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At SAS, performance management refers to how an organization leverages its assets (people, money and technology) to achieve short-, medium- and long-term strategic goals. Through a process and journey intended to improve value creation, it requires focus on four essential objectives:
Control cost without sacrificing future growth objectives Organizations are expected to do more with less to improve shareholder and stakeholder value. Given the nature of current incentives (meeting quarterly or annual targets), there is a risk that you may meet short-term targets at the expense of strategic growth initiatives.
Understand what drives cost and profit (or value) Fewer than 50 percent of executives are happy with their understanding of what drives cost and profit/value1. Without this understanding, managers are unlikely to allocate resources appropriately and may not know where to focus attention for improvement. At best, it may mean the organization is generating suboptimal results; at worst, it could mean it is destroying value without realizing it – until it's too late to recover.
Improve agility Change is happening faster than ever and information is doubling faster than ever. Organizations that can identify opportunities and threats more easily than their competitors, understand the implications, update strategy quickly and then execute that strategy consistently across the organization will be the winners. However, only 20 percent of CEOs and CFOs are happy with their organizations' agility. The most significant obstacles to improving performance are accountability, culture toward measurement and transparency2.
Identify and respond to environmental, social and economic risks, and opportunities Sixty percent of global executives regard global climate change as strategically important for product development, investment planning and brand management3. Eighty-two percent expect some form of climate change regulation in their organization's home country within five years4. A focus on the "triple bottom line" of people, profit and planet drives increased brand value through innovation, improves internal efficiencies and accountability, and engenders the loyalty of consumers, employees and other stakeholders.
How SAS® can help
SAS delivers performance management software and services to help executives:
- See reality clean and simple – ensure data quality, transparency and relevance for action.
- Manage and align resources (people, money and technology) to strategy – understand how cost and value flow through the organization and what drives or influences variation.
- Improve foresight and optimize value – prove which KPIs drive strategy; forecast and predict future outcomes with accuracy; optimize resources and activity for maximum value creation.
- Learn, share, codify and adapt – understand why things succeed or fail; update and communicate strategic change quickly and consistently for improved agility.
- Evolve through experimentation and innovation – simulate and plan options based on facts, not intuition; prove which options deliver the best balance of risk and reward.
Through implementing SAS for Performance Management at more than 1,500 customer sites, we’ve learned that more than 80 percent of engagements start with creating transparency. Get it right and companies adopt a more positive culture toward measurement, which in turn improves accountability. Employees act on facts, not gut instinct, improving resilience and consistency. In terms of performance management, this is merely the beginning of the journey.
Regardless of where you start, we believe a critical first step is organizing and cleaning your data. No matter how great the solution, if you skip this phase, it is “garbage in, garbage out.” SAS provides this capability with all SAS for Performance Management solutions. For more information on this critical capability, see Data Cleansing and Enrichment.
Many organizations start with the financial aspects of budgeting and planning and then move on to strategy management applications. Others begin by focusing on understanding what drives value. Everyone will have a different approach; the key is to evolve and not try to "boil the ocean in one try" – it will take too long and create multiple change management issues.
As you evolve through your journey, SAS can help with:
All are intertwined to improve performance.
Why SAS®?
Performance management isn’t a silver bullet; it is a journey with multiple phases. Many vendors focus on surfacing historical information allowing companies to see what’s happened, and then manage and report on performance. SAS goes further to help you improve, learn and evolve based on facts, not intuition.
SAS solutions are built on a common platform to address the complete process. Start with a single solution and evolve at a pace to suit your needs.
Our solutions are complemented by our ability to quantify and predict the influence of process standards and quality; effectiveness of strategy; market and economic trends; and customer and supplier behavior. As a result, you'll get unsurpassed insight into what truly drives value.
SAS is database/ERP-neutral and is viewed by the analyst community as visionary in performance management – particularly when it comes to advanced analytical approaches, strategy management and cost/profitability optimization.
SAS lets you do more than report on performance – we help you improve it!
1 "The Performance Management Exchange." Business Week Research Services and SAS, March 2007.
2 Ibid.
3 "How Companies Think About Climate Change: A McKinsey Global Survey." The McKinsey Quarterly Survey on Climate Change (December 2007): McKinsey & Company.
4 Ibid.
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