Banking giant JP Morgan raised eyebrows in 2012 when it revealed that it had lost a substantial amount of money because of poorly conceived trades it had made for its own account. The losses raised questions about the adequacy of its internal controls, and broader questions about the need for regulations to reduce systemic risk to the banking system. At the heart of the matter were the transactions made by “the London Whale,” the name given to a JP Morgan’s trading operation in the City by its counterparties because of the outsized bets it was making. Until that point, JP Morgan’s Central Investment Office had been profitable and apparently well controlled. In the wake of a discovery of the large losses racked up by “the Whale,” JP Morgan launched an internal investigation into how it happened, and released the findings of the task force established to review the losses and their causes [PDF document].
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Topics:
Sales,
GRC,
Office of Finance,
Operational Performance Management (OPM),
error,
Business Analytics,
Business Collaboration,
Business Intelligence,
Business Performance Management (BPM),
Data,
Financial Performance Management (FPM),
Information Management (IM),
Sales Performance Management (SPM),
controls
This is the third in a series of blog posts on what CEOs (and for that matter, all senior corporate executives) need to know about IT and its impact on running a business. The first covered the high-level issues. As I noted, it’s not necessary for a CEO to be able to write Java code or master the intricacies of an ERP or sales compensation application. However, CEOs must grasp the basics of IT just as they must understand basic corporate finance, the production process and – at least at a high level – the technologies that support that process. My second post was about four supporting technologies that will drive change in business computing over the next five years. It relates examples of how applications can help every part of a business operate more effectively, not just efficiently. Now let’s turn our attention to finance and sales – and as I’ve noted in the previous posts, what follows is an “elevator pitch” treatment of what could be a much longer discussion.
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Topics:
Planning,
Predictive Analytics,
Sales,
Customer,
Human Capital Management,
Office of Finance,
Operational Performance Management (OPM),
Budgeting,
close,
closing,
PRO,
Analytics,
Business Analytics,
Business Performance Management (BPM),
CFO,
Customer Performance Management (CPM),
Financial Performance Management (FPM),
Information Management (IM),
Sales Performance Management (SPM),
CEO,
FPM,
Profitability,
SPM
Quantrix recently unveiled Quantrix 5, an updated version of its financial modeling software designed to fill the gap between spreadsheets and business intelligence (BI) systems. Quantrix provides users with many of the capabilities of an enterprise system and addresses shortcomings of desktop spreadsheet software without requiring extensive training.
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Topics:
Big Data,
Planning,
Sales,
FP&A,
Office of Finance,
Reporting,
Budgeting,
Quantrix,
Analytics,
Business Collaboration,
Cloud Computing,
Business Performance Management (BPM),
Information Management (IM),
Sales Performance Management (SPM),
Supply Chain Performance Management (SCPM),
Workforce Performance Management (WPM),
FPM
I recently started a series of blog posts on what CEOs (and for that matter, all senior corporate executives) need to know about IT. The first covered the high-level issues. As I noted there, it’s not necessary for a CEO of a company to be able to write Java code or master the intricacies of an ERP or sales compensation application. However, CEOs must grasp the basics of IT just as they must understand basic corporate finance, the production process and – at least at a high level – the technologies that support that process. This installment is about four supporting technologies that will be drive considerable change in business computing over the next five years. Each of these subjects is worthy of a chapter-length discussion or even a book; what follows is the “elevator pitch” version.
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Topics:
Big Data,
Mobile,
SaaS,
Social Media,
Customer,
ERP,
Operational Performance Management (OPM),
Business Analytics,
Business Collaboration,
Cloud Computing,
Complex Event Processing,
In-memory,
Business Performance Management (BPM),
CFO,
Customer Performance Management (CPM),
Financial Performance Management (FPM),
Information Management (IM),
Sales Performance Management (SPM),
Supply Chain Performance Management (SCPM),
Workforce Performance Management (WPM),
CEO,
PaaS
The idea of devising and using maturity assessments to improve business performance has been a staple of management, functional and strategic consultants for decades. It’s based on two unassailable principles. One is the general assertion that companies differ in their ability to do anything along a range from nonexistent to advanced. The second is that at any time it’s possible for a knowledgeable individual to construct a scale of competence for some business function from least to most mature based on the important characteristics about how an organization designs and executes that function. Using maturity scales is a handy way for executives and managers to size up where they lie on a continuum of capabilities and an easy way to define the steps necessary for improvement. Maturity assessments have the advantage of being straightforward, but there’s the danger that they can be overly simplistic.
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Topics:
Performance Management,
Social Media,
Customer Experience,
Governance,
Operational Performance Management (OPM),
Business Analytics,
Business Collaboration,
Business Intelligence,
Cloud Computing,
Governance, Risk & Compliance (GRC),
Operational Intelligence,
Business Performance Management (BPM),
Customer Performance Management (CPM),
Financial Performance Management (FPM),
Information Applications (IA),
Information Management (IM),
IT Performance Management (ITPM),
Sales Performance Management (SPM),
Supply Chain Performance Management (SCPM),
Workforce Performance Management (WPM),
benchmark,
FPM
One of the community groups to which I donate my time is an organization that puts on a Concours d’Élegance – a vintage car show. Such Concours date back to seventeenth-century France, when wealthy aristocrats gathered to see who had the best carriages and most beaudacious horses. Our Concours serves as the centerpiece to a broader mission of raising money for several charities. There a many such events in the United States and elsewhere, but this one, which has been held every year since 1956, has the distinction of being the longest continuously running Concours in the United States.
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Topics:
Big Data,
GRC,
Operational Performance Management (OPM),
Business Analytics,
Business Intelligence,
CIO,
Operational Intelligence,
Business Performance Management (BPM),
CFO,
finance,
Financial Performance Management (FPM),
Information Management (IM),
IT Performance Management (ITPM),
Talent Management,
FPM
Our research consistently finds that defects in data are the root cause of a wide range of problems encountered by modern corporations. The magnitude of the problem correlates with the size of the company: Big companies have bigger headaches than midsize ones. Data issues diminish productivity in every part of a business as people struggle to correct errors or find workarounds. Issues with data are a man-made phenomenon, yet companies seem to treat bad data as some sort of force of nature like a tornado or earthquake – something that’s beyond their control to fix. At best they look for one-off workarounds and Band-Aids without tackling the root causes or recognizing the need to keep data issues in check. Data stewardship can and should be a part of a disciplined approach to management in the same way organizations implement quality control, cash management and legal compliance.
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Topics:
Big Data,
Predictive Analytics,
GRC,
Operational Performance Management (OPM),
Business Analytics,
Business Intelligence,
CIO,
Operational Intelligence,
Business Performance Management (BPM),
CFO,
Customer Performance Management (CPM),
finance,
Financial Performance Management (FPM),
Information Management (IM),
IT Performance Management (ITPM),
Sales Performance Management (SPM),
Supply Chain Performance Management (SCPM),
Workforce Performance Management (WPM),
FPM
For several years the U.S. Securities and Exchange Commission (SEC) has mandated that filers apply eXtensible Business Reporting Language (XBRL) tags to their financial statements. XBRL was developed to make it easier for investors to use a company’s financial information. Now XBRL US has kicked off its second annual XBRL Challenge, a contest designed to encourage development of open source analytical tools that can use XBRL-formatted corporate financial data from the SEC’s EDGAR database. Sponsoring the effort are the American Institute of Certified Public Accountants, the CFA Institute (of which I am a member) and the Wharton School of the University of Pennsylvania. XBRL US hopes to raise awareness of the wealth of available XBRL data and provide incentives for application developers to create open source software that enables broader and more frequent use of the standard. The contest will award $20,000 grand prizes to the two teams, and judging will be based on how well each submission improves access to corporate data and provides analytic capabilities in an original, user-friendly way. This competition is a terrific idea because it addresses the least well developed element in the drive to improve the communication of corporate data to investors. Earlier this year I reviewed some of the submissions to the first XBRL Challenge. Although the first round of software offered a good start, much more needs to be done to encourage use of XBRL.
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Topics:
Office of Finance,
Reporting,
closing,
XBRL,
Analytics,
Business Analytics,
Business Performance Management (BPM),
finance,
Financial Performance Management (FPM),
Information Management (IM),
Financial Performance Management,
SEC
Planning portfolio risk follows the same basic tenets as other sorts of business planning. It must be done in the context of a time dimension. In business, short-term plans are developed with a lot of givens or constraints. For example, capacities are fixed, because it’s impossible to wave a magic wand and bring a new factory on line, stuff more machine tools into already jammed facilities or source more raw materials in a capacity-limited supply chain. Short-term plans also incorporate assumptions about external forces (such as the economy, competitive moves or regulation) that are fixed or change very little in this period. By contrast, long-range or strategic planning is relatively unconstrained. The countries, markets or products that an organization can offer, for example, are not limited by current conditions. Indeed, that’s an essential point of long-range planning: assessing the impact of significant changes to today’s givens or assessing how to manage the impact of expected future trends.
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Topics:
GRC,
Office of Finance,
Operational Performance Management (OPM),
Analytics,
Business Analytics,
Governance, Risk & Compliance (GRC),
Business Performance Management (BPM),
Business Planning,
Financial Performance Management (FPM),
Information Management (IM),
Risk,
Sales Performance Management (SPM)
Risk has always been an integral part of business, but our recent Governance, Risk and Compliance (GRC) benchmark research shows that companies deal with risk with varying degrees of effectiveness – especially operational risk. A majority of companies lag in their overall GRC maturity, as I covered in a recent blog post. Operational risk management should be of greater interest to executives today because they can have greater control of it than before. The expansion of IT systems to automate and support most business processes has made it easier than ever to measure, monitor and report on what’s going on in a company. It’s now practical to expand the scope of operational risk management and improve companies’ effectiveness in handling risk events when they occur.
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Topics:
Big Data,
Performance Management,
Predictive Analytics,
Customer Experience,
Governance,
GRC,
Operational Performance Management (OPM),
Management,
Analytics,
Business Analytics,
Business Collaboration,
Business Intelligence,
Governance, Risk & Compliance (GRC),
Operational Intelligence,
Business Performance Management (BPM),
compliance,
Customer Performance Management (CPM),
finance,
Financial Performance Management (FPM),
Information Applications (IA),
Information Management (IM),
IT Performance Management (ITPM),
Risk,
Sales Performance Management (SPM),
Supply Chain Performance Management (SCPM),
Workforce Performance Management (WPM),
financial risk management
