AT A GLANCE
- Corporate Performance Analytics (CPA) can help you derive comparative analyses, such as peer performance, performance in the market, and wellbeing in the economy.
- CPA could be essential, mainly in the following areas: customer and product analytics, financial analytics, procurement analytics, and people analytics.
- People analytics extends the capabilities and responsibilities of HR departments, transforming HR decisions from gut-feeling-based to data-driven.
Corporate Performance Management (CPM) is the framework that measures the success of an organization’s strategy. It is the foundation for benchmarking financial performance data, uncovering insights for data-driven decision-making, and developing an impactful strategy plan.
In today’s technology-fueled high-paced world, organizations must act fast. This revolutionizes the way companies operate, forcing them to take advantage of their most useful resource: data and analytics! Luckily, CPM can help you improve your performance by assessing your existing technologies.
YOU CAN LEVERAGE ANALYTICS TO IMPROVE CPM
Organizations want easier access to more lucrative perspectives. Put differently; you need timely strategic insights to develop action plans to achieve your organizational goals. Thanks to CPA, you can use your existing data, deriving comparative analyses, such as peer performance, performance in the market, and wellbeing in the economy.
IMMATURE DATA AND FLAWED ANALYSIS ARE RISKY
Executives must keep in mind that an organizational performance review’s effectiveness depends on the quality of data. A bad data sample could inadvertently turn a CPM system to “representative” rather than “actual,” affecting the results.
That said, according to Gartner, about 40 percent of enterprise data is either inaccurate, incomplete, or unavailable, which results in businesses failing to achieve their data-driven goals.
Some companies fall into the so-called “data trap”;
- they accumulate large volumes of data,
- register cluttered, unfiltered, uncleansed data,
- use multiple data resources (solutions/platforms/software),
- save data randomly in disordered folders, or
- vary frameworks and structures.
Any data set must go through the following flow: data collection, cleansing, preparation, and analytics services. The suggested flow would help your organization reach a single truth source, uncovering valuable insights.
THERE ARE FOUR AREAS WHERE CPA IS ESSENTIAL
Aside from optimizing your organization’s performance, CPM can also help you automate your financial reports and align them with your strategic objectives. CPA could be essential, mainly in the following areas:
- Customer and product analytics: Providing a precise analysis of profitability at the lowest customer or product levels.
- Financial analytics: Combining the planning processes with financial consolidation, budgeting, forecasting, reporting, and score carding; effectively aligning performance with corporate strategic vision.
- Procurement analytics: Creating a robust supplier screening and monitoring process.
- People analytics: Improving workforce visibility and HR productivity.
CASE STUDY: INCORPORATING CPM WITH PEOPLE ANALYTICS
As archaic as it might sound, some executives still view HR as a mere cost center, a department with no tangible contribution.
The HR scene, too, adds fuel to the fire. Making decisions based on gut-feelings and sticking to the that’s-the-way-things-are-done-around-here culture brings scrutiny to HR departments. That is where people analytics, also known as HR 3.0, could help.
“As archaic as it might sound, some executives still view HR as a mere cost center, a department with no contribution bringing the food to the home.”
People analytics extends the capabilities and responsibilities of HR departments, transforming HR decisions from gut-feeling-based to data-driven. Let us present a case-study that was performed by Maven Insights.
Business executives have always wanted to map out the information flows within their organization. By doing so, they could have more control over their corporate strategy. Today, we call such studies Organizational Network Analysis (ONA). ONA is a nodal study that visualizes, digitizes, and analyzes how information flows within an organization.
Graph 1 : An example of a nodal diagram of employees
It should be noted, however, that the approach is not without criticism. Pundits point out that ONA considers only two things: digital footprint and valuable forms of communication. Face-to-face communication, for instance, is overlooked and not regarded as helpful.
On the contrary, human communication is far more complicated than other communication forms. Its sophistication and multidimensionality allow for multiple means of communication. Some employees prefer face-to-face contact with their colleagues, while others utilize digital means.
For that reason, any analysis, when comparing two data points, must normalize independent factors as much as possible. One silver lining of the COVID-19 pandemic was that it presented a perfect opportunity to normalize communication data.
Investigating the individual levels of data in an organization can help to map out the ONA node graph. Node analysis would identify the key points such as:
- Central node: Highly engaged employees with a lot of connections,
- Knowledge brokers: Employees who connect different localized groups,
- Peripheral: Employees with very focused relationships,
- Ties: Edges of the graph containing quantitative and qualitative information between the nodes (employees.)
ONA is an insightful exercise for understanding employee data. Moreover, it allows management to derive insights for a variety of corporate performance analyses such as workforce planning and right-sizing, rewards, and incentive analysis.
ONA is an example of how organizations can incorporate one of the essential pillars of any business, their human capital, into their corporate performance analytics.
In the final analysis, establishing Corporate Performance Management Analytics, which entails People Analytics, Financial Analytics, People Analytics, and Customer and Product Analytics, is a tall order.
That said, as a team of experts in those fields, we can help you in your journey, not only with our performance management capabilities, but also with our program and implementation support services.
To learn more about our Corporate Performance Management Analytics practice, please do not hesitate to contact us.