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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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1. Hackett Best Practices, 2002 Book of Numbers: Strategic Decision-Making (2002), 4.
2. Ibid.
3. Robert Blumstein and Henry Morris, Worldwide Financial/Business Performance Management Software Forecast and Analysis, 2002-2006, Document no. 27346 (Framingham, MA: IDC, 2002), 13.
4. Raymond R. Panko, What We Know About Spreadsheet Errors, Research Paper, University of Hawaii, 2000, 3, from web site
5. Bill Hostmann and Kevin Strange, Data Model Options That Support CPM Deployments, Research Note DF-15-9618, Gartner, Inc., May 3, 2002, 2-4.
Corporate Performance Management at Work
Early adopters of corporate performance management (CPM) are visionaries. They have turned against conventional approaches to planning, budgeting, and reporting in the belief that there is a better way to manage the implementation of strategy.
In most cases, these visionaries have established partnerships with computer software vendors to exploit that vendor’s technology expertise and experience in delivering solutions to other organizations. These partnerships are mutually fruitful. The vendor is able to use the experience to create solutions that it can take to the market with references from a live user base. The client organization is able to share the costs of developing a solution using the latest technologies and sometimes can influence its functionality. Gartner found that the success of early adopters’ systems often depended on the capabilities of their business intelligence (BI) solution vendors.1
Development of these early solutions always started with a pressing problem that needed to be solved. For most of these organizations, the most pressing problem was that their current budgetary planning and reporting systems did not meet their needs. They were fragmented, disconnected from strategy, and expensive to maintain in terms of both cost and effort.
Corporate Performance Management at Work
Gartner notes that early adopters of CPM had two common themes when implementing their CPM solutions:
1. The implementation of a second wave of Balanced Scorecard that more closely tied together operational and transactional data
2. The integration of disparate applications and processes such as budgeting, forecasting, consolidation, and financial reporting2
The designs and implementations of all the early adopter systems covered in this book were led by chief financial officers and are used by senior executives and operational managers to run their companies. These systems were seen as strategic to the organization’s ability to manage corporate performance; they were not seen as “just another software package for budgeting.” While some of these systems are not yet fully operational CPM solutions covering all aspects of performance management, all have been designed to deliver broad and expanding CPM capabilities over time.
Today’s CPM early adopters report a number of benefits. Many remark on dramatically reduced cycle times, allowing them to complete tasks they never would have attempted with their old systems. Others comment on how they are better able to use their time. Rather than spending it collecting data, looking for errors, and replicating information, they can use their time to analyze results and test scenarios. They marvel at the improved quality of their data, which in turn inspires confidence among managers about the decisions they make. Early adopters believe that they are now better able to respond to changing business and customer needs, which leads to competitive advantage and increased shareholder value.
San Diego Unified Port District: United States
The San Diego Unified Port District is a special government entity responsible for the harbor, airport, and public tidelands of San Diego, California. Like many organizations early on the path toward CPM, the Port identified budgeting as a pain point within the organization.
“For years, we handled the input and review of budget information via spreadsheets,” says Bob Graves, budget administrator for the Port.3 “Our staff assistant maintained a monstrous multiple megabyte spreadsheet that had almost everything in it, including entries for the entire
The Strategy Gap
chart of accounts. She would copy one worksheet for each of the 40 departments onto individual diskettes, then mail each of them out for input and review. As departments submitted revisions, we had the perennial problem of having multiple versions of the information. Then it took two weeks to publish the budget book once all the numbers and worksheets were final.”
In 2000, the Port implemented the first phase of a new CPM system to help with budget preparation. The system’s central database helped the Port eliminate the version control issues it had with traditional spreadsheets. In addition, it helped the Port dramatically decrease cycle time, which became a factor when a major reorganization happened in the middle of that year’s budgeting cycle. The reorganization affected about 40 percent of the Port’s departments. In addition, once the budget was re-created, the organization had to make cuts and resubmit the budget. “Management wanted new numbers the next day—and we were able to do it with the new system. What used to take a week could now be done in a day,” reports Graves.
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