Performance Management
Performance management, forecasting and transformation of core and support functions
Performance of company functions
Optimizing and resizing support functions: a strategic approach to control fixed costs
In a context of controlling and reducing fixed costs, optimizing support function processes is both an obvious choice and a trap. In which context is it an obvious choice, and in which a trap?
Overhauling and optimizing support function processes is obvious, because some of these functions are not differentiating, although they are necessary.
It can also be a trap, because the production processes for goods and, above all, services, are becoming increasingly complex and interwoven, to the point where it’s becoming difficult to distinguish between core and support functions. Human resources can still be considered a support function in science and education, IT in banking has probably become the first core function, finance in retailing has created its own service line, and customer billing in telephony has become a critical function.
Our tools and methods enable you to question your value chain.
Here are some examples of the issues and topics we can help you address:
- The choice between “doing it or having it done” is a complex one, and is not based solely on cost: many factors need to be considered upstream;
- Putting support functions back at the service of the business and improving management dialogue brings many advantages;
- The introduction of the “Driver Based Forecast” concept and value chain analysis play a central role in this transformation;
- The analysis of activities performed within the organization, through the ABC method for example, offers a new way of looking at performance. This approach goes beyond traditional boundaries, offering a cross-functional vision of the organization.
Towards operational excellence in services
Service optimization with shared service centers, competence centers and centers of excellence
The notion of shared service centers, competence centers and centers of excellence is omnipresent in large organizations, whether they are groups encompassing several companies, or companies comprising different Business Units.
This approach also extends to collaborations such as organizations, particularly in the public sector and NGOs.
The decision to share services is based on the desire to pool resources and achieve economies of scale, while offering the opportunity to share rare expertise.
For these high value-added but complex projects, careful preparation is essential. This includes :
- assessing the eligibility of the activities concerned,
- definition of initial and target perimeters
- strategic choice of location (near-shore, off-shore),
- determining future business models,
- drafting a business case, backed up by a rigorous presentation.
In the implementation phase, support for the employees affected plays a central role, as does the expansion of the service center. Logistical and material aspects, operational processes, management rules and their integration into information systems all require rigorous program management.
The implementation of shared service centers, competence centers and centers of excellence is a powerful lever for efficiency. When carefully planned and executed, this model brings significant benefits in terms of costs, operational synergies and, ultimately, competitiveness.
Business Analytics
Enterprise performance management (EPM): aligning performance management with the business model and strategy
There are many challenges linked to performance management:
- Improving data reliability and consistency between cycles (forecast and actual) and types (management, accounting)
- Simplifying reporting production processes
- Expanding analysis possibilities and depths
- Covering more functional areas and integrating upgrade requests
Companies need to define precise objectives in line with their strategic orientations. These objectives can then be matched with performance indicators, which in turn are determined by operational indicators.
Organizations use this method to draw up their reports, dashboards, and balanced scorecards. Decisions are made based on indicators aligned with the organization’s major orientations, at all levels of the organization: from head office to the operational units. This is known as “integrated business planning”.
Support and good practices
Together we will review your management needs and help you adopt best practices to reduce the time spent compiling reports in favor of performance analysis:
- reviewing management cycles,
- adopting a driver-based forecast or even eliminating the budget,
- accelerating closing deadlines or, on the contrary, siloing statutory consolidation and management reporting,
- reviewing analysis axes, their granularity and master data governance, align cost centers with the value chain and profit centers with strategic business areas (SBAs) and sub-areas (SDAs).
The chart of accounts
The chart of accounts is the most important axis, and includes the definition of the different margin levels for the company (EBIT and EBITDA, sales margin, gross margin…). These margins take on their full meaning in the notion of the contribution of the various business units. The underlying management and transfer pricing rules need to be clarified. A whole dictionary of cost calculations must coexist:
- For tax authorities, to determine transfer prices
- For accounting closing operations (inventory valuation, for example)
- For sales forces, to calculate individual sales performance
- For financial controllers and decision-makers, to assess the performance of individual business units.
Tomorrow accompanies you to
Tomorrow supports you in :
- Structuring, simplifying and unifying accounting and management reporting information and processes to guarantee data consistency, uniformity, comparability and reliability.
- Selecting a suitable solution to automate and improve the efficiency of the reporting production process, so as to devote more time to value-added analysis activities.
- Securing implementation of the chosen solution
