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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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Exhibit 5.17 Hierarchical exceptions capture exceptions in the context of their positions within structures.
phones,” and more. The products are divided up further within each of these members.
The coding of each variance is shown in relation to where it fits within the product hierarchy. This type of display helps users to evaluate whether the exception involves the entire entity (telephones), or a portion of it (Digital Phone T95 SP). In the example shown, the user can click on a member and drag it to rotate the hierarchy, revealing all parts of the structure. Those members that are not in focus can still be seen as color-coded dots. In this way, it is possible to view and understand thousands of exceptions quickly.
Detailed Exceptions at a Summary Level. Often summary reports can mask detailed exceptions. For example, if one budget center misses its goal by 5,000 but centers within the same division exceed their goals to the same extent, the entire division will appear to be within budget. In a CPM system, the color-coding for the division would show the division being within budget overall but would place a symbol alongside the division to show that a detailed unit was outside of the acceptable limit, prompting
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further investigation. When a user clicks on the symbol, the detailed variance is presented. By employing detailed exception reporting, hidden exceptions do not go undetected, and time is not wasted searching each hierarchy for exceptions that may not exist.
Software Agents. Because business is changing so rapidly, organizations rely on CPM systems to provide proactive alerts to bring exceptions to their notice without having to search and analyze reports. Software agent technologies do this searching automatically without the user even needing to be present.
When an exception is found, the software generates an alert, often in the form of an e-mail that is then sent to the appropriate user. Upon opening the e-mail, the user can select the alert and view the place in the database that generated the alert. Exception rules can be quite sophisticated, such as “generate an alert when sales for three consecutive months have decreased, while at the same time advertising expenditures have increased.” Like warning systems in a car, this means users will be alerted only when there is an issue that needs immediate attention, instead of having to spend time monitoring results.
Once an exception has been highlighted, CPM system users can— security permitting—access data online in any time period or version without advance notice. Reports do not need to be preconfigured. Users are able to view and analyze data across any appropriate dimensions, without limitations, such as by initiative, product, line of business, and so on. They are able to rotate and nest dimensions as well as drill down to lower levels of detail within the model. These drill-downs use the most current structures. When the lowest level of the business model is reached, drill-downs are capable of going back to the underlying data source.
The CPM systems also allow end users to produce their own, unrestricted (security permitting) analyses. These analyses include sorting, color-coding, charting, and ad hoc calculations. These analyses can be saved and recalled by users at a later date but will then feature the most current data.
These analytical capabilities are essential if users are to detect variances and their causes. With them, CPM systems prevent surprises. Users are always aware of current and potential exceptions and have time to evaluate alternative courses of action. These analytical capabilities also greatly reduce the time and effort the typical finance staff spends in supporting end-user queries.
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SUMMARY
The architecture of an application is often hidden from end-user view, but it will have an impact on the maintenance of a CPM solution and the processes that can be supported effectively. It is not sufficient for CPM systems to have most of the features discussed because the benefits of one feature may not be fully realized unless it is accompanied by others. For example, the web by itself will not make a system easier to support unless it also is accompanied by a central database, full process support, and end-user analysis. It is only by taking all features together that make true CPM applications easier to set up, maintain, and able to cope with continuous planning, budgeting, forecasting, financial consolidation, management reporting, and analysis. For this reason, CPM systems that consist of older-type applications that have been linked together are likely to fail.
Chapter 6 highlights some successful CPM system designs and reviews some of the benefits organizations are obtaining. Chapter 9 provides guidelines for evaluating vendor solutions that deliver true CPM functionality.
Endnotes
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