Did Somebody Say Strategy?

Retail Performance Management

In addition to increased competition and price pressures, the retail industry continues to be concerned about the general economy (weak housing market, the current credit crunch), and rising costs - especially labor and energy (fuel). Retailers need increased visibility into all the levers of the business.

Insurance Performance Management

The key concern of the Insurance industry these days is the ever-present management of risk: financial, economic, regulatory, and operational risk. This doesn’t leave much time for business model innovation and new product and service innovation, does it?  Another industry concern is continuous operational efficiency and margin expansion.

Focusing on operational efficiency, some of the major performance markers in claims operations, for example, include Loss Ratio, Time to 'closed,' and Claims Leakage. For each of these, do you model them (what happens to Time to 'closed' if we invest more in IVR and associate headcount?), do you plan for them (forecasted # of cases with time to closed greater than average), do you have a dashboard that monitors close times by branch, by product line, or by claim size?  And is what you learn from those dashboards, perhaps that more associate training leads to faster close times, fed-back into your predictive models?

Strategic Flexibility

One of the keys to growth is maintaining strategic flexibility: not being rigidly tied to goals and business models that were set in one set of circumstances, using one set of assumptions, when those circumstances have changed.

According to William Duggan in his new book “Strategic Intuition,” instead of setting goals first, you are well advised to watch for large-payoff/low-cost opportunities first and then set goals.  In an xPM world – you would have those opportunity models ready-at-hand and ready to turn into operating and financial execution plans.

One way to use the eXtended Performance Management model to accomplish this is with a rigorous debate in the business about future scenarios.  This includes capturing financial and operational models based on possible (and potential) futures.

Healthcare Performance Management

With the increase in demand for more efficient (and transparent) operations, the healthcare industry is gearing up for more (and better) scorecarding, dashboarding and overall operational and financial reporting and business intelligence.  Adopting and xPM (extended performance management) technology & process strategy can connect that demand to all parts of the healthcare management operating system, including budgets, plans & forecasts (for variance reporting), and models & scenarios for initiatives like Pay for Performance.

Performance Management in the Banking Industry

Obviously, sub-prime mortgage exposure is the hot-topic these days.  And Jamie Dimon is probably delighted that Citigroup’s Charles Prince quit.  Mr. Dimon (no relation that I know of), could swoop in to his former company and buy up the troubled parts.

Across the industry, one of the key concerns for banks is risk and uncertainty. Looming in the background is the on-going cost-cutting imperative and tougher competition (including hedge funds that are now directly originating loans). This is true for retail as well as commercial, private, and investment banking.

I wonder if Citigroup had had more visibility into the lending pipeline, correlated with FICO scores (or other measures of credit risk) and connected with assumptions in the forecast, would they be in this spot.

Industry Specific Strategy & Execution

Today we published a look into our industry-focused Periodic Table of Business tool-kit at  http://www.business-foundation.com/industryfocus.html

You will find some of they key performance indicators (KPI), measures and metrics, as well as some common extended performance management initiatives for the following industries:
• Banking
• Healthcare
• Hospitality
• Insurance
• Life Sciences
• Mining
• Pharmaceutical
• Retail
• Software
• Telecommunications

We have also published key financial benchmarks (such as revenue growth, cost of goods sold, SG&A expense, cash cycle, asset utilization, and profitability) for each industry leader and the average among the top 5 leaders - based on the last 4 quarters of performance.