VideoTo manage construction on an oil-and-gas delivery system, you have to like to travel — and not always to places familiar from tourist handbooks. That means a lot of miles logged on back roads and a lot of time spent in places where Internet connections — if they exist — are not always fast and reliable.
Colonial Pipeline is a transport company that delivers gasoline, diesel fuel, and other petroleum-based fuels to communities and businesses stretching from the Gulf Coast to New York Harbor. Its 50 construction managers travel the 5,000-mile system — running projects that range from pipeline expansion to system integrity improvements, to road and river crossings. Snail's pace E-mail connection times were a major problem for Colonial before it put its managers and everyone else who uses its financial data reporting system on a new Web-based platform two years ago.
Some of the facilities from which the construction managers found themselves forwarding their monthly capital expense reports "were really slow," recalls Kelly Nodzak, manager of shared systems at Colonial. "They don't even have T1 lines out there — they're on phone lines." On top of that, Colonial's old homegrown COBOL-based AS/400 system dated from the 1980s and didn't allow managers to work offline. But with the new system, they can simply download a template, add in the data on their laptops — "in their truck, if they want," Nodzak says — then reconnect and upload it. "You don't have the delay of retrieving and sending each time."
The new performance management software Colonial adopted is a combination of relational databases and a multidimensional OLAP (online analytical processing) database, all on a Web-based platform. It collects data from 150 users, including those construction managers and finance staff. Because it's not an old-fashioned batched system, it can consolidate all the data into a report to management in minutes instead of overnight, so that last-second corrections on the morning the report is due don't throw the delivery schedule off by another day.
Best of all, says Nodzak, the people in accounting and budgeting can update and roll forward information just as easily and quickly for other types of reports as well. That means they can drill down to the location, district, department, or corporatewide level to provide real-time information, as needed, about the company's performance that's tailored for users at any of these levels.
Many companies have similar stories to tell about how their financial reporting has been transformed. Corporate performance management used to be one of those things every company had — but didn't always know it had. At most companies, the components include budgeting, forecasting, business modeling, decision support (including dashboarding, traffic lighting, and balanced scorecards), strategic or long-range planning, and consolidation and reporting — along with the security measures needed to protect the data. Other functions that are often grouped with these as CPM include: activity-based management, Six Sigma, economic-value-added (EVA) incentive programs, the human resources information system, compliance, business intelligence, workflow, and approvals.
Until a new generation of sophisticated database applications was introduced and became available on Web-based platforms, however, many companies never thought of these functions as part of the same overarching system. Now, it's possible to combine them all into one suite and, with some vendors, into a single integrated platform that allows users throughout the company to enter and extract reports from the same data pool in real time.
But the advantages run deeper. A simple spreadsheet-based system of financial reporting is similar to operating on multiple databases — one per user, in fact — which for large companies means that software must be installed, maintained, and upgraded on perhaps hundreds of PCs. It also means a greater likelihood of inaccurate reporting.
CPM systems running on a common platform eliminate such problems, since all users work off a single data warehouse; they also tend to let information flow more freely within the organization, breaking down the silos that departments and divisions set up to protect "their" data from others. At cable giant Adelphia Communications, users work off an integrated OLAP decision-support systems. They also tend to let information flow more freely within the organization, breaking down information silos — and assuring that the process won't turn and reverse. The finance department, too, can devote far less time to gathering data and more time to analyzing it.
Meanwhile, a hybrid of an OLAP database and one or more relational databases — commonly called a "ROLAP" system — gives users a more flexible tool. OLAP allows them to perform complex computations very fast. Relational databases, on the other hand, allow users to integrate the text notations and the aggregated transactional information most commonly found in the planning of employee-related expenses, fixed-asset additions, debt-instrument additions, and even supporting detail for key line items that require a zero-based planning approach (e.g., travel, professional fees, dues, and subscriptions). This provides a single repository for all of the company's performance management components.
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