So far we have established that there is no single journey from BI to CPM. Instead it is an evolution that builds on successful implementation and aligns itself closer to the business in order to drive deeper and sustainable success. In the last post I also described a process of establishing requirements which was less about reporting and more about establishing the business priorities, the objectives required to deliver against them and then, in turn, the metrics required.
In this post I want to encourage you to expand on the objectives to understand how they are going to be achieved. This will help the business identify if it is measuring the right things whilst validating what you have discovered so far. It may also uncover related or more detailed information requirements.
For example, the engineering business we talked about in part 2, were looking to increase market share. One of the objectives they identified to achieve this was to increase account share. If we continue to explore this objective further we are likely to identify the initiatives required to achieve it. To increase account share the sales team must cross-sell. In order to cross-sell there has to be collaboration across the sales people that sell their products and services into a single account. In order for the sales team to cross-sell the services team must also align around a strategic account plan.
So our objective to increase account share actually becomes a series of cause and effect objectives or initiatives;
INCREASE MARKET SHARE by increasing account share
- Cross Sell
- Align services to strategic account plan
- Encourage global account collaboration
- Create compensation plan that reward global account collaboration
- Encourage global account collaboration
Here, we can see a basic cause and effect between these objectives. We can also see that they begin to cross departments because sales, services and HR all own objectives that contribute to the ultimate senior management team objective of increasing market share.
There are a number of methodologies which would drive these discussions including those introduced by Robert Kaplan and David Norton in a series of books including 'The Strategy Focused Organisation' and through their organisation Palladium. This approach organises this cause and effect matrix of objectives across the four balanced scorecard perspectives financial, customer, internal and learning and growth. The completed diagram, a strategy map, is a compelling visual representation of those objectives that should be driving the organisational strategy.
Whatever methods or techniques are used, the essence is aligning organisational information with current business priorities. The alternative, to either replicate (albeit improve) existing systems or to ask the business to mock up endless cross tabs in spreadsheets to communicate their requirements would only deliver partial success.
These last two posts have been about the impact of information systems on performance management. Whilst critical, this is only part of the story. Performance Management is also about what the business does with the insight. How it collaborates, adapts and executes the plan which in turn requires robust planning, budgeting and forecasting. More on this in future posts.
This series of posts draws greatly from the work of Kaplan and Norton and their approach to Corporate Performance Management using the Balanced Scorecard and Strategy Maps.
