Robert Kugel, Vice President and Research Director FPM, Ventana Research: Now with the different financial vs. nonfinancial data, who is looking at that data? Is it a different group looking at the operational data vs. the financial, or are the same people looking at both?

Brett Gladden, Senior Budget Analyst, Keystone Mercy Health Plan: We have a large operational structure. And because we've implemented our activity-based costing [ABC] model, we're using that to drive a lot of our BPM initiatives. And as we've been going through and mapping the processes, we in finance are also looking at financial and nonfinancial indicators. We're hoping that next year all the processes will be successfully mapped, and we'll build our budget based on nonfinancial measures, rather than in the past when we built it strictly on financial.

Haberer: How would you characterize your organization's use of leading vs. lagging indicators? How current is your data?

Michael Schwindle, Director of Financial Planning and Analysis, Galyan's Trading Company: As with most retailers of any significant size, we spend a great deal of time looking forward, especially when we start to talk about merchandise planning and sales planning. There's always room for improvement into forecasting processes. The key axiom is that one thing you know about forecasts is that it's wrong. I'd say we're looking to make some improvements.

Nystrom: With retail, you have to. But I think our company, Best Buy, can do an even better job of that. Our goal is to be "closest to the pin."

We have a lot of leading indicators -- such as macroeconomic factors and customer loyalty -- as well as many different operational leading indicators, but at the same time we recognize that it's probably not enough. And I don't know if there's an organization that ever has enough data. You've got to strive for more leading indicators to get better long-term visibility.

Haberer: How do you get that KPI [key performance indicator] information out to the organization in a timely and efficient manner?

Nystrom: It's reported very frequently throughout the entire organization. Once a month we summarize all information in the form of a six-page scorecard that goes to all officers, including our operating committee. And we're pushing it to our online reporting portal.

Gladden: We're actually in the process of designing those reports right now. One of the things we're looking at doing is, on the standard budget-vs.-actual variance report, including key metrics and tying them to a lot of the nonfinancial statistics. We need to understand why we're over- or under-budget through these data.

David Axson, Corporate Planning Executive, Bank of America: Is anybody monitoring how they're doing vs. competitors?

Nystrom: We look at competitor data very frequently -- daily, in many cases -- because we want to know if we are gaining market share.

Axson: Are you purchasing that data?

Nystrom: Some of it, yes, but some of it is included in their press releases when our competitors issue comparable store sales. Obviously, we want to know how our competitors are doing: Are we gaining market share? If so, how much? But we also look at shareholder performance, too; competition for shareholder return.

Gladden: With us, it's kind of difficult, especially whenever we're trying to do benchmarking. There are not very many companies exactly like us. Plus, a lot of our services are in regulated markets. So we're not able to market; the state basically divvies up the Medicaid population among the plans. But we do what we can; we get what data we can and try to extract the pieces of other businesses that are similar to ours.

Kugel: For those of you not using scorecards, what would you say if someone said they were going to implement scorecarding in your company? Do you think it would be useful?

Schwindle: What comes to mind is "the illusion of precision." You've got all these different indicators and there's no way you can focus on all of them, and frankly, even if you could focus on them, it's highly unlikely that all of them are material to the business, whatever business that may be.

When you put an indicator on a page, it takes on a life of its own, and it starts to breathe its own life, and it starts to get circulation and attention. And if you're not careful, you can get people focused on the minutiae, rather than on the big picture.

The Event The Business Performance Management Summit brings together leading practitioners, academics, consultants, and vendors to discuss the most important issues and trends in evaluating, implementing, and extending BPM in organizations today. Convened annually, the BPM Summit plays a critical role in building the growing body of knowledge related to BPM. The 2004 BPM Summit will be held at the New York Marriott Financial Center October 19-20. For more information, please visit www.bpmmag.net.

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