Visibility (and visualization) of opportunities and problems plays a key role in managing performance in all parts of the enterprise.
From a customer perspective, it is important to have visibility of the profitability and loyalty of individual customers, as well as customer responses to new product introductions and line expansions. Important performance measures on the operations side of the enterprise are responsiveness and agility combined with a measure of both asset and operational efficiency. On the supply side of the equation, collaborative efforts with suppliers to improve visibility in the demand planning process, along with visibility of cost management and supplier relations, are key measures to have. Finally and perhaps most importantly, is having in-depth visibility of business profitability and competitiveness that will allow for continued growth.
The road to improved visibility is cluttered with many broken parts, but at the core of improvements is deploying a sustainable business performance management (PM) system that broadly covers all segments of the business ― both customer facing and operations facing. That PM system is driven largely by robust tools and good data quality, both of which are often missing in businesses today. But having the right tools and good data quality is useless unless it is accompanied by a strong business case and the resulting management sponsorship. Finally, improved visibility is achieved through a set of focused, agreed-upon goals that are linked directly to top-level business goals.
If sustainable performance management is the goal, there are three stages that need to be considered:
- Point PM is project-driven, typically departmental in scope and tactical in nature, and capable of a quick implementation and fast ROI cycle. Even with a limited scope, it would enable bootstrapping into the Process PM.
- Process PM is focused usually on a single process that may cross several departments, providing consistency through automation. Generally the PM system targets process efficiency through the use of optimization tools and gains visibility with process analytics. Examples of the all-important customer facing visibility provided by Process PM in the area of Sales are shipments, DSO, forecasts and Open orders. In Marketing, examples are POS, sell thru, trade promotions and category sales and profits. From a customer perspective, examples are profitability, returns, fill rates, OTD, and cross selling. Here like Point PM, Process PM helps bootstrap into Enterprise PM.
- Enterprise PM is at the top of the Performance Management pyramid, being cross-functional and employing a cascading strategy to link goals at the top with process- and point-level goals throughout the enterprise. Enterprise PM is usually role-based using common processes and definitions and provides governance and collaboration.
To provide the needed visibility required to support a robust PM system, dashboards are the most effective tool with a mobile component across various platforms to provide 24X7 real-time visibility.
While Performance Management is clearly a survival solution there are various headwinds to overcome, such as competitive funding of other more tactical projects, potential difficulty in producing tangible ROI/business case justification, and the all-important IT backlog and resource availability. Managing today’s dynamic, fast-moving global enterprise is a huge challenge and nearly impossible without excellent visibility.
Categorized in: Intelligent Analytics
This post was written by John Hughes