Conceptualizing the optimized income statement (OIS) as the enterprise’s “master plan” assures the FP&A applications are all executing the maximally profitable forecast supported by the optimally feasible and sustainable supply chain.

FP&A is actually a sub set of applications included within the broader suite of applications referred to as business performance management (BPM).  Thus BPM will be the context within which FP&A is discussed.

Craig breaks the applications included within BPM into four categories described in his BPM Application schema. It is excellent.  As observed above,  one the four categories fits quite well with the familiar suite of Financial Planning and Analysis (FP&A)  applications (forecasting, budgeting and planning).

NOTE:  FYI.  Craig’s schema was included in his  webinar  “The Pulse of Business Performance Management 2013, What you need to know for budgeting, reporting and financial consolidation success, April 25, 2013″.

The current art of BPM is very well characterized by Craig Schiff, CEO, BPM Partners, who defines  business performance management (BPM) as:

“Technology: Business Performance Management applications utilize business intelligence tools to address a strategic business need.

“Business: Business Performance Management enables an organization to plan, monitor, and execute on its strategy.

“where corporate performance management (CPM)=enterprise performance management (EPM)=business performance management (BPM) ≠BI”

The distinguishing feature of BPM applications when compared with those of Sales and Operations Planning (S&OP) is the language BPM applications speak; it is dollars (i.e., finance) while that of S&OP is units (i.e., operations).  Thus, they are complimentary; both are essential in support of the enterprise’s planning and execution activities. See OIS, BPM and S&OP Applications Schema. In addition to the Applications Schema, there is a second way of understanding OIS‘s next generation planning functionality;  specifically from a practitioner’s vantage point.  see Practitioner Application Comparison

For a description of the product, INSIGHT Enterprise Optimizer which creates an OIS, see IEO Description on the INSIGHT web site: How to Maximize corporate profitability.

 

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