bpm - strategy and execution
TRANSCRIPT
Business Performance Management – Strategy & Execution
Ravi Tirumalai , Board MemberISACA Singapore Chapter
• Complexity In Today’s Business
• Managing Enterprise Performance
• How do we achieve
• Q & A
Agenda
Most Organizations have problem executing strategy
Why?
Headlines !
Managing Risks In Today‟s Business Is Critical
EnvironmentalClimate change
Water, energy shortages
Natural disasters
SocietalPandemics
Food, product liabilities
Infectious diseases
GeopoliticalTerrorism, War
Crime, Corruption
Breakdown ininformation infrastructure
EconomicOil shock
Fall in US Dollar
China hard landing
*Source: IBM Global CFO Study 2008
- 87% of those risks were non-financial
- Almost half were not prepared
- Only half manage risk formally
FACT:Between 2004-2007, 62%
of global companies experienced risk events*
Business Models Have Changed: From Vertical
Integration to Virtual Integration
Ford’s River Rouge Plant; 27 miles of
conveyor,
The epitome of Vertical Integration
Early 1900s
100 years later
The Boeing 787
Only the Vertical Fin Manufactured in Seattle
The ultimate Virtual Chain
Model „T‟ first introduced in 1908
Model „T‟ phased out in 1927 !
“The Customer can have any color
that they want, as long as it is BLACK”
The perfect „Make to Stock‟ Model
Early 1900s
Each Laptop / Desktop
Customized to your
Requirement
The perfect „Make to Order‟ Model
100 years later
Business Models Have Changed: From Mass
Production To Mass Customization
Adding further complexity?
System Complexity Creates Additional Chaos
MULTIPLE ROLES
DIFFERENTMETRICS
DISPARATE BI TOOLS & REPORTING SYSTEMS
FRAGMENTEDDATA SOURCES
Executive
Marketing
Finance
Human
Resources
CustomerService
COMPANY HEALTH
BRAND
EBITDA
HIRING QUALITY
SERVICE LEVELS
FINANCE
OPERATIONS
PLANNING
Multiple Point
Applications
Multiple ERP
Multiple
Supply Chain
Multiple Legacy
Applications
Multiple Data
Warehouses
Affecting?
Decision Making - More Complex And Challenging
75% of senior executives of top US companies said that the number of daily decisions has increased over the past year
More Decisions to Take…
50% said that decisions are more complex this year than last year
… Increasing Complexity
70% said that poor decision making is a serious problem for business.
… Leading to Bad Outcomes
Top casualties of poor decision making are profits, company reputation, long-term growth, and morale
… Across the Firm
Source: Opinion Research Corporation, “IT Professional and Decision Automation”, 2007
Impact Of Poor Decisions…
“The days when you could go to investors and say „sorry, we
didn‟t expect this‟ have gone,‟ admits one senior manager. „You
are supposed to have a precise calculation for the impact of every
act of God.‟”
- “Commodity hedging alleviates risk factor,” – Financial
Times, October 18, 2005
Growth...? Monitor/Analyze…?
Risk...? Trustworthy...?
• Complexity In Today’s Business
• Managing Enterprise Performance
• How do we achieve
• Q & A
Agenda
Performance Management: The Next Competitive Edge
Time
Competitive
Advantage
OPERATIONAL EXCELLENCE
PERFORMANCE EXCELLENCE
Cost – Lean and Mean
Quality – Six Sigma, TQM
Speed – Real-time, JIT
Smart – Deep Insight
Agile – Decisive Action
Aligned – Across the Extended Enterprise
Who is Responsible for Performance
Management – Strategy and Execution?
C-Suite and Board of Directors
Line of Business Managers
Office of CFO
Organizations make decisions at all levels
High Impact
Low Impact
Low Volume
High Volume
Strategic Decisions
Tactical Decisions
Operational Decisions
Types of Decisions
• Which company to buy?
• Which markets to play in?
• Where to make capital investments?
• Which products to make? At what price?
• Where to make products?
• Which segments to target?
• What to do with budgetary variance?
• Should we cross-sell to this customer?
• Which prospects to target campaigns?
• Which orders to process?
• How to route shipments?
Med. Impact
Med. Volume
Source: James Taylor, “Smart Enough Systems” and Oracle
Six Pillars that lead to PM Execution Mastery
Connected Enterprise
Value
Centered
Culture
Enterprise
Wide Risk
Management
Distinctive
Capability
Capital
Stewardship
Enterprise wide
metrics
Outcome based
Appraisal
System
Compelling Vision
PM Framework for Value Creation
Strategy
/Mission
Customer
Satisfaction
ERP
& Processes
Organization‟s
Resources
(capacity)
ScorecardsShareholders
Supplier Inputs
Note : Shareholder wealth creation is not the goal. It is a result
KPI
Scores
feedback
ROI
Order
fulfillment
CRM
How do we measure these?
Scorecard: Connecting Strategy to Execution
Source : Robert Kaplan
Excellence in Stakeholder Reporting
• Complexity In Today’s Business
• Managing Enterprise Performance
• How do we connect strategy to execution
• Q & A
Agenda
# of PM Projects
Costs
Integrated Approach
Fragmented Approach
Where is Your Organization Today?
• Reacting to a few high-priority PM
projects
• May not realize full extent of need
Focus on Reporting
• Compliant but at a high cost
• Limited view of interdependencies
• Looking to reduce resources spent
Focus on Metrics
• Integrated approach to PM
• Aiming to improve performance
• GRC is a by-product
Focus on Value
2009 ISACA All Rights reserved. 22
Harmonising the Elements of IT Governance
IT Governance
ResourceManagement
How do we execute on the above?
The COBIT®
Framework
0
10
20
30
40
50
60
70
80
No softw
are
Spreadsheets
Custom
BPM
ERP softw
are
BPM
software
% o
f re
sp
on
de
nts
Deploy Technology: The Most Popular Software Tool…
Enterprise Performance Management SystemIntegrates Transaction, Intelligence, Financial Systems
Performance Management
Financials HRSupply Chain ProcurementSales & CRM
Planning & Budgeting
Financial & Statutory Reporting
Metrics &Scorecards
Modeling Financial Management
BI Systems
Operational Business
Intelligence
Query & Analysis
Dashboards Alerts & Workflow
DataIntegration
OLAPData Warehouse
Enterprise/Operational Reporting
EnterprisePerformanceManagement
System
Transactional Systems
How do we ensure the outcome is achieved?
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6 Steps to Successful PM Strategy to execution process
1. Define Goals and Strategies
3. Define Metrics
5. Analyze and Improve
Existing Processes 4. Put ICT Strategies in Place
2. Define Standards, Policies, Procedures
Around Financial, Non Financials, Project, Service, etc
These 6 steps allow a company to incrementally develop
and mature their overall business goals
6. Refine and Go to the Next
Level
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Goals & Strategies
• Business and IT Goals
• ICT Strategy
• Existing Capabilities
• IT Roadmap
• Journey Management
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Create Standards, Policies & Processes
• Communicate
Executives
Business Leaders
Architects
Administrators
IT Managers
Office of CFO
Feedback & Monitor
PM
Committee
Governance
Board
Outcomes/
Policies
Create
Manage
Issues:
•Decision Rights
•Input Rights
•Exception Management
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Define Metrics for Success
• Why Measure ?
• Ensure Business Goals
• Deliver ICT Strategy
• What to Measure ?
• standards, compliance, # of Financial metrics, # of non financial metrics, # of process failures, impact to business due to decisions, # of exceptions, # of outcomes achieved vsplanned, # of metrics roll up to serve linkage to goals, etc
• How to Measure ?
• What can be automated?
• What can be easily captured?
Put Mechanisms in Place
Blueprints & Patterns
Financial
PortfolioPeople
OperationsProjects
Technology Architecture
Cash Flow/Working Capital
Funding Model
Projects
Applications
Platform Funding Business Services
Roles & Responsibilities
Service Ownership
Performance Group
Outcome based Owners
Service Lifecycle Gov
Shared Artifacts
Capacity Planning
Enforce Service Levels
Enforce Policies/standards/
metrics
Strategic Platform
Shared Foundation Srvcs
Enforce Platform Decisions
Reference Architectures
Architectural Standards
DRIVEN BY
EXECUTIVES
Information
Data Standards
Data Quality/confidentiality
Data Ownership
Analyze and Improve
• Metrics on process itself
• Metrics on progress of goals and roadmap• How often are people going off the path?
• Do they tell us when they do?
• Do we need to change restrictive policies?
• Do we need to have stricter enforcement?
• What do you do with the Information?
• Make decisions
• Create feedback loop
Refine and Go to the Next Maturity Level
• ICT strategies, goals, objectives met for this ICT
maturity level level
• Refine ICT strategies, goals, objectives for
current maturity level
• Create new ICT strategies, goals, objectives for
next ICT maturity level
Key Message
As an independent, nonprofit, global membership association, ISACA engages in the development, adoption and use of globally accepted, industry-leading knowledge and practices for information systems. ISACA helps its members achieve individual and organizational success, resulting in greater trust in, and value from, information systems. Its members and certification holders are qualified and skilled professionals who make a difference.
About ISACA
Your Needs + Our Certifications
Winning SolutionCONTACT:
Ravi Tirumalai, ACA, ACMA, CGEIT, CISA
Board Member – ISACA Singapore
http://www.isaca.org
http://www.isacatacs.com