Otherwise, "the garbage [data] just comes out a lot faster."
Sometimes companies use existing metrics such as the Six Sigma defects analysis often used in manufacturing or the Balanced
Scorecard approach that weighs financial performance, customer trends, internal processes, and internal education, notes Tony
White, an analyst at Gartner. But because such metrics are usually part of applications with hard-coded assumptions, "IT needs
to investigate these, which can be a real headache," he says.
Another challenge is finding the right predictive metrics, Southeast Corporate's McGowan says. "Regression analysis works
quite well in some areas, and in others, it doesn't," he adds.
Such work requires different skills than many IT organizations have, Gartner's White says. That's what BG&E found in its deployment
of an Outlooksoft Everest CPM system, which initially targeted operations, management, and capital planning across 110 project
groups, pulling data mainly from an Oracle Financial system. The company added a second functional analyst and has increased
the workload of both the IT and functional staff, says Tom Lowe, director of business strategy at BG&E.
And analysts and providers alike agree that the role of business staff must be greater in a CPM deployment than in most IT
efforts. "You really need the subject-matter experts empowered and well-trained on the tools," Southeast Corporate's McGowan
says.
Jim O'Connor, OLAP systems supervisor at cable provider Adelphia Communications, says he's noted that the transition to CPM
is harder for traditional IT people -- especially database administrators -- than it is for business staff. For example, as
Adelphia continues its deployment of a Clarity-based CPM system, O'Connor sees his staff's role changing from generating reports
and managing databases to developing the underlying data architecture and training business staff how to use CPM-based tools.
This shift can also reduce the need for some IT staff: As the CPM effort broadens across the company, O'Connor expects to
see significant overall savings, given that the need to create reports will diminish. After all, as Bill O'Connor, CIO of
semiconductor company Zarlink, says, "You only do the report once" in a CPM system.
Phasing in CPM
According to analysts and executives, deployment of a CPM system should be done in stages. "Don't bite off the whole thing,"
Hyperion's O'Rourke advises. "You need a clear decision on what metrics you're going to start with -- and not try to do everything
for everybody," says Sherman Mink, manager of financial and reporting applications at UGS. "It's an iterative process," Zarlink's
O'Connor concurs.
Most organizations start with financial performance management because most already have the data and metrics in place and
are trying to speed up the reporting of their financial reports, BPM Partners' Colbert says. Next are operational performance
issues such as reducing service calls or improving distribution, he says. That's because those areas are more easily quantified
and often use data-based metrics for process improvement and auditing, he adds.
Often, new data streams will be needed to assess performance in areas such as marketing and human resources, where most companies
haven't gathered meaningful data consistently, Colbert says.
It's also important to target your indicators and metrics. "You can't manage a thousand indicators," Price observes.
"Most organizations have too much information and tend to get into firefighting because of that," SAS' Hornby adds. "Each
individual should be looking at 10 to 20 metrics, all in alignment with the company's goals," he says. Otherwise, they're
just looking at a dashboard all day, rather than thinking about and acting on the business performance issues that CPM is
supposed to illuminate in the first place.
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