SG&A Performance Management

Selling, General & Administrative (SG&A) expense is top of mind for many organizations right now.

Simple SG&A Value Map example

Simple SG&A Value Map example

Everyone in the enterprise has an impact on SG&A expenses.  From your salary, to the office supplies you use, to the travel you take on behalf of the company.  It’s everyone’s job to help maintain and control these expenses.

SG&A spend should be optimized at the “right” level to help deliver on the promises of the organization.  If they are at too low a level, sales revenue will suffer.  At too high a level, Read more of this post

Data Consumption is undergoing a major shift

A good decision is based on knowledge and not on numbers.
—PLATO

As EPM practitioners, our job is to help deliver better insights to the business, and the starting place is delivering useful information: on time, at the right level of detail, to the people who can use it to make a decision that helps improve short and long-term results.

With the plethora of data we’re getting, and with the speed at which change happens and transactions occur, it’s getting harder to find out exactly where you stand. How, when, where, and why we consume data is undergoing a major shift: Read more of this post

8 Principles of Enterprise Performance Management

This is a list of what most of my clients tell me they want.  I propose that this list is exactly what EPM delivers.

So unless I hear otherwise, these are the 8 principles of enterprise performance management:

  1. We have a lot of data, we’re getting more every minute, and we want to use it to compete better;8 robots
  2. To use all that data, we want to gather it and transform it so that it makes sense;
  3. We want new insights into our business, based on the facts gleaned from the data;
  4. We want to know what levels of performance are possible in our industry, for our business, in the future; Read more of this post

Closing the Strategy-Execution gap

In March 2010, Harvard Business Review surveyed

Photo © Ruth Dimon, 2013

Photo © Ruth Dimon, 2013

1,075 readers about strategy and execution in their organizations.
Only 37% said their companies are ‘‘very good’’ or ‘‘excellent’’ at execution.

What is it that keeps us from having a sustainable process for executing our strategy?
On the one hand you have your strategic objectives, including:

  • Profitable Revenue Growth
  • Customer Success
  • Operational Efficiency
  • Employee Engagement
  • Cash cycle velocity
  • And so on.

On the other hand you have available resources at your disposal:

Answering Business Questions

Photo © Ruth Dimon, 2013

Photo © Ruth Dimon, 2013

Businesses have a ton of information.  The usual starting place for trying to understand all that information is a desire to answer a business question.
There are, at least, four foundational questions:

  1. Where are we right now compared to where we said we would be?
  2. Why did we get what we got? What happened to give us those results?
  3. What do we want to happen? What is possible in our industry, in this economy? And what’s next?
  4. How will we get it done?Who will do what, and by when?

These questions help us align our strategy, objectives, and initiatives with our intended results. They help challenge our objectives and help generate and reveal our assumptions, constraints, and value drivers. The answers to these questions should Read more of this post

“DRiVE” Driven *

DRiVEI’m a fan of Dan Pink‘s work and had the good fortune to meet with him recently at 30,000 ft between Chicago and DC.  He was generous enough to give me some advice about my own book and promoting the ideas of Enterprise Performance Management.  Luckily, I referenced Dan’s work “Drive:The Surprising Truth About What Motivates Us, ” in both the preface and in Chapter 9 of my book.  There is an entire dimension of Enterprise Performance Management as a structure or platform for fulfilling what motivates us that I’m compelled to write more about it.  Here is my thinking at the 30,000 ft level:

Autonomy – the desire to direct our own lives.
If we know what the strategy is, and what the corresponding strategic objectives and targets are, why can’t we direct our piece of the business, in concert with everyone else’s pieces of the  business, to achieve those objectives?  EPM ingredients include:

  • Accountability for the results
  • Independence to make fact-based decisions to deliver those results
  • “My” slice of the business (P&L by ‘x’ where x can be customer, cutomer-type, product, channel, territory, market, and so on)
  • More facts, less politics

Mastery – the urge to get better and better at something that matters.
Maybe what matters to you is Read more of this post

The Management Operating System

The management cycle

Enterprise Performance Management needs a closed-loop process to be truly effective.  And this process should:

  • Bridge the gap between strategy and execution
  • Support anyone in the enterprise in making better, faster, fact-based decisions
  • Transform all of that data you have into usable insights that will cause more effective actions to take place
  • Help align the enterprise on a common set of objectives, and have everyone focused on the right things

Each part of this closed-loop process should feed off of the other parts of the process.  For example, performance targets (vetted and agreed on in scenarios and what-if models) should feed the planning process, and actual results should be compared to the commitments made (by business unit, by product line, by sales team) in that same planning process.

In EPM Done Right, I use the management cycle pictured here to Read more of this post

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