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The strategy gap lavaraging thechnology to execute winning strategies - Goveney M.

Goveney M. The strategy gap lavaraging thechnology to execute winning strategies - Wiley & sons , 2003. - 242 p.
ISBN 0-471-21450-7
Download (direct link): thestrategygapleveraging2003.pdf
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110
Corporate Performance Management Systems
sional technology. The strength of relational databases lies in their openness, that is, their ability to integrate with other systems, such as the general ledger and ERP systems. Another strength is their scalability, that is, the ability to support hundreds of users with large volumes of information. Openness and scalability are two key requirements in the deployment of CPM solutions.
Hybrid Solutions. In recent years, relational vendors, particularly Microsoft, Oracle, and IBM, have developed multidimensional capabilities within their relational products. Microsoft, for example, offers Analysis Services with SQL Server 2000. This product is multidimensional in appearance and maintenance but uses relational technology to store data and metadata. Oracle 11i and IBM DB2 OLAP Services provide similar capabilities.
These technology leaders have recognized that organizations need both relational and multidimensional capabilities but prefer them to be combined in a single technology. This combination frees organizations from potential integration and maintenance issues. By using a hybrid approach from a single vendor, users benefit from the performance and reduced setup time of multidimensional technology and from the openness and scalability of relational technology. Given this move toward hybrid solutions by the major database vendors, it seems that pure multidimensional technology products will be confined to niche markets in the very near future and may even die out altogether.
CPM APPLICATION TIER Integrated Processes
The application tier of a CPM system consists of functionality that turns data stored in the CPM model into plans and results. As discussed in Chapter 3, a CPM system must manage and support the core CPM processes of strategy formulation, scenario analysis, tactical planning, budgeting, communication, monitoring, forecasting, and reporting. The CPM application tier must fully integrate these processes, allowing organizations to focus on implementing strategy and avoid the strategy gap. All CPM systems also help organizations to become event or trigger based rather than calendar based. The checklists shown in Exhibits 5.8 through 5.14 outline the base CPM system functionality required to support each core process.
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The Strategy Gap
Exhibit 5.8 Situation analysis and strategy checklist.
Situation Analysis and Strategy Formulation Functionality Checklist
Strategy Formulation
□ Create financial model based on centrally defined business dimensions.
□ Integrate actual, forecast, and historic data from a central database
for modeling purposes.
□ Model information based on strategic initiatives.
□ Driver-based modeling—for example, the ability to enter a driver such
as an inflation rate that uplifts all relevant data.
□ Link strategy text with resulting goals to allow publication of the strategic plan. Scenario Analysis
□ Top-down goal setting that allows a total to be entered that then adjusts the
underlying data.
□ View, side by side, various scenarios in order to evaluate and choose
the right combination of strategies.
CPM CLIENT TIER
The client tier consists of the user interface through which users gain instruction and interact with CPM processes. It must be designed carefully to meet a range of different user needs. For example, management needs to be able to communicate objectives, goals, and timetables, and review results. Users need guidance through the various CPM processes. Additionally, users must be able to communicate with management on
Exhibit 5.9 Planning checklist.
Planning Functionality Checklist
□ Development of tactical plans linked to strategic goals.
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Corporate Performance Management Systems
Exhibit 5.10 Budgeting checklist.
Budgeting Functionality Checklist
Revenue, Expenses, and Capital Planning
□ View strategic plan text and goals, budget timetable, and
budget-pass objectives.
□ View actual, forecast, and top-down goals by strategic initiative.
□ Generate a seeded budget based on historical extrapolation.
□ Enter data against targets by strategic initiative and other relevant
business dimensions.
□ Spread annual amounts based on seasonality and other relevant profiles.
□ Plan salaries by employee, groups of employees, title, and grade. Includes
entering percentage amounts, bonuses, and more by date to generate periodic amounts without user involvement.
□ Plan assets by asset type, group, and more. Should include the automatic
calculation of depreciation and book value based on asset criteria.
□ Calculate and post allocations.
□ Attach text and notes to entered numbers.
□ Support user-defined planning that can take place at a lower level than
defined by the CPM model, such as budgeting advertising by publication when only a total advertising account has been specified in the CPM model.
Plan and Budget Review
□ Support an approval process where users enter plans and submit them
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