Business Performance management: Seeing the wood within the trees

One of the technology challenges facing businesses, particularly those in Cayman’s financial sector, is the ability to understand what is happening within the business. How well is the business performing? What can be done to improve performance? How reliable is the data on which management decisions are made? Is there a single version of the truth for financial and client information? How profitable is each client relationship? What is your gross profit by staff resource or by service line?

These appear simple questions on the face of it, but gaining frequent, timely and accurate answers can be difficult to accomplish in practice.

Based on a long history of working with clients in the sector, MCS has observed that a significant proportion of businesses within Cayman’s financial sector have the ability to derive answers to such questions only at certain points in time – that is, at month-end, quarter-end, year-end and, even then, it is typically only weeks or months later, rather than real time. It is not uncommon within Cayman financial services businesses to find that the executive management possesses a very limited vision of how business performance, financial or otherwise, varies on a day-by-day and week-by-week basis. In many cases, interim data is either not available or must be drawn and consolidated from one or more disparate transactional systems.

It is not usually until key reporting milestones are attained that the veil is lifted and the true picture of what is happening (or rather what has happened) within the business is obtained. Even then, such periodic financial and business performance reporting is often delivered after-the-fact and precludes any immediate action to avoid poor performance. Instead, management looks to this historical information to help adjust performance in the medium- to long-term.

It is the understanding of MCS that this situation has been brought about by factors including the limited knowledge of executive managers about what can be achieved using information technology, the limited number of qualified and experienced information workers that are available locally to implement proven solutions and the fact that, in some cases, a number of financial services players evolved within a cash-rich niche where competition wasn’t apparent and the impetus to strive for increasing efficiency and performance wasn’t a business priority. To prove a point, even in 2009, there are several top-tier Cayman financial services organisations, which beneath their conservative exteriors, do not have an electronic billing system and rely on the manual production of invoices via MS Word. (I can almost hear the gasps of disbelief.)

So how can the management team of a local business understand business performance at a granular level and employ such timely information to take corrective and/or competitive action?

It is no surprise that the vast majority of the Fortune 1000 companies look to IT, specifically business performance management and business intelligence, for the answers. These solutions let you accomplish it all by translating strategies into workable plans, monitoring, executing and gaining the insights needed to improve performance in all areas of your company.

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In Cayman business today, economic conditions often dictate our corporate strategies. Companies are constrained by regulations and requirements from every corner. The challenges to your success in this demanding climate are increasingly daunting. You can move from surviving to thriving, but you need easy access to meaningful insights in order to manage your company and its performance dynamically. To improve business performance dramatically, many knowledge workers in a company must be able to make the right decisions at the right time and change direction quickly. To lower expenses and increase profits, companies and their managers need immediate and simple access to measurements, analyses, reports, business processes and more. One needs ways to consolidate, view and understand the links between all this information easily and quickly. These tasks call for powerful tools that support fast collaboration, effortless communication and a shared approach to managing in real time.

Business performance management solutions let you accomplish this by supporting the continuous and integrated business cycle of planning, monitoring and reporting while providing access to valuable information locked-in transactional systems – something that the vendors of those systems have seemingly been unable to deliver to date.

Today’s business performance management challenges are complex but clear.

Leading companies can no longer just rely on transaction systems, spreadsheets or even custom point solutions to manage effectively the performance of their business.

Finance managers need a single, integrated system that gives accurate, timely reporting of financial and operational results. Line managers, partners and stakeholders must rely on the same system to review and understand those results. Finance executives must accurately predict future results, make confident decisions and efficiently allocate resources while setting and meeting stakeholder expectations. They need the transparency and visibility that only such a fully integrated system can deliver.

In today’s demanding environment, businesses cannot afford to perform unnecessary accounting and auditing tasks, not to mention intensive data extraction and collation exercises. Business performance management unites the management cycle of goal setting, modelling, planning, monitoring, analysis and reporting into a single integrated concept. An accurate representation of past performance drives swift, confident planning and execution for the future. It supports closed-loop performance management so that business performance management provides a common, integrated view of your business, financial and operational performance and improves decision-making.

Business performance management reduces the time to accomplish routine tasks and releases valuable resources for higher-value planning and strategy work. By gaining an integrated view of your business, business performance management can help a company become more agile – so it can quickly and accurately model, plan for and overcome challenges.

In short, business performance management solutions can help a company transform the way it runs its business. By linking strategies to actions, planning dynamically, monitoring performance on demand and ensuring compliance, decision-makers around the world have moved from being reactive followers to becoming proactive business leaders. With business performance management, they have deeper insights to drive their companies’ performance and greater control in achieving success.

It is interesting to observe that those organisations in Cayman’s financial services sector that have been technologically progressive in their mindset and have chosen to implement, either partially or fully, the foundations of business intelligence and successfully, are now starting to reap those rewards. It will be those firms in the months and years to come that will have a better chance of surviving the challenges facing Cayman as an offshore jurisdiction. They will be more agile, given a deeper and richer understanding of their business performance, and will be naturally geared to make timely and informed decisions to remain at the competitive forefront of their industry.

Given the recent financial collapse, the world of finance is materially changing once again and the perceptions of the world’s leading nations as regards offshore centres such as Cayman are similarly evolving – not necessarily to our benefit, I may add. The jungle drums appear to be beating louder than ever before and those organisations that are unable to demonstrate agility through understanding and managing their corporate performance using business performance management may not weather the course as we move into a new world.

 

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MCS Business Performance Management
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