This article launches the yearlong focus of this blog on leveraging the right corporate performance management (CPM) tools to manage and analyze data.
The purpose of the blog this year is to provide executives, leadership teams, and those charged with organizational decision-making with a non-technical guide to help them understand the benefits and capabilities of modern corporate performance management (CPM) suites and to assist them in the analysis of their own organization‚Äôs current versus ideal-state capabilities to support optimal decision-making. By the three-quarters mark of this year, if you‚Äôre following this blog, the goal is for you to be an executive-level expert on this topic so you can help lead your management and project teams to select and deploy a CPM platform that will have a significant material impact on the performance of your business.
In other words, this blog will discuss optimizing your organization’s ability to make fast and good decisions by implementing a complete decision-support platform.¬†Before I go into more detail, let me establish what world-class decision-making can potentially do for the success of your company, and then we will look at how to use CPM technology as a major enabler to achieve this goal.
Here are some of the key findings from a survey published by McKinsey & Company. They received 2,327 responses from executives across the world and across all major industries. Companies who responded to the survey reported making decisions related to the following:
- Product, service, or geographic expansion
- General organizational changes
- Investment in current products, services, or geographic areas
- New infrastructures
- Mergers and acquisitions
- Maintaining the current infrastructure
The same survey also asked respondents about the various discussions that were key to their decision-making processes. One of these topics was the issue of who would participate in the decision-making process. Including workers based on their skills and experiences was believed to increase the likelihood of a positive outcome. According to the survey, when experienced employees were involved in a decision, revenue increases exceeded expectations by 59%; profitability exceeded expectations by 61%; and speed of completion exceeded expectations by 63%. But because of factors such as promotions, turnover, retirement, and lack of well-organized IT systems of record, expertise is often ‚Äúlost‚ÄĚ and not available to new or less-experienced decision-makers.
Additionally, when the decision-making process was transparent to all participants, positive results were seen. Transparency resulted in revenue increases that exceeded expectations by 58%; profitability exceeded expectations by 57%; and speed of completion exceeded expectations by 54%.
The results from the survey indicate that transparency, alignment with corporate strategy, and including key employees all help drive the success of the decision-making process. In other words, because of the significant direct impact on the company‚Äôs bottom line, apart from the actual designing of a high-quality decision-making process that includes thorough analysis, collaborative discussion and strategic planning, top management should encourage and support the implementation of modern technology to support and enable such critical processes.
So, the 2018 goal (or New Year‚Äôs resolution) of this blog is to discuss how technology can be used as a key enabler of world-class decision-making across your organization. Instead of implementing a complete, integrated CPM solution, most organizations have until now lacked a cohesive data management and analysis strategy, and they are still being reactive to their decision-makers‚Äô pursuit of more and better information by just adding a dashboard tool or replacing a report writer. Some try to attack the problem at the transaction level by attempting to build a home-grown enterprise data warehouse or by implementing a budgeting and forecasting point solution and hoping to achieve some incremental benefits. While it is completely fine to replace a specific CPM tool, like exchanging an older live ERP report writer with a new one to best serve a small group of users such as the accounting team, you need to think bigger if you aspire to enable world-class decision-making. The reasons are many, as this blog will cover in detail, and the return on investment (ROI) can be high by implementing a complete planning, reporting and analysis platform that can serve organization-wide managers and information workers with the key information they need for better decisions. Every organization that wants to be competitive will have this type of platform in the future, and some are already on their way. It is not implemented overnight because a successful solution requires good internal processes as well as reasonably clean transaction data, and of course it requires a highly flexible and user-friendly CPM solution to bring it all together.
Instead of several on-premise and cloud CPM tools being implemented separately based on how the platform is offered by each vendor, the optimal solution should be integrated and offered in the configuration that is best for you, both now and in the future. If that means being completely cloud-based or all on-premise or in a hybrid configuration, then the solution should let you do it that way today. Later, without replacing the tool, it should also let you migrate to a new configuration, for example all in the cloud if that is the direction your company is going.
Piecemeal replacement of different CPM software compared to implementing a complete, integrated decision-making platform is analogous to space, automotive and solar entrepreneur Elon Musk‚Äôs strategy to deliver a world-class product: He has built‚ÄĒand largely taken control over‚ÄĒan integrated supply chain. First, he collects renewable energy through solar panels, then stores it in batteries and uses it to propel vehicles, and then enables automated driving through autonomous technology to make it as easy and safe as possible to get from point A to point B. A complete decision-making platform should do the same: repeatedly pull data (like solar cells collect energy), store it (like a battery stores energy) and use it for better decisions to get the company from where it is today to where it needs to be in the future (like autonomous driving from point A to point B). If all of Musk‚Äôs components listed above came from different vendors, with different, not perfectly compatible interfaces, Tesla would likely not have a car business as successful as it is today. With its ability to quickly adapt to changes in technology and consumer demand, the result is that Tesla, despite its size and tenure compared to much larger car manufacturers, often is voted number one by consumers and experts. It will be in your best interest to approach your CPM technology future the same way. And this is just the beginning!
Solver enables world-class decisions with¬†BI360,¬†a¬†leading web-based CPM suite¬†made up of budgeting, reporting, dashboards, and data warehousing, delivered through a web portal.¬†Solver offers BI360 through cloud and on-premise deployment and is reinventing CPM with its next generation solution. BI360 empowers business users with modern features including innovative use of Excel in the model design process. If you‚Äôre interested in learning more,¬†our team is excited to hear about your organizational needs and goals.