Many organizations are far from where they want and need to be with improving performance, and they apply intuition, rather than hard data, when making decisions. Enterprise performance management (EPM) is now viewed as the seamless integration of managerial methods such as strategy execution with a strategy map and its companion balanced scorecard (KPIs) and operational dashboards (PIs); enterprise risk management (ERM); capacity-sensitive driver-based budgets and rolling financial forecasts; product / service / channel / customer profitability analysis (using activity-based costing [ABC]principles); customer lifetime value (CLV); lean and Six Sigma quality management for operational improvement; and resource capacity spending planning. Each method should be embedded with business analytics of all flavors, such as correlation, segmentation, regression, and clustering analysis; and especially predictive analytics as a bridge to prescriptive analytics to yield the best (ideally optimal) decisions. This presentation will describe how to complete the full vision of analytics-based enterprise performance management.
Why should you attend?
- How well do our managers and employees understand our executive team's strategy?
- Are we measuring the right metrics?
- If we are measuring key performance indicators (KPIs), are they "balanced" between financial outcomes and the non-financial measures related to customer loyalty, process improvement, employee learning & growth, and innovation?
- Are we measuring too many strategic KPIs where many are arguably operational performance indicators (PIs)?
- Are our product and service-line costs accurate? Or are our accountants mis-allocating indirect expenses (i.e., overhead support)?
- Do we measure non-product channel and customer costs to report profit or loss by each customer?
- How effective is our annual budgeting process? Does its benefit exceed the costs to produce it?
- Is the budget out of date within a few months after it is published?
- Do experienced managers "pad" their department's budgets?
- Is consolidating cost center budgets bottom-up cumbersome?
- Do we understand incremental/marginal expense analysis classifying the behavior of our resource capacity expenses as sunk, fixed, step-fixed, or variable based on the planning time horizon?
- Are many of our decisions based on intuition or experience rather than on fact-based data?
- How much competency does our organization have with analytics?
- How much resistance to change does our organization have that is slowing our adoption rate of progressive managerial methods?
Areas Covered in the Session:
- How strategy maps and their companion balanced scorecards communicate strategic objectives with target-setting to help cross-functional employee teams align their behavior to the strategy and better collaborate.
- Why measures of channel and customer profitability and customer value are now superseding profit and service-line measures - and shifting from product to customer-focused organizations including future potential value - customer lifetime value.
- How activity-based cost management (ABC/M) provides not only accurately traced calculated costs (relative to arbitrary broad-averaged cost allocations), but more importantly provides cost transparency back to the work processes and consumed resources, and to what drivers cause work activities.
- Reforming the broken annual budgeting process with performance-based budgeting that links strategy to operations and processes volume sensitive rather than simply incremental at each cost center.
- How EPM/CPM also applies to public sector government to understand their "output costs" and better serve citizens.
- Why business analytics, with emphasis on predictive analytics and pro-active decision making, is becoming a competitive advantage differentiator and an enabler for trade-off analysis.
- How all levels of management can quickly see and assess how they are doing on what is important - typically with only a maximum of three key performance indicators (KPIs).
- How to integrate performance measurement scorecards and ABC/M data with:
- Strategy formulation.
- Process-based thinking and operational productivity improvement.
- Channel/customer profitability and value analysis and CRM.
- Supply chain management.
- Quality and lean management (Six Sigma, cost of quality).
Who can Benefit:
- Financial officers and controllers
- Managerial and cost accountants
- Financial and business analysts
- Budget managers
- Strategic planners
- Marketing and sales managers
- Supply chain analysts
- Risk managers
- CIO and information technology staff
- Board of Directors