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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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As anyone who has implemented an enterprise-wide system would predict, implementing corporate performance management was not without its challenges for BCC. According to Ponych, “I think the first two phases of the implementation were made more difficult because we were recreating our processes at the same time we were trying to build the technology system. I wouldn’t recommend building a system until the business processes are finalized and clearly understood by everyone.”
Ponych continues: “We actually ended up recreating our business model after the first two phases of the technology system were implemented. We just had too much detail. It’s important to carefully consider what you’re really going to need and what you’re really going to use. Don’t just repeat what you used to do. Also, I think it would have been helpful to spend more time up front looking at what we could do to make life easier for our various users. If we had engaged more users initially, I think they would have been more aware that we weren’t just replacing systems because of Y2K. We wanted to take this as an opportunity to change what we were doing in order to make it better.”
Brisbane City Council soon will begin its fourth CPM phase: detail project evaluation. This functionality will enable the council to improve
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Corporate Performance Management at Work
its already robust project review and approval process through stronger data integration and by making the right information available at the right time of the process. This visionary organization also will be integrating more types of data into its CPM system in the quest to increase the efficiency and effectiveness of the performance management processes that support its vision of creating a better Brisbane.
Dutton-Forshaw: United Kingdom
Dutton-Forshaw is a leading European automotive and machinery group operating in a fiercely competitive, low-margin market. The group employs 1,800 people and has a yearly turnover of £450 million.
Following a management buyout from Lonrho in 1997, Dutton-Forshaw inherited a decentralized culture with 51 independent operating units. Competition was intense and the senior management team needed to control costs, improve margin opportunities, and culturally integrate the group for competitive advantage.
“Motor retailing is a low-margin, high-overhead business,” says Charles Cameron, finance director, Dutton-Forshaw Group.9 “Operating margins typically range between 1 percent and 3 percent. The manufacturers are keen to establish competitive advantage by ensuring brands are portrayed in modern environments utilizing the latest technology, which requires significant investment. Success depends on delivering excellence in customer service in a cost efficient manner.
“The growth in accounting and transaction systems in the business overwhelmed management with too much information and the relevance of the data was being lost. Without key performance management information, we were going to struggle,” says Cameron. “We decided to build a single system on a central database that could support all aspects of the financial management process—planning, budgeting, forecasting, and management accounting—and provide strong online reporting to allow executives and managers greater access to key data.”
In addition, the company traditionally had a decentralized culture that had each of the dealership units “reinventing the wheel.” “The company suffered from silo management,” says Cameron. “Everyone kept their own ideas and wouldn’t learn off other people. We had to move towards a more open style of management culture within the business and break down these barriers.” Dutton-Forshaw chose a CPM solution that enabled it to use its existing database technology, which would simplify the integration of data from its numerous internal systems.
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The Strategy Gap
“The CPM system has enabled us to reappraise the whole planning, budgeting, and reporting process,” says Cameron. “Previously, we wasted time in games of financial tennis, producing thousands of numbers by site and division. Future planning and forecasting processes will be a lot more efficient. Using one version of the truth undoubtedly saves significant time.” Divisional directors have access to the CPM system to drill down from the consolidated view to trial balance to examine individual dealership performance, uncover hidden details, and compare overheads between departments in similar or different franchises.
By implementing a CPM system, Dutton-Forshaw can now benchmark performance across business units, allowing managers to share best practices and improve sales performance. Cameron owned the implementation, and the project was finance oriented because the company’s key metrics are largely financial.
“Dutton-Forshaw has achieved significant benefits and return on investment,” says Cameron. “Some of the benefits are intangible, but they support broader strategic initiatives like the development of best practices and a learning corporate culture. As a result, management is much more focused on key issues and this has increased their ability to respond quickly to changing market conditions.
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