Senior managers at a London, U.K-based company say their business management capabilities have improved dramatically since the rollout of a new corporate performance management (CPM) tool.
Executives at Knight Frank LLP say benefits from deploying Clarity 6, include quicker data processing, faster planning of departmental budgets, as well as increased flexibility, security and visibility.
Knight Frank is a global residential and commercial property consultancy.
The company has rolled out Clarity 6, from Toronto-based Clarity Systems Ltd., to more than 300 users located in 150 departmental units across the United Kingdom.
Clarity Systems offers consulting, education and advisory services for financial budgeting, planning, reporting, consolidation, and analytics. Clarity 6, the company’s Web-based flagship application, provides processes, methodologies and metrics needed to measure and manage the performance of an organization.
Senior Knight Frank execs say since the CPM tool rollout, around a month ago, they now have real-time access to consolidated financial and human resources planning data gathered from across the organization.
In addition, departments have ownership of their budget, and are able to view the status of and manage their financial data at any given time.
The situation was very different prior to the deployment, when departmental budgets were planned across a slew of Excel spreadsheets, via a lengthy process of multiple meetings with senior management, says Rupert Hickman, group accountant at Knight Frank.
“Doing that on a spreadsheet was getting very painful. Although we had a clever spreadsheet, it didn’t give us the flexibility, visibilty or security [we needed],” says Hickman.
“Finally, we had to bite the bullet and acknowledge we were spending a huge amount of time processing data without any real opportunity to analyze it.”
Given this elaborate process around budgeting time, it would often be weeks before management received consolidated reports, says Corey Bidmead, manager of professional services at Clarity Systems.
“Furthermore, the budgetting team was getting extremely overwhelmed with all that incoming data in Excel format that they had to manually re-key,” says Bidmead.
While not the most efficient method, it’s not uncommon to see a company using Excel spreadsheets as a data collection tool, says Frank Pizzolato, CEO of Clarity Systems. “Knight Frank quickly realized it solved only half the problem. The other half [was] putting in a comprehensive performance management tool.”
Besides eliminating a slow, manual process prone to data-entry errors, Knight Frank wanted to give the 150 departments ownership of their budget through a unified application.
With Clarity 6, department heads and administrators now input data directly into the system and are able to see the changes applied in real time, without having to file a request and wait for results, says Hickman.
The application distributes templates and reports to the 150 individual user groups, and allows them to attach documents and other supporting forms that contribute to their budget. “They can build their budget the way they want to,” says Bidmead.
“Everyone had their own methodology, but data was easily consolidated back into the Clarity application for financial reporting from the corporate standpoint.”
“The idea is you want to empower field workers to build models they’re going to take ownership of, and be accountable for,” says Pizzolato.
Knight Frank also wanted an application that would integrate with its Essbase multidimensional database management system from Santa Clara, Calif.-based Hyperion Solutions Corp.
It was also essential that the application tie human resources planning to the budget. With 2,500 employees in the U.K., the majority of Knight Frank’s costs are people based, says Hickman.
These costs are driven by the number of staff, bonuses and commission arrangements, for instance. Therefore, it was imperative that human resources align its plans with the budget, in real time.
“With the application, Knight Frank isolated many direct costs, such as relocation, cell phones, car allowances, and commission bonus structures,” says Bidmead.
Integration of Clarity 6 into Knight Frank’s U.K. offices took three months, says Hickman. “Actually, we’re still developing [the application] as we go,” he says, adding that the company wants to build upon existing functionality and add more reporting analysis and forecasting.
And Knight Frank has aspirations to extend the application’s impact even wider, to other global locations, says Hickman. Specifically, it’s looking to regularly produce consistent reports at an international level.
The application has resulted in a change in employees’ behaviour – rather than just produce data, they actually analyze it, adds Hickman.
CPM tools are most often used, at the enterprise level, to look at metrics across multiple business units and provide an overview of the company’s performance at any given point in time, says Steve Mohammed, senior research analyst with Info-Tech Research Group in London, Ont.
He says the more dispersed the company is – with multiple business units, lines of business, and geographic locations – the more complicated the information flow is to the top.
Prior to CPM tools becoming available, says Mohammed, one of the most difficult tasks companies faced was coming up with metrics to drive business value and performance.
Once these tools emerged, they gave organizations the opportunity to “spring board their efforts” and generate key performance indicators with significantly less investment of internal development and time.
According to Mohammed, the mid-market has yet to catch on to the value of CPM systems.
There are smaller businesses that haven’t even ventured into the area of business intelligence, and don’t understand the benefits yet, he says.
Mohammed says companies already using ERP systems also wanted to use CPM tools recognizing that such applications would allow them to track components of the business in one place.
“So the mid-market is now realizing that CPM is an option; however, it’s still not that popular because other environments, such as ERP, are not that common there.”