0
“Management Reporting - Key
   Performance Indicators
      Getting the Most
From Your Oracle Applications”

        Doug ...
Management Reporting “Musts”
• Realistic Vision of Vertical Market
• Plan Anchored in Quantified
  Milestones
• Actual Per...
Overview
• Define KPIs
    • Balanced Scorecard
• Supporting Processes
    • Application Flow
• Oracle’s Approach
    • 11...
KPI - Definition
• Predetermined Target
  – Compare Actual Results
• Best Practices
  – Go Hand in Hand with KPIs
• Indust...
Balanced Scorecard
• Kaplan and Norton – Mid 90s
• Balanced Emphasis of KPIs
   – Finance, Customer, Internal and Learning...
Balanced Scorecard
Financial   Customer   Internal    Learning


 ROOA        Satisfy   $ per P/O   Train Hrs


Days W/C  ...
Days of Working Capital
    A/R                 A/P           INVENTORY


Channel     Product           Turns        RMA

...
Days of Working Capital
Days Outstanding of Working Capital        50.4

Receivable DSO 57.6 days              Inventory T...
Overview
• Define KPIs
    • Balanced Scorecard
• Supporting Processes
    • Application Flow
• Oracle’s Approach
    • 11...
Business Process
              Definition
• Best Practices Relate to Process Activity
• Benchmarking Facilitates Activity
...
Business Process Definition

• Working Capital Driven Processes
  – Order to Cash
  – Purchase to Pay
  – Order To Distrib...
Working Capital Driven
Order to Cash Activity Flow
          Order to Cash Days
•   Sales / Quote            Won / Loss %
...
Working Capital Driven
Purchase to Pay Activity Flow
    Purchase to Pay days – Cost per P/O Line
•   Originating Requirem...
Working Capital Driven
Order to Distribution Activity
• Customer Order ( Manufacturing Req.)
• BOM – Engineering Implement...
Performance Measurement

Closing
•   Sub-module Transaction Flows to G/L
•   G/L Setup
•   Journal Processing Model
•   AD...
PERFORMANCE MEASUREMENT
Management Reporting Flow
• Planning/Budgeting Process
• Set Tactical KPIs Related to Key Strategy...
Overview
• Define KPIs
    • Balanced Scorecard
• Supporting Processes
    • Application Flow
• Oracle’s Approach
    • 11...
Examples - Oracle e-Business
Software    Process   Activity      KPI


                       Select /
i-Procure    PTP   ...
Oracle e-Business
• General Ledger
• ADI and OFA
• Balanced Scorecard
• Business Intelligence
• Enterprise Data Warehouse
Oracle e-Business
General Ledger

• Chart of Account Definition
   – Product / Region Segments
• Value Set Definition
   –...
Oracle e-Business
ADI and Oracle Financial Analyzer
• Both Can Facilitate Drill Down

• Both Can Mimic Balanced Scorecard
...
Oracle e-Business
Balanced Scorecard
• Part of SEM Offering
• Relates 100% to Definition
• Simulation Capability
• Excel D...
Oracle e-Business
Business Intelligence
• Targets Specific Operational Areas
• Not intended for Executive Level
• Workbook...
Oracle e-Business
Enterprise Data Warehouse
• 1 Stop Shopping for all Data Needs
• Underlying Data Source for BIS and SEM
...
Overview
• Define KPIs
    • Balanced Scorecard
• Supporting Processes
    • Application Flow
• Oracle’s Approach
    • 11...
Pilot Program
Validation:
• Establish Key Strategic Initiatives
• Cause and Effect Definitions
  – Quantitative and Human
...
Words of Wisdom

High % of data required for KPIs
exists in transaction database
EDW views and BIS designed to
address mos...
More Words of Wisdom
If It’s Worth Doing -----
It’s Worth Measuring

If You Are Not Measuring -----
You Are Just Practicin...
“Management Reporting - Key
   Performance Indicators
      Getting the Most
From Your Oracle Applications”

        Doug ...
Management Reporting - Key Performance Indicators
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Transcript of "Management Reporting - Key Performance Indicators"

  1. 1. “Management Reporting - Key Performance Indicators Getting the Most From Your Oracle Applications” Doug McHugh Spectrum Direct - 630-472-2120 dmchugh@spectrum- ebusiness.com
  2. 2. Management Reporting “Musts” • Realistic Vision of Vertical Market • Plan Anchored in Quantified Milestones • Actual Performance Measured Analytically (Cause and Effect) • Fluid Assessment / Adjustment Process Effective Use of KPIs is the Glue
  3. 3. Overview • Define KPIs • Balanced Scorecard • Supporting Processes • Application Flow • Oracle’s Approach • 11i Specifically • Pilot Program • Benefits vs. Big Bang
  4. 4. KPI - Definition • Predetermined Target – Compare Actual Results • Best Practices – Go Hand in Hand with KPIs • Industry Vertical Impact – Unique to Vertical – Generic all Verticals • Cause and Effect – Enables Remedial Action
  5. 5. Balanced Scorecard • Kaplan and Norton – Mid 90s • Balanced Emphasis of KPIs – Finance, Customer, Internal and Learning/Growth • Effectiveness Requires: – Predetermined Analysis Paths – Integrated Application Processes – Centralized Support Process
  6. 6. Balanced Scorecard Financial Customer Internal Learning ROOA Satisfy $ per P/O Train Hrs Days W/C New Prod Quality Turnover Orders Key A/C Delivery Satisfy Expense Pricing Inv Turns Recruit $
  7. 7. Days of Working Capital A/R A/P INVENTORY Channel Product Turns RMA Country Complaints Quality Service Economy Service Deliver Training Customer RMA Vendor Production Predetermination of KPI Analysis Paths
  8. 8. Days of Working Capital Days Outstanding of Working Capital 50.4 Receivable DSO 57.6 days Inventory Turns 6.2 DSO Drill Down Turns Drill Down 40 days product X DSO : 2 turns product X 30 days target 15 turns target product x 2 day variance yellow 2 turn variance yellow Customer Complaints RMA 55% of Product X Sales 35 % returns Product X 5% target 5 % target 2 % variance yellow 2% yellow variance # of Service Calls Quality – Rework-Scrap $ RMA Vendor Performance
  9. 9. Overview • Define KPIs • Balanced Scorecard • Supporting Processes • Application Flow • Oracle’s Approach • 11i Specifically • Pilot Program • Benefits vs. Big Bang
  10. 10. Business Process Definition • Best Practices Relate to Process Activity • Benchmarking Facilitates Activity Monitoring • Cannot Be Modular Focused
  11. 11. Business Process Definition • Working Capital Driven Processes – Order to Cash – Purchase to Pay – Order To Distribution ( Through Production) • Performance Measurement Processes – Closing – Management Reporting
  12. 12. Working Capital Driven Order to Cash Activity Flow Order to Cash Days • Sales / Quote Won / Loss % • Order Entry • Credit • Billing • Customer Service / Collection DSO • Cash Application • General Ledger Interface • RMA Process
  13. 13. Working Capital Driven Purchase to Pay Activity Flow Purchase to Pay days – Cost per P/O Line • Originating Requirements • Select / Negotiate Vendor • Order / Contract • Receive / Inspect % rejected • Invoice Match / Control • Payment Processing • General Ledger Interface
  14. 14. Working Capital Driven Order to Distribution Activity • Customer Order ( Manufacturing Req.) • BOM – Engineering Implementation – ECO, BOM, Item Costing • Planning and Scheduling – Forecasting, Capacity Planning, MRP • Work in Process – Issues, Job Control, WIP Costing • Inventory – Controls, Planning, Misc. Transactions
  15. 15. Performance Measurement Closing • Sub-module Transaction Flows to G/L • G/L Setup • Journal Processing Model • ADI • Organizational Review Days to close and # of journal corrections
  16. 16. PERFORMANCE MEASUREMENT Management Reporting Flow • Planning/Budgeting Process • Set Tactical KPIs Related to Key Strategy • Apply Actual Results Against Plan • Evaluate Variance to Plan • Simulate Effect on Plan Change • Adjust Plan / KPIs as Required • Apply Actuals and Repeat Process Days to complete
  17. 17. Overview • Define KPIs • Balanced Scorecard • Supporting Processes • Application Flow • Oracle’s Approach • 11i Specifically • Pilot Program • Benefits Vs Big Bang
  18. 18. Examples - Oracle e-Business Software Process Activity KPI Select / i-Procure PTP Expense Negotiate CRM OTC Quoting Sales Workflow all all all BIS MR Analyze all
  19. 19. Oracle e-Business • General Ledger • ADI and OFA • Balanced Scorecard • Business Intelligence • Enterprise Data Warehouse
  20. 20. Oracle e-Business General Ledger • Chart of Account Definition – Product / Region Segments • Value Set Definition – Parent /Child Relationships • Cause and Effect Drill Down
  21. 21. Oracle e-Business ADI and Oracle Financial Analyzer • Both Can Facilitate Drill Down • Both Can Mimic Balanced Scorecard • Ideal for Pilot Situation • Neither Have Standard KPIs/Alerts
  22. 22. Oracle e-Business Balanced Scorecard • Part of SEM Offering • Relates 100% to Definition • Simulation Capability • Excel Downloads • Complete ERP Integration
  23. 23. Oracle e-Business Business Intelligence • Targets Specific Operational Areas • Not intended for Executive Level • Workbook and Alert Based • 20 Intelligence Areas: – Financials, Sales Performance, Customer Satisfaction, Planning, Order Management, etc. • Internet Alert and Delivery
  24. 24. Oracle e-Business Enterprise Data Warehouse • 1 Stop Shopping for all Data Needs • Underlying Data Source for BIS and SEM • Pre-built Data Collection Data Packs • Multi Dimensional (Cube Architecture) • Facilitates custom applications
  25. 25. Overview • Define KPIs • Balanced Scorecard • Supporting Processes • Application Flow • Oracle’s Approach • 11i Specifically • Pilot Program • Benefits Vs Big Bang
  26. 26. Pilot Program Validation: • Establish Key Strategic Initiatives • Cause and Effect Definitions – Quantitative and Human • Reporting Process Flow – Finance Usually Facilitates • Workflow Process Definitions • FSGs – ADI - OFA Are Good Tools
  27. 27. Words of Wisdom High % of data required for KPIs exists in transaction database EDW views and BIS designed to address most common needs Don’t re-invent the wheel Use statistical entries where appropriate
  28. 28. More Words of Wisdom If It’s Worth Doing ----- It’s Worth Measuring If You Are Not Measuring ----- You Are Just Practicing without Reliable Data ----- You Are Just Another Person with an Opinion
  29. 29. “Management Reporting - Key Performance Indicators Getting the Most From Your Oracle Applications” Doug McHugh Spectrum Direct - 630-472-2120 dmchugh@spectrum- ebusiness.com
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