A Guide to Driving a High Performance Organization

Transcription

1 A Guide to Driving a High Performance Organization Hubble is a registered trademark of International International. All Rights Reserved.

2 Table of Contents CHAPTER 1 High Performance Not Always So Easy to Achieve CHAPTER 2 Integrated Reporting, Analytics, and Planning for One View of the Business CHAPTER 3 Traits of a High Performance Organization CHAPTER 4 Why the ERP Makes or Breaks a HPO CHAPTER 5 Budgeting Chaos Wreaks Havoc CHAPTER 6 The Hidden Taxes of Broken Processes CHAPTER 7 How to Effectively Drive High Performance The Solution

3 Pay attention to the little things Ask any world-class athlete. It s the small obstacles and the required adjustments the placement of a foot, the tilt of a racket, the rotation of the hip that can make the difference between a champion and an also-ran. When a movement is repeated again and again, just the smallest flaw can be a major hurdle to success. Now let s examine that same problem, but with teams. Teams present a complex set of challenges. A winning team needs top athletes with excellent fundamentals but that s just the beginning. That alone won t put a team over the top when playing at the highest levels. A championship team is one that can execute plans quickly and can respond immediately and appropriately to changes in circumstances. These teams know that all members are top performers, focused on working together toward a common goal. They have the qualities of excellence, agility, and anticipation as well as an underlying premise of trust. Team members trust that they will execute to the best of their abilities in a given circumstance. They can do that because the team and its management have created a system in which trust is warranted. Business organizations are no different. Every company wants to be a High Performance Organization (HPO). Most leaders know what s required and work hard at putting the requisite building blocks in place. Good managers set goals, aim to hire the right people, and provide the right resources for success. 02

4 High Performance Isn t Always so Easy to Achieve So why do so few companies actually become HPOs? Often it starts at the beginning it s the small obstacles that drag organizations down. It s the inability to work in sync. Its performance targets that are set with outdated information. Its effort wasted getting the facts together instead of identifying opportunities. And it s the amount of time it takes to respond to changes in the market. As business becomes increasingly complex and the pace of change is as rapid as it is today, it is no wonder so many companies struggle. Indeed, just getting a solid plan together once a year feels like an enormous accomplishment. But this shouldn t be the case, and it isn t with High Performance Organizations. These entities are continuously in planning and response mode. They have direct access to up-to-the-minute information regarding the status of all aspects of the company. 03

5 Integrated Reporting, Analytics, and Planning for One View of the Business How do they accomplish this? The leaders of these companies are not necessarily geniuses or touched by the gods. What they have is a culture that is proactive and geared to constant change. And they have the software tools that allow everyone at all levels of the company to trust that the data on which plans and analysis are based is accurate and real-time. Thus, the company can be in constant motion, adjusting plans, forecasts, and responses with the support of the entire organization. Reaching that goal requires a reporting, analytics and planning system that sits on top of real-time data. One that is flexible enough to enable on-the-fly analyses for different parts of an organization. One that enables the whole business to access the information they need not just finance and IT. These tools exist. Companies can obtain an integrated suite of financialperformance planning tools that can take them from run of the mill to HPO. But not all companies are suited to high performance. The place to start is with the definition of an HPO and a look at what s required to make that transformation. 04

6 Traits of a High Performance Organization The Accenture 2014 High Performance Finance Study 1 found that High Performing Organizations: Are more likely to report high levels of satisfaction with their finance function and shared values Tend to have CFOs who have seen their strategic influence grow in recent years with ambitious goals Are more likely to have greater agility and control through end-to-end process ownership and delivery of mid and backoffice services Have finance leaders that are more engaged in assessing technology investments This all sounds reasonable. And in many ways, it s textbook. It s what every company hopes to achieve. Every organization aiming for excellence talks about shared values, ambitious goals, and agile behavior. But look at the reality behind these statements. Ambitious targets are great, but if they can t be altered until the next budget year in response to market conditions, they must be very conservative, impossible to achieve, or incredibly frustrating when suppliers and customers change their own strategies. 1. Accenture 2014 High Performance Finance-Study - Link 05

7 Shared values are critical everyone, whether they are sales representatives, product developers, or financial analysts, and the like should understand company goals and their roles within them. But it s hard to instill team spirit and execute a vision if the members of the team aren t confident that their part matters. And if suppliers and customers don t trust that their needs will be met, and team members can t trust that the information that they have is right, a lot of time is wasted in confirming and reconciling data. Forget about being proactive. How can a company act proactively without a proper plan? Take the deceptively simple example of forecasts. It s impossible to operate a High Performance Organization without proper forecasting, so that the supply chain is in order and revenues and profits are predictable. Forecasting requires that customers, sales, buyers, inventory, and suppliers are all in alignment. If the inventory count is out of date, how can a company know what to order from suppliers and how to meet the needs of its customers? What s more, inventory is almost always out of date. Not because store clerks and other personnel aren t holding up their end with the technology systems (although that can happen if they don t understand the importance of their task), but because inventory analysis is done in spreadsheets by many different buyers and financial executives, and all of them are out of sync with one another. 06

8 Why the ERP Makes or Breaks a HPO Very few companies do planning in the system that s named for it Enterprise Resource Planning. ERP systems do a great job of collecting and connecting every facet of a business. They hold the data necessary for the development of actual plans and analyses. But they are inflexible and cumbersome. And they don t offer much in the way of planning tools and predictive analysis. Instead, most companies do all their data manipulation in external spreadsheets. And this means that in order to get a true read on what is happening, financial personnel spend hour after hour after hour exchanging spreadsheets, identifying errors, managing version control, and doubling back to make sure numbers are correct. But there is no way the numbers can be correct, because once you ve broken the link with the ERP system, you are no longer working in real time and you ve introduced human error. Many companies invest in reporting, analytics or planning tools with the hope of implementing better processes and results. But regardless of the investment from big data warehouses to spreadsheet plug-ins exporting data out of the single source of truth, the ERP, will promise to bring about the same broken, untrustworthy operations. 07

9 Budgeting Chaos Wreaks Havoc Probably the best and most common example of this enormous problem is the annual budget process. Despite the importance of accurate, timely budgets, the average time it takes to create an annual budget is still 100 days, and for many organizations it can take six months or more. Why does it take so long? The inflexible nature of the ERP makes it impossible for the business to see their budgets next to their actuals. So begins the process of collecting forecasts and consolidating all that information in spreadsheets, reconciling what is being submitted with others in the organization and with the ERP system. Then that information must analyzed, using experience and historical data again, not real-time data but out-of-time market conditions. The process is so arduous, few companies have the capacity or desire to do budgeting more than once a year. But a year-old plan is hopelessly out of date and cannot be considered high performance in today s fast-paced environment. It s also disheartening for the organization as a whole, since these managers chose finance as a career with the expectation that they can drive a business forward. Instead, they find most of their time is spent gathering data, not being a catalyst for change. Then there are version-control issues. Studies have shown that 88 percent of spreadsheets have human errors, so financial personnel find themselves rekeying information. Many companies find that they have thousands of Excel spreadsheets, with lots of overlap and errors, with financial controllers doing adjustments in yet more spreadsheets because an insurance cost (or something else) must be changed or added to calculations. 08

10 The Hidden Taxes of Broken Processes Indeed, what most companies don t realize is that they are paying a hidden tax for all this back and forth as much as 90 percent of business performance can be lost through this process, particularly in the financial arena. Companies can find themselves paying a productivity tax, because many financial tasks require data dumps into spreadsheets before the data can be manipulated. This is an insecure method of data management that requires manual intervention. Typically, this creates reconciliation issues, adds huge delays to the financial process, and can even impact audits. There s also a hidden tax on technology, since the IT department often needs to get involved to answer many questions. The earlier solutions to these problems business intelligence programs and OLAP (online analytical processing) cubes aren t flexible enough to provide full visibility into business requirements. Financial analysts only get a subset of the data they need and again it s not real time. Sadly, because of all this, businesses pay a confidence tax. Because of all the human errors introduced by exporting, sharing, and manipulating data, company leadership doesn t have confidence in its validity. Finally, there is a responsiveness tax. Late nights, rekeying data, waiting for IT reports and the like can put a drag on business. Inflexible systems mean lost opportunities. 09

11 How to Effectively Drive High Performance - The Solution The solution to these hidden taxes is to purchase a business-performance management system that directly hooks into the roots of the ERP, so that all reports, plans and analyses are using real-time data. The system itself must immediately reconcile deviations in reporting, so the entire financial system is working with a single accurate source. Performance management systems like this enable the entire organization to drive high performance; users can easily obtain information for report creation, budgeting and planning, month-end close and analytics. Companies that have implemented systems like these find that they can bring warehouse, accounting, and billing into alignment. They can make accelerated comparisons and accomplish troubleshooting without IT assistance. These systems reduce the time it takes for tasks from days to hours and from hours to minutes. Forecasts are based on accurate data, and changes can be executed quickly. This not only improves productivity but also increases communication and trust among departments and staff. 10

12 NOW WHAT? IT S TIME TO START DRIVING PERFORMANCE Time to Make it Happen This is the recipe for developing an HPO. Performance-management solutions can help create an atmosphere of excellence by empowering every employee with relevant, real-time data. By connecting to critical business systems throughout the organization, the entire company can benefit from more streamlined processes and can make contextual, informed decisions that drive performance. All that s left is to execute. And that s how champions and High Performance Organizations are built. For more information on driving performance, visit gohubble.com Hubble is an integrated suite of performance management apps from. It offers reporting, analytics and planning in a single real-time solution that fully understands your ERP. Hubble integrates your critical business systems so users at all levels have access to live data extraordinarily fast. With this type of visibility, everyone can easily understand, manage and predict the business. Hubble is a registered trademark of International International. All Rights Reserved.