HOW THE

INTELLIGENT
ENTERPRISE
DELIVERS
PERFORMANCE
MANAGEMENT.
HIGHER
INTELLIGENCE.

HOW THE INTELLIGENT ENTERPRISE DELIVERS PERFORMANCE MANAGEMENT ::

MANAGEMENT SUMMARY
“...a new breed of
All organizations, public, private, large and small
need to effectively manage business performance.
This has never been more true than in today’s
company is upping the
complex, highly regulated and confusing business
environment which requires better decisions and stakes. ...have dominated
improved execution now!
their fields by deploy-
In spite of the billions of dollars invested in infor-
mation technology to address these challenges,
managers and executives in many organizations ing industrial-strength
still make key decisions underpinned by their
own personal versions of documents and spread- analytics across a wide
sheets. Their organization struggles to provide
a seamless flow of trusted information between
customers, suppliers and their employees. The
variety of activities. In
result is that most organizations cannot provide
their people with the right information at the right essence, they are trans-
time, and in attempting to do so are committing
significant resources to compiling and auditing
numbers instead of using them to inform the
forming their organiza-
business. Consequently, they are far more reac-
tive than proactive and ultimately they are not tions into armies of killer
efficiently and effectively managing their current
and future performance. apps and crunching their
Leading organizations are investing in managing
information and developing predictive insights to way to victory.”
drive sustainable business results. These com-
panies have become masters in Performance Thomas H. Davenport,
Management - going beyond mere users of Harvard Business Review,
business intelligence to become the “Intelligent January 2006
Enterprises.”

HOW THE INTELLIGENT ENTERPRISE DELIVERS PERFORMANCE MANAGEMENT :: 1

THE COMPLEX ENVIRONMENT FOR strategies. Recent Capgemini research indicates
MANAGING PERFORMANCE that the average company reports 132 metrics
each month. Within our sample, 59% of organiza-
Delivering increased performance year on year is a
tions indicated that they are, to a greater or lesser
difficult enough task in its own right, but it’s made
extent, reliant on spreadsheets to report these
even harder to achieve if the underlying informa-
metrics; consequently 70% indicate that their
tion systems are not able to accurately measure
planning and budgeting processes do not fulfill
corporate performance across the entire organi-
management expectations. In parallel, these com-
zation, top to bottom. As Figure 1 indicates, the
panies are seeing the sheer volume of data they
average manager and executive have a very tough
have to consider is increasing by 79% a year.
job to effectively manage the performance of their
organization. Organizations that have an understanding of how
their business is performing and also have a means
The ability to collect pertinent information and
of improving this performance in a cost effective
report on performance is no longer good enough,
way, have moved to making information a corpo-
although this is still quite an achievement for some
rate asset. They have embraced an approach which
large and complex organizations. Key metrics are
will lead them towards an Intelligent Enterprise.
put in place at all levels to frequently and consis-
tently monitor how the enterprise and its business
“Organizations often fail to
units are performing against strategy. These met-
rics, often referred to as key performance indica- execute their strategy –
tors (KPIs), are derived from analytical models dev-
failure rates may range from
eloped to measure the impact of financial and op-
erational decisions on overall strategy achievement. 60 to 90 percent.”
There is a management truism that “you can’t R Kaplan and D.P. Norton. “Creating the Office of
manage it if you can’t measure it,” and the fact is Strategy Management”. Harvard Business
that many organizations do fail to execute on their Review, April 2005

Figure 1 – The Complex Environment for Managing Performance

EXTERNAL PRESSURES EXECUTION

Compliance My
organization
Shareholder is in silos
Public Scrutiny
I have
Competition too much
information
Innovation What does it
Cost Pressure
Sophistication mean in terms
of actions?
Drive for Everyone’s
Adaptability Shared Services working to
different
Drive for priorities
INTERNAL PRESSURES Efficiency

COMPLEXITY SEC Faster Continuous

Filings Adaptation Improvement
Annual Budgets &
Corporate
Review Forecasts
Dashboards
Process
Organizational Unplanned Focus
Restructures
Market Obstacles
IFRS Updates

Balanced Business
Info. Matrix Performance Alignment
Rewards
Systems Mgmt.

HOW THE INTELLIGENT ENTERPRISE DELIVERS PERFORMANCE MANAGEMENT ::

A LEADING GLOBAL MOBILE TELECOMMUNICATIONS
COMPANY WORKED WITH CAPGEMINI TO MOVE TO A
CORE SET OF OPERATING METRICS ACROSS ALL THEIR
GEOGRAPHIC LOCATIONS, CONSOLIDATED IN ONE
PLACE, SHARED BY THE SENIOR MANAGEMENT COM-
MUNITY AND SUPPORTING BOTH FORMAL AND AD-HOC
MANAGEMENT REPORTING.
THIS FORMED A SUSTAINABLE PLATFORM FOR ONGOING
ENHANCEMENT WHILE DELIVERING EARLY BENEFITS.
BUSINESS INTELLIGENCE IS NOT ENOUGH
In 1979, John Rockart published the article “Chief
Executives Define Their Own Data Needs”1 pro-
posing that systems used by corporate leaders
ought to give them data about the key jobs the
company must do well to succeed. Ten years later,
Howard Dresner coined the term “business intel-
ligence”2 to describe systems that help decision
makers throughout the organization understand
the state of their company’s world.
Thomas Davenport published the results of a two
year study “Competing on Analytics”3 in January
2006. His research identified that virtually all the
organizations identified as “aggressive analyt-
ics competitors” were the clear leaders in their
fields, and they attribute much of their success to
the masterful exploitation of data. Key examples
HOW THE INTELLIGENT ENTERPRISE DELIVERS PERFORMANCE MANAGEMENT
would be Tesco, Wal-Mart, Dell, Marriott Hotels
and Progressive Insurance.
When contemplating business intelligence, most
organizations think about more technology and
apply an “application driven” approach which was
designed for the operation recording of transac-
tions. Capgemini uses an approach that is “infor-
mationally” driven which changes the ethos of
design and build. By being driven by information,
we focus on the business decisions that the users
and stakeholders are making in the operation of
their business.
The ultimate purpose of any BI tool is to help the
organization deliver improved performance. The
tool itself is merely a key enabler that provides in-
formation to decision-makers; it is the consequent
action that leads to improvement.
:: 3
In our experience, the reason most organizations
fail to realize the benefits of their investments in
business intelligence, is because the primary focus
is on the delivery of the tools, while the critical
elements of “people and process change” and
the broader Information Management dimension
are neglected. The organizations we have helped
to achieve successful outcomes have a relentless
focus on these very areas. These and other suc-
cessful organizations also employ a technology ap-
proach which enables iterative and agile delivery.
Today for many organizations, there is a discon-
nect in the core management planning and control
processes, for example, between setting targets,
formulating strategy, planning, forecasting, risk
management, investment planning, performance
feedback, and financial consolidation. The an-
nual budget, driven by the finance department,
frequently dominates the process, and the value
it adds in its current form is increasingly being
questioned. These processes need to be linked
together in a better way, making use of feedback
loops and control at three levels: Strategic, Opera-
tional, and Activities levels. Step-by-step progress
is required through the enterprise’s processes,
methodologies, metrics and technologies. Merely
implementing a business intelligence tool is not
the answer.
We have seen examples of failed projects where
technology implementation is done without this
understanding. As a result, the Performance Man-
agement approach we use (Figure 2) is more holis-
tic, addressing the full range of what is required to
drive performance.
PERFORMANCE MANAGEMENT
Performance Management offers an understand-
ing of the performance levers which can be
managed to drive high performance behaviors
and improve decision making. It focuses on the
design and integration of a Management Frame-
work which ensures alignment of people, process,
and the use of information, to the organization’s
strategic objectives.
HOW THE INTELLIGENT ENTERPRISE DELIVERS PERFORMANCE MANAGEMENT
Various factors are driving enterprises to take a
holistic view of Performance Management.
After a series of scandals and alleged frauds,
governments are demanding higher standards
of corporate governance. Another driver is the
need to complete the work started by adopting
enterprise resource planning (ERP) systems. In
addition, many enterprises are realizing that the
more turbulent world calls for a new view of how
the business is managed, and a new approach to
preparing for the future.
An effective Performance Management program
can be framed as a consistent and adaptive
process (from budgeting and planning to con-
solidation and reporting) and encompasses three
fundamental principles: driving a forward-looking
view of the business, ensuring alignment, and en-
abling more effective decision making at all levels
of the company. This system also ensures that key
business processes are conducted under the guid-
ance of a clear and well communicated company
strategy.
n First, dramatic increases in enterprise data
make Performance Management more
practical.
n Second, and more importantly, stakeholders
demand that management deliver predictable
execution, operational efficiency and corpor-
rate accountability, which collectively make
Performance Management more of an
imperative.
The benefits of a Performance Management initia-
tive will include more solid foundations for mak-
ing decisions, the discovery of previously hidden
inefficiencies and a more rational use of resources
in planning and control activities.
::
A MAJOR GOVERNMENT DEPARTMENT WAS FACING THE
CHALLENGE OF NOT HAVING THE INFORMATION IT NEEDED TO
MANAGE AND DRIVE THE PERFORMANCE OF ITS KEY OBJECTIVES.
OVER 55% OF ANALYSTS’ TIME WAS SPENT FINDING, EXTRACTING,
CLEANING AND INTEGRATING DATA, INSTEAD OF ANALYZING AND
REPORTING IT. THE STARTING POINT WAS TO ESTABLISH WHAT
INFORMATION WAS ACTUALLY NEEDED TO DRIVE PERFORMANCE
AND THEN TO ADOPT CONSISTENT DEFINITIONS.

A successful Performance Management program
will link together all of the key elements for man-
aging performance, including balanced scorecard,
activity-based costing and management, quality
management, value-based management, etc. All
involve processes, methodologies, metrics and
technologies, whose use can, collectively, be
called a Performance Management system.
They seek to align the organization and ensure a
focus on the desired outcomes (refer to Figure 3).
Appropriate tools will also be a critical factor. The
Performance Management tool of choice for many
executives remains the Microsoft® Excel spread-
sheet, predominantly because of familiarity and
ease of use.

Figure 2 – Characteristics of Holistic Performance Management

EACH ELEMENT HAS SPECIFIC AND INTERLINKED AREAS

Leadership Coaching, Accountabilities
PM Organization, Stakeholder Management

Employee Engagement Leadership Vision and Strategy

Change Management & Objectives and Goals
Incentives and Rewards Measures and KPIs
Governance
PM Capabilities Cascading
Communications PM Frameworks (eg BSC)

Capabilities Objectives
& &
Linking Measures
Cultures
Performance
Management

Budgeting Systems Information

Forecasting & & Reporting
Strategic Planning Processes Insight Analysis
Dashboards Performance Meetings
Data sources and Supply Decision Making Process

THE SUM IS GREATER THAN THE PARTS

HOW THE INTELLIGENT ENTERPRISE DELIVERS PERFORMANCE MANAGEMENT :: 5

INTELLIGENT ENTERPRISE – A JOURNEY
NOT A POINT SOLUTION
Performance Management is a continual journey,
which aims to gradually improve the effective-
ness and adaptability to a changing market for
the organization over time. The first step is critical
in moving forward and can be seen as part of an
overall future plan for improvements. Figure 4
illustrates the levels of maturity that can guide the
scope and focus of future initiatives.
Over time, business managers and users will move
from traditional uses of information to more novel
and explorative uses, always aiming to maximize
the investment in information and other resources.
The roadmap will:
n be a map that shows the way forward beyond
this project
n encompass an approach that covers all the
main aspects of Performance Management
n drive collaboration between the front line
and back office processes.
become masters in Performance Management and
gone beyond being mere users of business intel-
ligence to become the “Intelligent Enterprises.”
They:
1. Make information-based decisions making a
core part of the corporate DNA and culture—
and this is constantly emphasized and
communicated.
2. Focus on driving a step change in business
outcomes, through effective exploitation of
information, and will do this in partnership with
customers and suppliers. This focus is
managed at an enterprise level.
3. Include executives who make the develop-
ment and maintenance of analytical
capabilities a primary focus, and hire people
with the very best analytical skills, considering
them critical to their success.
4. Seize opportunities to generate information,
creating a “discover and learn” culture based
on numerous small experiments.

With reference to Capgemini research and that of 5. Make quantitative analytical and intelligence
Thomas Davenport, we believe that there are capabilities part of their company’s story, to
five characteristics of those companies which have be shared in the annual report and in discus-
sions with financial analysts.

Figure 3 – Managing Performance

“If we succeed, how will “How do we look

we look different? different?

How should we reflect

What are the critical
market changes in
success factors for
achieving the objectives? our objectives?
Mission
OUTCOMES
ALIGN

Do the KPIs still tell us

What KPIs address the whether we’re making
critical success factors? the right decisions?
Objectives
Growth How should we revise
What targets do Levers our targets to achieve
we need?
our mission?

What initiatives are KPIs Did we fill the gap?

required to fill gaps? What did we learn?

Personal Did we make the right

Actions
What are my priorities? Objectives decision?

Mission Effective Motivated

Delighted
achieved efficient prepared
customers
processes workforce

HOW THE INTELLIGENT ENTERPRISE DELIVERS PERFORMANCE MANAGEMENT :: 7

Figure 4 – The Route to Becoming an Intelligent Enterprise
Performance Management Embed continuous
will coordinate the drive optimization
towards sustainable service
improvements with a focus on
outcomes, supported by a bet- Establish forward INTELLIGENCE
ter performance management looking view Continuous process of
culture, systems and reporting optimizing processes and
OPERATIONAL EFFECTIVENESS

resources, to outcomes
Understand
INSIGHT and priorities
drivers of value Improve business confi-
dence by establishing a
robust, forward looking
Build the
INFORMATION view of performance
foundations Develop a new understand-
ing of the drivers of value This represents a long term
and how these support commitment to improvement
DATA delivery of strategy and governance arrangements
that will ensure that the pro-
Build the foundations for gram remains on track and is
effective decision making driven forward with energy and
through consistent commitment
measurement of results

VALUE EXTRACTED FROM INFORMATION

The challenges are mostly cultural. Every enterprise

accumulates a pattern of political relationships
Capgemini has created
that can be upset by a Performance Management
initiative. Middle and senior managers will feel the CPM Index tool,
the full impact of large-scale change which they
often resist. Performance Management programs
need to ensure that managers retain the ability which is designed to help
to manage their own performance while allowing
free and rapid distribution of shared information.
A Performance Management program will also
organizations understand
require taking a longer view and bringing the
costs of planning and control out into the open. where they are on the
This requires a structured and holistic approach
that will bring together business, technology
and information. Performance Manage-
Organizations that adopt this approach can
become masters in Performance Management, ment journey and how
with accurate and relevant information flows
throughout the organization, updated to reflect
the changing demands of the business. Decision far they need to travel.
making will be supported at all levels, projecting
the future not simply in budgeting cycles, but in
defining the actions which need to be taken. For more information go
Your organization’s leaders can become masters in
Performance Management - going beyond being to www.cpmindex.com
mere users of business intelligence to become
“Intelligent Enterprises.”

HOW THE INTELLIGENT ENTERPRISE DELIVERS PERFORMANCE MANAGEMENT :: 7

MASTER YOUR
INTELLIGENCE.

FOOTNOTES/REFERENCES:

1 – Harvard Business Review, “Chief Executives Define Their Own Data Needs”, 1 March, 1979, John F. Rockart
2 – IDG News Service, “Business intelligence at age 17”, 22 September, 2006, China Martens
3 – Harvard Business Review, “Competing on Analytics”, 1 January, 2006, Thomas H. Davenport

HOW THE INTELLIGENT ENTERPRISE DELIVERS PERFORMANCE MANAGEMENT ::

 About Capgemini and the
Collaborative Business Experience

Capgemini, one of the world’s foremost Through commitment to mutual success

providers of Consulting, Technology and and the achievement of tangible value,
Outsourcing services, has a unique way we help businesses implement growth
of working with its clients, called the strategies, leverage technology, and
Collaborative Business Experience. thrive through the power of collaboration.

Backed by over three decades of industry Capgemini employs approximately

industry and service experience, the
Collaborative Business Experience is de-
signed to help our clients achieve better,
faster, more sustainable results through
seamless access to our network of world-
leading technology partners and
collaboration-focused methods and tools.
68,000 people worldwide and reported
2006 global revenues of 7.7 billion euros.
More information about our services,
offices and research is available at
www.capgemini.com.

For more information on Capgemini’s approach to driving business value

with the Microsoft products, please contact:

Eddie Short Rob Bear Jorgen Heizenberg

Vice President, Global Leader Head of Performance Business Intelligence/CPM Index
Business Information Management Contact
Management +44 870 238 8778 +31 30 689 57 28
+44 870 238 8514 robert.bear@capgemini.com jorgen.heizenberg@capgemini.com
eddie.short@capgemini.com

Ramesh Harji Deepak Deolalikar

Head of Intelligent Enterprise, Head of Business Intelligence,
Capgemini West Region
+44 870 905 3195 +1 408 850 5576
ramesh.harji@capgemini.com deepak.deolalikar@capgemini.com

For more information on Microsoft’s approach to Business Intelligence

and Performance Management, please contact:

Bruno Aziza Joey Fitts Karl Ortner

Microsoft Business Intelligence, Microsoft Business Intelligence, Enterprise Partner Group
Product Team Partner Team +1 425 706 9941
+1 425 705 5263 +1 425 707 0566 karlo@microsoft.com
bruno.aziza@microsoft.com joeyf@microsoft.com

http://www.microsoft.com/bi/

HOW THE INTELLIGENT ENTERPRISE DELIVERS PERFORMANCE MANAGEMENT ::

www.capgemini.com

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HOW THE INTELLIGENT ENTERPRISE DELIVERS PERFORMANCE MANAGEMENT ::