Automation: A Key Driver for the Success of a Strategic Management System

Many executives are finding it difficult to improve the performance of their companies in today's competitive environment and realizing that the problems they face are structural, not just cyclical.  Traditionally, their response in tough times has been to put pressure on short-term operating performance to boost earnings, but this approach is no longer adequate. A new organizational strategy is required to develop growth initiatives even as companies pursue operating savings.

Strategy is playing an even more important role in the new economy - but in a transformed way compared to as it used to be in the industrial era, where strategy work was more isolated from operations.  In the old days, it was much clearer how an asset creates value, e.g. how funds received were deployed in standard products to customers at fairly stable margins.  Today it is harder, to establish that link when it comes to intangible assets, for example linking the knowledge of an employee, and a financial outcome. Strategy has to become an integral part of the management system of an enterprise.  Strategy work can’t be delegated just to the CEO, his executive colleagues and to the strategic planning department that is serving as a staff department to the CEO.  Everyone in an organization who makes decisions has to be linked to strategy and into a strategic feedback loop that feeds back important information as fast as possible about what is working and what is not working, to those who have to make or change major strategic decisions.  For the management system of the enterprise, that means that strategy has to be linked and integrated with the operational management. Tying strategic planning to performance monitoring and decision support at a tactical level creates a very powerful approach. However, running such a sophisticated system manually or using excel sheets creates an unmanageable overhead on the management.

Lack of automation is one of the main reasons why deployments of strategic management systems fail. A study by the Gartner Group in 2001, led them to conclude that Enterprises that choose to ignore IT during the design and implementation of the Balanced Scorecard (BSC), will fail to embed the BSC in the organization.

Automating the strategy management system should also not create any overhead on the managers. The automated system should be simple, so that strategy management becomes a part of every day actions of the managers.

In order to address the need to automate strategic management systems, traditional Corporate Performance Management Systems have evolved into a new breed of Collaborative Management Systems such as those provided by QPR Software (www.qpr.com) which allows companies to communicate and define their corporate strategy and objectives on an entirely new level.

Planning, implementation, communication and commitment are the corner stones of collaborative management.  This enables personnel at all levels of an organization to identify their individual responsibilities and targets so that strategy becomes understandable in an everyday operational sense.

The advantages of an automated Strategy Management System are as under:

• Facilitates and creates a framework for the Strategic Management implementation
• Provides Scalability of the Strategy Management System (think big, start smart)
• Top-down approach (need-based or strategy-focused solution instead of IT platform building)
• Visualizes and helps understand the strategy
• Agility (easy-to-adapt solution according to changes in the organization/environment)
• Saves time and money in data gathering and report generation
• Enables and systemizes feedback and interaction
• Provides tools for analysis and enables drill down to the real causes
• Provides one easily accessible interface to all strategy and performance related information

Across the world, progressive organizations such as the Commercial Bank of Dubai (Dubai,UAE), Gulf Agency Company (Dubai,UAE)and the Mustafa Sultan Group of Companies (Muscat, Oman) are leading the way in automation of Strategic Management Systems. As a case study we can look at the experience of the Commercial Bank of Dubai.  Their Strategic Management System based on the Balanced Scorecard Methodology was manually deployed for four years, prior to automating this in August 2004.  Benefits achieved though automation include greater visibility of strategic information, drill down capabilities to arrive at root causes of performance variations and transparency of objectives across levels of reporting.

Author: Jude Chagas Pereira - The Director of IYCON FZ LLC, a Consultancy and Technology Solutions Company, with a focus on providing High Quality Business and Technology Solutions to organisations across EMEA, Oceania and the Asian Subcontinent.