In a Board sponsored study, BARC explores the value of Integrated Business Planning, and the…
This article is the second in a series of three blogs exploring the theme of Digital Decision Support.
Digital corporate management and governance means the increased use of data, business intelligence (BI), and analytics for decision-making. This applies to all departments within an organization, but especially finance and controlling as a business partner of management. Nonetheless, areas such as sales, marketing, and human resources, which typically had less contact with BI and analytics in the past, now also increasingly have to rely on data for decision-making.
A data-driven decision-making culture affects the entire company. The ability to use data for decision-making and management, as well as identifying patterns and anomalies, should no longer be limited to just a small, elite group of employees. On the contrary, when it comes to digital corporate management, this skill must spread equally in all parts of the company. This inevitably requires the development of new competences and the internal training of employees.
The essential tasks involved in the management of organizations – planning, managing, and controlling the performance of the company – remain unchanged by the digitalization of corporate management. However, speed, agility, and foresight pose completely new challenges for organizations in this regard.
The BARC Decision Support Framework (see figure 3) illustrates very well how the management tasks mentioned in the context of corporate management are fundamentally related to one another as a cycle, but also how they are connected to process execution and strategy management. It shows how performance management and process management are linked. The aim of performance management is to align a company’s strategy and goals with business processes to achieve the best possible performance on a strategic, tactical, and operational level. Processes, methods, metrics, and tools are used in performance management to plan, manage, and control the performance and profitability of companies.
Now, more than ever, performance management is indispensable for increasing the competitiveness and performance of companies in the age of digitalization. The digital transformation massively accelerates the previously explained management cycle of planning, management, and control and increases its frequency:
Figure 3: BARC Decision Support Framework
The increased use of data as well as BI and analytics for decision-making requires both greater agility in the supply of information and increased availability of data for decisions. On the one hand, this can be supported very well by modern software applications for BI and analytics (see also part three of this blog series). On the other hand, and independently of this, however, companies need to help their employees develop new skills (enablement) and increasingly empower them. The digitalization of corporate management also requires the development of “digital competences” by in-house employees. When it comes to ensuring optimal use and analysis of the growing volumes of data available for corporate management, competences that need to be developed include:
Digital corporate management requires greater use of data as well as BI and analytics for decision-making (see also part 1 of this blog series). When doing so, it is important to meet the increasing demands on speed, agility, and foresight in the areas of corporate performance planning, management, and control. In addition to the use of modern software applications, employees must especially develop “digital competences” in order to be able to make the transition to a data-driven decision-making culture within the company. You can learn about the demands on supportive software solutions for digitalized corporate management in the third part of this blog series.