Transcript PPT test using new template

Corporate Performance Management:
The #1 Priority for CFOs
Vena Goh
General Manager, South Asia
Systems Union Software Pte Ltd
© Systems Union 2005
Agenda
 Who is Systems Union
 BPM Vs CPM
 Changing role of CFOs
 What are CFOs & CEOs looking for?
 Summary
© Systems Union 2005
Systems Union
2005
© Systems Union 2005
Impressive Global Presence
46 offices in 19 countries; 500 reseller partners in 73 countries;
50,000 customer sites in 194 countries;
Multi-language; Multi-currency
© Systems Union 2005
Solutions Portfolio
Financial
Management
Reporting
Performance
Management
Financial
Ledgers
Ad Hoc
Query & Analysis
Budgeting &
Forecasting
Corporate
Allocations
Financial &
Management
Reporting
Enterprise
Planning
Asset
Register
Desktop
Integration
Subsidiary
Management
Procurement
Debtor
Management
Risk Management
Services
Balanced
Scorecard
Sales Order
Management
Project Accounting,
Time & Expense
& Resource Mgmt
Consolidation
Support
Custom
BI Solutions
© Systems Union 2005
Systems Union Group
www. Systemsunion.com
© Systems Union 2005
Agenda
 Who is Systems Union
 BPM Vs CPM
 Changing role of CFOs
 What are CFOs & CEOs looking for?
 Summary
© Systems Union 2005
BPM (Business Performance Management) defined (1)
 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
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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
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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
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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.
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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.
© Systems Union 2005
Agenda
 Who is Systems Union
 BPM Vs CPM
 Changing role of CFOs
 What are CFOs & CEOs looking for?
 Summary
© Systems Union 2005
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
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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
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Why Do 9 Out of 10 Companies
Fail to Implement Their Strategies?
The Vision Barrier
Only 5% of the work
force understand
the strategy
The People Barrier
Only 25% of
managers have
incentives linked to
strategy
The Management Barrier
9 of 10
companies fail
to execute
strategy
60% of
organizations don’t
link budgets to
strategy
The Resource Barrier
Source: Renaissance Worldwide/Business Intelligence Survey 1998-1999
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85% of executive
teams spend less
than one hour/ month
discussing strategy
Pressures on executives
Political
Social


Regulatory eg HS&E,Sarbox,
Basel II, EU, IFRS, OFR
 Geopolitical security
 Market control
Demanding consumers eg
service, mobile, litigious
 Declining loyalty
 Changing demographics
Economic
Technology


Volatile markets


Competition & consolidation
 Margin and cost pressure
New channels to market
Lower unit cost
 Better business information
© Systems Union 2005
BPM across the enterprise
Shareholders
Suppliers
Corporate
Strategy
Safety / Risk
Compliance
Regulatory
Reporting
Extended
SCM
F&A, Tax, Legal
HR &
Benefits
Change &
Innovation
Governance
Extended
DCM
ICT
Regulators
Office
Services
Workforce
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Non-trade
Procurement
BPM Technology Framework
Source: BPM Standards Group
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What Should Be the Role of Finance?
Strategic
Specialist Services
Decision Support
Transaction Processing Compliance and Control
Operational
Discrete
Integrated
In order to become an effective ‘business partner’ to
the CEO …Finance must change the balance
© Systems Union 2005
Agenda
 Who is Systems Union
 BPM Vs CPM
 Changing role of CFOs
 What are CFOs & CEOs looking for?
 Summary
© Systems Union 2005
Demand for easy solutions rising?
Definition:
The need for
lightweight reporting
tools arose when
reporting vendors
moved on to
enterprise reporting ...
Quelle: Gartner Group, „Hype Cycle for Business Intelligence“, June 2004
© Systems Union 2005
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."

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Paul Hamerman, Forrester Research Inc. - 2003
One Version of Truth

Strategic
Strategic
• Executives & Senior Management
• Manage KPI’s by Exception
• Past, Present and Future Views
• Highly Visual
• Web Based
Tactical
Operational
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One Version of Truth
Strategic
Tactical
Operational
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
Tactical
• For middle Management

Issues
• Remove conflicting info
• Analysis – different data
sources
• Respond to immediate issues
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One Version of Truth

Operational
•
End users – day-to-day
•
Processing – A/R, A/P,
Purchasing, etc
•
Reporting – at or near realtime
Strategic
Tactical
Operational
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Who Are Decision Makers?
Executives
Strategic
Middle Management
Operational
Analysts
Operations
Transactional
Number of decisions

Decision makers are at every level of the organisation

Local decisions are more immediate, more relevant
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Providing Greater Value to Business
Finance Workload Distribution
Transactional
Activities
Control Activities
Decision
Support/Performance
Management
50%
34%
26%
29%
Today
In 3 Years
24%
37%
IBM Business Consulting Services 2003 global survey, 450 CFOs
© Systems Union 2005
Agenda
 Who is Systems Union
 BPM Vs CPM
 Changing role of CFOs
 What are CFOs & CEOs looking for?
 Summary
© Systems Union 2005
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
© Systems Union 2005