Difficult Times - Enterprises need to invest in technologies that re-energise corporate performance

London - 21 April 2009

Today organisations are being ultra cautious in all areas of IT expenditure, and many might question the value of investing in Business Intelligence (BI) technology solutions. A new report by Europe’s leading IT research and advisory organisation, Butler Group, questions exactly how any enterprise intends to survive without it. The report entitled ‘Business Intelligence – Corporate Performance Management’ points to the important role that BI and Corporate Performance Management (CPM) software play in illuminating and informing the business. Holding off investment for another year is not really an option, says Butler Group, especially when the drivers are diverse, ranging from strategic to operational to legal – as is the case with compliance. In many markets and vertical sectors, the requirements for some kind of BI and CPM capability are very real and pressing.

Born out of the need to proactively manage performance for business optimisation, CPM can play an important role in controlling costs, optimising resources, and ensuring that business units are adding value. BI has a crucial part to play in performance management, by presenting information in a timely and easily consumed fashion, and in providing the ability to reason and understand the meaning behind performance information through discovery, analysis, and ad hoc querying.

“Good decision making and performance management are key to business value generation but neither are easy in today’s complex world,” says Sarah Burnett, Senior Research Analyst at Butler Group and lead author of the report. “The corporate focus on IT costs is often driven by the enterprise-wide mandate to ‘do more with less’ and growing demands for compliance and governance-led transparency. BI and CPM solutions help firms answer three key business questions: ‘How are we doing?’, ‘Why are we doing this?’, and ‘What should we be doing next?’ “

Managers have to strike a balance between becoming more customer-centric and motivating staff in a positive way to re-energise corporate performance

“Economic pressures dictate that organisations manage corporate performance better to adapt to the different world that has emerged from the ashes of the Credit Crunch. The old adage ‘customer is king’ has never been more relevant to business than it is today” says Burnett. “I believe that managers have to strike a balance between becoming more customer-centric and motivating staff in a positive way to re-energise corporate performance. This calls for a more inclusive approach to CPM; one that is not only customer focused but also takes into account the needs of the employees”.

“We have already witnessed the dire results of the drop in demand in some sectors such as the car industry that has resulted in closure of factories, shorter working weeks, and redundancies”, says Burnett. “Even the public sector is not immune to the downturn with less money becoming available for public services. This type of uncertainty can have a demoralising effect on the workforce and lead to stress related sick leave and poor motivation.”

At the highest level CPM delivers a series of metrics that allows the organisation to achieve an accurate and balanced view of performance

CPM refers to the use of proactive management interventions to optimise overall corporate performance, based on the ability to track key performance indicators over time and productively model the impact of significant business events and alternative courses of action. BI-based solutions enable organisations to learn more about their customers and through analytics they can link customer behaviour to sales of products and services; to understand the whys and wherefores of success or failure of products and sales campaigns.

In recent years BI technology has become closely linked to CPM software. It joins the discipline of BI with enterprise budgeting and planning to give the organisation a window into performance: the ability to compare expectations with reality – what was predicted or planned to actual performance.

At the highest level CPM delivers a series of metrics that allows the organisation to achieve an accurate and balanced view of performance. It recognises that the various elements of the business will need subtly different interpretations of performance, based on their specific goals and targets, which will blend internal and external views, and financial and non-financial (operational) measures.

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