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

The Total Cost of Ownership (TCO) of Enterprise Performance Management (EPM)

moneyHere are some of the ingredients to consider when developing your ROI for EPM:

  • Cost to build or acquire the system (hardware, software, network costs)
  • Don’t forget the ancillary costs to the above (e.g., a system may require an add-on license for a relational database management system [RDBMS] or middleware)
  • Cost of capital
  • Cost to operate, maintain, and upgrade
  • Training costs (administrators and users) Read more of this post

Enterprise Planning

There are many kinds of plans in any organization. The kind of plan depends on what the plan is trying to accomplish, who the audience is, and how frequent and granular the plan needs to be. Here are the most common types of EPM plans:

paper whiteboard
Strategic Planning

  • Annual budget
  • Long-range plan/strat plan
  • Cash-flow forecast
  • Balance sheet plan

Finance Planning

CFO and CIO join forces to serve “The Business”

Organizations that have implemented Performance Management more broadly are nearly four times more likely to be among the most competitive organizations in their industry.

—Brian McDonough, Research Manager, Analytics and Data Warehousing Software, IDC, Financial Performance and Strategy Management Survey of Buyer Priorities for 2011, Doc #226261, Dec. 2010

Harvard Business Review advocates that business and IT shouldn’t just be aligned, they should be ‘‘forged together.’’  (David M. Upton and Bradley R. Staats, ‘‘Radically Simple IT,’’ Harvard Business Review, March 2008.)  One way HBR says you can do this is by having the CIO report directly to the CEO or COO, not the CFO. While I have seen this reporting structure in many of our client organizations, it does not automatically mean that IT and the business are forged together, or even aligned for that matter. Certainly the business analyst (BA) role has done much for crossing the chasm, in both directions, for IT and the business. And where I see the most successful financial systems implementations are where there the finance/information systems (IS) role acts as the BA. But this is still not a guarantee for a meeting of the minds between business and IT.

2 way arrows

Photo © Ruth Dimon, 2013

I propose five ‘‘better’’ practices for closer IT/business alignment based on my client engagements over the last 30 years: 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

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