Implementing CPM solutions in a fraction of the time and cost of traditional solutions

A toolkit approach to Corporate Performance Management (CPM) represents a new, unique and cost effective way for companies who want to win new challenges and maximise their CPM implementations. This approach provides significant advantages over traditional offerings, which can often be rigid, template-driven, hard to implement and costly.

With more than 2,000 customers worldwide and over 15 years of experience in the toolkit approach, BOARD MIT Management Intelligence Toolkit is a clear leader in the "CPM Toolkits" space and offers a unique combination of speed and simplicity.

Introduction

Whether we call it Business Performance Management (BPM) or Corporate Performance Management (CPM), everyone agrees that measuring and managing the performance of an organisation is one of today's top priorities.

Everywhere around us we see how the world of Corporate Finance is changing profoundly:

• The planning and forecasting processes are extended to a broader group of people across the enterprise
• Finance organisations are bringing together industry, customer, channel, competitor, product, macroeconomic and financial data into a comprehensive management information framework
• A combination of internal and external factors has increased the importance of having more sophisticated business analytic and performance management capabilities

A new breed of solutions, described as CPM toolkits, are now available to help companies answer these challenges. By using a CPM toolkit, companies can rapidly build and deploy sophisticated applications for business analysis, budgeting, planning, simulation and reporting. These toolkits deliver efficiencies and true business value by providing ease of use, application feasibility and scalable performance while dramatically reducing development and maintenance costs.

In this article, BOARD International, a pioneer in the CPM toolkit approach, explains how this approach and BOARD MIT Management Intelligence Toolkit can provide faster, more feasible and affordable alternatives for building CPM applications.

CPM Toolkits: A New Perspective

In 2005 Gartner published a research paper titled "A New Segment of the CPM Technologies Market Emerges". In this important work, we find the first official recognition of the toolkit approach to Corporate Performance Management:

"... [a] new technology direction is emerging: CPM toolkits, which are positioned between applications and spreadsheets. They contain CPM-specific functionality, but they're not ‘glued together' like an application. Rather, they work as building blocks on a pallet, or as functions ‘behind the right mouse button.' Applications for one-time use are constructed by drag-and drop based selection of objects and filling in the appropriate properties."

"Corporate performance management toolkits address users' requirements for more self-sufficiency."

"CPM toolkits provide a new perspective. They're positioned as solutions that offer the flexibility the CPM application suites don't provide, in addition to the manageability that Excel doesn't offer."

This combination of flexibility and manageability is crucial: if we consider the most diffused definition of CPM (described as the combination of methodologies, metrics, processes and systems used to monitor and manage the business performance of an organisation), it's clear that the software is just one component and it needs to adapt to the specific company's processes and methodologies.

In a recent survey CIOs mentioned among the top IT priorities the deployment of software solutions flexible enough to adapt to the specific company's needs, not asking the organisation to change just to reflect the approach of the software vendor.

Not All Toolkits Are Created Equal

While traditional CPM suites address specific needs with a dedicated module, a Toolkit is an integrated environment where you have all objects and functions to develop precisely what you need. Although the CPM Toolkit market segment has seen only recent official recognition, BOARD International is the first software vendor to adopt the toolkit approach, successfully bringing BOARD MIT Management Intelligence Toolkit to a large variety of organisations over the last 15 years.

Such a long experience is distilled into BOARD, making the toolkit's components both easy to use and extremely rich in functionalities.

At its core, the BOARD toolkit is a blend of tightly integrated tools which when combined in one environment, provide tremendous efficiencies during the design, development and deployment of CPM solutions. In and of themselves these tools - a highly scalable multidimensional database, data reading and transformation tools, application user interface environment (client and web), security and a multi-tier architecture for system delivery - are the pieces one might expect to need when building an analysis application. The BOARD toolkit was designed to use all these tools together within the same development framework to provide an unparalleled combination of speed, flexibility and affordability.

This integrated all-in-one approach eliminates the need for high levels of technical expertise and substantially reduces the complexity and costs associated with building, customising and maintaining a data analysis environment. Most of these efficiencies arise by eliminating the technical "plumbing" involved in combining the various software layers.

Users build BOARD applications using a wide variety of objects including reports, charts, worksheets, calculation models, pictures, gauges and multi-file viewing objects. To build applications, users simply drag-and-drop these objects from a toolbox onto the screen without any programming. Through this application environment, users gain access to a wide range of functions for maximum thoroughness and flexibility of analysis including time series analysis, exception reporting, sorting, ranking, filtering, colour-coding, 80-20 analysis and multi-dimensional modelling.

Seamless integration with the database makes the objects that comprise the application data-aware. This means you can easily synchronise the advanced visualisation and data exploration. Instead of simply drilling-down on a report to retrieve a lower level display of the same report, users can click directly on a report line and immediately see other related objects (charts, gauges, etc.) updated on the screen. In effect, this produces intuitive, immediate, on-screen drill-anywhere capabilities. It's even possible to launch a simulation/ calculation model from a report line and apply the logic (an allocation, a what-if, etc.) only to the subset of data related to that selection.

All these things factor into BOARD's value proposition, which is based on:

• ALL IN ONE - a single product combines all the features and functionality needed to build a complete solution
• FEASIBILITY - with an integrated environment, much more is possible than with traditional CPM suites
• SPEED - rapid design capabilities allow efficiency, on-line modelling, quick implementation and easy adaptation to changing business needs
• SIMPLICITY - programming-free toolkit of objects you "drag-and-drop" onto the screen and quickly synchronise to the data
• VERSATILITY - it can be deployed in various departments across an enterprise
• LOW COST - the unique programming-free toolkit approach leads to a low Total Cost of Ownership

Evaluating CPM Toolkits

The process of evaluating a CPM toolkit, much like the multi-dimensional data managed in a CPM application, is multi-dimensional. The following is a partial list of ‘dimensions' which could represent an evaluation model for CPM toolkits.

Variety/Richness of components: the number of different types of components and the richness of their functionalities determines the capability of a toolkit to deliver value-added applications, fully customised to company processes. In BOARD, among a long list of components, we find for example the S.T.O. (Simple Transaction Object) for controlled data entry of new members in a dimension (e.g. new products during the budget definition phase, or new scenarios in a simulation model). In addition, there is support for concurrent write-back with validation, rules, calculation triggers and workflow audit trail. Flow chart allows the creation, support and monitoring of strategic and process maps.

Quality of the ‘glue'/framework: to make the most of a rich toolset of components we need an intelligent framework managing the communication between these and the data. BOARD's active data-dictionary guarantees and controls the automatic synchronisation of different components through the data structure.

Data-handling: the ability to handle large volumes of data with data-entry support is crucial to providing a CPM application with depth of analysis, spanning across different departments. BOARD provides an integrated multi-dimensional database engine that guarantees speed and efficiency in information analysis and modelling. Its database is capable of handling massive amounts of data with amazing speed.

Virtual cubes can also be defined, pointing to data stored in a RDBMS (e.g. company data warehouse) Concurrent, multi-user write-back and embedded forecasting/ trending/ simulation functions make BOARD an ideal solution for company-wide budgeting, forecasting and planning. Integrating data from multiple sources is also easy thanks to BOARD's multi-cube architecture and the data-reader component with built-in ETL capabilities.

Modelling: the need to support a large variety of processes and methodologies requires the highest flexibility in building and maintaining models (e.g. what-if, cost allocation, etc.). In BOARD this is achieved through the programming- free creation of series of actions of various types: multi-dimensional cube calculation operations, selection, printing, data import and export, conditional branching, links to other screens, etc. Extremely sophisticated models can thus be created very quickly for simulation and support of corporate processes.

Development process: a CPM Toolkit must provide development process flexibility. BOARD is designed to use all its components together within the same development framework, to provide an unparalleled combination of speed, flexibility and affordability. The automatic synchronisation and data-awareness of the plug & play components eliminate the need for high levels of technical expertise and substantially reduce the complexity and costs associated with building, customising and maintaining CPM applications.

This approach allows for programming-free visual application design and management of the database and data loading. Fundamental changes to the database are immediately updated throughout the database as well as all related data read definitions, user applications, security profiles and automated procedures. This development flexibility eliminates significant maintenance activities and enables a truly iterative development process.

BOARD: The CPM Toolkit at Work

The best way to measure the effectiveness of a CPM Toolkit is to see it at work. The following case-study shows BOARD in action. After reading real-world testimony to the value of BOARD, it's clear why more than 2,000 companies around the world chose BOARD's unique toolkit. 

Case-study Salomon

Company
Salomon is the world leader in winter sports and is well-established in outdoor sports through footwear and technical apparel. Salomon's sports include alpine and cross-country skiing, snowboarding, and major outdoor sports like climbing, hiking, adventure racing and trail running. Salomon is part of Amer Sports, the world's No.1 Sports Equipment company with major brands such as Wilson, Atomic, Suunto, Precor and Mavic.

Business Challenges
Salomon selected BOARD to achieve the following objectives:

• Integrated controlling and planning environment
• Coherent figures inside the Group and increase planning processes accuracy
• User profiling by responsibility at any level
• Avoid useless data entry repetition at HQ or subsidiary
• Flexible architecture and application (extension to other business needs)
• User-friendly interface
• Suitable for any further internal development (programming-free)

BOARD Solution
The solution based on BOARD:

• Gathers and provides easy access to all the necessary data for the management and the forecast of a budget entity (activities, subsidiaries, functional services) including: logistics, commercial and financial information
• Provides flexibility in terms of use with summing functions, comparisons of periods and working phases
• Forecast by entities by product lines: providing tools for the activities to build forecasts by product line and by legal entities (problem of splitting the forecast by product line between Salomon SA and the subsidiaries, creation of inventories, intercompany eliminations)
• Simulations capacities for different working phases: online calculation of transfer prices, exchange of data with the subsidiaries, calculation using different exchange rates
• Consolidation of data and analysis of the output: meeting the needs of management reporting

The system is structured in three main areas:

Strategic Business Plan

This planning process is performed by Activity/HQ and Reporting Entities. It's main aim is to arrive at a final set of measures and indicators after comparison and analysis between the plans supplied.

Business Processes

This process is mainly in charge of subsidiaries and/or activities while the HQ overlooks the computation rules applied for landed costs and transfer prices for intercompany sales and purchase.

Budget & Forecast Processes

Subsidiaries Planning
Each subsidiary analyses and calculates average selling prices in local currency by sales type depending on orders and invoices in order to link them to the commercial forecast extracted from the Manugistics system and other internal sources managing weekly sold quantities and supply by model and sales type. 

Activities Planning
Commercial and Financial budget/forecast figures by subsidiary are then converted to Euros and consolidated by sales type, month and/or season. These plans are integrated in Salomon SA's Corporate Financial Forecast with a focus on Sales and Cost of Goods by Product Line. Data coming from production sites is used to apply transfer prices and standard costs. Variances, inventories and expenses are also included.

Corporate Planning
Aggregations and calculations provide the final output as Budget/Forecast Brand P&L: split by quarter, highlighting different results depending on budget and forecast, exchange rates applied, linking other indicators/rules used during the consolidation process.

Written by :

Rutger van den Berg