Analysis: Progress on Performance: Q&A With Cognos' Renee Lorton - InformationWeek

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7/17/2006
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Analysis: Progress on Performance: Q&A With Cognos' Renee Lorton

Lorton's strategic, enterprisewide approach to performance management combines good performance management, good reporting and good business intelligence.

Renee Lorton

Renee Lorton ran three product lines at PeopleSoft before joining Cognos early this year as senior vice president and general manager of performance management applications. Drawing on high-level experience, she points the way to a strategic, enterprisewide approach.

Some view performance management as the next step after business intelligence (BI), while others see it as a very different discipline. What's your view?

BI is an integral part of performance management. You're pulling data from underlying transaction systems into knowledge stores and then making sense of it. The executive information systems that we all dreamed about in the past are actually coming alive now that the technology is available. Companies are able to drive global and cross-enterprise performance through a single vehicle, using tools around BI for reporting and dashboard presentations to the right stakeholders at the right time.... You really can't separate good performance management, good reporting and good BI.

You helped lead a recent speaking tour that presented strategy management as the next big thing in performance management. Can you explain the term?

It's about driving strategy throughout an organization...not just in the finance department and at top levels. The way to do that is to use technology to get away from spreadsheets and arbitrary ways of measuring progress in both financial performance and workforce performance. It's a holistic system that gives you a scorecard and a readout on how you're doing against objectives that are driven by your strategy.

Scorecards are cropping up all over, but are they really being used in a coordinated, strategic way?

Absolutely. I think that's one of the biggest trends we're seeing. Companies have been implementing various metrics and scorecards departmentally for some time. Now they're taking it one step further and going to the enterprise level in implementing metrics and scorecards and the ability to measure across functions, not just within finance. In effect, you're radiating strategy beyond finance and beyond the executive level and driving it deep into the organization.

You talk about moving beyond the finance department, but has performance management even been broadly embraced for budgeting and planning?

Palladium did a study on performance and strategy management that found that only 25 percent of companies are currently using any sort of integrated corporate performance management platform, yet 75 percent of respondents acknowledged that they need to move--and intend to move--to an integrated CPM platform...[meaning] technology that brings together planning, consolidation and BI.

You've said there are similarities between the maturation of the enterprise resource planning (ERP) and performance management markets. What's the parallel?

Before the late 1990s, companies were very focused on adopting business processes and translating them into ERP systems transactions. It was a transactional focus that led to systematizing and adopting technologies to automate. I think we'll see the same trend line with companies spending more time on performance management--analyzing the processes, developing enterprise strategies and then systemizing and adopting technologies to automate performance management across the enterprise.

You've described a Performance Management Evolution graph with "access to information" on the horizontal axis, moving from departmental to enterprisewide, and "decisioning" on the vertical axis, rising from reactive to strategic. Where do most companies stand today?

As always, the trend is toward that important top-right quadrant, and that's where you see companies move from divisional reporting and planning, which would be in the center, toward more of an enterprise performance management system. That's where they're bringing together enterprise planning--versus just financial planning or departmental planning--and enterprise reporting, metrics and scorecards--versus spreadsheets and departmental measures and reporting.

Some feel it's more important to focus on making information available across the enterprise and it's a BI agenda. Others feel it's more important that it's a planning-business-process financial focus, and that's a strategic-planning finance agenda. But all this will come together, just as ERP came together, from separate modules into a fully integrated system to keep that trend line moving up to that top-right quadrant toward the high-performing enterprise.


Outtakes

What do you miss from childhood?

I grew up in Indianapolis, and I miss the corn and tomatoes. I've tried to grow my own without being able to duplicate the taste. I also have fond memories of Indianapolis 500 "fever" and the ritual of skipping school and going to time trials in May.

Memorable travel spot?

Guangzhou, China, where we adopted our twin girls (now four years old).

Who do you admire?

Elizabeth I for taking a very weak England and creating one of the world's greatest empires over time and against all odds.

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