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CHAPTER
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Performance Management
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erformance management, business performance management, corporate performance management, business intelligence each of these terms identifies a way to measure and manage performance within your organization IBM Cognos 8 Business Intelligence (BI) is technology that supports performance management by providing better visibility in business performance In order for your Cognos 8 implementation to provide maximum benefit to your organization, your organization needs to understand BI s potential to change the way in which decisions are made The more your organization is aligned with the performance management objectives and willing to change, the more significant the impact In many cases, change happens in stages We call this progression through stages a journey Your initial Cognos 8 implementation will evolve as your organization becomes more competent in both the process and the technology Changes in corporate positioning, strategy, or point of view can be implemented quickly and easily allowing for better, faster decision-making Failure to implement a performance management solution may put your organization at risk of being at a competitive disadvantage This chapter describes performance management and provides insight into how a strategic implementation can affect your organization Your first meeting with many prospects and clients begins with them telling you, We have the data that we need in our ERP We just can t get it out as usable information Sales managers often want better and timelier information about how they are performing against their forecasts The operations team has no coordinated view of the organization and often learns of closed sales opportunities long after the opportunities have passed Finance managers want better financial reporting and the ability to deliver accurate, yet critical information to key stakeholders and executive management As you continue to learn about business objectives for better information, you find that the process used to collect the needed information often exceeds business cycles, leaving no time to analyze or assess what has happened or to determine what corrective measures may be necessary to improve the company s performance Every aspect of a business is connected to every other aspect, and performance management helps you connect the dots and align the organization For example, optimized supply chain performance provides vendors a means for executing effectively through the supply chain so that orders may be fulfilled in a timely and quality-driven manner This impacts customer satisfaction Objectives of improved profitability, projected growth, and better overall performance are all impacted by the performance of the supply chain The performance
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Introduction to Performance Management and IBM Cognos 8 BI
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goals of the organization cannot be realized unless the organization has the means of aligning information and business process to produce results The promise delivered by this alignment is enhanced business performance or performance management
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Defining Performance Management
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Let s start by identifying how to define performance management It s not as simple as you might think An Internet search conducted in July 2007 on the term performance management returned 23,000,000 results Out of the gate, the search for the answer begins and we find ourselves digging through disparate data sources to identify the right answer With some initial investigation, we find that the term performance management is used and referred to as both business performance management (BPM) and corporate performance management (CPM) BPM is a set of processes that helps organizations optimize their business performance It is a framework for organizing, automating, and analyzing the business methodologies, metrics, processes, and systems that drive business performance BPM helps businesses efficiently use their financial, human, material, and other resources Organizations may take components of the performance management spectrum and deliver solutions specific to the business area seeking better decision-making Performance management then can be the next generation of BI CPM has been defined as a set of processes that help organizations optimize their business performance It is a framework for organizing, automating, and analyzing business methodologies, metrics, processes, and systems that drive business performance Sound familiar The Cognos 8 Solution comprises three coordinated segments of performance management that answer questions such as those shown in Figure 1-1: Measuring and monitoring Businesses seek the answer to How are we doing Most people find the answers to this question by going to a number of different sources or tools They pick up the phone, send e-mails, review the last presentation, and check spreadsheets Some companies have home-grown systems or tools that are focused at the executive level The answers get pulled together from various sources and are often manually entered into tools Reporting and analysis Decision-makers want to find answers to the question Why In most organizations, this means consulting a number of reports and analysis tools to pull together a picture of why they are on or off track Analysis tools use a variety of systems and pool data to get the answers It sometimes requires calling on an IT department to understand elements of the puzzle When did this happen Was it consistent across the board or limited to a couple of regions Was it all products or just a few Answers to these questions, and likely many others, are found via data analysis that is used to identify trends, high or low performance, and a deeper understanding through greater insight to the data Planning, budgeting, and forecasting Plan for the future and identify a reliable means to gather that plan across your organization The answer to What should we be doing begins with planning where you want to go It is the process of allocating resources to achieve goals with planning, budgeting, and forecasting and includes making course corrections when changes occur to reallocate resources Companies often do not have such plans in place In most companies, these answers come from thousands of individually created spreadsheets
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