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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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The summary data store typically has multiple detailed supporting stores. Each supporting store focuses on one particular area of the business, at a level of detail required to highlight any material change in the makeup of results. For example, while the summary data store may hold sales by major product groups, a supporting data store would hold sales by individual product and customer. This design would enable users to analyze the way in which various customer groupings buy products over
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Designing a Corporate Performance Management Solution
time. Supporting stores automatically feed the summary data store as discussed in Chapter 5.
The third type of information consists of links to documents, web sites, transaction systems, and so on. Links allow users to reference common documents that are connected with information held in any of the data stores as well as to interrogate supporting transaction systems directly. Examples of this type of information include written tactical plans, company reports, and lists of individual transactions for a particular product. Linking allows the CPM system to become a single point of contact for users when analyzing corporate performance.
Content of these data stores should not be limited to internal data. They should include competitor information, market assumptions, and external industry research. The design of this model is critical to the operation of the CPM system. Therefore, it must provide access to these types of information so that users can plan and monitor strategic initiatives.
Summary Data Store Content
The first step in designing the summary data store is to list all the business dimensions and dimension members that will be required. To do this, start by reviewing the strategic and tactical plans. For each tactic and associated goal, determine:
• The base measures and their associated business dimensions that are required to plan and measure the associated goals.
• The assumptions being made about the economic and competitive climate that could impact the achievement of the goals. In some industries this external information can be purchased. Otherwise, some form of research is required. If it cannot be purchased or researched, consider the following adage: If you cannot measure it, do not plan for it.
• The key performance indicators (KPIs) and other leading indicators that will be employed to warn users when a goal is likely to be missed.
• The person or department responsible for delivering the goal. If no one is responsible, then there is nothing to manage.
In the example shown in Exhibit 8.2, an organization has one goal and two tactics related to the strategy of improving sales productivity. The goal of this strategy is to generate revenue of $250,000 for each sales representative by growing the cellular product line by 25 percent over last
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The Strategy Gap
Exhibit 8.2 Review the strategic plan at a detailed level.
Strategy: Improve Sales Productivity
Tactic and Goal(s) Budget Center Measures Other Related Business Dimensions Frequency of Measurements
• Achieve sales of $250,000 per sales rep • Grow cellular product line by 25% on last year • Keep sales costs within 15% of total revenues Sales Sales Revenue Volume Cost of Goods Salaries Commission Other Sales Expense By person By product Monthly
External business assumption to be monitored: • Average sales per head of peer organization • Cellular market share
Internal threats • Not enough sales reps • Production can not meet demand Leading indicators to monitor • Number of sales reps and their level of experience • Cellular product line production levels
Level of detail to support monitoring • Revenue and volume by product, customer, and sales rep Level of detail to support forecasting • Volume by product • Revenue by sales rep
year and keeping cost of sales to within 15 percent of total revenues. The form has been used to document answers to each of the listed questions.
With this information, measures, dimensions, assumptions, leading indicators, and responsibilities (see Exhibit 8.3) can be determined for planning and tracking the strategic initiative. This process needs to be repeated for each strategy, tactic, and goal. The sample form included in Appendix B can be used to help facilitate this activity. The KPIs that monitor the success of this tactic will come from this list. In this example, the KPIs will be revenue, product growth, cost as a percentage of revenue, number of sales representatives, and product volume as a percentage of production.
The summary data store also will be used to generate management reports and probably financial reports. The reason why this is only prob-
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Designing a Corporate Performance Management Solution
Exhibit 8.3 Review the measures required to support each strategy, tactic, and goal.
Planning and Tracking by Initiative
Base measures and dimensions:
External assumptions to be tracked:
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