implementing strategic performance management (spm… · 2013-10-04 · implementing strategic...

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Implementing Strategic Performance Management

(SPM)Will it give You “The Power To Know”?

Pål Navestad, Phillips Petroleum Company NorwayIngrid Sternhoff, Phillips Petroleum Company Norway

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Phillips Petroleum Company Norway (PPCoN)

• Part of Phillips Petroleum with 32,000 employees

• 1610 employees • Approx. 420,000 BOE daily • 29 platforms

–Various ageand life cycles

• SAP as main IT system

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Strategy/measurement Prior to SPM

• Based on Lotus Notes• Text only, with manual follow-up• Hard to keep in synchronization with the

organization• Measurement separate from strategies• Measurement hard to maintain for all levels

in the organization

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Strategy Plan Not Well Known

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Example of Ppcon Strategy Plan in Notes

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Example of Indicator Measurement

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Why Strategic Performance Management?• A need to combine strategies and

measurement (performance indicators )• Easy to adapt to organizational changes• Link down and NOT drilldown

– What you want to see varies throughout the organization

• Still need to adhere to top level strategies

• Must be incorporated in PPCoN management system– E.g. Can NOT take Kaplan/Norton model as it is

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Link Down and Not Drilldown

Management level- Cost- Results

Operations dept.- Cost- Back log - Coming work- Number of faults

Support dept.- Cost- Planning capacity- Process faults- Process optimizations

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Choosing Software

• Looked at products vs. Consulting– E.G. SAS SPM

• Decided to purchase a product– Develop and maintain with internal personnel– Keep competence in the company– Need adaptability for future scenarios

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Installation of SPM

• Installed and verified in 3 days– Upgraded SAS to 8.2 and installed OLAP

server at the same time• Easy to get started

– SPM manual good– New person effective within 3 days using SPM

manual as only aid

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Building the Strategy Plan and Indicators

• Only PPCoN personnel– No one allocated 100 % to project

• Hard to keep focus• Problem gathering the core team

– Several people have acquired knowledge of product and strategy process

• Have been applied to other functions

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Building the Strategy Plan and Indicatorscont.

• Project start October 2001• Old structure and existing top level indicators were

tied together• Revised strategy plan structure • Included end users early

– Few guidelines • Several ways of developing strategies and operating plans• Consolidation needed• Increased intellectual capital• Best practices achieved

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• Year end 2001, top level strategies– Top level scorecard in production

• March 2002, departmental strategies and scorecards

• April 2002, the presentation for an employee town hall meeting was prepared in less than 1 day– Based on top level scorecard

• Currently automating data loading

Building the strategy plan and indicatorscont.

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SPM Tool for Knowledge Management

• Visualizes the strategy process– Increases organizational knowledge

• The tool is flexible– Facilitates sharing of knowledge

• Easy to test ideas

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PPCoN Top Level Scorecard

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Scorecard by Strategies

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From Raw Data to Knowledge

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Data and knowledge warehouse

From Raw Data to Knowledge Cont.

E.g. SAP tables

Other tables

Large Warehouse Tables

Specific tables

Specific tables

Specific tables

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From Raw Data to Knowledge Cont.

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From Raw Data to Knowledge Cont.

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Utilization of SPM Product/thinking

• Control safety barriers• Control risk • SPM product will probably be used as entry

level for all reporting

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Have We Achieved “The Power to Know”?

• Not 100 % but– We have the means– We have the flexibility– We have the ability to support a very complex

organization with live data– We have the ability to document data and knowledge– We have a learning tool for a learning organization

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