The Truth about Performance Management

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The Truth about Performance Management

  1. 1. WHITE PAPER THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS
  2. 2. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS Table of Contents About This Paper ......................................................................................... 1 Executive Summary ..................................................................................... 1 The Current State of Performance Management ....................................... 3 How Performance Management is Measuring Up ...................................... 9 Moving Beyond the Metrics ...................................................................... 12 The Final Wrap-Up ..................................................................................... 16 SAS® For Performance Management ....................................................... 17 About SAS .................................................................................................. 19 i
  3. 3. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS About This Paper Spending on performance management initiatives is expected to reach $23 billion this year. But despite the large amounts of money being poured into dashboards, scorecards, business intelligence and analytical applications, many organizations are not reaping the full benefits of their initiatives. This paper addresses the issues behind performance management: how it is approached, what obstacles organizations may face, what achievements they can expect when it is successful, and what seems to be working. An online survey of 1,143 respondents from cross-industry organizations worldwide serves as the basis for this information. Executive Summary Alignment is the most important benefit of performance management efforts, according to a recent survey of 1,143 respondents from across the globe. The survey was designed to assess organizations’ use of performance management and determine the barriers they face as well as the benefits they derive. • Performance management has moved beyond the confines of the finance department. The research found that performance management is not isolated within one functional area; in fact, it is pervasive across the organization. Respondents indicated involvement from every department represented in the survey (finance, marketing, IT, sales, operations, HR and customer service). The operations area is most likely to drive the effort, followed closely by finance and human resources. • Performance management efforts are primarily multidepartmental. Despite the broader use of performance management, enterprisewide initiatives are not the norm. Most efforts are multidepartmental, but only a third of these are aligned across departments. • Organizations are looking to performance management initiatives to help with alignment issues. Despite talk of revenue growth, competitive advantage and financial transparency, organizations are seeking help with alignment, including strategic, budget and planning, and resource alignment. Yet these seem to be the most elusive. • Cultural resistance to measurement is the primary obstacle to achieving performance management success. 1
  4. 4. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS Cultural issues – the human factors – represent the biggest impediment to performance management. Lack of collaboration and sharing is a result of the resistance to measurement, which creates difficulties in obtaining the right information. For many of these organizations, effective performance management will require a cultural shift. Unless performance management efforts have C-level sponsorship and buy-in from the bottom up, instituting this cultural shift will be difficult. • Multiple systems designed to solve problems across the organization have now become the problem. Investments in multiple systems from different vendors are now creating problems for performance management efforts. The inability to integrate these systems is a key obstacle for many organizations. Only 50 percent of respondents indicated that they access data from their ERP systems for performance management reporting. • A sequential approach to performance management yields better results. The research indicates that organizations that follow a sequential approach to performance management are much more likely to achieve the alignment they desire and reap the benefits of their efforts. The three aspects of this approach are to report performance, to manage and control performance, and to improve performance. Most organizations perform activities in all three, but the most successful organizations that establish a solid base in one before embarking on activities in the next. • The use of analytics dramatically improves the success of performance management initiatives. The study shows that the use of technology plays a key role in successful performance management. Organizations that realize more benefit from their performance management initiatives are also more likely to use technology such as consolidation, reporting, budgeting and planning tools. Even more effective, however, is the use of analytic tools such as forecasting and data mining. These predictive technologies have the most significant effect on improving performance management benefits. • Inclusion, from the C-level to the employee, is important to success. C-level sponsorship for performance management efforts is crucial. To make the cultural shifts necessary to get effective employee buy-in, top executives must drive the effort, communicate strategy and set expectations. Without this, performance management efforts will be doomed to merely improving results in isolated areas without achieving the alignment and effectiveness desired. • Maturity in the use of information drives the success of the performance management effort. 2
  5. 5. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS This study supports the notion that a company’s use of information has a direct impact on its success in achieving results. Companies that are more mature in information use understand the importance of data integration and quality, of sharing and collaboration, and they have established an infrastructure to support their goals. In addition, these companies are typically early adopters of technology and have moved from just operating to innovation. The more mature a company is in its use of information, the more effective it will be in its performance management initiatives. The Current State of Performance Management Coming of Age: Performance Management Emerges Throughout the Organization Pressures on organizations to provide financial transparency and meet compliance regulations have hastened the maturity of business performance management initiatives. If executives are to be held accountable for results, they must have mechanisms to monitor and manage the business beyond the budget and balance sheet. Indeed, many observers have written lately about performance management and its move beyond the confines of the finance department. No longer just about financial management, performance management is taking on a new meaning. The implementation of business intelligence software in organizations has provided access and analysis capabilities to a greater number of employees, allowing them to measure and report on details of the organization outside budget numbers. As executives look to create operational efficiencies, they will seek methods to understand the value that departmental activities add to the organization. Instead of implementing blanket cost-cutting initiatives, they will make decisions using information that helps determine where best to make the cuts. The spread of performance management throughout the organization is a reflection of this pragmatic approach to running the organization. But just how far has performance management come? The findings of this research bear out the notion that performance management is now pervasive across the organization. In fact, among those surveyed, the vast majority (84 percent) reported that their performance management efforts reach beyond the scope of one department. And the scope is broad – with involvement from operations, finance and human resources most prevalent. 3
  6. 6. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS Enterprisewide performance management is practiced in a third (34 percent) of the respondents’ organizations, a healthy evolution from isolated efforts run by finance. Not surprisingly, large organizations (more than $1 billion in revenue) are early adopters – that is, they are most likely to be engaged in performance management on an enterprisewide level. Performance management deployments across multiple departments are currently the most common (50 percent); however, the majority of these (by a ratio of 2-to- 1) are not aligned. The obvious problem here is that lack of alignment means the departments are managing performance in silos – which at best creates inefficiencies and at worst could mean goal conflict and actually increasing costs. Lack of alignment across departments is a sign of less mature performance management. Single-department initiatives still exist in a small percentage of the respondents’ organizations (16 percent). These individual-department efforts are more prevalent in organizations with revenue of less than $100 million than they are in larger ones, suggesting that smaller businesses are slower to adopt the broader use of performance management. Individual efforts also reflect of an organization less mature in its use of information. What is the Scope of the Current Performance Management Initiative within your Organization? One Dept Multiple Depts Enterprise-wide 84% Total 16% 50% 34% $1B+ 11% 47% 42% $100M to $999M 10% 56% 34% Under $100M 16% 52% 32% 4
  7. 7. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS As previously mentioned, many areas of the business – operations, finance, human resources, sales and marketing, IT, and customer service – are involved, at least to some degree, in performance management in the majority of the respondents’ organizations. As resources and budgets become tighter, department heads are being challenged to show the value of their efforts. While operations, finance and HR still tend to be the key drivers, other areas are getting on the bandwagon as well. Which Departments are Involved in Managing Performance? Drives the effort Very involved Somwhat involved Operations 27% 39% 21% Finance 23% 32% 22% HR 23% 22% 24% IT 12% 25% 28% Customer Service 12% 30% 23% Sales 10% 26% 22% Marketing 9% 23% 23% C-Level Sponsorship: Not Keeping Pace The importance of executive sponsorship for a performance management effort has been a focus of discussion. Because successful initiatives are linked directly to strategy, top executives should not only buy in to the concept, but they should also own it. More than half (57 percent) of the respondents reported that the performance management initiative is sponsored by a C-level executive. To the optimist, the proverbial glass might seem more than half-full – efforts are getting high-level support in the majority (although slight) of the organizations where performance management is practiced. But to the pessimist, the bad news is that C-level sponsorship is still lacking in the other 43 percent of the organizations. 5
  8. 8. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS High-level sponsorship does increase with the scope of performance management. Fewer single-department initiatives are sponsored by top executives than those with broader scope. When performance management becomes enterprisewide, C-level sponsorship reaches 72 percent. Although this certainly represents a strong majority of the enterprise efforts, it raises concerns about respondents who are executing performance management across the organization without the sponsorship of a high-level executive. The implication is that sponsors without an enterprise perspective might introduce functional bias to the process. If the finance director is in charge, for example, the initiative might be more focused on meeting the needs of the finance department (e.g., financial transparency) than on the organizational need for, say, strategic alignment. Highest Level of Sponsorship for Performance Management Efforts C-Level Sr. VP/VP Sr. Dir/Dir Sr. Manager Manager 5% 8% Total 16% 82% 14% 57% 1% 5% Enterprise-wide 11% 10% 72% 5% 10% Multiple Departments 18% 17% 50% 14% 8% One Department 24% 13% 41% It’s Not Just About the Money With large investments in performance management software, whether purchased from vendors or built in-house, expectations are high. But surprisingly, the most important benefit organizations hope to realize, according to the survey respondents, is not financial. In fact, revenue growth ranks fifth in importance among the benefits expected. If not financial improvement, then what are respondents seeking from their performance management efforts? Alignment. So important is this alignment that it is the focus of the top three benefits organizations hope to realize: No. 1: Strategic and cross-departmental alignment, collaboration and accountability. No. 2: Budgeting and planning process aligned with strategy. No. 3: Resource alignment and optimization. 6
  9. 9. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS Why focus on alignment before revenue growth and financial transparency? First, revenue growth is certainly possible without performance management. However, alignment is essential to operational efficiency and effectiveness at the enterprise level. Goals and metrics established by departments, and not aligned to an overall strategy, can be achieved independently but might not necessarily advance the organization as a whole. Lack of alignment – often a symptom of the silo mentality – allows areas of the organization to march to the beat of their own drummers and feel good about it. It’s a challenge to get departments to collaborate and share – to think about the greater good. But that’s the reality: Most organizations struggle with alignment issues – collaboration, resource optimization, tying planning to strategy – and they look to well-oiled performance management initiatives to help. The equation seems simple: Get your house in order first, and the rewards (financial transparency, revenue growth, agility, competitive advantage, etc.) will follow. How Important are these Benefits to Your Performance Management Success? Strategic alignment 70% Budget/plan aligned with strategy 67% Resource alignment/optimization 63% Financial transparency 59% Revenue growth 59% Agility 56% Competitive advantage 55% Compliance/governance 54% Response to market threats/ risks 51% Innovation 47% While alignment issues top the list for respondents as a whole, a few areas in the organization have a different agenda for performance management. For those in sales and marketing functions, it is about the money. These areas place the highest value on revenue growth as a benefit of their performance management efforts. Revenue growth implies increased sales, which is often, of course, the basis for sales and marketing incentive programs. Those in finance, however, are most interested in achieving financial transparency – for which they are stewards and which can create a high level of vulnerability if not achieved. 7
  10. 10. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS The Rush to Measure As performance management gets traction across the organization, leaders are engaging in a variety of activities to manage their efforts. However, pressure to show value and report progress may be pushing organizations to measure before they address more important issues. The survey assessed respondents’ practices in a total of 20 performance management activities. Eight in 10 organizations in this research are engaged in measuring performance against goals, ahead of summarizing and consolidating information. Three-quarters are tracking key performance indicators (KPIs). What’s more, without performing other foundation activities like integrating data from enterprise resource planning (ERP) systems and cleaning and rationalizing data, two-thirds of the organizations are identifying and prioritizing improvement opportunities as well as making decisions based on measures they believe drive the business. Most Common Performance Management Activities % Performing Performance measured against goals 81% Summarized reporting of financial and performance information 78% on department level Key Performance Indicators tracked 76% Consolidation of financials (by geo division product line, etc.) 68% Identification, quantification, and prioritization of improvement 66% opportunities Decision making based on understanding of which measures 64% drive the business The high level of measurement activity seems to suggest an environment where organizations may be placing undue emphasis on the metrics. Unfortunately, the rush to measure could be ill-conceived. Consider the findings that only half the organizations report integrating data from their ERP systems, and that a mere four in 10 respondents clean and rationalize their data, an activity almost at the bottom of the list of activities performed. How accurate can the results of measurement activities be if the data inputs to the process are not accurate? Dashboards and scorecards are all the rage in performance management these days, according to analyst reports, and significant investments in them will be made this year. But leading organizations understand that while these features help managers view key indicators at a glance, by themselves they do nothing to manage performance. 8
  11. 11. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS How Performance Management Is Measuring Up The Reality Gap Even with all the activity around performance management and estimates that organizations will invest more than $20 billion this year to build or buy performance management systems, the reality is that organizations have not fully achieved the desired results. In fact, the most important benefit of performance management (as expressed by the respondents) – alignment – seems to be the most elusive. Organizations report having the most difficulty achieving strategic and cross-departmental alignment, the No. 1 goal of performance management initiatives. Resource alignment and optimization along with agility – a firm’s ability to adapt – exhibit the second largest gap in achievement. On the other hand, respondents reported more success in the area of compliance and governance. Higher achievement of this benefit is likely driven by regulations such as the Sarbanes-Oxley Act, outside the purview of performance management initiatives. Revenue growth is also an area in which organizations report higher success. Clearly, it does not take a performance management initiative to grow revenue. However, effective implementation of a performance management system can help achieve operational efficiencies to grow revenue more efficiently and, in the case of the private sector, profitably Gap in Performance Management . Benefit Achievement vs. Importance Achieved Gap Strategic alignment 73 27 Resource alignment/optimization 74 26 Agility 74 26 Response to market threats/ risks 77 23 Competitive advantage 78 22 Budget/plan aligned with strategy 79 21 Innovation 80 20 Financial transparency 80 20 Revenue growth 83 17 Compliance/governance 86 14 Meaning for the numbers: Respondents were asked to rate the importance of performance management benefits and indicate the extent to which they have been achieved. The ratings were calibrated so that full achievement of a benefit relative to its importance yields a score of 100. The gap represents the difference between importance and the level of benefit achievement. 9
  12. 12. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS If we define an importance/achievement index as the score from 1 to 100 an organization receives on the achievement of performance management benefits relative to their importance, on average, the respondents in this study would receive a 78, which is a C+ grade. Although significant improvements need to be made to meet expectations of performance management, given its current level of maturity in most organizations, this is probably a reasonable score. As performance management initiatives continue to evolve, program leaders can expect to realize more benefits from their efforts. Key Obstacles: People and Infrastructure Too close to the vest The notion of “If you build it, they will come,” is certainly dispelled by this research. The respondents to the survey indicated that cultural resistance to performance measurement was the primary obstacle to the success of performance management initiatives. This resistance is likely at the root of the second-most cited obstacle: Departments don’t share information or collaborate. This silo mentality is not atypical for organizations early in their performance management journey. Broad access to and use of information is new to many, and in the early stages of information evolution, individuals often act independently of others. Knowledge becomes an asset, which some are reluctant to share. The best-built performance management systems in the world cannot address the culture hurdle. This is why C-level sponsorship and an inclusive effort are important to the success of the initiative. Senior management must set the stage for an environment of measurement, sharing and collaboration. Management must effectively articulate the business strategy. Employees need to understand the benefits of performance measurement. They need to know their roles in the effort and how that maps to the success of the organization. More is less Technological obstacles also impede performance management success. Organizations have established large infrastructures and over the course of a number of years, many have adopted multiple systems from various vendors to solve enterprise or departmental issues. Now the problem is information access across these systems. Data is held hostage in multiple areas of the business, unable to be fed into a performance management system. This lack of ability to integrate various vendor systems is the third performance management obstacle respondents report. The more systems across the organization, the less able they are to talk to one another. The inability to integrate across these systems can bring performance management efforts to a screeching halt. Without a full view of information, efforts to manage performance are meaningless. Organizations need to address the infrastructure issue so that information can flow seamlessly from multiple systems. 10
  13. 13. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS More than one-third of the respondents reported that insufficient information and information access are main inhibitors to performance management success. Clearly, it’s not the amount of data that’s the problem. Rarely do organizations complain about having too little data. These two issues relate to those mentioned above – if departments are not sharing information and collaborating, and if data cannot be accessed from various systems, those responsible for performance management will not have the information they need. Addressing the collaboration and infrastructure issues should resolve problems with data sufficiency and access. Not my job One in three respondents cited “little accountability” as a key obstacle to the success of performance management efforts. With cultural resistance, lack of information sharing and difficulty getting at the right information, it would be difficult to sign up for a tour of duty on this initiative. Again, C-level management must pave the way for the success of performance management efforts and do more than pay lip service about its importance, which will mean creating the appropriate reward system for collaboration and measurement while also holding employees accountable. What are your Organization’s Top Cultural/Technological Obstacles to Performance Improvement? Culture resists PM efforts Culture 44% Depts don’t share info / Culture 43% collaborate Lack of vendor Technology 40% integration Insufficient information Technology 37% Access to information Technology 36% Culture Little accountability Culture 34% The Cart Before the Horse As mentioned earlier, organizations are exhibiting a tendency to measure before they are fully ready. This is evident in the finding that the largest percentage of respondents are measuring performance against goals even before they are performing the activities necessary to report information accurately. Only half of the organizations are integrating data from across the enterprise (due, perhaps, to the problem of integration from multiple systems discussed earlier). 11
  14. 14. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS Organizations complain about data quality; indeed, as the amount of data gathered increases exponentially, quality becomes a big concern. More than one in four of those surveyed cited data inaccuracy as an obstacle to performance improvement. Yet among those concerned about data quality, there is no increased likelihood to do anything about it. Only 44 percent perform the fundamental task of data cleansing and rationalization. Lack of confidence in the data that goes into the performance management effort will make any output suspect. Moving Beyond the Metrics A Sequential Approach Works If we look at the performance management activities as a framework, we can view them as having three aspects: 1. Report performance to gain transparency into the business. 2. Manage and control performance to align the business. 3. Improve performance to drive the business. Each aspect involves a series of activities that when completed effectively move the business to the next level of performance management. Table 1 shows how organizations are engaging in these activities – the trend is toward performing two in each category and calling it a day. However, the research indicates that the results of performance management significantly improve as organizations perform more activities in each category. Just as organizations should strive to complete all activities within each category, they will also benefit from taking a sequential approach to performing these activities. Here we see that the three aspects of performance management are interconnected. By focusing on the foundational activities found in reporting, organizations can obtain improved transparency to better manage and control performance. Performing manage-and-control activities to build alignment helps organizations make informed decisions outlined in improvement. 12
  15. 15. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS Table 1: Percent of Companies Practicing Performance Management Activities Aspect Activity Companies Practicing Summarized reporting of information 78% Consolidation of financials 68% Report Integrated data from ERP General 50% Performance Ledger systems or similar systems Data cleansed rationalized 40% Performance measured 81% against goals Key Performance Indicators tracked 76% Capital expenditures management 59% Financial and operational strategy 52% alignment across the organization Manage and Resource alignment 46% Control Methodology adopted such as 43% Performance Balanced Scorecard Six Sigma or Baldrige Strategy mapping 42% Dashboard drill down reporting 40% Ability to see cause and effect impacts 35% (non-hierarchical based on business rules) Identification of improvement 66% opportunities Decision-making based on 64% understanding of which measures drive the business Decision-making that improves 56% competitive advantage revenue growth Improve Decision-making based on 54% understanding of why problems Performance occurred and which decision will best support the strategy Threat/risk mitigation 50% Forecasting, optimization, simulation 43% and/or correlation analysis to predict the future state of operations Measurement of customer profitability 40% 13
  16. 16. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS How do these activities affect the results of performance management? There is good lift after all report activities are performed, but the most dramatic difference is when all of the manage-and-control activities are added to the arsenal. Competitive advantage and agility improve most when organizations take this approach. Only a few respondents complete all activities in all aspects, so specific measurement of benefits at full completion of these activities cannot be made. However, the data indicates that performance improvement activities add considerably to the effectiveness of the performance management effort. The bottom line is that taking a sequential approach and moving through the activities related to reporting, managing and controlling, and finally improving will yield better results. Benefits Achieved Based on Performance Management Activities All Reporting and Measurement Activities Performed All Reporting Activities Performed Not All Reporting Activities Performed 16% Competitive advantage 28% 63% 12% Agility 26% 56% 25% Compliance/governance 40% 50% 25% Budget/plan aligned with strategy 31% 47% 24% Revenue growth 35% 47% 18% Innovation 25% 44% 20% Strategic alignment 24% 44% 14% Response to market threats/ risks 20% 41% 16% Resource alignment/optimization 19% 38% 20% Financial transparency 38% 34% Percent achieving benefits 14
  17. 17. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS Invest in Analytics Research across the industry consistently confirms the value of analytics to enhance the use of information. More organizations are taking the critical step to wean themselves from the simplicity of spreadsheet analysis to tackle the tough issues with advanced analytics. As opposed to other methods that provide a historical view (the rear-view mirror approach) and give you a sign that says “you are here,” analytical approaches allow an organization to understand what will happen next, how changes in business drivers will affect results, why customers behave a certain way and so on. This study shows the value of analytics to the performance management effort. Organizations that employ analytics are much more likely to achieve the desired results from their performance management initiatives. The bottom line is that adopting predictive technologies as a component of performance management can help speed the time to achieving desired results. The Effect of Analytics on Performance Management Initiatives Use Analytics Do Not Use Analytics Budget/plan aligned with 25% strategy 40% 25% Revenue growth 38% 27% Compliance/governance 37% 18% Competitive advantage 33% 24% Financial transparency 31% 18% Innovation 30% 19% Strategic alignment 29% 15% Agility 26% Resource 16% alignment/optimization 26% Response to market 15% threats/risks 25% Create an Environment of Inclusion We’ve seen that the scope of performance management across the organization varies, with significantly more efforts occurring at a multidepartmental level than in a single department. The research suggests that involving key constituents – the finance area, operations, IT – will have a positive effect on the outcomes. This inclusion helps break down some of the silos that impede sharing and collaboration. Having joint responsibility for the performance management efforts helps to ensure that the initiative is not too function-centric. 15
  18. 18. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS Recruit the C-Level, Then the Employees C-level sponsorship is important to the success of performance management initiatives, but it must be the right sponsorship. Executive management needs to actively manage the culture to break down resistance to measurement and encourage employees to collaborate and share. The effort must have employee buy-in. The most sophisticated technology cannot overcome employee resistance. Communication of strategy, clarification of roles, and assignment of accountabilities will help employees understand where their jobs fit in the scheme of things. The Final Wrap-Up Organizations are spending significant amounts of money and other resources to manage their performance, yet most are not realizing the full benefits of their efforts. Cultural resistance to measurement, unwillingness to share, problems with information integration and access are the key obstacles to achieving performance management success. In addition, perhaps because of a strong need to prove value to stakeholders and constituents, organizations have often rushed to measure without first ensuring that what they are measuring is accurate or complete. Employing a sequential approach to performance management – starting with reporting, then moving to management and control, and finally to improvement – will dramatically improve the results of performance management efforts. In addition, taking the step to invest in and use analytical technology as a component of performance management will enhance the effort dramatically. Finally, looking at the process of performance management holistically, we see that successful implementation of performance management tends to take place in organizations that have a high level of maturity in information use. These leading examples include key departments in their efforts, are diligent in practicing the important activities in each performance management aspect and have adopted a core set of technologies to help them achieve their desired results. It is the combination of people, processes, skills and infrastructure that allows organizations to make significant strides in improving their performance. To read about how leading businesses leverage SAS technology to succeed in their performance management efforts, go to http://www.sas.com/success/solution. html#PerformanceManagement 16
  19. 19. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS ® SAS For Performance Management Don’t just manage performance – improve it To know which actions will improve your organization’s performance, you need a deep understanding of the factors that influence it. That understanding requires much more than a pretty dashboard sitting on top of basic reporting applications. Organizations that rely on a few shallow capabilities for performance management often find it difficult to pinpoint the root cause of performance issues, identify business opportunities, make agile decisions or sustain profitable growth. SAS provides the broadest, deepest range of offerings for performance management. Our performance management capabilities help you bring context and direction to your business intelligence initiatives and support a continuous process for improvement. In short, we let you do more than manage the performance of your organization – we help you improve it. Key benefits SAS offers the flexibility for you to implement any number of performance methodologies, from a balanced scorecard to Baldrige, Six Sigma or any other customized framework. Whether or not you choose to adopt one of these methodologies, SAS’ capabilities for performance management provide a number of powerful benefits: Better align resources with strategies. When you understand which measures drive your business, you can begin to align operations toward those drivers. Predictive scorecarding capabilities let you tie traditional scorecard features such as traffic lights and speedometers to powerful predictive analytics. Synchronize financial and operational strategies. Collaborate on the development of scenarios and associated budgets. With one integrated solution for financial planning, budgeting and reporting, SAS gives you the ability to create more frequent, accurate forecasts, ensure financial transparency and publish reports more quickly. Dynamic consolidation also ensures that the latest information is always available for decision makers and regulatory agencies. Quickly respond to business and market changes. At-a-glance dashboard visuals ensure that you have the most efficient access to your organization’s current status. Automatic alerts inform you immediately of important events. You can also view cause-and-effect relationships between events, which help illustrate results in the proper context. A diagram editor makes it easy for you to visualize strategies and process flows. All these capabilities are offered through one integrated solution. 17
  20. 20. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS Ensure a single view of enterprise information. To ensure a clean, consistent view of information within each department, SAS’ performance management offerings are all built on the SAS Enterprise Intelligence Platform. This platform offers unmatched data integration, storage, business intelligence and analytics, so you can always be confident that your choices will deliver the expected results. Identify the true value of customers, products and channels. Profitability management creates highly accurate profitability metrics from detailed transactional data that drive strategic decision making and instill confidence in your performance management programs. SAS creates drillable P&L reports that allow you to choose the level of detail needed to make your most critical business decisions. Reduce costs without compromising profitability. SAS provides activity-based management to let you get a complete operational view of cost and cost drivers. Focused departmental solutions SAS provides a number of focused solutions to enable performance management in various departments within your organization: • IT – Clarify the real costs and value of your information assets, and identify the best projects and strategies to maximize that value. • Human resources – With a holistic view of your work force, analyze and optimize human capital. • Finance – Create a cohesive, holistic perspective of true costs, profitability, regulatory compliance, forecast scenarios and optimization strategies. • Customer intelligence – Understand customer behavior, risk and profitability, and then drive more effective offers and marketing campaigns. • Marketing performance management – Understand, align and improve the performance of your marketing efforts, as well as quantify how marketing contributes to your organization’s overall success. • Procurement – Analyze spend and supplier performance, so you can make strategic sourcing decisions and optimize your supplier base. 18
  21. 21. THE TRUTH ABOUT PERFORMANCE MANAGEMENT: A REPORT OF SURVEY FINDINGS About SAS SAS is the leader in business intelligence software and services. Customers at 40,000 sites use SAS software to improve performance through insight into vast amounts of data, resulting in faster, more accurate business decisions; more profitable relationships with customers and suppliers; compliance with governmental regulations; research breakthroughs; and better products. Only SAS offers leading data integration, intelligence storage, advanced analytics and business intelligence applications within a comprehensive enterprise intelligence platform. Since 1976, SAS has been giving customers around the world THE POWER TO KNOW ® . 19
  22. 22. SAS INSTITUTE INC. WORLD HEADQUARTERS 919 677 8000 U.S. & CANADA SALES 800 727 0025 www.sas.com SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. ® indicates USA registration. Other brand and product names are trademarks of their respective companies. Copyright © 2007, SAS Institute Inc. All rights reserved. 102716_ 424375.0107

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