CPM Presentation

Slide 2: ‘ Balance Score Card Corporate Performance Management-CPM KPI – Key Performance Indicators Business Intelligence for Emerging Enterprise’

Slide 3: Diapers and Beer Wal-Mart, the world’s largest retailer, supposedly found out that there are certain times at which beer and diapers sell particularly well together - when on Friday evenings young men make a last dash to the supermarket to get beer and their wives call after them, “Pick up some diapers, too, honey!” “Some of the ways Wal-Mart managers found to exploit their findings are legendary. One such legend is the story, “diapers and beer”. Wal-Mart discovered through data mining that the sales of diapers and beer were correlated on Friday nights. It determined that the correlation was based on working men who had been asked to pick up diapers on their way home from work. On Fridays the men figured they deserved a six-pack of beer for their trouble; hence the connection between beer and diapers. By moving these two items closer together, Wal-Mart reportedly saw the sales of both items increase geometrically.” A version with a slightly different view of the roles involved suggests that the men are sent to the supermarket for the diapers and, because there’s no time left to go to a bar, take beer home with them. In all versions of the story, Wal-Mart then puts the diapers closer to the beer and makes a fortune.

Slide 4: Business Challenges Risk Market Volatility Management Large Customer base Skilled Manpower Consolidation TECHNOLOGY Transaction Volume Credit Government Management Reforms

Slide 5: Today’s Business Pressures Accountability, Transparency Rapidly Changing Conditions • How do I comply with corporate • How can I accelerate my planning governance requirements? and decision cycles? • How can I ensure accurate, timely • How do I monitor conditions and reporting? take early corrective action? Plan & Sales Marketing Model Risk Credit Execute Service Finance Report & Human Project Mgmt Resources Analyze Efficiency & Cost Control Ineffective Decision Support • How can I sustain / improve • How do I filter extraneous data profitability? and focus on relevant information? • How do I keep information • How can I access and rationalize current? disparate, fragmented data?

Slide 6: Road signs, not red lights Intelligent traffic lights for controlling In the world of the car driver, a traffic light provides two clear signals: red means stop, green means go. In business reality, this clarity is painfully lacking, and it is something that even multi-colored reports cannot create. At the traffic light we can only either stop, or drive on. In contrast, a company has countless ways in which it can react to red or green signals.

Slide 7: Trends are like friends; with values start seeing trends

Slide 8: New World Growth & Drivers Drivers 6,000 4,924 5,000 • Internet Users: 35M+ Total E-commerce Market ($ Mln) 4,000 • Broadband: 2.M++ 3,077 3,000 • Mobiles: 130M++ 1,836 2,000 1,058 • Credit Cards: 45M+ 1,000 422 • Venture Capital ! - 2004-05 2005-06 2006-07 2007-08 2008-09 Year Source: IAMAI, PhocusWright, Internal Estimates

Slide 9: How do we measure impact on our business Unthinkable is Happening around us Frequency is increasing and we cannot control it

Slide 10: Volumes of Data – How to Extract Maximum Utility Data Information Knowledge Intelligence Hindsight Insight Foresight ETL OLAP Advanced Analytics Sums and Means Drilldown Statistical Predictions Operational Decisions • Exponential growth of corporate data and computing power in the past two decades – ETL with sums and means provides hindsight from corporate measurements – OLAP with drilldown provides insight from the ETL data warehouse – Only advanced analytics with statistical predictions provides foresight from the ETL data warehouse • Data Availability + Computing Power + Advanced Analytics → Competitive Advantage and Best Decisions

Slide 12: You have data quality reporting issues, whether you know it or not.

Slide 14: Balanced Scorecard • In 1992, Robert S. Koplan and David Norton introduced the balanced scorecard, a concept for measuring a company's activities in terms of its vision and strategies, to give managers a comprehensive view of the performance of a business. • The key new element is focusing not only on financial outcomes but also on the human issues that drive those outcomes, so that organizations focus on the future and act in their long-term best interest. • The stratagic management system forces managers to focus on the important performance metrics that drive success. It balances a financial perspective with customer, process, and employee perspectives. • Measures are often indicators of future performance.

Slide 15: Implementing Balanced Scorecard • Implementing the scorecard typically includes four processes: – Translating the vision into operational goals; – Communicate the vision and link it to individual performance; – Business planning; – Feedback and learning and adjusting the strategy accordingly.

Slide 16: Balanced Scorecard Perspectives • The scorecard drives implementation of strategy using perspectives which generally include: – Financial Perspective - measures reflecting financial performance, – Customer Perspective - measures having a direct impact on customers and their satisfaction – Business Process Perspective - measures reflecting the performance of key business processes, – Learning and Growth Perspective - measures describing the company's learning curve --

Slide 17: Balance Scorecard – Vision and Strategy

Slide 20: KPI – Key Performance Indicators • Key Performance Indicators (KPI) are financial and non- financial metrics used to quantify objectives to reflect strategic performance of an organization. • KPIs are used in Business Intelligence to assess the present state of the business and to prescribe a course of action. • The act of monitoring KPIs in real-time is known as Business Activity Monitoring (BAM) • KPIs are frequently used to "value" difficult to measure activities such as the benefits of leadership development, engagement, service, and satisfaction.

Slide 21: Example of KPI • "Increase Average Revenue per Customer from Rs. 1000 to Rs.1500 by EOY 2008". • In this case, 'Average Revenue Per Customer' is the KPI. • KPIs should not be confused with a Critical Success Factor • For the example above, a critical success factor would be something that needs to be in place to achieve that objective; for example, a product launch.

Slide 22: KPI's need to be SMART • S - Specific • M - Measurable • A - Achievable • R - Realistic • T - Timely

Slide 23: KPI (General) Market Share Growth • EBITDA Profitability Calculation : Market Share (current) / Calculation : EBITDA / Revenue Market Share (previous period) Information : Operating Efficiency Information : Marketing Efficiency Frequency : Monthly Frequency : Quarterly Business Value Growth Lost Clients Rate Calculation : Business Value (current) Calculation : Lost Accounts Number / / Business Value (previous period) Opening Total Accounts Number Information : Business Management Information : Business Risk Frequency : Quarterly Frequency : Quarterly Brand Recognizebility Prime Clients Rate Calculation : Mentions Number Calculation : Clients Generating 70% Received by Representative Sampling of Revenue / Total Accounts Number Information : Business Risk Indicator Information : Business Management Frequency : Quarterly Frequency : Quarterly

Slide 24: KPI (Human Resources) • Staff Turnover Calculation : Staff Leaving over the Month / Staff Number at the Last Day of the Month Information : Efficiency Indicator Frequency : Monthly Recruitment Quality Calculation : New Hires Leaving Within 6 Months / Total Hires Over the Year Information : Efficiency Indicator Frequency : Monthly Training Days Execution Calculation : Actual Training Days / Budget Training Days Information : Efficiency Indicator Frequency : Monthly Fill Vacancy Time Calculation : Average time HR required to fill 1 vacancy (broken down by grades) Information : Marketing Efficiency Indicator Frequency : Monthly

Slide 25: KPI (Information Technology) • Data loss accidents Calculation : Data loss accidents happened Information : IT efficiency indicator Frequency : Monthly Quality of software Calculation : Average score at 10-grade. Scale obtained at users survey Information : IT efficiency indicator Frequency : Quarterly IT budget execution Calculation : Actual IT costs / Planned IT costs Information : IT efficiency indicator Frequency : Quarterly • Quality of communications bandwidth Calculation : Average score at 10-grade. Scale obtained at users survey Information : IT efficiency indicator Frequency : Quarterly

Slide 26: KPI (Internal Operations) • Cycle times Calculation : Information : Efficiency Indicator Frequency : Monthly Inventory turnovers Calculation : Information : Business Management Efficiency Indicator Frequency : Quarterly Defect rates Information : Quality Indicator Frequency : Monthly Plant utilization Information : Marketing Efficiency Indicator Frequency : Quarterly Unit cost compared to competition, Information : Marketing Efficiency Indicator Frequency : Quarterly

Slide 27: KPI (Innovations) • Number of new products Calculation : Number of new products Information : Efficiency Indicator Frequency : Yearly Number of patents Calculation : Number of patents Information : Business Management Efficiency Indicator Frequency : Yearly New technologies adopted Information : Efficiency Indicator Frequency : Monthly System improvements implemented Information : Efficiency Indicator Frequency : Quarterly

Slide 28: Corporate Performance Management ‘Corporate Performance Management (CPM) is the area of Business Intelligence (BI) involved with monitoring and managing an organization's performance, according to Key Performance Indicators (KPIs)

Slide 29: CPM Significance • Marketing Departments can develop better products & services, assess the results of campaigns, better understand their target market, cross sell, upsell… • Credit Departments can leverage CPM for collaborative analysis and slicing and dicing data in new and creative ways • Human Resource Departments can use it extensively to analyze the workforce and the impact of salary and related decisions • Executives can get real-time access to key performance indicators, and would be able to interact and drill-down on data as against a static number • Portfolio & Fund Departments can analyse patterns for effective and faster investment decisions

Slide 30: What CPM enables? • Make the right investments in products, people, projects and processes • Continuously assess operational performance based on key performance indicators and historical trends • Adjust & re-align strategies as needed to achieve organizational goals • Deliver consistent information to all levels within the organization for collaborative performance • Visualise enterprise-wide planning and budgeting in a single model • Analyze customer, product and services profitability in real-time • Consolidate financial data from disparate sources across the entire enterprise • Standardise on data communication, data comprehension & data control • Optimise IT resources and infrastructure • Single version of the truth

Slide 31: CPM Framework C3 : Communication, Comprehension, Control

Slide 32: CPM Elements Strategic Objectives & Goals Business Operational Measurements Objectives IT infrastructure Business Information Processes & Management Activities

Slide 33: CPM factors Internal External Business Functions Statutory Compliance Data Integration Market Hierarchy External Entities Security Industry Regulations Operational Discipline Competition

Slide 34: CPM Benefits CPM Solution Benefits Align the business strategy Organizations are no longer horizontally and vertically throughout fractured by independent actions of your enterprise. the business units. They now are aligned and working towards the same business goals. Enabling proactive and directed Resources are directed towards actions that are consistent with action. meeting the business goals. This enables improved resource planning and prioritization.

Slide 35: CPM Benefits CPM Solution Benefits Providing real-time, contextual insight, Results in a consolidated view of the delivering role-based visibility into current state of the business, by business operations and metrics. combining process state information, operational activity status and IT status. It puts the current state of the business in context, enabling proactive problem avoidance. Improving team productivity and Enables improved and automated effectiveness. processes and allocation of resources. Provides collaboration across enterprise teams and processes to accelerate business performance improvements.

Slide 36: Initiating CPM • Integrate and take advantage of existing IT assets • Identify the data integration strategy • Identify a Business Intelligence strategy (Operational + Tactical) • Blending Business Intelligence with elements of planning, budgeting and appropriate-time monitoring • Identify measurable Business Performance Parameters (BPP) • Peg operational data with BPP • Improve and simplify pegging continuously

Slide 37: CPM • Limited standard reports in core business applications – Time consuming scripting for additional reports • Availability of only Static reports – No analysis possible • For analysis & intelligence, export to Excel – Chances of data corruption and data manipulation • Multiple Data sources – Single view not possible • Tactical & Strategic Business Intelligence – After-the-fact reports and analysis • Adhoc and enhancement requests from business users – Productivity loss of IT resources Solution : CPM through Operational Business Intelligence & Reporting

Slide 38: Structured CPM methodology Eg: KPI KPI Description Ageing Analysis KPI Objective Maintain credit period of less than 3 days KPI Benefits Better Cash flow KPI Start Date 1-Apr-07 KPI End Date 31-Mar-08 KPI Life Span & Reporting Periodicity 12 months, Daily KPI Unit of Measure & Formula Days KPI Target Value Less than 3 days KPI Upper & Lower Tolerances Plus or minus 1 day Anticipate Upper and Lower Limits 7days, 1 day KPI Sponsor Mr. XYZ KPI Initiator Mr. ABC KPI Benefactor Mr. ABC KPI Internal or Customer Facing Both KPI Data Sources Back Office application running on Oracle, Transaction application running on SQL,

Slide 39: Data Communication

Slide 40: Data Comprehension

Slide 41: Data Control

Slide 42: Data Communication

Slide 43: Data Comprehension

Slide 44: Data Control

Slide 45: Summary • CPM is not a technology, but a Business Strategy • Core concept for CPM : C3 (Communication, Comprehension & Control) • Business Intelligence is an Intelligent first step in incorporating CPM

Slide 46: "If you don't have a dashboard you can't drive the car. Clear Marketing Directions and Road Map Performance related Information is like Compass will give you right directions

Slide 47: Thank You!