1C: Management by objectives and KPI

Performance management system (CPM, EPM, BPM)

The last several years heads of the companies show high interest in the questions connected with business performance management. Business process automation and rational personnel management (objective assessment of results, growth of the involvement and motivation) are capable to mobilize the huge potential of internal efficiency of the enterprises. It is reasonable to solve the specified tactical problems in the context of the selected business strategy.

Will not be exaggeration to tell that a weak point of most the companies is implementation of already created strategy, and it is directly connected with questions of efficiency of personnel in each separate workplace and automation as the instrument of support of the existing management system.

Performance management of company (CPM, BPM, ERM)

For the last ten years it is created several concepts describing a performance management method of the company. There are several terms for designation of these concepts: CPM - Corporate Performance Management, BPM - Business Performance Management, EPM-Enterprise Performance Management.

Ensuring efficiency and its growth is the complex, constantly becoming complicated task. Performance management of the company is implemented through determination of strategic objectives and management of activities for achievement of effective objectives using the optimal volume of resources (material, financial, labor, etc.). Achievement is implemented through processes of operational planning, the organization of execution, control and the analysis. For acceptance of the justified management decisions it is necessary to analyze large volumes of business information, to have an opportunity to quickly estimate a condition of the organization for different aspects.

Using the automated systems of new generation constructed on the principles of performance management of the enterprise (EPM) it is possible to resolve issues of the approved business planning, coordination of efforts of different divisions and employees, coordinating strategic priorities of the companies to the current activity. Besides, using this system monitoring of work of the organization on the basis of a set of criteria is provided that allows heads to make decisions, relying on analysis results of large volume of the structured business information.

Practically all elements of ERM-sistema use key indicators of activity [efficiency] (Key Performance Indicators - KPI). Without exaggeration it is possible to tell that KPI are a core of this system. On the one hand, by means of unloading or broadcast of data from the transaction accounting systems information on the most important aspects of activity of the company is consolidated and structured, on the other side of KPI show degree of controllability of business processes, achievement of average or long-term goals of business. It is important to note that an EPM system should operate not only quantitative indices, but also qualitative, applied to assessment of activity and tracking of promotion of works and projects.

It is possible to carry such practical tools to elements of an EPM system as:

The balanced scorecard – the instrument of determination of criteria of efficiency at the level of all enterprise;

The budgeting focused on the purposes – formation of budgets according to certain priorities of the company for the period;

Instruments of goals management, operational planning, approval of plans, the plan-fact analysis, and determination of corrective actions on deviations;

Instruments of project management – collection of information about degree of controllability of projects in the company, coordination of efforts of the employees involved in projects;

Consolidation of data from the accounting systems – the instrument of selection, transformation, aggregation and data storage according to a certain standard;

Panels of indicators (Dashboard) and different instruments of monitoring of indicators and reportings allowing to make the timely and justified management decisions;

The business analysis (BI - Business intelligence) financial and non-financial information, a research of patterns between indicators;

Tools of assessment of effectiveness of personnel, use of subjective appraisals, questions of motivation and stimulation;

Instruments of communication – coordination of efforts of divisions and employees within goals management, ensuring feedback coupling, coordination of business process of goals management;

Despite relative independence and independence of each element of such system, their application it is interconnected, in a complex, allows to achieve the synergy which is expressed in higher degree of controllability the company, and as a result of more high efficiency.

The balanced scorecard (Balanced Scorecard - BSC) represents the instrument of formalization and decomposition of strategic objectives, determinations of priorities in operating activities. By means of KPI informing employees on the existing purposes of the organization is implemented, their role and responsibility in implementation of these purposes is defined. The budgeting system, first of all, is a planning tool and distributions of financial resources, determination of responsibility of heads for results not only regarding income, but also expenses. At the same time process of budgeting should be focused on the set strategic priorities and the purposes.

The organization focused on development and strategy implementation is forced to provide coordination and effective management of projects of any scale, since strategic projects, such as merge, reorganization, output of a new product to the market, finishing with local projects: holding advertizing campaign, software implementation and installation of the new equipment. Project management means use as financial, material resources, and labor, due to attraction to project implementation of employees from different departments and divisions. For the project organizations (the construction organizations, software development) use of such approach is a key factor of success. For implementation of strategic objectives, the head should provide approved process (the regular, repeating activity) and project (creation of unique results in limited terms) management taking into account the limited financial and labor resources which are available in the company.

Consolidation is intended to collect and structure the diverse data which are in different automated systems (ERP, the trading systems, accounting), external sources (the websites, measuring systems on production), or being in an unformalized type (satisfaction indicators, subjective appraisals, etc.). Consolidation of data on KPI should be made with a certain regularity to provide the relevant and full-fledged picture showing degree of controllability of the company in each separate timepoint. Functional automation allows to solve this problem with the minimum costs.

Indivisible element of a performance management system of the enterprise is monitoring and the reporting. Most often this task is implemented through specialized panels of indicators and designers of the reporting. The key condition of application of such panels is the flexibility and convenience of their use. As such tools are focused on heads, their setup should be the ordinary, fast, intuitive, allowing to construct the necessary report without participation programmers. Regular monitoring allows to make the timely and justified management decisions. It, finally, allows to pass from "reactive" to "pro-active" management of divisions and business in general.

It is reasonable to use tools of the business analysis in a situation when in corporate systems the considerable volume of the structured data showing change of the significant factors affecting business efficiency collects. The business analysis allows to investigate and analyze data on business performance with different extent of detailing, to reveal patterns and causes and effect relationships between different factors. The research of such patterns, with a support on the known experience of other companies (Benchmarking), allows to adjust strategic objectives and to define new.

The special part is assigned to personnel management in the EPM concept. The employee involved in implementation of strategic objectives of the company, and, providing performance management at the most bottom level of business hierarchy, is an uncontested basis of existence of a business system. His professionalism, efficiency and motivation are the most significant factors providing success of functioning of business. Instruments of goals management allow to define formal professional requirements to personnel, to provide his involvement at a stage of operational planning, to create efficient material and non-material incentives that finally positively influences motivation level.

Instruments of communication allow to coordinate business process of goals management, informing employees on need of accomplishment of certain actions, heads about the revealed deviations revealed during monitoring of indicators of effectiveness of processes and execution of projects. Instruments of communication solve the problem directed to prevention of distortion and attenuation of the managerial impulse passing on a hierarchical structure of the company. Besides, communications can provide coordinated management by the geographically distributed company or the employees working out of office.

1C: Management by objectives and KPI

Automated system "1C: Management by objectives and KPI" is the universal solution designed according to the EPM principles, integrates above and above the listed tools and has ample opportunities for integration into other software products. The program is held for use as the highest leadership team for planning, monitoring and the analysis of target indicators, and other employees, for ensuring operational efficiency, control of execution of tasks and calculation of an award depending on results of work. "1C: Management by objectives and KPI" allows to manage a single system of indicators, to perform monitoring and to automate routine control functions as at small, medium-sized enterprise, and in large holding structures.

In the program "1C: Management by objectives and KPI" is available an opportunity to distribute responsibility between employees for specific purposes and business indicators. For each head and the non-management employee a set of criteria according to which results of work are estimated forms. Each employee regularly receives a feedback concerning as far as he conforms to qualifying standards. An unstable (bonus) part of compensation can be put into dependence on production and other indicators, significant for business. At the expense of it coordination of efforts of divisions is provided, a regular feedback and stimulation of personnel is implemented.

Creation of strategic maps in software "1C: Management by objectives and KPI" happens according to the concept of the balanced scorecard. Using the BSC card it is possible to define strategic priorities, to organize work of divisions, approving it with strategic objectives. Budget management on the basis of the purposes is implemented using others accounting to systems on a basis 1C: Enterprise, however exposure of planned values, collecting of actual data can happen at the expense of the configured automated data exchange to a product "1C: Management by objectives and KPI".

The automated consolidation of data allows to collect necessary data from the separate accounting systems. Data exchange can be implemented at the expense of seamless integration with the accounting system on 1C: Enterprise platform, and setup of broadcast of data within the general information space. It is possible to configure exchange with external databases on 1C: Enterprise platform through COM connection. For exchange with databases on other platforms it is possible to use XML packages and also to configure direct access to external data sources via the regular mechanism of 1C: Enterprise platform. It will allow to obtain data directly from external base, without overload. Besides, in a system there is an opportunity to carry out measure calculation on the basis of formulas, to apply interval scales to conversion of values.

The dashboard of business indicators (dashboards, the control, meter panel) represents the instrument of graphic visualization of the most important for control and management of indicators in a generalized view. Such information allows to reveal instantly crucial signals on the basis of up-to-date and relevant data. Thanks to this tool, heads of different level, having assessed a situation in the company, can make the weighed and reasoned decisions.

The analytical reporting of a system allows to provide data, as in a static type (for a certain date), and dynamics (on any periods); both in the form of the structured tabular reports, and in the form of charts and diagrams. For example, using this tool, it is possible to estimate dynamics of sales amounts of products with a certain characteristic in the selected region, to construct the diagram of loading of warehouse taking into account seasonality, to compare the effectiveness of marketing efforts and dynamics of sales for the period, etc. This tool allows to conduct a research and data analysis about business performance in different measurements and with different extent of detailing, to reveal patterns and causes and effect relationships between the different factors affecting efficiency.

2014: Edition 2.0 "Management by Objectives and KPI" configurations

In December, 2014 1C Company informed users and partners on release of edition 2.0 solutions "1C: Management by objectives and KPI" – a joint product of 1C Company and Development center of Volgasoft company, expansion of the range and the change in price.

When developing new edition 2.0 "1C:Enterprise 8. Management by objectives and KPI", were considered results of implementation and operation of a configuration more than at 100 enterprises among which there are Ajax, Karazhyra, Vitek, "BIG-Master", SM Center, Tyumenmoloko, Mashuk, "FloraGrow" and others.

Editions 2.0 include functionality of the "Management by Objectives and KPI" configuration:

• Portal of the employee. On the portal of the employee up-to-date information about the current indicators of effectiveness (KPI), the available smart tasks and also about tasks on the control and estimates which are put down on the basis of standards is provided;
• Tactical panel. The panel is an information visualization element about effectiveness of the employee or division. Flexible configurations allow to output only the set information and it is easy to scale it;
• The panel "A matrix of indicators" is implemented for viewing the planned target indicators (KPI) and shows percent of their accomplishment on the principle of "traffic light";
• Function of selection on branches is implemented.

Use of new edition of a configuration is possible only with the 1C: Enterprise platform of version 8.2.19 above.

Software product "1C:Enterprise 8. Management by objectives and KPI" edition 2.0 underwent certification of 1C: Compatible, infopismo No. 18816 of 9/12/2014.

Interest in software products "1C:Enterprise 8. Management by objectives and KPI" show the enterprises of different scale. Control objects in the "Management by Objectives and KPI" configuration are established posts of the company to which certain employees are assigned, (i.e. 1 object is 1 employee of the enterprise on which creation of matrixes of effectiveness is provided, planning and tracking of indicators for the period), at requests of medium-sized and large enterprises the new progressive scale of discounts for acquisition of licenses since 20 control objects is entered. Introduction of the new prices makes the solution available to all enterprises irrespective of scale, new license 4601546113306 "1C is also added: Management by objectives and KPI. Additional license for 10,000 control objects".

2014: About transition "1C: Management by objectives and KPI" on the 1C: Enterprise platform of version 8.3, on program protection of a configuration and expansion of the range

Software product "1C:Enterprise 8. Management by objectives and KPI" gives opportunities:

• Performance management of the organization using key indicators of activity (KPI) and the balanced scorecard (BSC);
• Use of a method of goals management in the company (planning from top to down, approval from below up);
• Creation and support of a single system of the purposes, indicators, tasks and mutual estimates (method of 360 degrees);
• Use of the flexible mechanism of the automated collecting, storage and calculation of measure values;
• Data view in a convenient form (from generalized in a graphic type at the top level, through the analysis by the analyst on an average, to the detailed analysis at the level of transactions and documents on lower);
• Multidimensional data analysis of indicators on analysts (the analyst defines set the user);
• Tracking of execution of key indicators of activity and informing employees in the presence of deviations (increase in efficiency of a feedback);
• Use of payment on the basis of result;
• Distribution of data access of a system of goals management depending on the rights and roles of users;
• Independent setup of algorithms of collection of data on indicators and forms of the output reports, without participation of programmers.