The SAP Management Cockpit (SAP MC): How executives make a decision in the 21st century?

1. The SAP Management Cockpit(SAP MC):How executives make a decision in the 21st century?

2. Executive Information System (EIS) • A computer-base system intended to provide easy access to both internal and external information relevant to meet the goal of the organization. • a broad range of summarization of detail • summary highlights potential problem areas • the drill-down feature

3. Management Cockpit • A strategic management room with visual fields on the three walls of the room. • Managers can use high-quality graphics to make business decisions. • Each wall provides simple information of Key Performance Indicators (KPIs)

4. Background • Created by Professor Patrick M. George of Neurological Expert Technology N.E.T. Research. • Dr.George is a neurosurgeon at the UniversityHospitalCenter in Europe. • SAP acquired the license of MC.

5. According to His Research • If person receive information up to 800 words per minute, they are relaxed and comfortable. • If they cross this limit by giving them more information, they will get nervous. • then speed up his decision-making and begin to make judgment errors.

6. Guess Question? • How much information can executives receive? • Ans. average 4,000 words per minute, in the form of phone calls, e-mail, faxes and reports

7. The Magic Number • Miller (1956) said we typically are not capable to processing more than five to nine district pieces of knowledge at a time. • This is called “the magic number seven, plus or minus two.” 5 - 9

8. According to his study 6 • The human brain cannot take more than six discreet pieces of visual information. • For this reason, the KPIs come in blocks of six and each wall has six primary KPIs.

9. Strategic Enterprise Management • An analytical solution that translates a strategy into operational activity • One key feature of SEM is Corporate Performance Monitor (CPM), • Key Performance Indicators (KPIs) to monitor actual performance at all levels • An effective monitoring system gives companies a way to determine how applied strategy affects outcome.

10. Management Cockpit’s Components • The Wall Display System • Black wall: the principal critical success factors and financial indicators. • Red wall : external environment. • Blue wall: performance of internal processes, quality, productivity, and employees. • White wall: the status of strategic projects, monitors decisions, allows drill down, and displays special projects.

13. Key Performance Indicators and Balanced Scorecards • Quantifiable measurements that reflect the critical success factors of an organization. • A school - graduation rates of its students • A Customer Service Department - percentage of customers’ calls answered in the first minute

14. Four Perspectives • Financial: • What is the impact of performance on shareholder value (in historical sense)? • Customers: • How are we perceived by our customers (as of today)? • Internal Business Processes: • What core competencies do we possess and what can be developed (from today)? • Learning and Growth: • What is the capacity for the organization to learn and grow (into the future)?

15. SEM-PM: Management Cockpit

16. Conclusion • Using MC, executive can make an effective decision in timely manner. • In the Information Age, the MC will be a common tool found in every organization, where its CEO understands the power of knowledge.