In the process of enterprise value creation, business performance management (BPM) is the bridge between enterprise strategy and execution. BPM is a bridge between strategy and execution. It assists companies to correctly formulate strategy through globally adopted tools and methods, such as the Balanced Scorecard (BSC), and gradually breaks down the strategy into departmental and individual Key Performance Indications (KPIs), implements the corresponding action plans, and effectively monitors and optimizes the strategy during the execution process.
This case shows how the six processes of the BPM cycle, including goal setting, modeling and forecasting, planning and budgeting, monitoring, analysis and evaluation, and reporting, can be used to optimize a company's strategy. The blanket? South Ran? The case shows how the six processes of the BPM cycle, such as setting goals, modeling, forecasting, planning, budgeting, monitoring, analyzing, evaluating, and reporting, can be used to achieve the desired results. Kim, Dongseok! Hogane, Gyeongsang, and Sangsang are in love with each other. What's your favorite thing to do? Warming up? What's the reason for the metal cap disorganization and its effect on the people? Kim, Dongseok! Puzzle? The first step in the process is the creation of a new generation of products, which will be used in the next generation.
Blu-ray is in a domestic position to develop and produce laser equipment, with a staff of 600, of which 300 are production staff, more than 100 are R&D and design staff, and the rest are engineering, sales, marketing and management staff. It produces two main types of optoelectronic products: electronic digital calculators and lasers. The company sells its products mainly through its direct sales team and agents, with 3 branches and 11 agents throughout the country.
Strategic Objectives
With the development of the economy, there are higher requirements to maintain Blu-ray's advantages in the industry: fast changing market requires more and more transparency of the company; intensified competition in the market requires faster response; the market requires more and more innovation ability of the company; and the investors require higher positioning of the company's profit.
Bluecom purchased Financecom software two and a half years ago, mainly for financial management. Under the new competitive requirements, the original Financecom has been obviously unable to support the strategic development of Blu-ray. The specific performance is: the number of customers is increasing, but the satisfaction is declining, resulting in increased customer turnover; production efficiency is not high, the cycle is long; the inventory capital occupies a large amount; the enterprise's response to the market changes is slow; manual operation, information transfer is not timely, inaccurate; the management mode is old and does not adapt to the long-term development requirements of the enterprise.
In the face of this status quo, the CEO, who assumed office in 2002, clearly put forward: "will lead Blu-ray to realize informationization". At the same time, he will Blu-ray's strategic objectives are defined as: "continue to introduce new technologies and products to create the return on shareholders and to achieve this year's sales revenue growth of 50%."
Research Report
After determining this strategy, the CEO quickly set up an in-house informatization committee and hired Kingdee Software, a domestic management software company, to write a "feasibility study report on the realization of the strategy" for him.
After Kingdee's representatives were stationed at Blu-ray, they quickly conducted a comprehensive research and assessment of the company's current situation according to the six key steps of the BPM cycle:
Setting goals: According to the four dimensions of the Balanced Scorecard (BSC) - finance, customers, internal processes, and learning and growth - Blu-ray was not able to systematically break down its strategic goals into specific KPIs and implement them into the departments and individuals. and implement them to departments and individuals. If Blu-ray is to achieve its goal of a 50% increase in sales revenue, it must meet the targets of a 32% increase in gross profit margin, a 15% increase in after-tax profit margin, and a 10% increase in net profit margin.
Modeling Forecast: In this process, Kingdee found that the sales director of Blu-ray often complained about the inaccuracy of the sales forecast, while the production director would blame the high number of temporary orders, and it was difficult for Blu-ray to make a prediction of the operation status and profit income beforehand. In this case, Kingdee pointed out that modeling tools can be used to forecast the operating conditions and profitability of various business models, which can be used to measure the feasibility of strategic goals.
Planning budget: In Blu-ray, the production director only makes monthly plans and never makes plan adjustments and revisions; and the finance director also gives feedback that the budget changes a lot and it is difficult to give feedback! Therefore, it is necessary to carry out comprehensive planning and budgeting according to the objectives of the enterprise, department, and individual, and fully deploy all kinds of resources of the enterprise in order to play its value. And develop the corresponding action plan to ensure the operability of the strategic objectives.
Monitoring: In Blu-ray, almost from top to bottom, the unanimous reflection of the lack of effective monitoring guarantee, the CEO said it is difficult to monitor in a timely manner; the sales director complained that only after a few days to know how the current status of sales; CIO pointed out that the integration of finance and business has not been realized. In this case, advanced management monitoring tools can be used to compare the differences between actual KPIs and planned KPIs in real time, facilitating the adoption of measures to ensure that the execution of departments and individuals is consistent with the company's overall strategic goals.
Analysis and evaluation: Since the above 4 steps are not well realized in Blu-ray, it is difficult for the CEO to get effective analytical data, and he does not know how the goals are achieved; and the CIO is even more unable to make effective evaluation of the departments and products. Therefore, there is a need to provide perfect tools and methods to y analyze and evaluate the results of business operations, analyze the reasons for the difference between actual and target, and provide correct decision-making information for the adjustment of business strategies.
Reporting: CEO can't get effective and accurate reports; CFO can only provide financial reports; sales director can't get financial data. In this section, it is necessary to provide a wealth of reports to meet the needs of different managers, reflecting the full range of business operations.
Summing up the above, Kingdee concluded that the outdated and old-fashioned management style and informatization tools left behind by the former CEO had become a major obstacle for the company to achieve its strategic goals. The key factors for Blu-ray to achieve strategic success are: improving data analysis and decision support capabilities; expanding sales channels and enhancing sales capabilities; strengthening budgetary control; improving production processes and increasing production capacity; reducing inventory and increasing inventory turnover; reducing costs and delivering goods on time; improving the efficiency of internal communication; and developing new products and shortening the time-to-market for new products.
How to make the above indicators in the short term to get a significant improvement? The urgent problem that Blu-ray needs to solve now is to make decision-making information thoroughly penetrate the whole process of strategic enterprise management, including strategy formulation, strategy execution and strategy optimization. The consultant of Kingdee recommended the latest strategic enterprise management informationization solution to the CEO of Blu-ray, which is centered on business performance management (BPM) and can effectively connect Blu-ray's strategy and execution. Its contribution lies in its ability to help Bluecoat learn decision-making information in a timely manner and realize the whole process of strategy from formulation to execution to realization of enterprise value.