There's an old saying that reminds us "the only thing you don't know is what you don't know." Without this type of tool at the heart of your enterprise, "what you don't know" is a lot more than you probably realize.
The Algorithm Blog
The majority of established companies in our space have some form of an enterprise resource planning (ERP) solution in place and have for some time. For many years, this was enough to stay competitive.
But that is no longer the case. In today's rapidly-changing business environments new solution niches have emerged that are necessary for taking that next competitive step—business intelligence (BI) and corporate performance management (CPM).
As I am flying over the Grand Canyon, it looks completely different than standing on its rim. Granted, from both perspectives, it is a really big hole.
But flying over it gives a fuller sense of the enormity of this natural wonder and the events that created it.
Sometimes a different perspective helps us understand things better. Looking at comparative financial statements gives us one perspective, but looking at a common-size statement can help us learn something new.
Rarely has a budget been seen in a positive light. In personal finance, it is just a yoke that keeps you from doing the things you want like taking a vacation or buying a fishing boat.
In business, it is just an annual, time-consuming exercise that often yields little more than a hammer for your manager to use to justify declining your conference request.
Or it becomes a tool for the sales manager to stir up the sales force that hasn’t “made their numbers”. I am willing to go out on a limb and say that those budgets probably follow the traditional process of “last year + 10% on revenue and 5% on expenses” method. They are just meaningless numbers on a spreadsheet.
The great management thinker Peter Drucker has been quoted as saying “you can’t manage what you can’t measure”. True, and if you can’t manage it, you at least need to know what impact it can have on you and your business. But what about the things you can measure?
Then you change one little word and have, “you can’t manage what you don’t measure”. But, just because you can measure something, should you? Does the measurement provide value for the organization?