Statement of Qualifications - Integrated approach to Reporting

A couple of weeks ago I received the Statement of Qualifications (SoQ), which was developed by one of our practitioners (Edwin van den Broek). The Statement of Qualifications is intended to inform our clients about our vision with respect to Corporate (or Integrated) Performance Management, the methodology and tools we use to implement Corporate Performance Management and some detailed business cases of CPM-projects we did in the past.

Deloitte successfully implemented a great amount of CPM-projects from which we developed best practices on how to create an integrated reporting cycle. All our experiences (good experiences and of course some bad experiences) helped us to develop this practical framework and I am convinced the document gives the reader a lot of insight in the way a CPM-project should be implemented.
I would gladly share a chapter of the SoQ with you. To be more precise, it deals with our vision on how to implement an integrated reporting cycle and I would like to invite all of you to read the chapter and leave your comments on the blog. I am really curious about your point of view and experiences on this subject.

If you are interested in receiving the complete Statement of Qualifications, please send one of our practitioners an email and the SoQ will be send to you.

Information: Identifying requirements and sources

• The first step toward integrated reporting is to identify the critical information decision-makers need and to select definitive sources. To determine an organization’s information requirements, start by examining its performance scorecards at the corporate, business unit, and functional levels. Identify the competencies and critical success factors that drive the success of the business and enable the organization to meet its strategic goals.
• Then use those insights to link high-level and detailed performance measures to the organization’s success factors and goals. It is also important to address the organization’s detailed reporting requirements. Those typically include: financial data (e.g., consolidated P&L, tax, statutory), customer and operations data (e.g., channel, backlog, sales pipeline), and people-related data (e.g., headcount, turnover).
• Once the information requirements have been defined, the challenge is building consensus on where the information will come from. Agreeing on an authoritative source for data is more difficult than it sounds. Most organizations have multiple applications that provide different answers to the same question, so decision-makers must decide which source will provide the one definitive answer everyone will regard as the truth. Achieving that consensus generally requires new procedures for reconciliation and synchronization.

Process: Capturing and managing data

• In some cases, an organization’s information requirements will include data that do not currently exist. Filling those gaps typically requires modifying an organization’s processes and systems to capture the data at its source.
• For consistency, key performance measures should be gathered at the same point as the detailed data — eliminating discrepancies and ensuring a single version of the truth.
• In many cases, process steps can be eliminated to speed up the process and improve reliability.

Technology: Organizing information for delivery

• Effective reporting translates raw data into meaningful insights that are directly relevant to the targeted decision-maker. Many companies strive for a single, do-all reporting solution. But in our experience, that rarely makes sense. Most reports fall into one of three categories, each requiring a different reporting approach:
• Executive information consists of high-level measures and key performance indicators that provide a quick overview of business performance.
• Analytic information provides focused, in-depth analysis across time periods, processes, locations, business units, and/or functional areas.
• Production and control information focuses on specific business activities within a defined time period (e.g., daily disbursement report, cash collection report). This information is generally contained within a single application or transaction system.
• While some organizations have successfully implemented a single solution for all three types of reporting, they often find themselves frustrated by the functional limitations of a single solution. Leading companies with IPM generally prefer to specialize, using ERP and transaction systems for production reporting, while applying data warehousing tools, online analytical processing, and advanced data analysis techniques to executive and analytic reporting.

Delivery: Disseminating information

• There are a dizzying number of options for presenting information, from wall posters, presentations, paper reports, and spreadsheets to e-mail and voicemail, PDF files, exception-based alerts, and interactive analysis tools. The right choice depends on both the situation and the particular needs of the decision-maker. Critical factors include cost, timeliness, importance, location, and technical constraints — as well as the sophistication and behavioral preferences of the targeted decision makers.
• While no solution is perfect for all situations, self-service web delivery is fast becoming a central part of every organization’s reporting strategy. Decision-makers already know how to use a web browser, significantly reducing the learning curve and providing a consistent interface for future enhancements and modifications. Web-based tools are also cost-effective to maintain — streamlining the reporting and decision-making processes.
  

Measuring Performance in Services

In the McKinsey Quarterly a good article was published about how to measue performance in service-oriented organisations. Services are more difficult to measure and monitor than manufacturing processes, but executives can rein in variance and boost productivity if they implement rigorous metrics.
Faced with stiffening competition, increasingly demanding customers, high labor costs, and, in some markets, slowing growth, service businesses around the world are trying to boost their productivity. But whereas manufacturing businesses can raise it by monitoring and reducing waste and variance in their relatively homogeneous production and distribution processes, service businesses find that improving performance is trickier: their customers, activities, and deals vary too widely. Moreover, services are highly customizable, and people — the basic unit of productivity in services — bring unpredictable differences in experience, skills, and motivation to the job.
Such seemingly uncontrollable factors cause many executives to accept a high level of variance — and a great deal of waste and inefficiency — in service costs. Executives may be hiring more staff than they need to support the widest degree of variance and also forgoing opportunities to write and price service contracts more effectively and to deliver services more productively.
As with any task or operation, to improve the productivity of services, you must apply the lessons of experience. Consequently, measuring and monitoring performance (and its variance) is a fundamental prerequisite for identifying efficiencies and best practices and for spreading them throughout the organization. Although some variance in services is inescapable, much of what executives consider unmanageable can be controlled if companies properly account for differences in the size and type of customers they serve and in the service agreements they reach with those customers and then define and collect data uniformly across different service environments. To do so, it is necessary to bear in mind a few essential principles of service measurement.

• First, service companies need to compare themselves against their own performance rather than against poorly defined external measures. Using external benchmarks only compounds the difficulties that service companies face in getting comparable measurements from different parts of the organization.
• Service companies must look deeper than their financial costs in order to discover and monitor the root causes of those expenses. This point may seem self-evident, yet many companies fail to understand these causes fully.
• Finally, service companies must set up broad cost-measurement systems to report and compare all expenses across the functional silos common to service delivery organizations. The goal is to improve the service companies' grasp of the cross-functional trade-offs that must be made to rein in total costs.

None of these principles is easy to implement. Top executives are likely to face resistance from managers and frontline personnel who insist that services are inherently random and that service situations are unique. Managers who have grown used to the protection that lax measurement affords may be reluctant to view their operations through a more powerful lens. But only by adopting these principles and implementing rigorous measurement systems throughout the organization can service executives begin to identify reducible variance and take the first steps toward bringing down costs and improving the pricing and delivery of services.

After this seriuos content I would like to show you life ain't all bad. At YouTube I found an hilarious clip which was based on the movie Office Space.

CPM Conventions Calendar 2007: the first quarter

Business Intelligence Congress: 13 March

This congress and the Business Intelligence Awards 2006 is an initiative of congress organisator WE ARE and organisation Passionned. The congress and the Business
Intelligence Awards are supported by media partners Computable and Finance & Control and sponsored by Deloitte. The purpose of this congress is to inform decision makers on the latest developments on Business Intelligence, to meet-up with colleagues and suppliers of BI-software and to present the results of a national research on Business Inteligence.

The BI-Congress:
This congress aims at the decision makers of different (inter)national experts and end-users that play a leading role in one of the inter-active sessions (lectures, workshops and break-out sessions). Based on their knowledge, vision and experience they will inform +/- 200 organisations on how to achieve maximum results on present and future information systems in combination with human resources. One of the key note speakers this year is drs. ing. B.A. van der Klift, CFO of ARCADIS. He will speak about how Business Intelligence is used and will be used in the future to power current and future growth of ARCADIS.

During this educational and inter-active event the following aspects are leading:
• Behavioural culture
• Performance management
• Operational Business Intelligence
• Leadership at the top
• Managing technology
• Procesmanagement
• BI project management
• BI Governance
This program will be concluded by the presentation of the results of the ‘Nationaal
onderzoek Business Intelligence 2006’, the presentation of the Business Intelligence Award to the most intelligent organisation of 2006 and a executive diner.

The Business Intelligence Award 2006
The Business Intelligence Award is an award that Passionned in cooperation with other associates presents to the most intelligent organisation of 2006. Based on a research among 200 respondents a list of nominates will be determined. The best in class will be nominated for the BI award. Every Dutch speaking organisation in the Benelux can register for this award until 31-01-2007 (go to: www.biaward.nl). Different developments like globalization, digitalizing, internet, liberalism, the ongoing influence of a free market system and the enormous amount of data urges organisations to behave more intelligent to improve the performance of their operations. As turned out last year, the Business Intelligence Award can have a huge impact on the development of BI within the organisation. By winning the Business Intelligence Award new BI-budgets were given. But also the specific feedback on the BI organisation can help you to bring attention on BI by top management.

Outlooksoft Benelux UserConference: 22 March

On 22th of March Outlooksoft organizes her annually Benelux UserConference at the Castle of Brasschaat (Belgium). All ingredients are present to make this a successfull day: live demo's of version 5, CPM-testimonies by Outlooksoft CPM users, workshops, test drives and a opportunity to meet Outlooksoft International and Deloitte Consulting.