© Systems Union 2005 Corporate Performance Management: The #1 Priority for CFOs Vena Goh General Manager, South Asia Systems Union Software Pte Ltd

© Systems Union 2005

Corporate Performance Management:

The #1 Priority for CFOs

Vena GohGeneral Manager, South AsiaSystems Union Software Pte

Ltd


Agenda

Who is Systems Union

BPM Vs CPM

Changing role of CFOs

What are CFOs & CEOs looking for?

Summary


Systems Union2005


Impressive Global Presence

46 offices in 19 countries; 500 reseller partners in 73 countries;46 offices in 19 countries; 500 reseller partners in 73 countries;50,000 customer sites in 194 countries; Multi-language; Multi-currency50,000 customer sites in 194 countries; Multi-language; Multi-currency


Solutions Portfolio

Financial Management

Financial Ledgers

CorporateAllocations

AssetRegister

Reporting

Ad HocQuery & Analysis

Financial &Management

Reporting

DesktopIntegration

Performance Management

Budgeting &Forecasting

Risk Management

Procurement

DebtorManagement

Sales OrderManagement

Project Accounting, Time & Expense

& Resource Mgmt

EnterprisePlanning

Consolidation

SubsidiaryManagement

CustomBI Solutions

Balanced Scorecard

Services

Support


Systems Union Group

www. Systemsunion.com


Agenda


BPM Vs CPM



Summary


BPM is a set of processes that help organizations optimize business performance.

Next generation of Business Intelligence (BI).

Focused on business processes such as planning and forecasting.

Helps businesses discover efficient use of their business units, financial, human and material resources

• From Wikipedia, the free encyclopedia• http://en.wikipedia.org/wiki/

Business_performance_management

BPM (Business Performance Management) defined (1)


BPM (Business Performance Management) defined (2)

BPM is a set of integrated, closed-loop management and analytic processes, supported by technology, that address financial as well as operational activities.

BPM enables a business to define strategic goals, and then measure and manage performance against those goals.

The core BPM processes include financial and operational planning, consolidation and reporting, modelling, analysis, and monitoring of key performance indicators (KPIs) linked to organisational strategy.

• The BPM Standards Group March 2004


Corporate Performance Management (CPM)

CPM comprises all processes, methodologies, metrics and technologies that enterprises use to measure, monitor and manage business performance.

• methodologies that may drive some of the processes (such as the balanced scorecard or value-based management)

• metrics used to measure performance against strategic and operational performance goals.

• processes used to manage corporate performance (such as strategy formulation, budgeting and forecasting)

• delivered by the Business Intelligence/Analytics Tools It is an enterprise wide strategy that seeks to align

departmental initiatives to prevent managers from optimizing local business at the expense of overall corporate performance. Gartner 2004


BPM vs CPM

CPM implies that performance management is for large corporations.

Theoretical and needs to be coordinated first at the enterprise-level.

Reality is that organization of difference sizes are moving forward with performance projects.

Any Business is really a candidate for some level of performance management, … thus BPM

In 1989, Howard Dresner of Gartner Group popularized “BPM” as an umbrella term to describe a set of concepts and methods to improve business decision-making.


Corporate Performance Management

Gartner information :• 10% of Global 2000 organizations had

implemented CPM solutions at the end of 2002.• Predicts that > 40% will do so by 2006

Sun Tze’s The Art of War claims that to succeed in war, one should have full knowledge of one’s own strengths and weaknesses and full knowledge of one’s enemy’s strengths and weaknesses. Lack of either one might result in defeat.

Sun Tze also believed in using information to formulate war strategy.


Agenda


BPM Vs CPM



Summary


Business Challenges

Aims Dependent on

Maximize shareholder value Business intelligence

Improve customer satisfaction Communication

Enhance customer retention Business planning

Increase market share Detailed visibility

Increase profitability Business controls


New Era of Corporate Accountability

CFOs under pressure to respond to new regulatory demands

Increased focus on transparency, consistency and timeliness

Combining finance and operational data is key, but not easy

Many companies have difficulty accessing data. This combined with the local use of spreadsheets meant that no single view of data was available.

Accenture & Cranfield School of Management

62% of companies report that getting combined financial and operational information is ‘hard’ or ‘very hard’, and 64% confess that data is different between different departments.

PMP Research – Corporate Performance Management Survey 2003




Why Do 9 Out of 10 Companies Fail to Implement Their Strategies?

9 of 10 9 of 10 companies fail companies fail

to execute to execute strategystrategy

Only 25% of managers have

incentives linked to strategy

The People BarrierThe People Barrier

Only 5% of the work force understand

the strategy

The Vision BarrierThe Vision Barrier

85% of executive teams spend less

than one hour/ month discussing strategy

The Management BarrierThe Management Barrier

60% of organizations don’t

link budgets to strategy

The Resource BarrierThe Resource Barrier

Source: Renaissance Worldwide/Business Intelligence Survey 1998-1999


Pressures on executives

Political Regulatory eg HS&E,Sarbox,

Basel II, EU, IFRS, OFR Geopolitical security Market control

Social Demanding consumers eg

service, mobile, litigious Declining loyalty Changing demographics

Economic Volatile markets Competition & consolidation Margin and cost pressure

Technology New channels to market Lower unit cost Better business information


BPM across the enterprise

Extended SCM

Office Services

F&A, Tax, Legal HR & Benefits

Non-trade ProcurementICT

Corporate Strategy

Safety / Risk Compliance Governance

Regulatory Reporting

Change & Innovation

Extended DCM

Str

ateg

icO

per

atio

nal

Su

pp

ort

Shareholders

Cu

sto

me

rs

WorkforceRegulators

Su

pplie

rs


BPM Technology Framework

Source: BPM Standards Group


Strategic

Operational

Discrete Integrated

Specialist Services Decision Support

Compliance and ControlTransaction Processing

In order to become an effective ‘business partner’ to the CEO …Finance must change the balance

What Should Be the Role of Finance?


Agenda


BPM Vs CPM



Summary


Demand for easy solutions rising?

Quelle: Gartner Group, „Hype Cycle for Business Intelligence“, June 2004

Definition:

The need for lightweight reporting tools arose when reporting vendors moved on to enterprise reporting ...


Improving Systems and Processes

Budgeting and planning processes are inefficient• “The budget process may take 6 months and consume 30% of managers

time.” Simon Caulkin, “Needed Like a Hole in the Head” The Observer – 2004

• 60% of companies say that budgeting and planning process takes too long.

CFO Research, “Budgeting and Planning at Midsize Companies”, 2004

• “The most obvious problem with the planning and budgeting process in most organizations is that it takes too long.”

Ventana Research, “Budgeting: Stop The Madness!” – 2003

Over-reliance on spreadsheets for performance management• 90% of spreadsheets used in corporate planning contained significant

errors. PriceWaterhouseCoopers survey – 2002

• "Besides being extremely unwieldy for processes involving large volumes of data and multiple users, spreadsheets often contain substantial, material errors."

Paul Hamerman, Forrester Research Inc. - 2003


Strategic• Executives & Senior

Management• Manage KPI’s by Exception• Past, Present and Future Views• Highly Visual• Web Based

Operational

Tactical

One Version of Truth

Strategic




Operational

TacticalTactical

Strategic

Tactical• For middle Management

Issues• Remove conflicting info• Analysis – different data

sources• Respond to immediate

issues







OperationalOperational

Tactical

Strategic

Operational• End users – day-to-day• Processing – A/R, A/P,

Purchasing, etc• Reporting – at or near

real-time



Who Are Decision Makers?

Executives

Middle Management

Operations

Analysts

Number of decisions

Transactional

Strategic

Operational

Decision makers are at every level of the organisation

Local decisions are more immediate, more relevant


Providing Greater Value to Business

IBM Business Consulting Services 2003 global survey, 450 CFOs

Finance Workload Distribution

37%

29%

34%

24%

26%

50%

DecisionSupport/Performance

Management

Control Activities

TransactionalActivities

Today

In 3 Years


Agenda


BPM Vs CPM



Summary


Conclusion

Performance Management can drive your business by:

• Up-to-date views on your business

• Granularity

• One version of the truth

• Forward and backward visibility

• Strong compliance / controls

Documents

© Systems Union 2005 Corporate Performance Management: The #1 Priority for CFOs Vena Goh General Manager, South Asia Systems Union Software Pte Ltd