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

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.

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

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

6. Intelligent traffic lights
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.

7. Trends are like friends; with values start seeing trends

8. New World Growth & Drivers
Internet Users: 35M+
Broadband: 2.M++
Mobiles: 130M++
Credit Cards: 45M+
Venture Capital !
Source: IAMAI, PhocusWright, Internal Estimates

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

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
Data Availability, Computing Power, and Analytics have improved such that every business must use analytics or be left behind

12. You have data quality reporting issues, whether you know it or not.
Most CEO now understand what impact data quality can have on business. MAIA BI products helps reduce it and bring authenticity to reported data. Spread sheet creates lot of snapshot of data in silos and with MAIA BI product erroneous reporting and data reconciliation issues are resolved .
You have data quality reporting issues,
whether you know it or not.

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.

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.

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 --

17. Balance Scorecard – Vision and Strategy

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.

21. Example of KPI
"Increase Average Revenue per Customer from Rs 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.

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

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

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

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

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

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

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)
such as revenue, return on investment, overhead, and operational costs’

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

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

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

32. CPM Elements

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

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

35. CPM Benefits CPM Solution Benefits
Providing real-time, contextual insight,
delivering role-based visibility into
business operations and metrics.
Results in a consolidated view of the
current state of the business, by
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
effectiveness.
Enables improved and automated
processes and allocation of resources.
Provides collaboration across enterprise
teams and processes to accelerate
business performance improvements.

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

37. Solution : CPM through Operational Business Intelligence
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

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,

39. Data Communication

40. Data Comprehension

41. Data Control

42. Data Communication

43. Data Comprehension

44. Data Control

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

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

47. Thank You!