Financial and operational Performance Management

© 2014 IBM Corporation 1
Performance Management Financial and Operational Performance Management
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© 2014 IBM Corporation
Financial and Operational
Performance Management
Creating the future-ready enterprise
Enabling better decisions to drive better outcomes
with performance management

What I’ve heard
• Organizations need a performance
management solution that provides a
line of sight to improve outcomes.
Data
collection
New business
modeling
Profitability
and pricing
Performance
scorecarding
Error
checking
Decrease effort Increase focus
Process
monitoring
Increase in value from analytic initiatives

Banking and
insurance
Government
and
education
Retail
Consumer
packaged
goods
Industrial Life sciences
North-
western
Mutual
U.S.
Department
of
Agriculture
Patagonia Estee Lauder
Daimler NA
Truck
Pfizer
State
Farm
North
Carolina
General
Assembly
Elie Tahari Nike
Becker
Underwood
Merck
National
Commercial
Boston
University
Best Buy
Del Monte
Foods
Denver
Water
Novartis
AON U.S. Navy Mueller PepsiCo Jabil Circuit Abbott
Thousands of clients in dozens of industries are using IBM for their
financial and operational performance management platform
Read about IBM client successes at ibm.com.

Survey says enterprises want to do better in five key areas
Integrate information
across the enterprise
Optimize planning,
budgeting and
forecasting
Develop talent in
the finance function
Provide input into
enterprise strategy
82%
87%
87%
92%
91%
24%
41%
45%
55%
57%
Measure and monitor
business performance
Importance of activity Effectiveness of function
58-point
gap
46-point
gap
42-point
gap
37-point
gap
34-point
gap
The latest IBM study aims to identify
drivers of outperformance
4,183interviews in
70countries
6roles:
CEO, CFO, chief HR
officer, CIO, chief
marketing officer, chief
supply chain officer
SOURCE: IBM, The Customer Activated Enterprise: Insights from the Global C-Suite Study, October 2013.

IBM is helping clients weave business modeling and predictive intelligence
into cross-enterprise performance management processes
Manufacturing
Sales
Marketing
Finance
Logistics
Technology and
product
development
HR
Creating a
future-ready
enterprise
The flexibility of IBM [Cognos® TM1® software] for all these different applications and the ability to
view data in different layers and at different resolutions really make it an ideal solution, not only for
our office of finance, but increasingly for users in other areas of the business.
—Laura Smith, director of corporate finance analysis and support, BBVA Compass
“
”

Three imperatives for improving performance management outcomes
Transform the
system of
engagement
Integrate
finance and
operations
performance
management
Infuse
scenario and
predictive
intelligence
The IBM point of view
Creating a
future-ready
enterprise

1/22/2014IBM Confidential
Transform the
system of
engagement
Integrate finance and
operations
performance
management
Infuse scenario
and predictive
intelligence
Financial and operational performance management
Guided business processes, mobile, collaboration
Profitability modeling
and optimization
Scorecarding
and strategy management
Planning,
budgeting and forecasting
Management and
performance reporting
Predictive intelligence and scenario analytics

IBM is a world-class ally for this journey
Value
Maturity
Today’s
challenge
Realize
performance
potential
Drive analytic
innovation
Forecasting
success
Elevate with
predictive
Better
outcomes
Analytic
agility
• Spreadsheets
for reporting
and analysis
• Enterprise
resource
planning
budgeting
• Isolated
applications
• Disparate data
• Financial and
operational
performance
management
• Rolling
forecasts
• Key
performance
indicators
(KPIs) and
scorecards
• Statistical
algorithms to
improve
information
under
uncertainty
• Predictive
intelligence
• Driver-based
planning and
forecasting
• Near-real-time
analysis
• Scenario
analytics
• Narrative
reporting
• Dashboards and
management
reports
Span the
enterprise
First
steps
Status quo Integrate and
accelerate
Automate and
model
• New analytic
modeling and
enhancement
• Product and
customer
profitability
analysis
• Continual
alignment of
resources with
opportunity

1
• Link operational models and plans with financial
forecasts
• Monitor strategy execution to more quickly identify
performance gaps
• Assemble performance reports more quickly to drive
understanding
2
Why IBM is different
Transform the system
of engagement
3 Infuse scenario and
predictive intelligence
Integrate finance and
operations performance
management
• Leverage available data to drive predictive intelligence
into forecasts and profitability models
• Enable more rapid simulation and scenario analytics
across the enterprise
• Drive participation and greater frequency in
performance management processes
• Support continual, dynamic collaboration with social
and mobile advances
• Guide business process engagement with task lists to
help reduce alert overload

• User experiences support a variety of user
needs across the web, desktop and
spreadsheet.
• Drive participation and greater frequency in
performance management processes
• Guide business process engagement with
task lists to help reduce alert overload
• Blend social collaboration and guided
business processes with mobile devices into
a collaborative performance management
process evolution
Help ensure tailored
user experiences and
keep people in the
loop, even when on
the go
Finance Executives Managers Line of business IT
Transform the system of engagement
Transform the
system of
engagement

Support a wide variety of user needs to encourage high participation
• Web
• Mobile
• Desktop—connected and
pack and go
• Microsoft Office integration

Support continual, dynamic collaboration with social
and mobile advances—virtually anytime, anywhere
Guided business processes
Personalized task lists highlight priorities and
walk users through processes step by step to
highlight important, time-sensitive tasks and
help improve efficiency
Focus on collaboration
Act upon insights by more easily collaborating
and sharing data analysis with almost anyone,
almost anywhere to build consensus around
business decisions
Mobile enabled, cloud deployable
Activity streams alert you to changes and
collaborative insights as they occur across the
enterprise; prioritized tasks can be acted
upon sooner
http://www.youtube.com/watch?v=FqORBjtaRtY

IBM redefines the workspace for task-based
navigation, activities, collaboration and metrics

Integrating financial and operational planning is the
bedrock of performance management excellence
IBM advantage
• Financial and operational
planning in a single
application
• Dynamic, near-real-
time forecasting
• Ability to capture forecast
data from virtually the
entire organization at
required levels
• Integrated reports,
dashboards and
scorecards
Manufacturing
Sales
Marketing
Finance
Logistics
Product
development
HR
Analyze
and
enhance
Plan,
forecast
and
control
Collect and
aggregate
Integrate
finance and
operations
performance
management

Integrate finance and operations performance management
SalesMarketing FinanceOperations HR
• Campaign
scorecards
• Promotion plans
• Customer and
product
profitability
• Revenue plans
• Sales
dashboards
• Sales forecasts
• Incentive
compensation
• Quota plans
• Territories
• Sales channels
• Enterprise
scorecards
• Strategic
financial plans
• Profit and loss
• Balance sheets
• Cash flow
• Workforce KPIs
• Headcount
plans
• Salary and
compensation
• Staffing plans
• Training and
development
• Operational KPIs
• Strategy and
operations plans
• Capacity and
inventory plans
• Product
allocation
• New products
Planning, analysis, forecasting and scorecarding in one platform to
span finance and operations
Strategy and activity driver-aligned organization

Manufacturing
Sales
Marketing
Finance
Logistics
Product
development
HR
Scorecarding
and strategy
management
Monitor strategy execution to quickly recognize performance gaps
Integrated scorecards
highlight KPI and metric
variances
•Communication of strategy
and vision to support
success
•Visual classification of the
results, outcomes and
impacts
•Ability to tie strategic plans
to forecasting data
Forecasting
and
corrective
actions
Performance
reporting

Rapidly assemble management and performance reports
to drive understanding
• Daily, weekly, monthly and quarterly board
books and presentations
• C-suite and board packages
• Performance reporting
• Save potentially hundreds of
hours per year
• Reduce errors
• Accelerate understanding
Narrative reporting
Workflow and
approvals
Business
rules
Security

ANCAP refines its approach to operational analytics
96 percent
reduction in time required to
complete budget consolidation
processes
Practically instant
generation of reports that previously
took 10 days to produce
Increased
operational visibility with access to
near-real-time information Business challenge: How can a leading energy company manage almost
every aspect of its business—from refining and logistics through sales and
marketing—when time-consuming reporting processes prevent it from gaining
a centralized view of its operations?
Analytics journey: Working with IBM Business Partner Quanam, ANCAP
deployed a suite of IBM business analytics solutions to help streamline
operations by providing a unified, near-real-time view of the business.
“The IBM Cognos solution we implemented was a total success, in every area
of the company up to top management levels, and we are absolutely satisfied
with the technical support and business insight delivered by both IBM and
Quanam.”
—Sergio Pi, CIO, ANCAP

• A patented 64-bit, read-write, in-memory,
online analytical processing (OLAP)
engine provides analysis beyond the
financial planning process to:
– Profitability modeling
– Detailed customer analysis
– Marketing campaign analysis
– Sales forecasting
– Headcount analysis
– Almost anywhere there are large
amounts of disparate data
• Supports multidimensional analysis
• Advanced sorting and ranking
• Familiar Microsoft Excel and web
interfaces
Scenario analytics
Infuse
scenario and
predictive
intelligence

Profitability modeling
• Modeling and quantifying the
business
• Scaling the analytics to include
small subsets of the business
to the entire organization
• Providing an interactive user
experience to manage data
and scenarios
• Enabling scope to cover
almost all operational and
financial aspects of the
business
• Direct integration to predictive
intelligence modeling for
statistical impact IBM offers best-in-class predictive and
big data analytics
Likelihood of churn
Credit worthiness
Future lifetime value
Consumer data
Transaction
history
Social media
history
Transaction
history
Profitability
analysis on
retention,
performance
and patterns

McCormick protects profit with detailed understanding of customer
value and uncertain prices
Challenge
• Significantly reduce the profit at risk because of volatile
commodity input prices
• Solution
• Collect and analyze sales plan data by customer and
across more than 30,000 SKUs
• Evaluate the resulting profit contribution of product input
in the bill of material
• Results
• Diagnosed profit improvement moves ahead of time;
commodity price increases can be passed on to
consumers or renegotiated with industrial customers
• Conducted value engineering with operations to
reformulate flavors using commodities from different
regions and suppliers
• IBM Cognos software helped McCormick record
USD56 million in cost savings from its comprehensive
and continual improvement program
McCormick is a global leader
in flavor. With more than USD4
billion in annual sales, the
company manufactures,
markets and distributes spices,
seasoning mixes, condiments
and other flavorful products to
the entire food industry—retail
outlets, food manufacturers
and food service businesses in
more than 110 countries.
Challenge
Solution
Results

What is predictive analytics?
Predictive analytics helps connect data to
effective action by drawing reliable conclusions
about current conditions and future events.
—Gareth Herschel, research director,
Gartner Group
I do not know what I may appear to the world, but
to myself I seem to have been only like a boy
playing on the sea-shore, and diverting myself in
now and then finding a smoother pebble or a
prettier shell than ordinary, whilst the great ocean
of truth lay all undiscovered before me.
—Sir Isaac Newton

Predictive analytics enables organizations to better understand their data,
surfacing insights that drive better results
• Interactive interface designed to be easy
to use, without the need for
programming and with an automated
exchange with the performance solution
• Automated modeling and data
preparation capabilities
• Data is fed directly from and to an IBM
Cognos TM1 system
• Enables the discovery of key insights,
patterns and trends in data that can be
used to enhance business decisions

Mueller, Inc. uses advanced business analytics to transform its business
model, becoming an information-driven enterprise
Business challenge: A shift in business strategy from manufacturing to retail
drove a comprehensive cultural transformation within U.S. manufacturer
Mueller Inc. The company needed to analyze its business processes and
performance to assess how well employees were adapting to its new business
strategy.
The smarter solution: Mueller implemented business analytics technology
that enables company employees to view and analyze company data in near-
real time, empowering workers to measure individual performance and assess
how their work affects the bottom line.
“We can show sales teams exactly how they are contributing to the business
and explain what they need to do to improve their metrics...a much more
effective way of driving the changes in behavior that are vital for business
transformation.”
—Mark Lack, manager of strategy analytics and business intelligence
20–30% reduction
in scrap metal manufacturing waste
20% return on assets
resulting from rapid identification and
tracking of business process
improvements
113% return on
investment
through use of business analytics

Let’s get started achieving better business outcomes with proven
approaches to collaborative problem solving
Business value
assessment
Align business
capabilities with
business strategy, and
recommend a road
map for improved
value.
Solution workshop
Lay out the path ahead,
from immediate
improvements to a
common future vision.
Proof of concept
Prove the path forward,
starting small and
scaling up.
1
Visioning workshop
Whether via web
seminar, at your facility
or in an IBM solution
center, we can begin
charting a course.
2
3
4

Thank you.

Trademarks and notes
© IBM Corporation 2014
• IBM, the IBM logo, ibm.com, and Cognos are trademarks or registered trademarks of International Business Machines
Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their
first occurrence in this information with the appropriate symbol, these symbols indicate US registered or common law
trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common
law trademarks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark
information” at ibm.com/legal/copytrade.shtml.
• Microsoft is a trademark of Microsoft Corporation in the United States, other countries, or both.
• Other company, product, and service names may be trademarks or service marks of others.
• References in this publication to IBM products or services do not imply that IBM intends to make them available in all
countries in which IBM operates.

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