Business Performance Management
Optimising performance across a distributed organisation Retailing today is characterised by a distributed model with large numbers of people making independent decisions. Organisations often find that they are seeing a wide variance in performance between product ranges or stores that should be performing at around the same level. The challenge is to achieve sufficient control to ensure consistently high performance levels without unnecessarily hampering decision-makers’ freedom and creativity.
The right balance of control and distributed decision-making can be achieved by putting in place frameworks and management processes that allow performance to be measured and managed in a consistent way across the distributed estate. Once you make it easy to see the business’s performance objectives and the extent to which they are being achieved by each business unit, it becomes much easier to correct any shortfalls.
In this section:
Benefits of Business Performance Management
Benefits of Business Performance Management
The unexplained variance in performance that is typically seen in a distributed business indicates that there is considerable scope for improvement. While it’s not realistic to expect all stores or ranges to equal the performance of the best, if you can just get bottom-end performers to equal middle-ranking performance you will achieve significant gains. One of our retail clients managed to identify and close a value gap of over £100m in this way.
Capgemini’s approach
The first step in moving performance upwards is accurate segmentation. By grouping together comparable stores and product ranges, you can compare like with like to make sure the improvements you are asking for are realistic.
With the correct segmentation in place, there are a number of tools available to help you move performance in the right direction. Balanced scorecards, appropriate metrics, carefully-defined roles and responsibilities, alignment of individual KPIs with organisational ones, senior management incentives - all these have their part to play. Individual objectives and incentives must be balanced to achieve the desired business performance: in particular, financial goals need to be
The tools must be used within a management process that identifies and reacts to significant changes, encouraging and replicating exceptional performance and quickly addressing problems.
While tools and processes are vital, they can’t do their job unless you have the right data to populate the scorecards and dashboards. The data has to be rigorously defined to ensure that everyone understands an item such as “sales” in the same way (is it net or gross? how is VAT handled? and so on), otherwise comparisons will be constantly challenged.
Capgemini’s capabilities
We have many years’ experience of helping tier one retailers, including Tesco and Waitrose, to implement tools such as balanced scorecards and steering wheels, together with the management processes to make use of them. As well as designing business intelligence solutions, we can help you build them, and if you do not yet have a suitable data warehouse for performance data we can work with you to develop one.
We can also provide you with, or help you set up, a business intelligence competence centre, staffed by experts in data management and statistical analysis. This centre will ensure that you have a single version of the truth by checking that data is consistent and reliable and is being interpreted correctly. These centres can also use the techniques of statistical process control to interpret movements and ensure that management reacts to movements that indicate significant trends, but recognises temporary deviations for what they are.
Chris Webster
Vice President, Head of Retail
Email Chris.webster@capgemini.com
Success stories
Tier one UK retailer
Capgemini is helping this household-name retailer to deploy a new Enterprise Data Warehouse that will provide sales and stock reporting in support of an Integrated Point of Sale (iPoS) programme. The project is based on IBM’s DB2 database, IBM DataStage ETL tool and the Business Objects reporting layer, together with IBM’s Balanced Data Warehouse, which Capgemini will be implementing. Once deployed, the system will be accessed by around 2000 users within head office and stores, who will be drawing on about 35 reports across 15 subject areas. In order to create these reports, data will be assembled from six different data sources including the Point of Sale system, the stock management system, three reference data sources and the existing retail data warehouse.
