The Raleigh Chapter FENG Meeting - A CFO's Wish List

August 9, 2023

Gary said that he will be GIVING AWAY some of his books for FREE. 

Tonight Gary will cover these enterprise and corporate performance management (EPM/CPM) methods:

product, service line, channel and customer profitability (using activity-based costing [ABC]); strategy management using strategy maps, balanced scorecards (with strategic KPIs) and dashboards (for operational PIs); process improvement using lean and quality management (including lean accounting and the cost of quality [COQ]; capacity-sensitive driver-based budgeting and rolling financial forecasts; enterprise risk management (ERM); and data science and analytics. 

This month we have the pleasure of hearing a real common sense business performance management presentation by someone with years of experience doing just that, Gary Cokins. 

All you true accounting and finance people will love this and find it very informative. The rest of you should be ready for a wake-up call. 

Date: Wednesday, August 9, 2023

Time: 6:00 PM to 8:00 PM 

Location: CareerPro - 3739 National Drive, Raleigh NC 27612 - Suite 112 - first floor and easy to find. Plenty of free parking around the building. 
 

Topic:  Analytics-Based Enterprise Performance Management

Many organizations are far from where they want and need to be with improving performance, and they apply intuition, rather than hard data, when making decisions. Enterprise performance management (EPM) is now viewed as the seamless integration of managerial methods such as strategy execution with a strategy map and its companion balanced scorecard (KPIs) and operational dashboards (PIs); enterprise risk management (ERM); capacity-sensitive driver-based budgets and rolling financial forecasts; product / service / channel / customer profitability analysis (using activity-based costing [ABC] principles); customer lifetime value (CLV); lean and Six Sigma quality management for operational improvement; and resource capacity spending planning. Each method should be embedded with business analytics of all flavors, such as correlation, segmentation and regression analysis, and especially predictive analytics as a bridge to prescriptive analytics to yield the best (ideally optimal) decisions. This presentation will describe how to complete the full vision of analytics-based enterprise performance management.

This presentation by a leading practitioner and author will cover:

1. How strategy maps and their companion balanced scorecards communicate strategic objectives with target-setting to help cross-functional employee teams align their behavior to the strategy and better collaborate.
2. Why measures of channel and customer profitability and customer value are now superceding profit and service-line measures – and shifting from product to customer-focused organizations including future potential value – customer lifetime value. 
3. How activity-based cost management (ABC/M) provides not only accurately traced calculated costs (relative to arbitrary broad-averaged cost allocations), but more importantly provides cost transparency back to the work processes and consumed resources, and to what drivers cause work activities.
4. Reforming the broken annual budgeting process with performance based budgeting that links strategy to operations and is process volume sensitive rather than simply incremental at each cost center.
5. Why business analytics, with emphasis on predictive analytics and pro-active decision making, is becoming a competitive advantage differentiator and an enabler for trade-off analysis. 
6. How all levels of management can quickly see and assess how they are doing on what is important – typically with only a maximum of three key performance indicators (KPIs).
7. How to integrate performance measurement scorecards and ABC/M data with:
8. Strategy formulation.
9. Process-based thinking and operational productivity improvement.
10. Channel/customer profitability and value analysis and CRM.
11. Supply chain management.
12. Quality and lean management (Six Sigma, cost of quality).

Learning Objectives: 

1. How to view enterprise and corporate performance management (EPM/CPM) as the seamless integration of managerial methods rather than as a process.
2. Understand how business analytics is an advance over business intelligence and where Big Data fits in.
3. How to identify and differentiate strategic KPIs in a balanced scorecard and operational performance indicators (PIs) in dashboards.
4. How to properly calculate product, service-line, channel, and customer profitability for analysis, insights and actions.
5. How to perform “predictive accounting” for capacity-sensitive driver-based budgets / rolling financial forecasts, what-if analysis, and outsourcing decisions 
6. How to overcome implementation barriers such as behavioral resistance to change and fear of being held accountable.

Why should anyone attend? The fear, uncertainty, and doubt (FUD) concerns 

Many organizations struggle answering these types of questions:

• How well do our managers and employees understand our executive team’s strategy?
• Are we measuring the right metrics?
• If we are measuring key performance indicators (KPIs), are they “balanced” between financial outcomes and the non-financial measures related to customer loyalty, process improvement, employee learning & growth, and innovation?
• Are we measuring too many strategic KPIs where many are arguably operational performance indicators (PIs)?
• Are our product and service-line costs accurate? Or are our accountants mis-allocating indirect expenses (i.e., overhead support)?
• Do we measure non-product channel and customer costs to report profit or loss by each customer?
• How effective is our annual budgeting process? Does its benefit exceed the costs to produce it?
• Is the budget out of date within a few months after it is published?
• Do experienced managers “pad” their department’s budgets?
• Is consolidating cost center budgets bottom-up cumbersome?
• Do we understand incremental / marginal expense analysis classifying the behaviour of our resource capacity expenses as sunk, fixed, step-fixed, or variable based on the planning time horizon?
• Are many of our decisions based on intuition or experience rather than on fact-based data?
• How much competency does our organization have with analytics?
• How much resistance to change does our organization have that is slowing our adoption rate of progressive managerial methods?

Key Take Away

To learn how the seamless integration of enterprise and corporate performance management (EPM/CPM) methods that are each embedded with advanced analytics will exponentially increase an organization’s performance.

Speaker: Gary Cokins, CPIM  

([email protected]; phone 919 720 2718)

http://www.garycokins.com

Gary Cokins is an internationally recognized expert, speaker, and author in advanced cost management and performance improvement systems. He is the founder of Analytics-Based Performance Management, an advisory firm located in Cary, North Carolina at www.garycokins.com . Gary received a BS degree with honors in Industrial Engineering/Operations Research from Cornell University in 1971. He received his MBA from Northwestern University’s Kellogg School of Management in 1974.

Gary began his career as a strategic planner with FMC’s Link-Belt Division and then served as Financial Controller and Operations Manager. In 1981 Gary began his management consulting career first with Deloitte consulting, and then in 1988 with KPMG consulting. 1992 Gary headed the National Cost Management Consulting Services for Electronic Data Systems (EDS) now part of HP. From 1997 until 2012 Gary was in business development with SAS, a leading provider of enterprise performance management and business analytics and intelligence software. 

His two most recent books are Performance Management: Finding the Missing Pieces to Close the Intelligence Gap (ISBN 0-471-57690-5) and Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics (ISBN 978-0-470-44998-1). His most recent book co-authored with Larry Maisel is Predictive Business Analytics (ISBN 978-1-118-17556-9) published by John Wiley & Sons. Mr. Cokins can be contacted at [email protected] .

Linkedin.com contact:

https://www.linkedin.com/in/garycokins 

All of my books that I have authored or co-authored are at:

https://www.goodreads.com/author/list/47692.Gary_Cokins 

About our Host: John M. O’Connor, President of CareerPro, Inc. 

John M. O'Connor is a multi-year career coach, outplacement and career services leader based in North Carolina with clients worldwide since 1991. CareerPro Inc. serves clients in North Carolina and globally. Mr. O'Connor addresses issues crucial to career development and talent. He offers career services, corporate and individual outplacement as well as talent/HR consulting through www.careerproinc.com. You can find him on LinkedIn at www.linkedin.com/in/johnmartinoconnor. 

His writings, quotes and publications are featured in numerous career books, national publications, and numerous Forbes Coaches Council contributions, including 53 feature articles in less than two years.