This presentation talked about how to benchmark the performance of your finance organization. It discusses it from a Hackett Group perspective, who does a lot of this.
What is Benchmarking?
This is different from what your DBA calls benchmarking. Essentially, they’re looking at efficiency and effectiveness of a given business function. This gets into many of the concepts important to embedded analytics, because you’re aligning the measurement with the business processes.
Impact to a Finance Organization
For a finance department, the focus on cash flow optimization as key driver as effectiveness of finance organization.
The slides had some very good information related to business processes that occur in a finance organization (for most folks, it’s a bit more nebulous than the business processes for HR, for example, where you hire, incent, manage, and terminate employees as business processes)
Here are many of the processes that span SG&A
Here are the Procurement business processes
He then went on to illustrate how for each process, you should think about benchmarking. He showed the following formula:
Demand drivers + structural factors = performance metrics
processes organizations perform + how organizaitons structure themselves and conduct those processes = Measurement of how well the organization is doing
one last translation
Business Operation + Dimension = Key Performance Metric
One of the things I liked about this presentation was how it identified the business processes that are part of a finance organization, and how you can align the things you measure with those operations you’re performing. Although this isn’t a BI presentation, much of what was illustrated translates well into the BI world, where analysis isn’t easily tied to the tasks that people perform (and ultimately, what organizations need to continuously improve).