A planning software buyer’s guide

An efficient budgeting, planning and forecasting process is a cornerstone of successful organizations. Software goes a long way in driving that efficiency – and I’m not talking about Excel. If you’re outgrowing spreadsheet-based planning and will be evaluating dedicated planning solutions to facilitate more accurate, timely and agile planning, over the next few articles, I’ll be laying out the system components, or specific features, you’ll want to look for. You can see these components demonstrated in my recent webinar on Budgeting and Planning in 2013, but here I’ll write about them in more detail and explain why they’re important to the success of your planning initiative.

Workflow
Enterprise workflow is what separates your financial planning or corporate performance management system from simple data collection and reporting systems. Planning systems with workflow allow planners to follow a series of steps to bring the plan from initiation to completion. Workflow logically orders tasks and enables managers to keep an eye on where their team is in the planning cycle.

For instance, a system like arcplan Edge, which has integrated workflow, enables plan creation, submission and approvals to occur sequentially, with notifications sent out to the right users and approvals occurring within the system itself. So once users finish their plans and submit them for review, arcplan alerts their supervisors that action is needed. As the plan goes up the chain of command for approvals, alerts are sent and plans are locked to changes, except where they are rejected and sent back for modification.

Workflow can go even deeper in terms of holding planners accountable for their work. The fact is that people who procrastinate in life will procrastinate in planning. These people can seriously hinder the success of your planning process, but there’s something you can do to hold them accountable in a public manner – utilize a transparent workflow calendar. Many arcplan deployments use these public calendars as a means to improve process transparency by exposing everyone’s status in the current planning cycle. They introduce a healthy dose of planning peer pressure. Though the system will send prompts when tasks are due, department managers can use the calendar to send additional reminders to planners about their workflow status and prompt them to complete their tasks as soon as possible.

Benefits
Why is workflow so beneficial to modern planning systems? Workflow makes collaboration easier by defining responsibilities and due dates, and it improves transparency and accountability. Alerts allow planners to know exactly when a plan is approved or rejected – especially helpful in large, distributed organizations. And hand-in-hand with workflow is permissions – which users can modify plans and when. This is a level of control not present in Excel-based planning.

Stay tuned for my next posts – I’ll share more essential components for your planning system:

• Part 2: Spreading
• Part 3: Offline Planning
• Part 4: Supporting Details & Commentary
• Part 5: Tactical Planning Dashboards with Visualizations

 

By Dwight deVera, frm:  http://biblog.arcplan.com/2013/03/essential-budgeting-planning-system-components-part-1-workflow/

Before an organization can execute these high-level strategies, it must have the following:

• An existing BI framework that can be leveraged
• Current technology (hardware and software) used for BI that support mobile capabilities
• A support infrastructure to address technical challenges.

If an organization meets these minimum prerequisites, then there’s a greater chance for success. Thus, the higher the level of BI maturity, the better a head start an organization gets on its mobile BI journey.

“Mobile-Only” Strategy

A “mobile-only” strategy reflects a strong commitment, or all-in approach, by the management team to mobile BI, or mobility in general. This may be due to a specific reason, such as the relevance of mobility in a particular industry or the opportunity to create a strategic advantage in a highly competitive market. Or a company may decide that mobility needs to be a vital part of their vision.

However, in order for this strategy to be successful, it requires a commitment that results in both championing the cause at the board or senior management level and making the necessary resources available for execution at the tactical level.

In reality, this approach doesn’t necessarily translate into creating a mobile version of every analysis or shutting down all production lines for PC-based outlets for reporting and analytics. Instead, it reflects a strong emphasis on establishing scalable mobile consumption paths for analytics, and it signals a willingness to exploit a mobile-first mindset.

“Key Asset(s) First” Mobile Strategy

Organizations that aren’t ready or don’t have the resources for a mobile-only strategy may be forced to pursue a less ambitious approach. This would enable such organizations to supplement their existing BI portfolio with key analyses delivered in mobile BI, resulting in a smaller initial investment and reduced pressure to overhaul large stacks of assets, so to speak.

With the “key-assets-first“ strategy, the spotlight is on finding key BI areas of focus that can both return the maximum value when delivered effectively on mobile platforms, and can directly support the execution of the business strategy in the short-term. For example, the business strategy may include expansion into a new market, and the mobile BI may deliver analytics to help sales teams to sell more and provide management with insight into forecast and pipeline.

To me, this is the most flexible strategy because it doesn’t commit to an all or nothing approach. Most importantly, it differentiates between what may be conducive to mobile-ready consumption and what can produce the maximum impact by ignoring those assets with marginal returns on investment.

“Key Group(s) First” Mobile Strategy

A “key-group-first” strategy makes a considerable commitment to arm a particular group or groups in an organization with a complete set of capabilities that can be delivered in mobile BI. This hybrid strategy identifies the best candidate group(s) for mobile BI and delivers an end-to-end solution. At minimum, it may consider the existing BI framework, the BI culture (history in terms of successes and failures), the BI adoption across the enterprise, and the current BI asset portfolio to develop this more comprehensive approach.

For example, sales teams, which travel and spend a lot of time in the field, tend to benefit most from mobility. If they’re selected as the target group, the mobile BI strategy’s goal will be to provide them with a comprehensive package of sales-centric BI assets. Thus existing capabilities in enterprise mobility for sales teams may compliment not only the delivery of new mobile BI resources but also the greater adoption of mobile BI content.

Mobile BI Bottom Line

The fundamentals don’t change–a smart mobile BI strategy needs to contribute to growth or to profitability. In order to deliver the true business value for mobile BI, all three strategies must embrace the common objectives of an integrated mobile intelligence framework. They must leverage the technology’s strengths as well as minimize its weaknesses within a supported infrastructure.

The mobile intelligence framework can’t exist separately from, or independent of, the organization’s business or technology strategy.

What is your start-up strategy for mobile BI?

By Kaan Turnali, from: http://www.the-decisionfactor.com/business-intelligence/three-strategies-to-get-started-with-mobile-business-intelligence-bi/

However, the idea of tapping big data in the context of the workforce, in order to gain a competitive edge, is just beginning to sink in with many HR organizations. Josh Bersin, chief executive and president of Bersin & Associates, says “of the companies we talk to, five to fifteen percent are very sophisticated at analyzing people data.” This subset of companies recognized the unique value of their workforce data long before their peers and are able to build a competitive edge and lead their industries as a result

Financial institutions’ history of performing in-depth analyses illustrates that a lack of available tools and technologies need not represent a barrier by itself for the HR function. However, it does point to the fact that HR organizations don’t have the funding for necessary solutions and resources to accomplish this. Inadequate funding can be attributed to the fact that HR hasn’t effectively built the business case and articulated the value that it can provide with the data it holds – most likely because HR is preoccupied with transaction processing

Play Ball: The Moneyball Approach to HR

There are numerous blog entries and articles about the book Moneyball: The Art of Winning an Unfair Game by Michael Lewis and the movie that followed. The authors draw parallels with HR departments’ search for talent to successfully drive their organizations’ objectives of growing and maintaining the business. One fact that can’t be lost is the importance of the HR organization to hire and nourish the analytic-minded talent for the HR organization itself, complementing and supporting the more traditional roles already in HR.

In Moneyball, Oakland A’s General Manager Billy Beane accomplished this with the help of Peter Brand, a research-minded economics graduate from an Ivy League school. Brand was able to crunch through statistical data and arrive at insight on how to place value on the players selected for the roster. The Oakland A’s built their advantage not only from the players that were selected but also from Peter Brand, a key role in building a team to win the World Series

People Analytics at Google

Google is another example of an organization that takes their HR analytics as seriously as banking and finance treat their industry data. Google employs a team of approximately 50 dedicated to “people analytics,” as they call it. There have been many talks and presentations on Google’s quest to build a better boss, find ways to retain high performers, and forecast the future organizational structure based on hiring and promotion practices – among their many projects

HR organizations can certainly invest in tools and technologies to get standard reports, metrics, and analytics – and should.  Concurrently, HR organizations also need to arm themselves with talent, skills, and capabilities similar to those in the financial world – people who can think beyond standard processes and are proficient with the tools and data-mining techniques to surface problems, verify hunches, and uncover differentiators – and ultimately provide the business with the edge it needs to become a leader and maintain that position

SAP is a leading provider of analytics tools, technologies, and solutions – SAP BusinessObjects business intelligence suite, SAP HANA, SAP BusinessObjects Executive HR Reporting rapid-deployment solution, andSuccessFactors Workforce Planning and Analytics – that help HR in its quest to become strategic and help the business run better.

By Kourous Behzad, from: http://scn.sap.com/community/erp/hcm/blog/2012/07/19/analytics-from-the-world-of-finance-to-the-hr-organization

Quality control needs to be embedded in business case processes, not tacked on at the end.

During the Civil War, the Union army put out contracts for a manner of supplies including wool coats for the soldiers. Some suppliers took shortcuts by adding “shoddy” to virgin wool. Shoddy is wool reclaimed from rags, but the fibers are shorter and damaged from prior use, therefore not as strong.

Army quartermasters examined the cut and stitching of these jackets and gave them passing grades because the inferior fibers were undetectable. But once subjected to long marches and exposed to the elements, the jackets literally unraveled on the backs of the soldiers.  The term “shoddy” evolved from a noun to an adjective describing poor quality hidden from view.

At the other end of the English language is “integrity.” Today we use the word to describe high moral character, but its Latin origin, integritas, is the concept of wholeness.

Ancient Romans used integritas to describe pottery. Saying a ceramic piece had integritas meant the quality that appeared on the outside existed throughout the entire piece. There were no hidden weaknesses or imperfections covered by an attractive glaze. A vessel with integritas will hold up under stress.

Wholeness or Hidden Weakness
A key role for senior executives is evaluating business cases and deciding whether to green light the proposals, committing capital and talent to the initiative. The challenge lies not only in weighing the merits of the recommendations, but also in confirming the quality of the business case itself.

A decision is a process (see A Decision Is Not An Event) with the majority of the work delegated to business teams. Final inspection and authorization is only the last event, relying on the soundness of the team’s work. Business cases are usually highly polished presentations that attempt to provide a compelling argument supporting their recommendations. Spotting weak internal quality at this stage is very, very difficult (if not impossible):

• Did they take shortcuts and overlooked a solution that costs less or provides greater benefits?
• Did they fall prey to any one of the dozens of biases that over-estimate value or underestimate risks?

Embedded Quality Assurance
To consistently receive high quality business cases, senior executives must demand consistent application of high quality business case disciplines during the problem-solving and evaluation work. Otherwise, undetectable shoddy work will sneak through, squandering opportunities and wasting resources.

By Dave Wittenberg, from: http://capexcompass.com/2012/10/09/shoddy-or-integrity/

Dave Wittenberg is a writer, educator, and practitioner in strategy execution and executive decision-making. He brings the experience of more than 250 major strategic initiatives across a wide spectrum of industries, helping companies successfully execute strategy with greater impact while using less capital. Dave¹s unique blend of finance tools and cutting-edge behavioral techniques transforms how business teams attack decisions to
foster innovation, wring out waste, and boost growth & ROI. Dave earned
his MBA from The Wharton School at the University of Pennsylvania.

The median pay was still at roughly $1 million, in inflation-adjusted terms, when Drucker’s 1954 landmark, The Practice of Management, came out. Executive compensation was at the same level when his Managing for Resultsappeared in 1964. Ditto when Drucker’s Management: Tasks, Responsibilities, Practices was released in 1973.

But why? Were CEOs suddenly playing a role worth many times more than their predecessors had for five decades? Are the CEOs who sit atop the U.S. auto industry today really deserving of far fatter salaries—on an apples-to-apples basis—than what, say, Alfred Sloan of General Motors pulled in during the 1930s?

Most certainly not. Yet to hear some tell it, more and more CEOs are now being properly remunerated because they are “paid for performance.” Last week, The Wall Street Journal highlighted the trend, noting that more than half of the compensation awarded to 51 CEOs last year was tied to their companies’ financial results or stock price. That was up from 35% in 2009, according to Hay Group, a consulting firm.

But this also raises a question: How is “performance” being defined? Linking a CEO’s pay to a company’s bottom line or the trajectory of its shares is, arguably, better than having no measure in place at all. Still, as has become abundantly apparent in recent years, this approach carries its own risks, especially if it prompts executives to think too much about goosing earnings in the short term at the expense of the long-term health of the enterprise.

“You have to produce results in the short term,” Drucker asserted. “But you also have to produce results in the long term. And the long term is not simply the adding up of short terms.”

Beyond that, though, something far more fundamental is at play: Meeting financial targets, while obviously vital, is an awfully narrow way to think about executive performance. Indeed, Drucker believed that there were at least four other criteria that should be used in creating a “scorecard for management.”

First, he said, executives should be evaluated on how successfully they’ve invested capital. “Most managements spend an enormous amount of time on capital appropriations decisions,” Drucker wrote. “But amazingly few managements pay much attention to what happens after the capital investment has been approved.”

“To be sure,” Drucker added, “if the new multimillion-dollar plant falls behind schedule or costs a great deal more than was originally planned, everybody knows about it. But once a plant is ‘on stream,’ there is not too much attention paid to comparing its performance with the expectations that led to the investment. And smaller investments, though in their totality equally important, are barely ever looked at once the decision is made.”

Second, Drucker said, management should be assessed on how effective it has been in hiring and promoting people. There is no part of an executive’s job, after all, that is more essential than steering the right talent into the right spots in the organization.

“Yet, while admitted to be crucial, the area is usually considered to be intangible,” Drucker wrote, while quickly making clear that this attitude is little more than a cop out. People decisions can’t necessarily “be quantified,” he explained, “but surely they can be judged—and fairly easily.”

Third, Drucker called for appraising how management has fared when it comes to innovation. “What is expected from a research effort, from a development effort, from a new business or a new product?” Drucker asked. “And what then are the actual results—one year, two years, three years, five years later?”

Admittedly, achieving success here can be difficult. “Even the most competent management probably bats, at best, around .300 in the innovation area,” Drucker pointed out. “Innovation is chancy. But surely there is a reason, other than luck, why some managements—a Procter & Gamble or a 3M, for instance—have done consistently so much better in product development and product introduction than most others.”

Finally, Drucker advised, management should be held accountable for its business planning. “Did the things predicted in the plan happen?” he wrote. “And were they the truly important things? Were the goals set the right goals, in light of actual development, both within the business and in the market, economy and society? And have they been attained?”

Drucker decried the surge in CEO pay—a topic I’ve explored before and alsocommented upon to the Securities and Exchange Commission. He thought that, among other problems, it undermined the spirit of the organization.

But Drucker also would have frowned on the formulas being used to justify such outsize compensation. Unless companies do more than track financial metrics when rewarding their CEOs, “pay for performance” will continue to be a misnomer.

By Rick Wartzman, from: http://www.forbes.com/sites/drucker/2013/03/26/pay-for-performance-is-a-sham/

That might sound harsh, but it baffles me that so many companies (often with impressive products, processes, services or systems) fail when it comes to corporate training.

It’s a shame –after all there’s no doubt that a well designed and structured training program is essential for organisations to improve performance through its people. (If you need convincing, have a read of my last post – which discusses why training is a smart investment). Today however I’m going to talk about five key factors for successful staff training.

Plan, plan, plan!

I can’t stress enough that you shouldn’t rush into training without a proper plan. Training invariably occurs during change – often with the introduction of a new system, organisational structure or business unit. Before you launch into training delivery, do some analysis – what skills do your employees currently have?  This will guide you in pinpointing the training content you need.

Make training a priority

All too often managers underestimate the time and money required for training. Whilst training may seem like a hefty investment, if you’ve done your homework and use a reputable supplier, you’ll reap the returns.

Bring training to life

This sounds like a no-brainer, but sadly interactive training is a rarity. Blended training programs may include elements such as face to face training, e-learning and virtual training. This kind of blended approach is great for engaging staff, reinforcing knowledge and making scenarios real.

Make it real, make it relevant

I’ve probably taken part in more software training than I care to remember. All too often, this training has focused solely on the software system itself, rather than the surrounding business procedures that need to be learnt. Whilst it’s important to learn the processes and technical details, it’s also important that users understand the bigger picture behind why a change has occurred and the expected outcomes.

Training should be built around employees’ responsibilities, needs and goals. Training is most effective when it is highly focussed on the business’ specific needs, meaning it should be linked to a specific area that the organisation is looking to improve.

Commit for the long term

Remember: training should be seen as an ongoing investment – not a one off event. In today’s rapidly changing world, it’s more important than ever to keep up with trends. Training shouldn’t be something that happens once a year and is then forgotten – instead it should be the backbone of continuous improvement in an organisation.

By Joe Collins, from: http://www.cammsgroup.com/blog/163-five-steps-for-successful-training

Where planning usually falls down is when you try to marry the planning outcomes to operational decision making. In a plan you make decisions at high levels that are generally thought to be accurate based on historical trends. It’s a best guess using all of the information available at hand, and short of having a bat-phone to Cleo the Psychic, it’s your best option. My problem isn’t with the concept, or whether you use a 2 year CAGR versus a 3-month rolling average, it’s with how the planning assumptions are applied and how execution flows as a result.

Anyone in the business of creating a forecast for the future that has tried to turn the assumptions they’ve made into actionable results knows how difficult that can be.  One of the primary reasons is that the finance and operational clocks are different. Finance thinks in terms of quarters (or maybe even months if you have a bold team with some decent tools), while operations thinks in terms of weeks or even days. This means creating an actionable plan that ties to the finance view in terms of expectations starts out with an enormous reconcilement challenge.

The next biggest challenge is going from the aggregate in terms of geographies, segments, channels, people, products, etc… to the finite. Big plans are created across big subsets. For example, when creating a quarterly volume plan you might look at regions such as Americas/Europe/Asia, then break down products by high-level product categories such as Hardware/Software/Services. Maybe you even go down to a channel level and compare direct versus indirect or partner sales.  Here the problem with relating the forecast to actionable plans is similar in that operations needs to know exactly where, who, and what, to go with the when. Without execution detail to reference on the plan the teams end up building their own plans that may or may not tie out to the high-level executive strategy. Even if you have a robust process around marrying these two together you end up with inconsistencies driven by my favorite Excel issues: emailing different versions of the plan back and forth resulting in confusion on the latest iteration, troubles with concurrent users accessing the same files over a network, and summarizing spreadsheets collected from numerous sites and teams into one cohesive plan.

Finally, the last but possibly even greatest challenge can be in making sure the numbers tie out. Are the high-level figures by location, time, and product matching the low-level build-up from the teams in the field? When these numbers don’t match you can end up with differences in product and timing mix that results in profit misses or shifts in seasonality that weren’t communicated or expected.

The answer lies in using a system that not only ties the top-down process to the bottoms-up directly, allowing for reconcilement and analysis of gaps, but in creating a top-down plan that goes ALL THE WAY DOWN. Take your assumptions at a regional level for growth and see the actual impact at a SKU/Loc level. When you grow each SKU by its own CAGR rather than the group CAGR you’ll generally get a much more accurate result, with a rolled up number that could be quite different than would be built by staying at a high level. With a top-down plan at the lowest level you can actually compare apples-to-apples with the field teams’ assumptions and understand opportunities with a granularity never possible before. Put this system in the cloud and you’ll have a system that the entire team worldwide can access, review results in real-time, and everyone will always be on the same version of  the truth.

Tuesdays with our Solutions Consultants is updated the last Tuesday of every month on the Anaplan Blog. Interested in connecting with Tom to discuss this post further? Get in touch with him: @tommyj314 or us: @anaplan and let’s talk!

About the Author: Tom Jones has been with Anaplan as a Solutions Consultant since April 2012 on the Pre-Sales team. Tom aids the team in demonstrating the value of the Anaplan platform to customers by drawing on experience across a wide set of industry verticals including Healthcare, Banking, Transportation Logistics, and Retail. Prior to Anaplan, Tom helped to define and built best-practice financial modeling, planning, and analysis tools at Best Buy in the Entertainment group as a Senior Financial Analyst. He holds a BS degree in Computer Science from the University of Minnesota, as well as an MBA in Finance from the Carlson School of Management at the University of Minnesota.

By Tom Jones, from: https://www.anaplan.com/blog/2013/03/securely-plan-who-what-where-and-when-at-the-lowest-level/

As managers and organizations, do we step up and take a stand on how and why we made our compensation decisions? Do we truly reward those who excel? Or do we choose not to rock the boat by obviously differentiating and committing to pay-for-performance? No doubt there are pros and cons to either approach. Setting aside the unpleasantness of telling a perfectly competent employee that they make less than the “rock stars,” many managers are simply unable to articulate how the merit increase and compensation benchmarking process works. Or they’re not encouraged to do so by the organization.

In the IBM 2012 Global CEO Study, CEOs cited human capital as the single biggest contributor to sustained economic value. It’s also the largest expense for most organizations. Our researchalso shows employee engagement increases with a clear understanding of compensation and a direct link to performance.

With such a high investment and critical part in company success how are companies investing these dollars and communicating the rationale of their distribution? We asked practitioners in HR and compensation questions about their variable pay practices and pay-for-performance strategy. Not surprisingly there was a range of conceptions about what this means and how it’s executed.

REWARDING THE HIGH PERFORMERS

Less than 8 percent said that a separate budget exists for compensating those whom the company deemed “high performers”, most commonly through merit increases. Most organizations have a merit increase budget in the range of 3 percent. So, how is this used in a meaningful manner to differentiate and incent the 15 percent of workers highlighted as top-performers in organizations?

53 percent of companies said they target pay for top-performers above market rate for their positions, while the rest admitted to either paying at market or having no pay philosophy. This leaves almost half of companies compensating their best employees at what would be considered an average rate for all incumbents in their job role. So how are they differentiating?

RECOGNIZING THE HIGH PERFORMERS

The possible answers are many. Maybe they’re not differentiating and hoping for the best. Or maybe they’re trying to make up for potential compensation short falls with other things that surveys say are equally or more important than compensation such as career path, training and acknowledgement in non-monetary (i.e. job flexibility or a simple “job well-done”).

However, one startling fact revealed in our survey was that while 53 percent of organizations track high-performers, only 48 percent of organizations formally tell those individuals that they are tagged as such. Is this simply because we’re not good at communication? Or are we afraid  our top-performers will start making demands or choose to leave?

VARIABLE COMPENSATION

Another option for differentiating pay-for-performance through variable compensation beyond merit increases. 59 percent said they use individual bonuses as a reward, and another 29 percent use long-term incentives to serve the dual purpose of reward and retention. 18 percent use spot awards to provide immediate and targeted rewards for a specific accomplishment. Another 7 percent said they award bonuses to teams for group efforts.

While organizations still report having reductions in force and unemployment rates remain high, HR and compensation practitioners are still concerned with succession planning and a scarcity of talent. Ensuring that employees feel recognized and fairly rewarded are important in both retaining top performers and creating a culture that attracts the right kind of candidates.

At Kenexa, we’ll continue to track and report on what the compensation community is doing to tackle these challenges. Feel free to share your thoughts on what is being done (or not done) in your organization.

By Deborah Nielsen, from: http://blog.kenexa.com/the-challenge-of-pay-for-performance-whats-the-real-value-infographic/

Sales, marketing, and finance have leveraged analytics successfully as part of their toolkit for some time, but as research points out, only best-in-class organizations have processes in place to understand and leverage workforce data to drive better business decisions. Why can’t this scale to all organizations?

It can scale—if HR takes a more methodical approach to workforce analytics, and starts small.

Start Small with Specific Questions

HR has always had an abundance of workforce data, but how do you make progress in how you are using this data? It’s important to point out that technology and data aren’t enough—data needs context and qualification.

Analytics should be targeted. Analytics shouldn’t be an open-ended exercise in data-mining, especially for firms and HR organizations that have limited resources with analytics skills. You should be able to ask specific questions and answer them with data.

The information presented should tell a story. The story should be compelling, one that connects the data to its audience. It must be relevant to the issue at hand or tied to the priorities and challenges faced by a business leader—what really matters. This is why it’s critical to start with the business issue, not by randomly searching for data.

Build an HR Framework

Establish a framework from an HR perspective by determining relevance so that you don’t get the question “why are you telling me this?”. Begin by answering the following basic questions:

• What business outcomes are we trying to impact? Profitability, margin rate, revenue/budget-to-goals, customer satisfaction, and operational excellence are some examples.
• What are the human capital drivers of these outcomes? Engagement and motivation of workers, capabilities and performance, and retention have direct impact on the business outcomes.
• What is our current state of our workforce compared to the optimal state?
• What talent strategies drive these outcomes? Recruiting, training, mobility, performance, and staffing mix optimization are examples of strategies utilized by HR that can be leveraged to impact behavior.

Use a Line of Sight Visual

A line-of-sight visual helps to draw the link between metrics and relevant business issues, or vice versa, cascading from business strategy down to metrics. It’s very simple, and can be very effective.

Mick Collins and Jaye Tanner, in their 2013 HCI Workforce Planning and Analytics Conference workshop onActionable Analytics: From Big Data to Better Data, shared a very effective example of a line-of-sight-visual. This simple representation shows how selected metrics are relevant and important to keep in view as you work through specific strategies and initiatives as an organization.

A clear line of sight means that you’re able to map every metric you report on and demonstrate its relevance directly to the business objective. Whether a senior business leader needs to look at dashboards of metrics, or an analyst needs to pull required data together—both will have a clear understanding of the context and the story.

Actionable Analytics Present Choices

In order for analytics to be considered actionable, it must present choices clearly. These choices will result in decisions being made and action being taken. The information provided becomes transformative, resulting in actions that lead to a change in people’s behavior in order to “move the dial.”

This basic framework helps to get the most out of people’s time, energy, and talents by moving the conversation focus from data and metrics definitions to answering “so what?”, discussing prospective actions, identifying those responsible, and allocating resources.

Analytics helps build credibility for the HR function, and positions HR as an agent of impact. HR’s role as a strategic partner becomes prominent as it provides guidance on best course of action.

By Kouros Behzad, from: http://www.the-decisionfactor.com/performance-management/are-your-human-resource-metrics-relevant/

Now and again you come across a tool that makes you think – “Wow this is useful – I wonder why no one else has done this before?”MVX Business Modeller from Metavizix is such a tool that allows business analysts / consultants to model the way an organisation generates value and provide management with a range of reports and analyses that allows them to challenge the way the business operates.

The Goal: Improving performance

Most, if not all organisations, constantly strive to improve performance. There are only three basic ways of doing this: reducing costs, improving income, or finding new ways to satisfy their customers. Out of these, cost reduction has been a dominant theme and is typically achieved by telling budget holders not to spend. But logically this can only go so far – at some point the impact on saving costs will be minimal. Also just cutting budgets could mean that some vital activities may become underfunded, which in turn will have an adverse affect on improving performance. But there might be a better way ….

Understanding how the business generates value

In my experience, although many businesses understand broadly the processes involved in generating value, few understand the costs involved in each activity. For example in manufacturing there will be processes involved in turning raw materials into finished goods; there are processes involved in developing market awareness and selling products/services to end users; there are processes involved in collecting and dealing with cash, stock, product development and a whole raft of other activities that together generate organisational value.

But to be competitive organisations must perform this ‘value chain’ in ways that are cost effective and, according to Michael Porter, that is different from competitors. This applies not only to profit focused organisations but also the ‘not-for-profit’ sector such as government departments, charities, hospitals and so on.

In the past this type of analysis required specialist tools, time and motion studies, as well as considerable expertise in developing models that would reflect the way the organisation operated. It wasn’t for the faint-hearted and could involve a lot of expense.

But the developers at Metavizix, people with considerable experience in this area, thought they could do better. They set out to develop a simple tool that could be used by business analysts, which would produce tangible results in days or weeks.

Introducing MVX Business Modeller

MVX Business Modeller is a stand-alone PC application that facilitates the building of a model of a business to provide managers with insights not readily available from their usual management reports, which typically reflect budget holder responsibilities, cost centres and/or a departmental structure.

MVX focuses on providing an understanding of the key business processes and where and how costs are incurred in the organisation.

Businesses generate outputs (products and services) in response to inputs (customer orders). The outputs of the business are produced by processes that consist of series of activities.

Activities consume resources in the form of people, goods (consumables) and assets.

Various drivers determine the volumes of activities and ratios between processes, outputs, activities and resources. These are the building blocks used to construct the MVX business model.

MVX Business Modeller facilitates the construction of a tree-type model of the business containing multiple levels of processes, each process containing the series of activities necessary to carry out the process and each activity containing the resources consumed/deployed in completing the activity.

Assumptions are made as to who gets involved in each activity – for example the percentage of their time – and resources that have been consumed and reported in the General ledger can also be loaded. From this, a number of reports can be viewed.

For example, data can be analysed and viewed in process lanes (each lane is a single process showing all the activities in that process), swim lanes (usually departments or cost centres (each lane is for a department and includes all activities “owned” by that department; activities from several processes may be present in the swim lane).

There are also a variety of tables/grids, standard reports and bespoke reports that can be built using the MVX query builder. This gives the user the ability to view how the organisation generates value from multiple perspectives, leading to many insights into how costs are incurred and how they could be managed in the future.

These insights then lead on to the development of strategies to improve performance but from a fact base rather than a ‘gut feel’ instinct that are often wrong.

To find out more

In the space of a blog it’s not possible to go through all the capabilities of the product but for those interested you can visit their website at www.metavizix.com and download a free evaluation copy to see for yourself.

I mentioned at the start that I wondered why no one had thought of this before. Of course they have and there are a number of products that help you to analyze processes. But they are typically complex enterprise systems that you can’t run on a standalone PC. As such they are out of reach for most organisations and certainly for individuals who want to ‘try out’ such a tool to see if it could help their organisation.

Here, Metavizix steps into the gap and provides a simple, low-cost solution that has the ability to transform the way a company operates.

By Michael Coveney, EPM Contributor, from: http://www.stw-consulting.co.uk/Articles/332912/STW_Consulting/The_CPM_Blog/Systems/Modelling_Business_Processes.aspx

Michael Coveney, who is based in the UK, has more than 35 years of experience in the financial analytic software industry, helping enterprises combine ‘best management practices’ with technology to improve the efficiency and effectiveness of their performance management processes.His energetic style and insightful views has led him to become a regular speaker at international events, a course leader with the Antwerp Management School, and the author of many articles and books including his latest ‘Strategy to the Max’ – a down to earth look at all you need to know in setting up systems that support the implementation of corporate strategy.