Many organizations are far from where they want and need to be with improving performance, and they apply intuition, rather than hard data when making decisions. Enterprise performance management (EPM) is now viewed as the seamless integration of managerial methods such as strategy execution with a strategy map and its companion balanced scorecard (KPIs) and operational dashboards (PIs); enterprise risk management (ERM); capacity-sensitive driver-based budgets and rolling financial forecasts; product/service/channel/customer profitability analysis (using activity-based costing [ABC] principles); lean and Six Sigma quality management for operational improvement; and resource capacity spending planning. Each method should be embedded with business analytics of all flavors, such as correlation, segmentation regression analysis, and especially predictive analytics.
Ultimately costing principles, such as the causality principle, must be converted into practical practices with supporting tools. This presentation examines how cost modeling has evolved over the last century. It will describe the trends and obstacles that have helped or delayed developments. These evolving areas and trends include:
Gary Cokins is an internationally recognized expert, speaker, and author in advanced cost management and performance improvement systems. He is the founder of Analytics-Based Performance Management, an advisory firm located in Cary, North Carolina at www.garycokins.com . Gary received a BS degree with honors in Industrial Engineering/Operations Research from Cornell University in 1971. He received his MBA from Northwestern University’s Kellogg School of Management in 1974.
Gary began his career as a strategic planner with FMC’s Link-Belt Division and then served as Financial Controller and Operations Manager. In 1981 Gary began his management consulting career first with Deloitte consulting, and then in 1988 with KPMG consulting. 1992 Gary headed the National Cost Management Consulting Services for Electronic Data Systems (EDS) now part of HP. From 1997 until recently Gary was in business development with SAS, a leading provider of enterprise performance management and business analytics and intelligence software. His two most recent books are Performance Management: Finding the Missing Pieces to Close the Intelligence Gap (ISBN 0-471-57690-5) and Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics (ISBN 978-0-470-44998-1). His most recent book co-authored with Larry Maisel is Predictive Business Analytics (ISBN 978-1-118-17556-9) published by John Wiley & Sons. Mr. Cokins can be contacted at gcokins@garycokins.com .