December 7, 2007, Newsletter Issue #30: The Role Of Performance Planning In Improved Scorecarding

Tip of the Week

Cognos.com Tip: Annual planning processes have long been beset with inherent inaccuracies in the numbers selected and used in the plans and forecasts. These inaccuracies fall into a number of categories:
· Legitimate errors arising from mishap or difficulty acquiring data
· Complexity errors resulting from difficult or poorly understood mathematical constructs
· Calculated guesses
· Overtly false or ‘gamed’ figures, etc.

Consider performance planning software because its approaches appear to provide solutions to some, if not all of these error sources due to one simple factor; deriving the organization’s key performance indicators, hence true business drivers from a dynamic and adaptive process drawing upon manipulation of real numbers from myriad sources. This has the effect of essentially ending inaccurate information. It therefore is an important side benefit of business intelligence and reflects the power analytical techniques, such as statistical error checking, provides when employed on a broad scale set of data.

Another valuable benefit is that a balanced scorecard solution is easily achieved because the underlying business drivers truly drive determination of the scorecard metrics. This avoids the pitfall of having bulky, traditional budgeting exercises choke the strategic value of the scorecarding initiative.

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