by Michael Coveney, co-author of "Budgeting, Planning, and Forecasting in Uncertain Times"
The role of planning is to help manage what can be controlled (i.e. the organisation ’s business processes, the resources it applies to those processes, and the volume and quality of work done in those processes) to produce outcomes that will achieve organisational objectives, within an uncontrollable and unknowable external environment. From this, it can be seen that an organisation’s business processes are central to Business Analytics.
To plan and monitor performance effectively requires a network of analytic models. Most organisations are too large and complex to have a single model, and so the models I will describe may be implemented as separate but linked physical entities.
These models focus on 7 key questions that management should know about its business processes:
Each of the above models is likely to have different content, structures and are used by different people at different times. However, none can be omitted or ignored, and all need to operate as a single, data-driven management system.
From a planning systems point of view, this network of models can be visualized as follows:
Schematic overview of the 7 key models required to manage performance
As can be seen, these models are fed with data from internal systems such as the general ledger, and from external sources such as market information, along with data supplied by end-users.
Obviously in this type of blog, I’ve been unable to go into too much detail on how these operate, but hopefully, there is enough here to get you thinking about the models you need to run your business.
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