Sherwood Group Consulting: PM Executive Presentation


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Choosing the right software is only part of the game . Making change needs a plan.and commitment.

Making sure yourproject is well defined, well resourced and well sponsored is the art a PM project success.

The bottom line for making a change to add value to a business is to make sure everyone with a stake in the outcome is involved, is accountable and can win....

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Sherwood Group Consulting: PM Executive Presentation

  1. 1. Sherwood<br />Group Consulting<br />Performance Management <br />Future Directions & Exploiting Performance Management & BI Systems value<br />
  2. 2. Topics of Discussion<br />Changes occurring in performance management <br />Future directions of the PM software services. <br />Share some large and small organisation experiences on how they to use their PM applications to exploit value. <br />Sherwood Group Consulting<br />
  3. 3. Gordon Wood, is the Executive Director of Sherwood Group Consulting, performance management & analytics consultants and solutions implementers <br />Gordon has been working with clients in Asia-Pacific since 1993, on high profile projects for manufacturing, mining oil & gas exploration, retail and financial services sectors.<br />About the Presenter <br />Sherwood Group Consulting – Confidential <br />
  4. 4. About Sherwood Group Consulting<br />Sherwood Group Consulting – Confidential <br />
  5. 5. Let’s start by sorting the jargon<br />BI  - Business intelligence <br />IFRS  - Inter’l Financial Reporting Standards<br />OLAP - online analytical processing <br />PM - Performance management <br />SOA  - service-oriented architecture <br />SaaS - software as a service <br />Sherwood Group Consulting – <br />
  6. 6. Some PM definitions from the web<br />Performance management links strategy with corporate objectives and aligns a company&apos;s resources by coordinating efforts of every member of the organization.<br />The integrated process by which an agency involves its employees in improving organizational effectiveness in the accomplishment of agency mission and strategic goals.<br />The process of quantifying, measuring, correcting and reporting system service levels<br />PM is a business process application for managing outcomes from strategy thru to execution. <br />Sherwood Group Consulting<br />
  7. 7. BI, what exactly is it?<br />Intelligence or information gathering in business terms broadly covers employment of analytical systems to retrieve process and present information for business use.<br />BI tools now come with sophisticated analytically based graphics and intuitive interactive end user reporting and reduce massive online data sources to simple and decisive value. <br />Performance management have embedded BI processes for transaction drilling <br />Sherwood Group Consulting – <br />
  8. 8. PM BI Systems <br />Succinctly put, Business Intelligence (BI) systems present decision based information by systematically analyzing an organization&apos;s own business data directly from its source.<br />Sherwood Group Consulting – <br />
  9. 9. PM Software Today <br />Execution<br />Strategy<br />Direct<br />Align<br />Control<br />Planning<br />Strategy<br />Forecasting<br />Consolidation<br />Budgeting<br />Process Workflow and Compliance<br />A complete process end to end <br />in a closed loop system<br />
  10. 10. PM Understanding its value<br />PM ROI – is dollars, but could be lives and safety.<br />ROI calculations on PM projects are mostly subjective and not always necessary. <br />The &quot;soft&quot; benefits of PM are the most important - The main benefits you get from PM are intangible benefits of strategic value, such as <br />faster reporting, <br />better management information, <br />better decision making and <br />more productive users.<br />Executive sponsorship is key to sell and recoup these kinds of soft, intangible benefits.<br />Sherwood Group Consulting<br />
  11. 11. Assessing the Value<br />Estimate what is be needed to revert to a manual spreadsheet system.<br />How many people, Time taken <br />Decision lead time and so on<br />Result .. Yes it is not possible to revert <br />But check you are not doing both – old habit die hard, believe me. <br />Sherwood Group Consulting<br />
  12. 12. Testing the value Example Do a top down Plan first <br />Try doing the top down approach first .<br />Then do the budget bottom up and match it<br />(budget can be done in detail even by product)<br /><ul><li>Discuss the Gaps and proceed with approvals </li></ul>(Do another round if and compare in minutes /days)<br /><ul><li>Consolidate and present to Board
  13. 13. Check how long it took and the quality </li></ul>Suggest revert and see reaction <br />(That is everyone go back to the offline spreadsheet) <br />Impossible so you know the value<br />Sherwood Group Consulting<br />
  14. 14. Live Experience -SME is MalaysiaPrivate Company $25 million <br />Scenario <br />All states logistics operation Very profitable <br />Incentive based management style <br />Budgets takes 6-10 weeks and painful <br />Actuals take 17 days each month including reprocessing. Management issue <br />Sources CPM ERP, Budget, Operations data. <br />Vendors support difficult to find<br />Business growth constrained by systems<br />Sherwood Group Consulting<br />
  15. 15. Live Experience -SME is Singapore Results – as we go approach <br />Implemented PM system in 4 days <br />Loaded data and budgets in 2 days & collaborating immediate value <br />Live in development (parallel) fix as we go.<br />Results now taking 4 days as issues dealt with<br />Next year budget already planned top down.<br />Growth plan is now in the design. <br />restructuring issues solved on the fly.<br />Operations are thrilled.. Can see the numbers<br />Sherwood Group Consulting<br />
  16. 16. Live Experience -SME in Malaysia Operation 12 months but formally still a POC internally<br />As a Service no technology in-house (yet)<br />Process focus and outcomes were the key <br />Business rules adopted quickly to facilitate build <br />Very focused finance team for results and buy-in<br />Dedicated consultant working remotely <br />One face to face meeting with Consultant <br />Recommended by Accountants for growth and due diligence planning (always ready) <br />No way back now.. Management ecstatic <br />Sherwood Group Consulting<br />
  17. 17. PM Users, who are they & why? <br />An estimated 23% of business have a PM system. This is mostly high end organisations<br />99.9 % of all business have a spread sheets 75% manual 5% link then to sources directly.<br />Small but significant growing number of SMEs taking up PM (3-5% but rapid take ) <br />And about 35 % are using some form of BI or information extractions tool <br />There is a big gap and huge demand growth with the software industry targeting that very hard<br />Sherwood Group Consulting <br />
  18. 18. PM and BI Trends & drivers & why?<br />Sherwood Group Consulting – <br />
  19. 19. Evolution of Capability<br />Sherwood Group Consulting <br />
  20. 20. Business Pressures Unrelenting-PM gets you proactively ahead<br />Shortened Cycles<br />Regulatory Scrutiny<br />IFRS<br />IAS<br />Business Performance<br />GAAP<br />Global Competition<br />Changing Markets<br />19<br />
  21. 21. Performance Management Software Today is Highly Sophisticated<br />Delivers<br />Embedded disciplines knowledge foundation<br />Intuitive Workflow based processes <br />Pervasive ease of use and accessible <br />Maintainable in open technologies <br /> Total business Applications not only tools.<br />Functionally <br />highly flexibility to change for growth <br />business people can see and exploit the value <br />Business and People adapt to change environments<br />Sherwood Group Consulting <br />
  22. 22. Software Expectations <br />Software subject matter must perform like a <br />A highly qualified graduate with 100 perfect pass park in the highest university level course in the world currently and have at least 25 years experience.<br />Manager’s may not have the skill to manage this level of resource and get the value<br />Specialist consultants are important <br />Everyone wants support <br />Sherwood Group Consulting – Confidential <br />
  23. 23. Skill Shortages changes impacts<br />Today there is a serious shortages of skilled financial controllers and financial management people <br />Open market is generating massive demand for control <br />World on move so quickly so no sustainable transitions <br />Functional learning base rather logic based with problem solving skills changing or less sustainable <br />Less focus on in-house formal manage training and leadership courses <br />Smart management and BI software is picking up the gap as they manage the processes too<br />Universities now teach use of software as a core<br />Sherwood Group Consulting – Confidential <br />
  24. 24. Consolidation Systems – Now <br />Must have <br />Organisation , including complex ownership structures <br />Currency translation (including accounts valuation distinctions) <br />Data Flow Standards (Opening Balances and automatic results re-balancing from inputs) <br />Consolidation entries and audit process<br />Intercompany and Investment elimination functionality <br />Complex accounting automation (journals and adjustments)<br /> <br />Sherwood Group Consulting – <br />
  25. 25. Consolidation Systems - Future <br />New breed smart systems in the works will :<br />Automate movements analysis (attributed capability for structured movements analysis)<br />Have Automated attributed outcomes for report generation (e.g. Cash flow)<br />Handle transaction currency and Hyper inflation revaluation.. They do already actually<br />Provide Functional currency switching . (What happens when you the rules change and you answer is different? )<br />Sherwood Group Consulting – <br />
  26. 26. Example on Grand Scale Building the ultimate PM/ BI<br />In Oil drilling information is rich in information but is scattered across the world <br />Same for manufacturing and mining as with services banking and in fact every process<br />Alternative energy and exploitation and conservation will depend on the ability to normalize and analysis this data form disparate sources and formats<br />But how can we do this?.<br />Sherwood Group Consulting – <br />
  27. 27. Grand Scale Example – cont’dBuild the ultimate PM/ BI<br />Chevron planning a PM /BI project that will take 5 years to complete. <br />Largely in Asia with skills high capability at lower cost.<br />It will provide indexing of data to a normalize BI data mart with search engine power <br />And use high end visualization and simulation tools<br />Data will stay where it is but available, real time<br />Sherwood Group Consulting – <br />
  28. 28. Emended Business intelligence <br />Amazing Yes. but not really<br />We do it every day now but with blinkers on.<br />PM systems & embedded BI like Infor does this now <br />But the scale is now becoming obvious as business people are seeing the value and expand the platforms away from just being finance focused <br />Sherwood Group Consulting – <br />
  29. 29. Futurist Maintenance Performance <br />Use of Optical scanning on operator head gear fed back to central database will provide instant diagnosis of performance.<br />This is real now in energy companies so imaging the impact on manufacturing automotive and general life operating life style if were harness that technology <br />Six Sigma to identify and remove the causes of defects will look like quite a passé <br />Sherwood Group Consulting – <br />
  30. 30. Software as a service [Saas] <br />Is it a real phenomenon or just a hype to sell software <br />What does it mean?<br />What is the value proposition?<br />Who gets the benefit? <br />What are the risks?<br />What about the 2 sets of books?<br />Do we really trust an outside computer? <br />What is SAS70?<br />Sherwood Group Consulting – <br />
  31. 31. Just a few examples <br /> <br />Range of services including, web services, email, photo news and many more<br /><br />Try Finance for share portfolio management <br /> <br />Huge take up for sales pipeline management <br />Many more .. And it is here to stay<br />Sherwood Group Consulting<br />
  32. 32. Live example Using PM as a change tool<br />Thai company recently spent a year revamping their corporate performance management thinking. <br />The sort is fantastic for this 100 year old consumer products company of 85000 employees, including 4000 in IT.<br />You would think they would have all the tools but they chose just a Strategy Management tool for the task and it has had revolutionary results <br />Sherwood Group Consulting<br />
  33. 33. By Joining the dots in the strategy <br />Sherwood Group Consulting – <br />
  34. 34. What makes up the plan and what is the drag on the plan when it falters<br />Sherwood Group Consulting – <br />
  35. 35. Performance Contribution Value<br />Sherwood Group Consulting – <br />
  36. 36.
  37. 37. Making it happen<br />If you don’t have a PM system<br />It is costing you a fortune <br />It places you at risk in a downturn<br />Planning for growth is costly and hard to achieve <br /><ul><li>Get your PM up and working </li></ul>It will invoke best practice and attract quality people to exploit it to grow your organisations<br /><ul><li>If you have one now I guarantee it ‘sunderutilized</li></ul>Expand and exploit it and add planning BI an SM <br />Sherwood Group Consulting<br />
  38. 38. Shernox Thailand Client <br />A Top 10 Public Company in Thailand <br />Oils and Gas industry <br />International in Asian and other countries<br />Operated and Non Operated Assets <br />65 + separate complex organisation <br />Onshore and offshore operations<br />Multi currency trading and reporting<br />Several presentation currencies <br />Cross functional structured with shares<br />Sherwood Group Consulting – <br />
  39. 39. Implementation Methodology <br />38<br />Support<br /> Implementation<br />Configure <br />Application<br />Form Team<br />& Design <br />Business Case<br />Deploy <br />In <br />Short Stages<br />Business case – (Understand Benefits)<br />Form Team & Design (Design Commitment) <br /><ul><li>Involve managers and users (early buy in)
  40. 40. Get Finance involved as information owners
  41. 41. Get IT involved as the infrastructure owners
  42. 42. Design – Agree Process, function, scope & plan</li></ul>Configure Application (Develop System)<br /><ul><li>Manage outcomes & risks
  43. 43. Tackle boundary issue early. E.g. security </li></ul>Deploy in Stages (to see value early)<br /><ul><li>Deliver early for user buy-in & confidence</li></ul>Support Implementation (Make it stick)<br /><ul><li>Test, Train, and support</li></li></ul><li> Other Visionaries - Who & what are they doing?<br />Richmond Police Force , Richmond, Va. predict the crimes patterns and deploy officers to potential hot spots.(,289142,sid91_gci1250435,00.html)<br />Jefferson Medical Center - monitor employee productivity (,289142,sid91_gci1202027,00.html)<br />Office Depot - Financial data arrives from 1,000 retail outlets every day, and needs to be accessed by thousands of users. Built processes for receiving, storing and accessing data. (,289142,sid91_gci1139408,00.html)<br /> <br />Sherwood Group Consulting<br />
  44. 44. 40<br />Shernox Oil Project Phases & Deliverables <br />3.88<br />
  45. 45. Integrated of budgets and reporting<br />Sherwood Group Consulting<br />Earnings, Cash Flow, Capital Summary Reporting<br />Performance Metrics, Net Sales/Production Statistics<br />Other Expenses & Payment Planning<br />Tax & Working Capital<br />DD&A Rating <br />Reporting<br />SOE Cash Expenses Classification<br />Capital Project & <br />Reporting Analysis<br />Net Cash<br />Expenses & Analysis<br />Drilling Performance<br />Planning<br />Revenue Planning Gas, Condensate & Oil<br />Expense Allocation<br />& Partner Recovery <br />Allocation <br />Capital Projects <br />Detail Planning<br />Production Planning<br />Department Cash<br />Expenses Planning<br />Expenditure<br />Production & Revenue<br />Capital<br />
  46. 46. 42<br />Budgeting Preparation - Overview<br />Strategic planning Linking<br />Budget Process & Function<br />Budgeting time table and meeting information<br />Budget assumptions / Global drivers <br />Multiple budget version<br />Multi-currency transaction budgeting<br />Accrual budgeting / Cash budgeting<br />Budget preparation workflow route<br />Incrementalbudget capability<br />Formats<br />Non-monetary data<br />Efficient budget preparation worksheet<br />Efficient supporting sheet<br />Different formula / budget item for each worksheet<br />
  47. 47. 43<br />Budget Preparation – Functional <br />Automated Alternatives<br />Automate Work Programs <br />Automatically calculate some certain budget e.g.. Salary & Traveling expenses<br />Top-down budgeting route<br />Closing forecast preparation <br />Allocation process <br />Processes & Budget Review Efficiency<br />Consolidation<br />Consolidated budget analysis and report<br />Screen proposed budget analysis<br />Standard analysis method for decision making.<br />
  48. 48. 44<br />Budget Preparation-Work Flow <br />Approval Process <br />Approval & Communication<br />Approved budget notification<br />Change Control<br />Request for Contingency workflow route<br />Request for Budget reclassification workflow route<br />Authority for expenditure and Internal authority for expenditures preparation workflow route<br />Support Management <br />Budget help desk workflow route<br />Alert messages with e-mail report distribution.<br />
  49. 49. 45<br />System Administration <br />Organisation Management <br />Dynamic organization and matrix organization view.<br />hierarchical responsibilities.<br />Security <br />Easy to create, maintain user security accountability.<br />audit trail.<br />Data Management<br />Easy to create and maintain dimension value.<br />Easy to create and maintain formula.<br />Processing & Control<br />Quick calculating process (with reliable output).<br />Efficient task scheduling and sequencing.<br />Indicate error details and solutions in running result.<br />
  50. 50. 46<br />Technical Requirements <br />General System requirement<br />Flexible Application Server based<br />Databases; Oracle, Microsoft & others<br />Network Open<br />Software design<br />Flexible Platform configuration <br />Hardware design<br />Open system architecture for industry interfacing.<br />Fault tolerant.<br />Architecture multi-tier<br />Integrated auditable security<br />
  51. 51. Technical Requirements<br />Reporting <br />Standard set of reports and analytical views<br />Monthly cost control report<br />A drilldown to transaction level report<br />multidimensional reporting and analysis with annotations, flexible formatting, graph types.<br />Ad-hoc reporting tools<br />Two-ways communication<br />Administration & Support <br />List of available report with authorization <br />Most frequently used report<br />Quick access to reliable information.<br />Good print-out.<br />E-learning<br />Sherwood Group Consulting<br />
  52. 52. Best Practice Lessons<br />Intuitive Solutions (If you can say it simply, it works)<br />Simple scope…. (Don’t do too much at once.)<br />Challenge bad practices (Don’t carry on mistakes)<br />Exploit strengths. (Decide who does what best)<br />Share knowledge. (Regular communication)<br />Test, test, and test live well before going live<br />Plan Good Support for “Go Live”<br />Exploit valueas phase 2 project in Rollout ….<br />48<br />