towards meeting our long-term plans CFO, Services Provider

Getting Started : 

Getting Started Gain an executive mandate to implement performance management. Most likely CFO’s office Most organizations started with a specific project: Automating planning and budgeting processes Achieving consistency in statutory and management reporting Formalizing KPIs and providing continuous visibility Reporting on Profitability by Multiple Dimensions 22 "We started our initiative by deploying performance management software to the operations department to enable better insight into project metrics, such as on-time performance and budget versus actual cost comparison. From there we expanded our deployment to the finance, HR, and R&D groups.“ Finance Director, Pharmaceuticals

Slide 23: 

23 Departments/Areas Using BI Solutions N=130 (Base=BI Users/Purchasers): QI11MR. Where in your organization is BI software being utilized? Please select all that apply. Still traditional entry-point Traditional entry points Emerging Emerging Emerging. Areas for competitive differentiation Emerging. Areas for competitive differentiation Emerging. Areas for competitive differentiation

Slide 24: 

24 Business Issues Supported by BI/Analytics N=128 What business issues are being supported by your BI or analytics solutions? Please select all that apply.

Initial Challenges To Performance Management Adoption : 

Initial Challenges To Performance Management Adoption No initial initiative to spur adoption of performance management Existing manual methods can be extremely entrenched Lack of a consistent set of strategic, operational, and tactical KPIs Data sources spread across the organization Demand for wider support among users can overwhelm the finance department and IT Lack of understanding of the technology required to support ongoing performance management 25

Choosing a Solution : 

Choosing a Solution While mature, there are significant differences among the systems as centering on emerging requirements such as supporting the automation of processes that take place between the accounting close & completion of financial reports required by regulatory bodies or third parties (such as lenders), incorporating eXtensible Business Reporting Language (XBRL) in the applications and supporting increasingly popular mobile devices such as smartphones.

Once The Initiative Has Started : 

Once The Initiative Has Started Support intra-company collaboration to establish a consistent set of strategic, operational, and tactical KPIs Outline the processes and data sources that will inform future strategic planning initiatives Prepare to overcome existing methods for operating the office of finance (i.e. rely less on spreadsheets) Foster a culture that relies on performance data to make decisions Expect change in the number and type of business users that will be supported by the office of finance 27

Common Benefits of Closed-Loop Performance Management : 

Common Benefits of Closed-Loop Performance Management Improved enterprisewide performance visibility Improved value and impact of strategic plans Improved performance consistency Focus on achievement of common goals Improved investment returns and investment decisions Improvements in organizational competitiveness 28

Consequences : 

Consequences IDC found that organizations that are more competitive within their industries have higher levels of analytical orientation.

How? : 

How? More competitive companies are almost 2x more likely to use a formal performance management methodology Performance management methodologies — such as The Balanced Scorecard or John Boyd's OODA (observe-orient-decide-act) — have one thing in common: They emphasize the closed-loop nature of the solution in which all steps from setting strategy to tactical execution of organizational goals are taken into consideration and institutionalized through policies, procedures, and technology

Slide 31: 

31 Current Method for Supporting BI/Analytics N=168 (Base=Respondents familiar with BI status): QI17A. How does your organization currently support and plans to support your BI/analytics? - Currently supports Head of FinancePharmaceutical Company "Data governance is perhaps the single most important task for ensuring performance management project success. Without a common set of terminology, metrics, and key data elements, even the best-intentioned organizations with the latest software tools will fail in their performance management efforts. In our case, establishing a virtual data governance team that consists of finance, line-of-business, and IT staff turned out to be a key success factor.”

Slide 32: 

32 Planned Method for Supporting BI/Analytics Encouraging Signs N=168 (Base=Respondents familiar with BI status): QI17B. How does your organization currently support and plans to support your BI/analytics? - Plans to support IDC research suggests that a best practice is to set up a data governance body as a virtual entity that is made up of employees with decision-making authority. Much of the job of the governance body is to explain, cajole, influence, placate, and otherwise bring different end-user groups into agreement about a common language for managing organizational performance. A governance body must show leadership in resolving any intergroup conflicts. Success stories sound like this interview, "as a result of the new BI solution, including the establishment of common metrics and software tools, data has now become actionable“ or “we created a common global language for analyzing performance-related topics.”

What’s Next? Big(ger) Data : 

What’s Next? Big(ger) Data The Data Explosion continues. Expansion of the very large data warehousing (VLDW) market with multi-hundred terabyte data warehouses is now relatively common. Need to move past “coping” with data explosion to “thriving” with it. Lots of new technologies are moving from the GOOG, AMZN’s of the world and into other areas. Providing all users with access to information is not enough. To achieve pervasive BI, an focus must be placed on data integration & data warehousing–related tasks. Fundamentals are still first – a task magnifying by the volume of information.

What’s Next?Mobility: Beyond Devices into Apps & Solutions : 

What’s Next?Mobility: Beyond Devices into Apps & Solutions Secure Operational Decision Making… …but on multiple devices? …and locational data, both personal & corporate is already here… …New form factors enable new ways of doing business… …but at a cost…

What’s Next? Changing Interfaces : 

What’s Next? Changing Interfaces Consumerization of Enterprise Software Gamification of Enterprise Software Changing Interfaces to Software

Conclusion : 

Conclusion The implementation of a closed-loop performance management process can yield a powerful advantage by enabling an organization to link strategic planning to tactical execution. The Office of Finance must: Collaborate Coordinate Integrate Communicate Close The Loop 36 Visibility into our business at levels previously not possible lets us make better decisions about how we spend resources to meet short-term goals that accumulate towards meeting our long-term plans CFO, Services Provider

Nigel Wallis : 

Nigel Wallis nwallis@idc.com

Alan Whitehouse : 

Alan Whitehouse TGO Consulting

The Corporate Performance Management Loop : 

The Corporate Performance Management Loop

We Love ExcelThe #1 Budgeting and BI Tool For a Reason : 

We Love ExcelThe #1 Budgeting and BI Tool For a Reason Everyone Owns It Everyone Has Used It Easy Enough for Beginners Power for Advanced Users But Excel Leads To…

Excel Hell ! ! ! : 

Excel Hell ! ! ! Number of Workbooks Slow Turn Around Endless emails The Merging Mess Out of Date Data You Did That Calculation How? Multiple Versions of The Truth

We Have An Answer : 

We Have An Answer Excel Web-Based Budgeting Ease of Use Power of Excel Centralized Control SharePoint Web-Based Business Intelligence BI for the Masses Power for the Analysts Configurable for All

DEMONSTRATION : 

DEMONSTRATION

The Corporate Performance Management Loop : 

The Corporate Performance Management Loop

Next Step The Proof of Concept : 

Next Step The Proof of Concept Meet with TGO to Discuss Requirements TGO Takes Copies of Your Data/Forms We Present Back Mock-Ups that Are Specific to Your Company

Questions? : 

Questions?