Can't see the wood for the trees?

In light of financial regulations like Sarbanes-Oxley, as well as an increasingly competitive global marketplace, it is imperative that companies have a true and accurate view of corporate performance so they can ensure every part of the business is contributing to its overall goals. Ultimately, this means senior managers can focus on driving the business forward, confident in the knowledge that they are adhering to regulations, and providing an open and accurate overview of the state of the business to shareholders at all times.

In terms of regulatory compliance, accountability and transparency are very high on the agenda for our customers. Cognos is working with customers to identify the areas that they need to report openly on. IFRS means they must collate financial data in a different way, while Sarbanes-Oxley requires companies to clearly map internal processes. For example, Northern Rock is using Cognos Enterprise Planning to cut the time it takes to do complex amortisation calculations under IFRS.

Achieving a tight and accurate view of corporate performance is challenging, as complying with corporate regulations throws up a massive amount of data to sift through. In turn, this threatens to inundate the corporation, blinding the company from seeing a true view of corporate performance.

How can PM solutions enable an enterprise to monitor its progress towards it business objectives and to act accordingly? What would you say are the core requirements of a PM solution?

Accurate, real-time information is essential for the health of an enterprise. Companies need to stay ahead of the competition in terms of knowing what their customers want and delivering it faster. Companies are starting to ditch the traditional model of making business adjustments on a quarterly basis. Instead, they are using business intelligence and performance management tools to make real-time shifts in strategy to respond to changes in the marketplace. Tools such as scorecards that monitor key areas across the business (key performance indicators) and real-time reporting help identify areas of concern so action can be taken quickly.

At its core, a powerful PM solution offers users a unified architecture, bringing together all the different business intelligence capabilities on a single, standardised platform, providing more value for less resource, while delivering a consistent version of corporate performance.

How do your own solutions address those requirements? Where would you like to see the technology develop further?

Cognos 8 BI, which we launched in September 2005, is the industry’s first product to provide the complete range of BI functionality on a single, proven web services-based architecture. It offers reporting, query and analysis, dashboards and scorecarding, event lifecycle management and the unifying power of centralised metadata – all the essential elements of corporate performance management (CPM) in one product. Cognos 8 BI delivers all of these capabilities through a 100 percent web browser interface for all users.

It is able to deliver all organisational users accessibility at the right time, in any way they want to review it to understand what is happening, why and the actions they need to take to help the organisation succeed.

I think the next few years will see even more growth in international business across borders, which will increase the need for automatic multi-lingual and multi-currency solutions. While Cognos offers this function now, it is likely that demand will grow over the next few years and this is an area we are working hard to continue develop. Equally, as companies continue to streamline costs, we are seeing a trend towards standardisation of our software across global businesses – in every department, in every country.

What answers or results can it provide that the company can easily understand and act upon?

General benefits for the organisation include up-to-the-minute business performance updates, easy to understand reports and powerful marketing indicators from customer sales data. The value of performance management solutions can only be realised if they provide information, which is easily accessed and understood by the users, and not just the IT staff.

As an example, BMW, chose Cognos Impromptu for better visibility of its stock available to the team and as well as a consistent and up-to-date view of marketing and sales information. This enabled efficient and effective supply and demand tracking. These products have added structure across the organisation – giving more people more access to consistent, reliable and relevant information such as a clearer view of sales across the dealer network. Across the business there has been a dramatic improvement in the reporting of company figures. In the parts warehouse alone, the increased visibility of stock levels and management created an immediate ROI of 500 percent in a matter of months through cost reduction.

As a result of this successful implementation, BMW UK has rolled out Cognos PowerPlay, Cognos Impromptu and Cognos ReportNet throughout the company to improve reporting and analysis of information.

Another example is Caledonian MacBrayne, the Scottish ferry operator, who is using Cognos business intelligence solutions to easily understand information relating to customer service calls. Passenger calls to customer advisors across the ferry’s 18 remote port offices are pooled, and Cognos technology is used to extract this information from the data warehouse. Using the BI solution, CalMac can easily create reports on calling trends, such as the number of calls coming into the organisation by time of day, average length of call and the most common passenger queries. Predictive trend analysis allows the ferry operator to deploy resources where they are most needed across the call centre network. The flexibility of the Cognos technology also allows CalMac to drill down into individual calls to provide full details of customer options chosen, which is invaluable in tracking and maintaining customer service levels and managing resource. In the first month after using Cognos PowerPlay and Cognos Impromptu, an increase of 74 percent on the number of calls handled through the new Virtual Call Centre was measured, compared to the same period a year ago.

Large retailers are inundated with sales data, which is useful but time consuming to analyse. Thomas Pink, the shirt maker, is using Cognos software to create a daily package of up-to-date information about how the business is performing. It is being used to track information such as sales performance the day before, by store or region, enabling sales managers to instantly analyse which stock is most and least popular. It is also used to monitor sales promotions and allows senior executives to understand which promotions perform best in which stores or regions. Each night, data is extracted into a database from which pre-built reports are automatically updated, making them ready for staff to use the next day.

Moreover, different departments within companies continually find new uses for BI systems, tailored to their information needs – from finance to sales, HR and IT. One example of this is Skandia, who implemented Cognos PowerPlay and Strata’s HR Analyser (which uses Cognos Impromptu, PowerPlay and Metrics Manager) to cut down on HR reporting times.

With a disparate workforce across four continents, Skandia faced a long administrative burden in gathering information to generate required HR reports on absenteeism, training and churn. Processes were in place to help speed up the process, following the replacement of the HR and payroll system, but the team realised they simply weren’t being used effectively. Instead of spending days generating information for reports, the BI tools mean that the teams can now obtain a snapshot view of every month’s personnel changes and generate reports about absenteeism, training and churn within two hours.

What is the value of implementing such a system and how does that translate into ROI? Are there other less easily quantifiable benefits?

With the advent of the agile enterprise, organisations no longer create and work from yearly plans. The most successful companies will constantly be re-evaluating performance and reacting accordingly. The value of implementing a CPM system to help achieve this goal cannot be underestimated.

The ROI of a BI solution can be seen immediately, as in the case of Cognos customer Watling JCB, one of the largest JCB franchises in the world, who achieved ROI in less than an hour of being implemented. Watling JCB specialises in selling new and used JCB machinery into the construction, agriculture and industrial industries.

Cognos’ BI solutions allowed the company to drill down to relevant information about performance, by customer or by location within minutes. One way in which this impacted revenue was in the renegotiating of customer contracts. Before using a CPM system, it took days to sift through client history. Cognos technology ensures the company has a single view of each customer, and can easily produce reports on activity history such as machine, parts and/or labour spend, in a matter of minutes. This allows the retailer to offer customers the most attractive deals, best suited to the customers needs.

Moreover, without needing to increase their headcount they now have a system capable of instantly reporting on many aspects of their business.

Additional, less easily quantifiable benefits that performance management provides include the following:

• Enhance the accuracy of the planning and budgeting process by allowing department or business unit heads to be involved in the process. For example, the English pub chain JD Wetherspoon uses Cognos Enterprise Planning. This technology allows the group ownership of the budget at pub-level by allowing pub managers to directly contribute to the plans based on performance.
• Control expenses more effectively and intelligently during challenging economic times.
• Achieve greater accountability through higher participation in the planning and budgeting process by business managers.
• Increase agility in adapting to changing conditions.
• Deepen visibility into the business to improve decisions.
• Ensure managers use resources effectively by applying internal benchmarking.