Business Process centric Performance Management
In one of the earlier Extending Performance Management Organization wide, some of the processes around performance management were discussed and this highlighted how extending performance management organization wide was important. Here we bring some more insight into the topic of business process centric performance management. We also want to highlight here how Performance Management solutions are more aligned with operational systems such as ERP.
Business Process
Business processes are a set of activities involved within or outside an organization that work together to produce a business outcome for a customer or to an organization. One of the typical business process in a manufacturing setup is the procure to pay business process, where the process defines the various activities from procurement, goods receipt, invoicing, and then payment.
Performance Management Business Process
A business process centric approach to performance management can give great results. This involves identifying the set of activities involved in these processes, to achieve the goals set out for the business. Let us take few examples here:
Financial Close to Report: The above process involves several activities that spans across the organization to ensure the financial results are reported. This is a typical use case for performance management business process. The process starts from closing billing for the period by Sales, completing the inventory reconciliations in warehouse, taking stock of work in process in production, recording all goods receipts in inbound warehouse, booking all liabilities to suppliers, eliminating intercompany balances, consolidating the numbers with currency conversions and reporting on the financial results. As you see this whole process is not just finance centric but entire organization is involved to ensure accurate reporting.
Quarterly Forecast reviews: Another important process that is very important to Performance management is forecast reviews. This process gets triggered as soon as the financial closing to reporting process gets done. Forecasting involves restating the budget data with year to date actuals, and then allowing the users to make adjustments to the budget for balance of year.This is then put across through an approval process and finally forecasts are signed up. Again the forecasting process goes through several set of activities before the final forecast is made available.
SAP CPM support in Process Centric Performance Management SAP’s solutions have been always process centric vs being just function centric. All of the operational systems have in-built business processes. Performance Management is no exception. The ‘Business Process Flows’ in SAP Business Planning and Consolidation (BPC) allows for modeling the business process onto the performance management applications. BPF has the following key features:
The important aspect of the above feature is that it can be modeled by the business user, with a wizard driven administration interface to build business process flows.
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SAP CPM solutions are the best P squared solution i.e. Process centric Performance Management. With effective Why EPM solution with integration to ERP and built in GRC are critical?, these solutions can be the only solutions to ensure Best Performance through defined and company wide business processes.
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