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• What processes are missing or are inadequately covered?
• Are the market assumptions, including economic and competitor assumptions, recorded and monitored throughout each process?
• Can the defined metrics that appear in the strategic plan be monitored through each part of the CPM process? In what parts of the process do they fail to appear?
• Do the detailed written tactical plans tie in to the corporate strategy? Can they be measured and monitored throughout all the CPM processes?
• Can the planned, actual, and forecasted progress of strategic initiatives be tracked individually?
• What information is not getting to the right people?
• What information is being distributed that is superfluous to the implementation of strategy?
• What feedback loops or triggers that start a process are missing?
• What detailed analysis behind summary numbers is missing?
The answers to these questions should be documented, and the organization should determine whether the gap is being caused by the systems being used, the methodology being adopted, or simply a failure to consider something important when the system was implemented.
Identify Pain Points
The next step in building a CPM road map is to identify the pains being experienced in the current processes and the causes of those pains. The budgeting and forecasting process is the most likely source of pain in organizations.4 Many organizations still rely on spreadsheets and lengthy budgeting processes that do not respond easily to change or to the needs of management.
When identifying pain points, it is vital that the organization expose the root causes of the pain or issues that need to be corrected. For example, if the budgeting process takes too long, what are the contributing factors? Does it take too long because budget holders are submitting their budgets late? Is it because the budget submissions are incomplete or not within the established guidelines? Perhaps it is because the managers do not understand this once-a-year process or the system being used is too complex for novices.
The Strategy Gap
Assess Planned Business Intelligence Initiatives
At any given time, an organization may be planning or implementing various business intelligence initiatives. It is important to review these initiatives because a particular one could work against the implementation of a CPM solution. For example, if a new customer relationship management (CRM) analysis system is being implemented, it is important to know whether it can form part of a detailed store beneath the reporting of a summary CRM measure. If the CRM analysis system is a stand-alone solution, then it may be difficult or impossible to integrate it into the final CPM system. This would result in having two systems that could cause integrity problems because each system could potentially give different results. It also would double the maintenance effort because there would be two models to maintain.
Corporate performance management solutions are built on top of a business intelligence (BI) platform that could and should be used for as many BI initiatives as possible. In this way, administrators have only one set of technologies to learn, and integration between the various data stores will be greatly simplified. Reviewing all the current and planned BI initiatives may help to leverage development effort and will certainly help in the planning of any integration that may be required in the future.
Calculate Return on Investment
The return on investment of a CPM system should be assessed relative to the strategic gaps and pain points being resolved. Because systems are expensive and resources are limited, organizations have to continually assess whether any effort is worthwhile. Without calculating return on investment (ROI) and quantifying value, it is too easy for organizations to cancel or delay essential initiatives. In addition to helping convey the value of a CPM implementation, calculating ROI also helps enterprises set priorities and choose the order in which initiatives are implemented. The calculation of ROI is discussed in detail later in this chapter.
Set Implementation Priorities
Having established the value of delivering the various components of a CPM solution, the order in which to implement them can be deter-
mined. The best way to do this is to consider five aspects of the existing system(s) and how it needs to change over time:
1. Comprehensive. Does the system cover all aspects of the organization (sales, production, materials, labor, overhead, capital, cash, etc.), leading and lagging indicators, and intangibles?
2. Strategic. How strategic is the system in terms of sharing the corporate vision, linking initiatives to operating budgets, and focusing on objectives that drive the organization forward?