4-page Case Study - Posted 10/8/2007
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Microsoft Drives Corporate Performance with Office PerformancePoint Server 2007
Microsoft Corporation is comprised of hundreds of internal organizations and business groups, each focusing on a particular aspect of the business. Certain groups address the needs of the various customer segments – large enterprises, small and mid-sized businesses and consumer – that Microsoft serves, while others focus on particular Microsoft products and distribution channels. In addition, Microsoft also has organizations that oversee geographical regions and the subsidiaries in the countries within those regions.
The business process that is used to connect all the different organizations within Microsoft is dubbed “The Rhythm of Business.” However, connecting these distributed organizations and ensuring their goals are aligned through every level of the enterprise presented a challenge for Microsoft. Consequently, senior leaders and decisions makers were concerned Microsoft may be missing out on opportunities to enhance business performance through more effective cross-organization initiatives and greater accountability at all levels of the enterprise.
Jeff Sargent, Director of Financial Planning and Analysis Solutions at Microsoft, sums up the problem in three words: lack of process. “It’s hard to connect these different groups if you have no process for doing that, and we simply didn’t,” he says. “Basically people were sharing their targets and results by emailing a lot of standalone Excel files.”
This created concerns around the potential for data inaccuracies, inconsistencies and security. Also, with standalone Excel worksheets being used, there was no immediate way of tracking who changed data and when.
The perfect solution presented itself in Microsoft® Office PerformancePoint™ Server 2007, an integrated performance management application with comprehensive capabilities that include budget and forecasting, which are essential for establishing the targets to support the company’s strategies and objectives. Based on Microsoft Office and Microsoft SQL Server 2005, Office PerformancePoint Server 2007 also offers scalability, data management and security, and a familiar, easy-to use-interface for data entry using Microsoft Excel.
Microsoft addressed the challenges of the Rhythm of Business process by creating a monthly target-setting solution that would track and measure a number of key performance metrics. Key to this process is Office PerformancePoint Server 2007 which supports a critical monthly target-setting exercise put into place to measure actual performance against stated goals. “Your strategy is made tangible by setting up metrics and targets that you are going to accomplish in the next year,” says Sargent.
A simple solution to a complex problem
In March 2007, Microsoft launched Phase I of the new solution. This phase focused on target-setting and other functionalities inherent in PerformancePoint Server 2007, including the ability to have the information cascade to lower levels in the organization.
Utilizing the familiar Microsoft Office Excel front end, approximately 300 users were able to quickly enter their target information into PerformancePoint Server 2007, replacing the old system of creating standalone Excel spreadsheets and circulating them by email.
“Using PerformancePoint Server 2007, Microsoft is now able to react to a brand new business process and support it in a very cost-effective manner,” Sargent says. “We have two people managing permissions, data entry form creation, and workflow for a solution that’s being used by hundreds of decision makers worldwide.”
B.J. Moore, General Manager of Finance Solutions Delivery at Microsoft, says he was impressed by the ease with which Microsoft has been able to build the new solution.
“It’s amazing! Last year, it took two people three months to manage the target-setting process for just one scorecard,” he says. “With PerformancePoint Server 2007, we now have 30 scorecards with 900 targets and we were able to complete the process in just a couple of weeks. Having a connected process like this translates to huge time savings for us.”
With the new solution, managers are able to set their targets for a particular set of metrics then have those targets cascade down through Microsoft’s organizational hierarchy. For instance, a business group manager can set targets for his group at a global level and cascade these targets down to the area level. Area-level managers can then set their targets and have these cascade down to the subsidiary level, where subsidiary managers can also set their goals accordingly.
Since the metrics are pre-defined at an enterprise level and are applicable to the various internal organizations and groups, Microsoft can be assured that targets are being set and measured consistently throughout the organization. In addition to improving the target-setting process, the new solution also enables Microsoft to hold their executives more accountable throughout the process and drive deeper accountability throughout the various levels of the organization.
Neil Latham, director of Rhythm of Business, says the biggest value-add of PerformancePoint Server 2007 is the familiar Excel interface.
“We now have a single entry point for users to go to for access and in a format very familiar to them,” he says. “This means immediate and widespread user acceptance with no ramp up time.”
With the new solution, only authorized users can change calculation formulas, enhancing security, data accuracy and consistency. Managers and users can also trace data to find out who last accessed and changed any particular cell.
Sargent says he expects to see 500-800 users worldwide empowered to set and track global and local targets based on consistent, enterprise-wide metrics reaching beyond the Rhythm of the Business process into other operational performance management areas. With the ability to see the bigger global picture, decision makers will have a cohesive view of the enterprise, allowing them to finally fuse the different layers and joints of Microsoft’s organizational matrix.
“I think the new target-setting solution with PerformancePoint Server 2007 is a great example of how large, distributed organizations can connect the thousands of dots in their business to improve performance,” says Sargent. “And what is especially amazing about it is how easy it is to deploy, implement, and use – proof of how a simple, elegant solution can effectively solve a complex business problem.”
