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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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REPORTS AND ANALYSES Reviewing Methodology
Corporate performance management systems contain more data than can be analyzed; the last thing busy organizations need is a slice-and-dice tool that their employees can use to wander aimlessly—and endlessly—
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Designing a Corporate Performance Management Solution
Exhibit 8.10 CPM enables collaborative dialogues throughout the organization.
through countless results. They need focus to be efficient and effective. Therefore, it is important to notify users about items that are outside of guidelines or expected results and what areas need further attention.
Similarly, reports can easily mask problems by not showing abnormal trends that are buried in the detail. In Chapter 3, a methodology was discussed that could be used to review the validity of a budget. Rather than looking straight at the bottom line, for example, a logical review of key questions could immediately highlight whether the budget is even attainable. Once this has been done, time then can be spent looking at the bottom line and determining how to improve it.
The same concept applies whether reviewing a budget, a forecast, or actual results. Determine what needs to be assessed and reviewed, and then lead users through this review process (see Exhibit 8.11). Bear in mind that “traditional” reports that are made up ofjust numbers do not necessarily convey information that is easy to digest. The CPM systems allow the imaginative use of visualization techniques that enables users to assess large volumes of data, helping them to determine which areas need closer study.
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The Strategy Gap
Exhibit 8.11 Using technology to lead users through a review process.
Exhibit 8.12 Corporate objectives and tactics by department.
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Designing a Corporate Performance Management Solution
Reviewing Strategic Success
Strategic success should be a focus of CPM systems. The systems can do this in some innovative ways. In the next example, the corporate objectives and tactics that apply to each department are shown as a grid. Selecting any of these would show the appropriate measures and results. This screen also allows users to investigate results by person, security permitting, irrespective of department or tactic (see Exhibit 8.12).
When a user’s name is selected (see Exhibit 8.13), a list of the individual’s specific tactics—color-coded to show the current status of actual versus plan—appears. Selecting any of these items then reveals the detailed results, which can be investigated further.
Another way of reviewing the total strategic plan is shown in Exhibit 8.14. This overview chart shows the four areas of a Balanced Scorecard. These four areas are then broken down into the various strategies and tactics. In the screen shot, only the financial aspect of the scorecard has been expanded to reveal each color-coded tactic and the status of each department’s success in attaining its goal. Selecting the department by clicking on its name reveals the detailed measures and how they compare to the plan, which is presented in a more traditional-looking report. This is a
Exhibit 8.13 Measures and results by person.
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The Strategy Gap
Exhibit 8.14 An overview allows the system user to quickly see the entire enterprise.
prime example of how technology can show quickly which parts of the plan are not working so that attention can be focused on them.
Reviewing Status against Competitors
Most organizations’ strategies include beating the competition, so it follows that results must be reviewed in light of the competition’s performance. To do this requires contrasting results and providing intelligence in a form that is easy to access. In Exhibit 8.15, for example, the summary data store holds updated key performance information on competitors, which is compared to the organization’s current performance. Using the provided buttons allows the user to change the measure being compared. This is currently set to “Return on Assets.” Similarly, a button allows the selection of a competitor and displays the latest intelligence about that competitor on the CPM system screen.
Another way to show how well the organization is performing against competitors is to show the trend in winning. This information would come from a supporting data store fed by a sales tracking system. Exhibit 8.16 is an example that shows the win rate ratio by sales
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Designing a Corporate Performance Management Solution
Exhibit 8.15 Comparing results with competitors' performances.
Exhibit 8.16 Win rate ratio by sales department.
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The Strategy Gap
Exhibit 8.17 CPM clarifies the impact of currency rate fluctuations on results.
department. This ratio is a leading indicator and can help focus management’s attention on actions that will improve future performance.
Reviewing the Impact of Currency
Currency fluctuations in an organization that trades in many countries can easily mask actual performance. All CPM systems are capable of working in multiple base currencies and with multiple versions of exchange rates. In Exhibit 8.17, this capability has been put to good use in comparing actual performance at both the budget and actual rate and plotting the result. Here a favorable movement in exchange rates has improved actual performance at a consolidated level. Performance had nothing to do with strategy. Other reports can be developed that show, by country, which units benefited from unexpected exchange rate differences.
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