Driving Business Performance with Microsoft Performance Management

Nic Smith BI Solutions Marketing Microsoft Corporation

Scorecards Slide decks Meetings Analytic applications Presentations Financial reports Dashboards Webcasts Charts and graphs Internet Project plans Documents Spreadsheets Intranet Blogs Portals RSS feeds Business books Television reports Magazines Newspapers IM/chat Email

1990s 2000s Financial Systems Infrastructure Increasing Globalization Internet bubble Accounting Scandals Shareholder, Board Transparency Business Trends Affecting Finance Technologies for Finance Business Intelligence Internet E-mail Y2K updates Desktop Accounting Compliance Controls Enterprise Risk Management Information explosion Business complexity

Source: "The Changing Role of the Finance Organization in a Multi-Polar World: Accenture High Performance Finance Study 2008." High performers are more focused on strategic business issues than operational details High performers invest in advanced capabilities

People Processes & Methodologies Technology

Organization-wide access to relevant business information (no IT filter)

Easy-to-use intelligence tools for all levels and roles

Role-based delivery of performance-related information

Scorecards, dashboards, and strategy maps that identify business drivers

Standardized KPIs to align with business goals and initiatives

Redesigned business processes to affect business drivers

Automated workflow for simpler consolidation and reporting

Data integration to combine information from existing systems

Data consistency, security, and integrity

Server-based views to allow collaboration and consistency – single version of the truth

Increasing Value

Organizational Alignment Finance & Ops Management Costing, budgeting, forecasting, tactical dashboards Executive Management Strategic & capital planning, scorecards, risk dashboards Front Line Employees Collaboration, reports, action Enterprise Performance Management (EPM) aligns and connects the entire organization – everyone knows goals and roles Continual process

Performance Management

Human Resources

HR Analytics, Headcount Planning, Talent Scorecards, OPEX Planning & Analytics

Financial

Budgeting, Planning and Forecasting, Consolidation, Management Reporting, Scorecards & Analytics

Operational/Supply Chain/MFG

Operational Dashboards, Supply Chain Analytics, Constraint Based Planning

Sales/Customer/Marketing

Analytic CRM, Sales Forecasting, Campaign Management & Analytics, Sales Scorecards

“ I need to improve our analytics capabilities so we can understand our current business performance and do a better job of planning for the future." “ I need better visibility into my cost of operations so I can target specific cost reduction opportunities that won’t have a negative impact.” “ I need better visibility into our pipeline performance so I can focus on deals that help me grow business with my most profitable customers.” “ I need better visibility into our talent management so I can plan for growth and understand issues before they become troublesome.” Performance Management Applications

Point solutions for management processes

Little or no integration

Doesn’t deliver the integrated BI solutions

Users attempt to integrate data in their own environment (Office)

Many management systems developed ‘offline’

Disconnected from source and ‘formal’ systems

Data Mart Data Warehouse CRM Planning Sales Analytics Management Reporting Dashboard

Need for an Integrated Approach Forecasting What will happen? Planning and Budgeting What do I want to happen? Dashboard What is happening now? Analytics Why did this happen? Scorecard How to coordinate what happens? Management Reporting Financial Consolidation What did happen? Common KPI’s and Business Rules

“ Less than 5.0% of the typical workforce understands their organization’s strategy” Kaplan & Norton

Actionable strategy has a financial plan

Why is Planning Important? Source: IBM Business Consulting Services, The Global CFO Study 2005 Moderately effective organizations in managing performance Utilize collaborative planning, reporting and decision-making process Employ rolling forecasts, based on relevant business events Use a streamlined, integrated budgeting process Create enterprise-wide performance management reporting 48% 50% 55% 71% 28% 43% 65% 68% 50% Use linked and aligned scorecard metrics cascaded down to each function and business unit 35% Recommended Actions Evidence from Highly Effective Organizations Highly effective organizations in managing performance

The Microsoft Difference for Finance Financial & Business Reporting Treasury & Cash Management Corporate Strategy Budgeting & Planning Compliance Risk Management Analysis & Monitoring FINANCE DEPARTMENT Information Technology Legal & Regulatory Human Resources Sales & Marketing Business Units REST OF THE BUSINESS Operations Management Data Management Across Multiple Systems

What happened? Reporting, Consolidation What is happening? Scorecards and Dashboards Why did it happen? Analytics What will happen? Forecasting What do I want to happen? Planning, Budgeting

Monitoring Seeing what is happening

Key performance indicators (KPIs) measure performance at all levels of the organization

Scorecards and KPIs align, monitor, and drive performance Real-time dashboards help decision-makers spot trends, problems, and opportunities

Analysis Understanding why it is happening

Business users can have the information their way—in exactly the view they need and without reliance on IT

Business users can analyze key measures by product, geography, channel, segment, or other filters

Planning Shaping what will happen

Assumptions and business drivers are part of the system, not offline

Model “what if” outcomes to determine best course, alternatives, and opportunities

Planning based on analytical models for each business area with accurate measures of resources and results

Mainframe/ Departmental Systems END USER TOOLS AND PERFORMANCE MANAGEMENT APPLICATIONS BI PLATFORM (RDBMS, ETL, OLAP, Reporting) DELIVERY

Oticon

Wenatex

High Performance is a Journey Tactical Operating Aligning Accelerating Leading No management methodology Manual planning process Financial metrics BI = spreadsheets Strategic Three to Five Year Progression “ Try on” methodology (BSC, Six Sigma) Process codification – financial planning Departmental metrics Pockets of BI, data marts Methodology permeates Closed-loop continuous process Metrics cascade throughout BI standardization Innovate methodology Continuous planning (frequency) Extended enterprise scorecards BI extranets Use of BI First step is to know your “BI Maturity”

Microsoft Business Intelligence Vision and strategy