Implementation of the Business Cockpit system
for enterprise performance management
Key points:
✓ Gripping the objectives to measurable indicators to improve the performance of the business
✓ Transparent to the agreement on the objectives of the across all levels of management
✓ Integrated tracking performance in accordance with the existing management processes
✓ Flexible change management in the objectives, indicators and strategies
✓ Link with SAP and other systems for the effective exchange of data
16. October 2024 ┃5 minutes of reading
The automotive industry, known for its complexity and global reach, is facing particular challenges in the area of monitoring and optimization of performance across the different departments and geographical regions. Traditional approaches to the management of performance often fail in providing a comprehensive perspective on the company and effectively linking strategic objectives with daily operations.
Trend in the industry becomes, the implementation of advanced systems for the management of corporate performance (EPM), to enable organizations to better align their strategic objectives with operational activities. These systems try to overcome the traditional barriers between different levels of management and provide a single platform for tracking, analyzing and improving performance in real-time.
Client
Volkswagen Group, one of the world's largest automotive manufacturers, is known for its extensive network of brands, manufacturing facilities and sales channels around the world. With more than 660 000 employees and operations in more than 150 countries represents the Volkswagen Group a complex ecosystem that requires sophisticated tools for the management and optimisation of the performance.
Challenges
Volkswagen Group faced several major challenges in the areas of performance management and strategic planning:
- The fragmentation of data and inconsistent in reporting were the main obstacles to effective performance management across different departments and geographical regions. Managers often worked with outdated or inconsistent data, which led to inefficient decision-making and difficulties in tracking the achievement of strategic goals.
- Insufficient link between the strategic objectives and the daily operations of the this represented another major challenge. Employees at the lower levels of the organization often did not understand how their work contributes to the overall objectives of the company, leading to lower engagement and productivity.
- The complexity of the organisational structure of the Volkswagen Group complicated the implementation of a uniform system of performance management. Different brands and divisions have often their own processes and metrics, which limited the creation of a comprehensive picture of performance across the group.
- The need for flexibility and scalability in the system of performance management it was another key challenge. With the constantly changing market and new strategic initiatives needed to Volkswagen Group solution, which would have been able to quickly adapt to new requirements without requiring large changes in the infrastructure.
The Volkswagen Group has set the following objectives for the implementation of the new system of performance management:
- Gripping the objectives of the enterprise: In accordance with the company's strategy targets are divided on the daily process indicators, which allows you to create a transparent map of the performance metrics in different areas of society.
- Measurable indicators: Ensure that all of the performance indicators were measurable, with clear definitions and identified data sources for the assessment.
- The agreement on the goals: The implementation of the system for early-upper and upper-lower control to all levels of management aligned with the objectives. This alignment is reinforced signed agreements and fulfilment of the objectives is directly linked to the remuneration of employees.
- Integration with organisational processes: The system seamlessly integrates with existing management and reporting processes, which provides a centralized platform for communication and tracking performance.
Migration Process and Strategy
On the basis of these objectives, and the challenges of the Volkswagen Group implemented a system of Business Cockpit, a comprehensive solution for the management of corporate performance inspired by the methodology Balanced Scorecard. This system, developed during the 15 years, was designed to provide continuous system for managing strategy and measuring performance across the entire group manufacturing organizations Volkswagen.
Business Cockpit transforms the strategic planning for the target-oriented process with specific objectives and measurable indicators. A key aspect of the solution is its ability to integrate these strategic objectives with the daily management and reporting processes of the organization.
The system includes several key components:
- Catalogue of indicators: A comprehensive list of available indicators, each with a clear definition, method of calculation and the source of the data. Each indicator is assigned to the responsible person, to ensure accountability.
- Protocols indicators: Transparent documentation of what each indicator means, as calculated and the origin of the source data. This module provides clarity and consistency in the interpretation of performance data.
- Agreement and the target matrix: Planning and subsequent monthly performance evaluation compared to agreed goals. If the goals are not met, responsible individuals must develop and monitor corrective actions to ensure improvement.
- Change management: Module designed to manage changes to the objectives, indicators, or strategies, which ensures that all the updates are documented and effectively communicated.
- Administrative Control and Configuration: Provides a comprehensive range of configuration options and management tools, allowing the management of user roles, the integration of the data and functions of business intelligence (BI).
- Dynamic User Roles and Access Rights: User roles and access rights are dynamically assigned on the basis of the organisational structure and management model, which ensures the security and integrity of data across the system.
- Integration with SAP and Other Systems: The system is integrated with the SAP master data and values, allowing seamless data exchange and synchronization with existing business systems.
Implementation of Business Cockpit in the Volkswagen Group has not been without challenges. One of the main obstacles has been the integration and consistency of the data across various regions and departments. Another significant challenge was the design of the user interface that should be intuitive for technical and non-technical users. Access control based on roles represent an additional challenge due to the complex organisational structure of the Volkswagen Group.
- The integration and consistency of the data: Ensure accurate and consistent integration of data across various regions and departments was a major challenge. The system needed to maintain the current data, and allow for flexible reporting and analysis.
- Design of the user interface: Proposal for a intuitive user interface that would meet the technical and non-technical users, was key. The interface had to keep consistency across various devices and sizes of screens, to ensure the availability and ease of use.
- Access control based on roles: Implementation of a secure and flexible system of access control that would handle the diverse range of roles and responsibilities across the organization, it was essential to maintaining the security and integrity of the data.
Results
Implementation of Business Cockpit has brought the Volkswagen Group, significant improvements in the field of strategic management and operational efficiency. The system significantly improved the ability of the company to drive its strategy by offering a clear and specific measurable set of goals. This led to better alignment between organisational goals and individual performance of the employees.
A centralized approach to managing performance significantly reduced the time and effort needed on the monitoring and reporting of the key performance indicators. Managers at all levels now have access to current and accurate information, which enables faster and more informed decision-making.
The modular design of the system of Business Cockpit allows for easy updates and scaling, which ensures that the system can adapt to the changing needs of the organization. This flexibility was crucial for maintaining the relevance and effectiveness of the system over time.
Although exact figures on the improvement of the performance are not available, the Volkswagen Group recorded significant improvements in several key areas:
✓ Increased efficiency in the process of strategic planning and execution.
✓ Improved transparency and accountability across the organisation.
✓ Faster identification and resolution of problems in the performance.
✓ Improved ability to adapt to changes in the marketplace and regulatory environment.
Conclusion
Implementation of Business Cockpit in the Volkswagen Group has shown the importance of an integrated approach to the management of corporate performance. Provide a centralized platform for strategic management, performance measurement and reporting, which has improved the decision-making processes and operational efficiency of the organization.
The project emphasized the key role of technology in the management of performance and achievement of strategic objectives, and integration of data and speed adaptation to the changes have been for the success of critical. Long-term benefits include improved tracking performance and culture oriented to the results, which increased motivation and commitment of employees.
This implementation provides valuable lessons for other large organizations, emphasizing the importance of a clear vision, planning and flexibility in the deployment of similar systems.
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