 |
Cpm Gives Enterprises Adaptable it Infrastructure
Author: Jose Allan Tan  | Posted: 02-02-2008 | Comments: 0 | Views: 2 | Rating: (52)  (?) 
 In a competitive environment, competing businesses try to outclass, outbid, outshine and outperform the each other. Nowhere is this more prevalent than in the financial services sector where competition is fierce and product differentiation is virtually non-existence. Time-to-market advantage is all but useless as copycats can deliver better offerings in a matter of weeks. In such a highly competitive environment, the best strategy is to compete against oneself. For by trying to outdo a known benchmark (your own), realistic goals can be set and performance targets achieve.
Until recent years business managers assessed the performance of their enterprises by seeing if the planned strategies are being met and the targets exceeded. The perennial challenge has been to drive strategy down and across the entire enterprise, transform strategies into actionable metrics and deciphering what the numbers mean in the hope of making profitable decisions.
Business managers are looking for ways to measure the performance of products and services to determine which ones can generate the most profit. They want to measure the performance of business units to determine where they should invest for growth. They want to measure the performance of customers to identify lucrative demographics. They want to measure who are contributing to the company's success, who need retraining, and who need to go.
Within the financial services industry performance measurement is a major challenge. Factors such as risk and cost of capital must be factored into profitable calculations. Selling costs are often difficult to capture.
What is needed is a method that allows a systematic, integrated approach that links enterprise strategy to core processes and activities. "Running by the numbers" now means something as planning, budgeting, analysis and reporting can give the measurements that empower management decisions. Corporate Performance Management or CPM is one such method.
Gartner defines CPM as the processes, methodology, metrics, and technologies that enable an enterprise to manage the performance of its business. Although most companies probably have systems or applications that fit into that definition, many are just starting to look at the broader, corporate-strategy-oriented benefits that most analysts believe CPM can deliver.
CPM is really about tying together the strategic initiatives of a company and being able to dynamically drill down into tactical execution plans and data that are coming from operational systems. "Companies may start with a specific need, such as a balanced scorecard or business planning, but ultimately they should choose a solution that can be part of a larger strategy and a larger vision," says John Van Decker, senior vice president of META Group.
Implementing business performance management is not like simply buying applications and suddenly having business performance management capabilities. It's really part of a business process to be able to more dynamically forecast and make changes to your enterprise plan at the highest level and then have those changes filter down into the organization, getting the results into the hands of the managers who influence business on a daily basis.
But CPM is more than technology. It often requires significant cultural change -- from how people share information to what actions and behaviors employees take, based on performance metrics or business results.
Finally, CPM is more than just about measuring performance. Distinction should be made between performance measurement and performance management. A measurement is a static indicator. However, such measurements are not enough on their own to manage a sales strategy, which requires a combination of controls, discrete and continuous indicators, plans, targets, and tactical decisions. Enterprises should watch for solutions that are no more than measurement tools and do little else.
Because CPM combines the elements of business intelligence with those of planning, budgeting, and appropriate-time monitoring, integration with an organization's existing IT assets is important. CPM solutions are often required to work alongside competing offerings and support other elements of CPM in a best-of-breed approach. The goal is to have a flexible CPM architecture that allows the organization to introduce and adapt to new elements of IT infrastructure easily.
Case Study
On any given month the management at Amalgamated Bank of South Africa (ABSA) Group would sift through more than 1200 reports to make business decisions. What's more, no one was clear how much of the information contained in those reports was actionable. Management needed to make sure their investments in creating information actually help managers make better business decisions.
ABSA completely overhauled its approach to business intelligence and performance analysis. A standardized approach was developed and implemented throughout the organization under one technology platform. Classic Kaplan and Norton balance scorecard principles were applied to all business units. To guarantee everyone had access to the system, a Web-based user interface was chosen. To ensure everyone fully co-operates with the implementation, successes at each business unit was conveyed to everyone.
Savings followed quickly as ABSA terminated fragmented projects. The CPM projected quickly identified systems and processes that were leaking performance and resulting in lost opportunities. More importantly, counter measures were implemented to repair these situations.
At ABSA, we learned to aim for early delivery of tangible results, and use those benefits to drive broader support (making sure to avoid the hard sell approach). Finally, to make sure that the metrics are relevant to managerial decision making.
Another CPM story is Union Bank of California. Clear recognition that summary-level data was insufficient to support tactical and strategic decision making in a competitive environment forced the bank to re-evaluate its reporting mechanism. The two-phase CPM project entailed the building of a detailed data capture-end-report mechanism and placement of consistent metrics across the enterprise. This enabled the bank to precisely measure profitability and ensured same statements were reconciled with the general ledger system. Managers were then able to compare actual budgets against projections. The second phase saw pro rata cost allocation replaced with more granular activity-based costing. This enabled the bank to do precision segmentation.
Not the end of the story
Having successfully implemented a CPM doesn't guarantee success altogether. You need to continually evaluate the CPM against set expectations which are dynamically reset to higher goals at every milestone, taking into account marketplace volatility, product proliferation and competitive pressures.
Companies with best-in-class CPM processes and technologies focus more on improving new product introduction strategies and processes, and relatively less on cost-centric value chain strategy pressures than their competitors.
Aberdeen Group lists the following as essential takeaways
Analyze performance from the profit impact across the value chain and not by functional silo; this requires access to financial and operating data at a customer/product/channel/market level of granularity
Identify the root cause of performance variances through better business data analysis -- the real cause of a shortfall is rarely where the impact is measured
Institute a continuous learning environment with a closed loop decision process to inject findings into the company's future decision making process
Support end user access to decision data and "what if" simulation tools in an 'on demand' environment
Pay particular attention to analyzing early the performance of your own and competitors' new and enhanced products -- remedial action requires compressed time to identify issues and determine best responses.
The adventure continues...
Rate this Article:
Current: 0 / 5 stars - 0 vote(s).
Article Source: http://www.articlesbase.com/information-technology-articles/cpm-gives-enterprises-adaptable-it-infrastructure-322802.html
About the Author:Jose Allan Tan is a technologist-market observer based in Asia. A former marketing director for a storage vendor, he is today director of web strategy and content director for Questex Asia Ltd. He also served as senior industry analyst for Dataquest/Gartner and was at one time an account director for a regional PR agency.
|
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free! |
|
Related Articles
Why Companies Need Business Intelligence
By: Jose Allan Tan | 31/01/2008 | Information Technology
Business Intelligence is about enabling enterprises to use available information to make better business decisions. BI tools' failure rests in the business unit's failure to communicate their needs and IT's failure to ask the right questions. The result is solutions that fail to deliver expectations.
10 Simple Rules for Successful ERP Projects
By: Jose Allan Tan | 02/02/2008 | Software
Up to 75 percent of all ERP projects fail and failure is often ignored until the consultants leave building. The blame does not entirely rests on the hands of those in charge of integrating the solution into the existing business process. Everyone is to blame, including senior management, for failing to realize that ERP requires an enterprise-wide transformational change.
New Challenges in Business Travel
By: Jose Allan Tan | 31/01/2008 | Organizational
Time efficiency and flexibility will become increasingly important to commuters. These travelers will select to use suppliers which facilitate smooth and fast travel.
Taking Some of the Headache -- and Cost -- Out of Trading Transactions
By: Jose Allan Tan | 02/02/2008 | Management
Imagine if you have a system where the information about your business is stored electronically and when you need to issue an LC, you simply connect to a service provider, identify the bank you want to deal with and provide the details of the track. The system extracts the appropriate information and electronically fills in the form.
Where is your Competitive Edge?
By: Jose Allan Tan | 02/02/2008 | Technology
For an organization to effectively compete, it needs to be intimately familiar with its strengths. A company can excel in one of three areas: operations, customer relationship and innovation. In recent years, it has been proven that a well-integrated information technology can add significant value to each of these areas.
Logistics Industry: Intentions are Good But You Need a Strategy to Survive
By: Jose Allan Tan | 02/02/2008 | Organizational
A Supply Chain Management strategy enables the alignment of mutual business goals within the network to achieve competitive advantage against other supply chain networks as opposed to traditional discrete company competition. At the heart of this strategy is technology and processes that enable a network of businesses to work seamlessly together to serve one customer.
Biblical Entrepreneurship - Part 2
By: Stephen D. Owens | 29/03/2008 | Entrepreneurship
This is the second article in the series dealing with Biblical Entrepreneurship. In this article, we will focus on one of the main components of being a Christian entrepreneur. The topic of today is service.
Build Your Own Call Center: Advise From the Field
By: Jose Allan Tan | 02/02/2008 | Business Opportunities
Following the feature "Call Center opportunities -- what's all the fuss about?", we continue the series with a look at the process of building a call center from the ground up. Critical to the success of building a call center business is due diligence, flexibility, adaptability and persistence. The recommendations listed here are from field discussions with owners and managers of existing call centers in Asia.
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
With inflation eating into every pocket and ...
By: arllyn | 11-07-2008
With inflation eating into every pocket and Crude oil prices surging ... What should India look forward to?
What is the right time to start with stock investing?
By: Tadday | 11-07-2008
Stock Investing - what is the right time to start with stock investing?
What is Melvin A. Wilmore doing now?
By: steve pearce | 11-07-2008
What is Melvin A. Wilmore doing now?
C of C?
By: mike | 10-07-2008
what does "C of C" stand for? I am being requested to furnish one for a printing project my company is providing.
Who is Robert Tuck and Leisure Ventures in Houston ...
By: AA Travel | 10-07-2008
Who is Robert Tuck and Leisure Ventures in Houston, Texas?
Looking for a hotel/motel help
By: jen walker | 10-07-2008
HelloI dont know if any one out there can help me or not, but i would like to know, i am trying to buy a hotel/motel start property but my credit score is 500 and no bank is willing to loan me the money to but a property, the size of the preproty that i am looking for is from 30 to 60 room with NO resturant. where i would like to have it is in AK,WA,ID.MT,ND,PA BUT If SOME ONE WOULD LIke me to be some where els thats fine. At this time i am a manager for a wearhouse with a B.S in hospitality and i would be glad if i can get my first starter property. yes i will do what i have to, get down to give you your money back. Please if you can help me let me know.
Q&A Powered by: 
Latest Information Technology Articles
Online Support for Personal Computer
By: Smit Mathur | 23/07/2008
Online computer Support is gaining esteem among tech users for helping Home Users and Business Magnets avoid hauling themselves into the hassles connected with taking their computer to a service center.
Search Engine Optimization and Its Benefits for You
By: Sarah Folgea | 23/07/2008
If you're a new webmaster and have recently uploaded the company web site online, you may or may not be surprised to find out that there is now much more to your job than just uploading additional content and answering readers' emails. For a web site to be considered successful, it needs a steady stream of visitors coming in. But how do you increase the number of your site's visitors? Well, most knowledgeable web masters employ search engine optimization and you should, too.
How Healthy is Your Website?
By: Sarah Folgea | 22/07/2008
On occasion, SEO consultants have been compared to the likes of medical doctors. They have been expected to correctly analyze and diagnose the symptoms of your website. Instead of reading medical x-rays, the SEO consultants take a look at the integral workings and symptoms of your website and determine what is healthy and what could use some improvement.
Using Podcast Submissions to Enhance Your Podcast Marketing Strategy
By: Christopher Conlan | 21/07/2008
Podcast marketing is a crucial part of your overall podcast strategy. Once you’ve developed the idea, bought the equipment, downloaded the software and created your podcast the next question is “how do I find an audience”. Start with how the audience finds you as your premise and make sure you’re where they’re already looking.
Bit Torrents
By: srimanigandan | 19/07/2008
Bit Torrent is small file which contains all the information that needs for the info needed for the download which the torrent made for, it contains the file names, their sizes, location of download and many other information
Technology Project Planning: Too Much of a Good Thing?
By: Timothy Nuckles | 18/07/2008
For project owners who are in the midst of planning a new project—gathering requirements, fleshing out specifications, polling user preferences, etc.—the law of diminishing marginal returns sets in much earlier than they realize. The resources spent during the initial planning stages produce some hefty returns. But soon after, spending the same amount of resources again, and the next time after that, will produce smaller and smaller chunks of benefit.
High Hopes for Open Virtual Machine Format
By: Arthur Cole | 17/07/2008
Will the OVF, the Open Virtual Machine Format, really make it easier to manage virtual resources across multi-platform environments?
The World is a Social Network, are You a Part of It?
By: John Barnes | 17/07/2008
The rise of social networking sites has meant that people can stay in touch and keep updated with their friends’ whereabouts.
More from Jose Allan Tan
Hardwiring Disk Encryption for Extra Protection
By: Jose Allan Tan | 08/07/2008 | Electronics
Data encryption falls under three broad categories: data-in-transit; data-in-use; and data-at-rest.
Why is Iso 14001 Relevant to a Sustainable Initiative?
By: Jose Allan Tan | 01/07/2008 | Ethics
“Within the next few years it may not be possible to conduct business in most of the world unless you can prove your ‘green’ credentials,” says Bob Hayward, Director of IT Advisory at KPMG.
Rising Pc Adoption is Translating Into Higher Software Piracy Rates in Asia
By: Jose Allan Tan | 01/07/2008 | Information Technology
Software piracy remains the scourge of many a software vendor. Through the efforts of lobbyist organizations such as the Business Software Alliance (BSA) governments in Asia are taking positive steps in reducing illegal software use both at the consumer level and in some cases even at the corporate and government levels.
Asia's Storage Priorities and Concerns
By: Jose Allan Tan | 02/06/2008 | Information Technology
A few years ago, I spoke to the CIO of a major Asian conglomerate. A fire gutted their main data center. Although the company never deployed a hot standby data center, they dutifully performed backups of their data every day. So when the time came to do a restore, the tapes were found to be blank. Oops!
Preparing for the Future Data Center
By: Jose Allan Tan | 02/02/2008 | Business Ideas
In the future, the forces of standardization, commoditization and virtualization will drive down the cost of the data center and reduce the time to get a configuration online, providing greater capability through the dynamic assembly of lower cost processors into massive networks of computing capability.
Best Practices in Building a Wireless Enterprise
By: Jose Allan Tan | 02/02/2008 | Networks
When mobile operator 3 Australia wanted to migrate its customers from 2G to 3G, it realized that beyond the preparation of a glitzy marketing campaign, it also needed to make sure that its 43 retail outlets and 45 dealers would be able to cope with the new business. The solution was nothing short of inspiring.
Successful Financial Supply Chain Strategy: the Cfo Connection
By: Jose Allan Tan | 02/02/2008 | Management
A study conducted by Accenture, Stanford, and INSEAD found that senior executives of leading companies view supply chains as critical in their operations, and most agreed that investments in supply chain capabilities have increased in the last three years. Central to achieving such a transformation is the chief financial officer (CFO).
Unleasing the Potential of Retail Through Wireless Technology
By: Jose Allan Tan | 02/02/2008 | Networks
In the crazy world of commerce, few businesses are as predictably unpredictable as retail apparel. This unpredictability requires in-depth understanding of the business and the intuition to look beyond current practices. PEPPO Fashion in Bangkok answered this call to change.
|
|
Computers 
