Page 107 - Performance Leadership

96 • Part II Operational and Analytical Dimensions

instance, counting transactions per week using the clearing date will
include all transactions with a transaction date of the previous week, but
a clearing date within this week. However, it will not include all trans-
actions with a transaction date of this week, but a clearing date of next
week. The definition of the interest date further complicates this issue.
Not all transactions may be accepted by the bank on the receiving
end. Perhaps an account is blocked, or it doesn’t exist anymore. This
will again lead to a lower number of transactions.
Although from an operational point the story ends here, the impact
of transactions goes beyond the core business process. Transactions
need to be stored in various information systems, leading to a number
of new records for each transaction. And in the end there is an impact
on the bank’s financial department, where the collection of transac-
tions leads to journals in the general ledger. All definitions and shapes
of a transaction, between the first customer contact and the general
ledger of the bank, are connected (see Figure 6.2).
In the previous cases, we pointed out that connecting these defini-
tions within a single report helps in separating valid and invalid defi-
nitions, brings new insight in the efficiency of core business processes
by analyzing the differences, and helps operational managers see the
financial impact of their decisions. The example of bank transactions
shows another advantage: it provides a predictive view on the business.
Sudden changes in the number of customer contact moments will pre-
dict the workload in the later steps in the value chain.

Call to Action

Adopting a horizontal alignment approach can bring about real insight
and greatly enhanced business performance. But how can this approach
be implemented?
A key barrier to implementing a horizontal approach to alignment
lies in the current vertical structure of management reporting and per-
formance management processes and systems, leading to information
that cannot be reconciled or compared. The cases described here have
demonstrated how management processes and business scenarios struc-
tured horizontally can provide greatly improved insight into an
organization: