While execution is the key to any operational objective, the strategy and planning elements surrounding why execution should occur and the context by which execution should be performed is also important. In recent technological offerings, SAP has improved these features, along with a formal approach to risk management to address market opportunities that organizations pursue. In this way strategy is aligned, performance is predictable, and executives can make better business decisions.
Executives live in a financially driven environment, where operational processes are traditionally a means of organizing resources inside the company and its value chain and employees are the responsible actors to execute those processes. The strategy gap that some industry watchdogs have noted is real and growing. Innovative technologies provide one approach to collapsing this gap and allowing corporate strategic outcomes to be fully realized and risk management programs to be fully described.
SAP provides SAP BusinessObjects Strategy Management to fill this need. SAP BuisnessObjects Strategy Management (SSM) product is part of the overall Enterprise Performance Management (EPM) suite by SAP BusinessObjects. EPM is a field of management that combines the intent and direction of an organization with the business of operations in a manner which can be predicted, monitored and guided. Regardless of an organization’s industry or position inside an industry segment, the sound practice of EPM to drive the agenda of a company or association falls under the “blocking and tackling” of management activities for executives, operations directors, and members of an organization management team.
Broadly speaking EPM approaches one or more of the following issues which the organization may face during its inception and subsequent operation lifetime:
- Strategy Formulation. How does the organization determine the direction of its agenda, and once that direction is established how does it know what to track and what corrective actions to take to reach a particular target state.
- Business Planning and Consolidation. How does the organization develop business plans consistent with the organization’s strategy and align activities and reporting requirements across multiple operations, regions, and product or service lines.
- Financial Information Management. How does the organization leverage its history and projections of financial performance including its various cost models, expenditure patterns, profitability expectiations, and investment portfolio in future product or service portfolios.
- Supply Chain Performance Management. How does the organization take advantage of the extended enterprise, understanding and diagnosing the financial, inventory, delivery, and defect performance of its suppliers to anticipate small probability, high impact “fat tail” risks supporting sourcing and research and development activities.
A more holistic approach to operations management using the disciplines of EPM provides several competitive advantages to the organization and its executive team. Visibility increases dramatically across key performance areas of the organization, allowing for a pro-active versus reactive approach to management. For example, an executive team may develop a strategic plan with initiatives spanning the next several years. This is the strategy formulation function. When the business plans of an organization’s operating units are developed and consolidated to begin work on a new initiative, this activity can be expressed using the business planning and consolidation function. The development and information around financial performance and management, as well as the effectiveness of the organization supply chain can also be expressed, analyzed, managed and predicted using SAP BusinessObjects EPM tools.
This article provides a specific overview on how to support the strategy formulation activities of SAP BusinessObjects EPM through the specific use of the SAP BusinessObjects SSM product. To view the full article please visit http://www.grcexpertonline.com/article.cfm?session=&id=5022.