Information on Demand: How New Turbo-Charged Tools Are Changing the Face of Business Performance Management
Menninger, David, Strategic Finance
Just as spreadsheets changed the nature of numbers crunching, powerful business performance management (BPM) tools are now changing the way we gather information and use it. Good thing, especially since executives want more information faster than ever before. The age-old tools of financial analysis simply can't meet these demanding requirements.
Timely information is critical to being effective in BPM, which is about aligning business strategy with resources and execution to generate optimal results. Thanks to new information technology tools, executives can gain unprecedented insight into business performance in near real-time. This on-demand ability to take the temperature of any aspect of a business and to model the reactions that will occur to any business action means executives can make faster and better forward-looking decisions.
And it isn't just executives who need to access the information. From line-of-business (LOB) managers to executives, people throughout the company need to view, understand, and manipulate raw business data. Granted, spreadsheets are useful for presentation information, but they don't always offer the depth and breadth needed for a full understanding of the data. As more team members touch the information, financial managers need to provide tools that make it as easy as possible to use the data. This is where BPM tools can help.
Let's first consider what to look for in new BPM information technology and then discuss the trends fueling the need for real-time information to succeed in today's business environment.
SELECTING A SOLUTION
By integrating an analytics solution with operations information, a BPM solution enables executives throughout an enterprise to take action: They can plan, analyze, and adapt to the data's implications with the result of optimizing business performance. For example, a large hospice company has a complex system for numbers crunching, performing what-if analyses, scenario planning for start-up sites, labor management, and drug formularies. Rather than "hard-code" custom reports for each LOB executive, the company uses a BPM system that puts easy-to-use analysis tools in their hands.
When looking at the facets of a BPM tool, you should require support for the following processes:
* Key performance indicators (KPIs), scorecards, dashboards, and alerts that monitor performance against operational targets.
* What-if scenario analysis for understanding the impact of business decisions.
* Continuous and real-time review and refinement of performance measures.
* Interactive decision making across all levels of the company that aligns individual targets with strategic objectives.
* Data exploration, query, and analysis, including drill-down.
* Profitability analysis of the company, business units, products, channels, and customers.
* Integration with multiple enterprise resource planning (ERP), customer relationship management (CRM), and other operational systems.
In addition, you need to consider some basics about your business. For example, if financial planners and analysts are most comfortable working with Microsoft Excel, you need to focus on tools that offer Excel (natively or in add-ins) as the user interface. And if your business requires monitoring performance and numbers on more than a quarterly basis, you need to select a solution that goes beyond batch processing into real-time presentation of fluctuating data.
Also, determine how many people need to work with--not just view--the numbers presented in the BPM system. If your answer is several financial planners and analysts, line-of-business managers, and executives, then you clearly need a solution that allows for multiple users to both review and update information in the application.
By assessing the type of data you need and the way you need to work with it, you can make some strategic decisions on how to implement BPM within your organization, which takes you beyond business intelligence (BI) applications. …