Strategy Simplified with SAP Strategy Management 10.0
The word “Strategy” is often misused and mis-interpreted by most people because of various misconceptions. The general feeling about strategy is that it is permitted to only the top management and the guys in the “Board Room”. While to some extent strategy formulation is done in the upper echelons of the firm, strategy implementation must be a co-ordinated effort involving most people in an organization.
Most successful firms have strategies which are simplified and communicated effectively to the entire organization. Complex frameworks are not needed for successfully implementing a strategy. Moreover, communicating complex frameworks might not be a right way to help the organization improve the performance. This is where the simplicity of SAP Strategy Management 10.0 comes very handy. Though it follows the Balanced Scorecard Methodology, the interface is kept quite simple for the entire organization to easily comprehend. Also, the most important part of strategy management is the communication of the strategy. This is where it scores over the traditional tools and helps everyone keep informed and empowered that they are a part of the success of the organization.
Tips for effective strategy formulation and communication with SAP Strategy Management 10.0:
- “Too often we measure everything and understand nothing” – Jack Welch. This quote is very relevant in today’s ever changing world. Most organizations measure a lot of performance indicators but not the KEY performance indicators. These KEY performance indicators are the real ones which help drive the change in the company. However, in most cases, these Key performance indicators cannot be directly measured. They need to be derived from a combination of performance indicators and this is where the flexibility of SAP Strategy Management helps. It helps the company to arrive at a KEY performance indicator by providing enough flexibility to compute complex KPIs
- “Adapt constantly with changes in business needs and environments”. Quick adaption is the mantra of most successful organizations. That has been the basis of survival. With SAP Strategy Management 10.0, the business can quickly adapt to the new needs with the help of various initiatives. Classification of these initiatives is an excellent feature of SAP Strategy Management 10.0. The various types of initiatives such as Corrective Action, Risk Mitigation and Strategic Action help communicate the steps taken by the management to address business concerns as well as move in the right direction.
- Subjective assessment facility helps the management correctly assess the true impact of any KPI. Though the numbers give a different story, the reality might be in stark contrast to what the value is suggesting. One-off events or sudden natural disasters may cause havoc to the KPIs, but the right indicator needs to go to the management and no division /section needs to be penalized or reprimanded for underperformance for reasons beyond their control
Finally, the importance of communicating a strategy across the organization as follows:
- Strategy needs to create a sense of belongingness to the people within the organization. Everyone should feel that he/she is a part of the strategy and contributes to the performance improvement. If any strategy fails to capture this point , it may not be as effective as desired
- Everyone needs to know the real reasons behind a strategy. Why the company is working this way? Why this road map? Why this initiative taken? Why this KPI? Are all very pertinent questions which need to be communicated in the right manner to the concerned person or team. SAP Strategy Management 10.0 provides an effective tool to communicate this message.
- Watching strategies fail is not an option. The failure of a strategy might not be the wrong formulation always. If all the pieces of the puzzle are not put together, the desired effect is lost. An end-to-end strategy management tool is always needed to address this concern. SAP Strategy Management 10.0 ticks all these boxes.
Good explanation !!
Excelent! great introductory ideas.