The document discusses an evolution in performance management systems from PM 1.0 to PM 2.0. PM 2.0 utilizes predictive analytics and a multidimensional database to provide four types of intelligence - financial, operational, customer, and people. This closed-loop system allows organizations to develop strategies, plan operations, monitor and learn from results, and ensure alignment across the organization for improved performance. Key aspects include a balanced scorecard with rolling KPIs, actionable insights from predictive models, reliable dynamic forecasting, and expense management to improve profitability. Lastly, it discusses using customer intelligence for life cycle management from prospects to former customers.

1. Predictive Performance Management System(PM 2.0)
Balanced Scorecard
Vision Mission Value Strategy
Financial Intelligence
People Budgeting Customer
intelligence Forecasting Intelligence
Consolidation
Activity based Management
Process Sales Purchase MFG Intelligence
Predictive Analytic Platform+Multi Dimension Database Platform
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2. Evolution of Performance Management
Predictive
PM 1.0 PM 2.0
Analytic
Financial Operational
Intelligence PM 2.0
Intelligence
Process Customer People
intelligence intelligence intelligence
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3. Closed Loop Performance Management
Develop the strategy Plan the strategy
• Mission,values,vision • Strategy map/themes
• Strategic analysis • Measures/Targets
• Strategy formulatoin • Initiatives portfolios
• Funding/STRATEX
Strategy Plan
Test and Adapt Performance
Measure • Strategy map Align the Organization
• Profitability analysis • Balanced Scorecard
• Strategy correlations • STRATEX • Business units
• Emerging Strategies • Support units
• Employees
Performance Results
Measure
Operating Plan
• Dashboards
Monitor and Learn • Sales forecast Plan operations
• Resource requirement
• Strategy reviews • Budgets • Key process improvement
• Operating reviews • Sales planning
Results • Resource capacity plan
• Budgeting
Execution
Process
Initiatives
Source: Robert S. Kaplan ,Execution Premium
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4. Balanced Scorecard - Rolling View
KPI
• Relative KPI
• Reliable Key Leading
Indicator(KLI)
• Rolling view looking
forward
Visual
• Sparkline to show trend
• Red Traffic light to focus
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5. Balanced Scorecard - Actionable Data From Predictive Model
Actionable Data
• Link From Summary data
to detail actionable top 20
possible to churn
important client
Predictive Model
• Actionable data come from
reliable predictive model
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6. Reliable Dynamic Rolling Forecast
Let’s focus on the most import number to forecast: Sales
Biased
Sandbagged
Judgment
Predictive Model Reliable
Trustable
Judgment
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7. Expense Management – Avoid budget dilemma
We should spend up
Budget Item Target to 21,999 before
Marketing 22,000 year end, otherwise
next year9
Expense
How can we improve
Budget Item Target campaign
profitability, can
Revenue >=5.3 response model help?
/Marketing
Expense
Predictive
Relative KPI
Model
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8. Customer Intelligence: Life Cycle Customer Value Management
Established Former
Prospect Responder Customer Customer
High Value Voluntary
Churn
Target New High
Responder
Market Customer Potential
Forced
Low Churn
Value
Source: Michael J. A. Berry, Mastering Data Mining: The Art and Science of Customer Relationship Management
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