Corporate Performance Management
"We help managements change the
way they lead their companies."
A major challenge for managers is how to leverage the information within their organisations for effective decision-making. One of the many difficulties they face is that companies often have a disparate mix of technologies and ways of gathering and analysing data unique to their organisation. This not only creates inconsistencies but also gaps in the information flow. As operations get more international, even mid-sized companies cannot afford to live with the limitations of such a system. The situation can easily become a nightmare if the company has problems assessing its markets, customers and future profitability or if inconsistencies in financial statements emerge. The resulting chaos can distract even the best management teams from running their business effectively.
To eliminate the gap between the information an enterprise needs and how it is made available and accessed, IT consultants have developed applications and technologies to organise and analyse the different metrics needed for corporate performance management (CPM). In this niche, the name of avantum is often mentioned as a sought-after specialist in Germany.
Several factors have contributed to avantum's success. For one, it has shown that it has what it takes for managing the 'human element' of corporate performance management projects. Equally important, avantum's consultants are experienced in CPM frameworks, especially for complex customer requirements. Such solutions, which process analytical queries online and in real time, are built around key performance indicators or KPIs. These are a diverse range of client-specific operational and financial metrics used for monitoring an organisation's performance. KPIs, in turn, are linked to the company's strategy through balanced scorecards and are monitored through a set of visual indicators called management cockpits.
Axel Meyer, avantum's founding partner says: "We are witnessing a renaissance in he balanced scorecard concept as it can help combine strategic goals with operative goals and targets. For instance, with a balanced scorecard we can take a company's strategic targets and break them down into operative units in different locations and diverse businesses. We do such conceptual work quite often and, in the next step, implement tools to monitor these KPIs in the form of management cockpits."
As an independent CPM consultant, avantum specialises in conceptual work and integration of CPM solutions supported by a change-management approach. Increasingly, consulting services around customer relationship management (CRM) systems also play an important role. As a solutions partner for international consultants such as Ernst &Young and Capgemini, avantum functions as a systems integrator for clients, providing implementation and support through the entire project lifecycle.
To this end, it is a certified partner for many of the industry's leading software vendors such as Applix, Hyperion, SAP, Update and Winterheller. Utilising their products, some of avantum's implementations include: A user-friendly controlling system for endemol, Germany 's leading independent television producer. Based on Winterheller's Professional Planner, avantum has integrated different data sources to provide endemol an overview, in real-time, of all relevant figures-such as costs, profitability, personnel and other resources-for individual projects and television shows in production. Other corporate planning and reporting projects include implementations for Thomas Cook, the international travel and tourism company; WALA, a manufacturer of natural cosmetic products; and Werhahn, a diversified group of companies, among others.
For Dräxlmaier, an automotive components company, avantum implemented a strategic sales planning system based on the Applix TM1, a MOLAP (Multidimensional Online Analytical Processing) database server. The system's fast query performance and natural indexing function enables Dräxlmaier to analyse large sets of operational data in real time to calculate incoming orders. Another TM1 project of note has been for Rhenus-a company providing a full range of transport and international logistics services such as forwarding, distribution and warehousing.
What all these solutions have in common is an emphasis on reliability, speed and functionality. In the case of WALA, for instance, the time needed for reporting was reduced from two weeks to an hour and for the budgeting process it was reduced from six weeks to six days.
As part of its ongoing assessment of the CPM market, avantum surveyed the strategic decision-making process in German companies. The target group was mid-sized, manufacturing, services and trading companies with an annual turnover of 50 million euros and above. The survey cocluded that although 99% of the companies had clearly defined strategic goals, only 60% had direct access to information relevant for strategic decision-making. One-fifth of the companies with a performance-management tool in use were unable to access the relevant data due to either conceptual or organisation weaknesses in the system. Another fifth had problems with the quality or integrity of the information in their databases. This showed that, despite the availability of the right software and tools, some of the key factors hindering the effective use of CPM are data integrity, faulty implementation and human resources issues. One of the key elements for avantum, therefore, is change management. This essentially means defining the changes in technology, business processes, skills and people-interaction necessary to achieve the client's performance-management objectives.
"It all starts with assessing how certain changes effect an organisation," explains Meyer. Once we understand how a change will be perceived by the organisation, we then come up with the required measures that are supported through training concepts, communication concepts and changes in the style of management. It then goes down to concrete measures to ease the consequences of change. Nobody likes change, of course, but the management instruments that we apply are to introduce change. By involving others and making people responsible, we help management teams change the way they lead their companies. This process is all part of our work."