It goes without saying that business performance has become critical to today’s public and
private organizations. Corporate scandals from many years ago created a level of skepti-
cism that has left shareholders and the government eyeing every financial and operational
move a company makes. It is no longer sufficient for a company to simply comply with
today’s standards - investors and shareholders are demanding that corporate executives
find new and innovative ways to improve their operational and financial performance.
Forward Relieving the Pressure
So what are companies doing about these new demands? Many are turning to Business
Performance Management software to achieve improved growth and profitability more
quickly, while others are apprehensive about what the software can actually do for them.
The believers have taken a leap of faith and are investing in portions of Business
Performance Management software such as Web-based budgeting and planning to help
bridge the gap between long-term strategic plans, and shorter-term budgets. Others have
started with corporate scorecards to uncover, measure, and monitor their key perform-
ance indicators to create a more performance-accountable organization. Then there are
those who wish to delve into the sea of analysis to uncover the key drivers for growth and
profitability. Those companies are taking advantage of business intelligence tools that tap
into previously-hidden data in transaction systems such as ERP and CRM. The starting
point is unique to each organization, but many companies start with the area of the busi-
ness that will move the organization closer to its strategic performance objectives.
Business Performance Management—Just a Buzz Word?
Business Performance Management has been around in different forms since the begin-
ning of time. Historically, it was much clearer how an asset created value—e.g. how a
piece of machinery contributed to producing a specific kind of product, at a specific cost,
which was sold for a predefined price. Today things are much more complex—it is more
difficult to establish that link when it comes to intangible assets. Today, there is no direct,
one-to-one relationship between an asset, an intangible asset, like the knowledge of a
worker, and a financial outcome. Today’s environment is more dynamic, and Business
Performance Management plays a critical role in helping companies make sense of their
operational and financial performance in a very complex environment.
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From Unstable to Steady—The Aftermath
In the wake of the dot com boom, the financial and operational performance of technolo-
gy companies is under the microscope. It is no longer sufficient to have a good idea and
go public on that idea. Investors are scrutinizing every new idea that walks through their
doors for viability and long-term steady growth potential. For existing technology compa-
nies, shareholders are demanding better corporate governance and steady profitable
growth. So how are companies competing and excelling? Many are turning to Business
Introduction Performance Management software to help them better budget and strategically plan,
accurately forecast, and monitor their key performance indicators. Specifically, technology
companies are challenged with:
I Reducing operating expenses without sacrificing customer service or research
I Efficiently using human capital and planning workforce needs
I Modeling different business scenarios which may include new pricing structures,
outsourcing options, new product development and acquisitions or mergers
I Determining and monitoring key performance indicators such as growth of a
specific product line or in a specific geography, workforce retention, or increasing
revenue and earnings per share by x amount
I Creating accurate forecasts based on meaningful information
To gain and maintain a competitive advantage, technology companies are turning to
Business Performance Management software.
Reducing Operating Expenses
A Web-based budgeting and planning system is a powerful tool which provides finance
and operations personnel with unprecedented insight into expenses vs. actuals, budgets
against forecasts, and other information to support the creation of a long-term, corporate
plan. As the door to the budget process opens for more and more individuals within
technology companies, it is important to have a single, centralized repository for budget
information. It is no longer sufficient to consolidate hundreds of spreadsheets from multi-
ple departments. Giving more people access to the budgeting process in a centralized
repository gives finance and operations the ability to see detailed budget information and
adjust accordingly to improve performance numbers.
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Workforce Management and Planning Monitoring Key Performance Indicators
As departments from within a technology company request additional personnel to When the company’s goals and objectives are clearly articulated to employees, and their
research and develop new products, market those products and support the entire organ- strategies and tactics are monitored against the corporate objectives, you are on the
ization, it becomes critical to clearly understand how each new hire or existing employee road to improving your performance. If your key performance indicators are to increase
contributes to revenue or adds to the cost of sales. With a Web-based budgeting and marketshare by 10%, the employees in each department should have supporting per-
planning application, HR departments can more effectively manage and plan for future formance goals that they are tracking regularly. If your goals include reducing customer
growth, or understand how downsizing will impact the business. Finance departments are service costs, having a clear understanding of each of the costs associated with cus-
able to ensure their hiring plans reflect the resource requirements of their projects, and tomer service allows you to determine where positive changes can be made. You may
that the budgeted costs for those resources are accurately reflected in both plans. Host employ a scorecard on each customer service representatives desktop in which they are
Budget contains both detailed workforce planning and project budgeting capabilities held accountable for meeting specific levels of customer service while reducing costs.
using standard costs and actual costs from an HR plan. The “to be hired” headcount Marketing professionals may have a scorecard that tracks how well their campaigns
requirements from a project plan can seamlessly integrate with the HR plan. Many budget are performing and whether sales forecasts are being met. Host Scorecard enables
environments plan projects and their required resources as a separate and disjointed executives to clearly articulate key performance indicators and monitor each employees
function from their human resource planning. This leads to disjointed budgets. Host progress toward those goals.
Analytics enables HR departments to better forecast future staffing needs, create “what
if” scenarios for executive management and drive position requirements and “To Be Accurate Forecasting
Hired” positions based on revenue drivers, budgeted service levels or volumes. The end As you know, stated revenue projections are key for today’s technology companies. If
result is that HR has the opportunity to play a more important role in improving business you project a certain number in license revenue or product sales for a given quarter, you
performance. As technology companies work to improve their overall business and corpo- better meet that number. Shareholders want to see that you can do what you say. Host
rate performance, the budgeting process continues to play a critical role. Forecaster gives you the ability to more accurately forecast based on budget information
from Host Budget. This in turn provides you with the mechanism to improve your corpo-
Modeling Different Business Scenarios rate governance and more accurately state your projected earnings to Wall Street.
Business Performance Management software plays a critical role in improving business
performance by allowing users to model different business scenarios. Whether you are
focused on mergers and acquisitions, or implementing a new pricing structure, Host
Budget allows you to model “what if” scenarios and clearly understand the impact of your
business decisions. For example, if you are interested in increasing revenues with pricing
changes, Host Budget enables you to model different pricing structures to determine the
best scenario—what the market will bear in terms of higher prices and if customer serv-
ice levels need to improve to support the higher costs. If you are considering a merger or
acquisition, you can plug in revenue, expenses and workforce costs from the company
you wish to acquire, and determine the best purchase price for the company and their
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As one of the fastest growing companies in the semiconductor space, SigmaTel’s goal
was to create a streamlined, global budgeting, planning and consolidation model. Host
Analytics has improved the top-down and bottoms-up budgeting and planning process,
Real World Scenario eased global financial consolidations, and provided employees with visibility to their
performance against strategic corporate goals. Prior to Host Budget, SigmaTel pieced
together hundreds of independent spreadsheets for budgeting and forecasting.
Consolidating spreadsheets was cumbersome and compromised the integrity of the
process. Forecasts were created based on high-level summary data with no drill down
capabilities. The company required a Web-based solution that mimicked Excel for ease
of adoption, accommodated multiple planning scenarios, closed loop planning, rolling
forecasts, multi-dimensional reporting capabilities, integrated workforce planning, and
ability to support multiple currencies.
About SigmaTel, Inc.
Founded in 1993, SigmaTel (NASDAQ: SGTL) designs, develops, and markets analog
intensive, mixed-signal semiconductor solutions for a wide range of digital multimedia
products in the consumer electronics and computing markets. The $325 million dollar
company saw growth in upwards of 67% in 2005.
Host Budget provides SigmaTel with a Web-based, Excel user interface, where managers
of profit and cost centers can view their budgets, route proposed changes to upper
management, and view actual-to-budget variances in real-time. The company now has
a quarterly budgeting process where managers have full accountability and control with
an audit log generated each step of the way. Prior to implementing Host Consolidator,
multi-dimensional and ad-hoc reporting was cumbersome for SigmaTel. The company
now uses Host Consolidator for inter-company eliminations and routine allocations which
will free valuable resources from keying information into the general ledger system.
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Many companies have asked why they should look at new software and process today.
We answer with a question—can you afford to wait? Aren’t you ready to improve your
business performance today? Your shareholders are demanding it and Host Analytics
offers the most cost-effective path.
One of the key values that no other Business Performance Management Software vendor
can offer is the option to have your solution hosted (software as a service or SaaS),
meaning there is little disruption to your business and IT resources. Host Analytics has a
unique implementation methodology to get an organization up and running quickly. With
the hosted model, if the software doesn’t work, the customer doesn’t pay. It’s that simple.
Lastly, the solution is cost-effective—it is 1/5 that of the other vendors offering the same
Host Analytics, Inc.
911 Washington Avenue
St. Louis, MO 63101 USA
Toll Free: 866-853-HOS T (4678)
If you are ready to change the way you budget, plan,
forecast and monitor your performance, contact us at Additional Resources
Host Analytics at Toll Free: 866-853-HOST (4678) or Events: www.hostanalytics.com/events.html
E-mail: email@example.com White Papers: www.hostanalytics.com/resources.html#wpapers
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