Consolidator

In the role of consolidator, the CPO must take the disjoint performance data and consolidate this data to one view. This is usually in a single system or database. This consolidation role will also require significant business knowledge. In particular, expertise in how the measures are used in combination is key. Business expertise and experience will guide the CPO to which data must be homogenized and which can remain distinct. Many parts of the organization will use financial performance measures, but most likely the measures from the finance organization will serve as the ‘data of record.’

One requirement of performance data consolidation is the process of technical consolidation. There are many technical tools and techniques such as data warehouses, online analytic processing (OLAP) and data cleansing tools that can assist with the technical consolidation. Ultimately, these systems must represent the relevant business rules and not just perform technical consolidation of the raw data. This is another area where the risk of chasing ‘technical glory’ is high. Many technologists will apply pressure to implement more highly automated and highly complex systems than are pragmatically possible, when many times simple consolidation, using existing technology is all that is needed.

The CPO must know when the consolidation can be helped by technology and when the process can be hindered by technology. Since the ultimate goal is getting the heads-up display for the CEO, pragmatism must rule.

As important as what to consolidate is what not to consolidate. The CPO must use business knowledge and experience to exclude data that should not be consolidated. For example, older customer information or long-time discontinued products and their actual order line items may not make sense for wasting computing time on consolidation. Instead, the CPO may choose to consolidate information about discontinued customers and products to avoid the overhead of processing through thousands of irrelevant line items.

Condenser

The CPO must also act in the role of condenser. Even after the performance data has been consolidated, it needs to be condensed to a concentrated level that is usable by executives. The collection and consolidation process may limit, or even filter, some of the data being collected, but in the role of condenser, the CPO must now present the most relevant data. Much of the data collected and consolidated will have too much detail to be usable by the CEO. For example, during collection and consolidation, product level (SKU) information may be used. The CEO, though will require division level performance data. This not to say that this condensed data should be the only data available, but as condenser of the data, the CPO must present the highest level of data to support the decisions of the CEO. If further data is needed to prove out the higher level data, that data should be available. As a condenser the CPO must be able to keep the most relevant data easily accessible, without flooding the CEO with unneeded details.

Communicator

The role of communicator is the most important for the CPO. What good is it to have collected, consolidated and condensed the data to only have it locked up in a computer system? Or, worse yet, if they need an army of dedicated programs to produce ‘management reports’?This is actually the downfall of many business intelligence and executive information systems. The CPO must be prepared to communicate the data in the desired state of the recipient. This means that one size does not fit all. Some executives will only require a Power Point briefing of the most relevant facts supported by some graphs and tables. Others will want to have a digital dashboard approach of an executive information system where the executive may drill into more detail interactively with a computer system. Others may require detailed briefing books that present an executive summary, and also presents supporting analysis results and industry references.

The CPO needs to understand the needs and wants of the executives for their own version of a heads-up display. Based on these needs, the CPO will need to prepare and present the performance data. As a communicator, the CPO needs to be prepared for two way communications. The presented results of the performance data will most likely cause the CEO or other executives to take corrective actions. The CPO must be able to understand the actions required and be prepared to explain the results of such an action in terms of performance, while still speaking in executive terms.

Beyond the executive level, the CPO must be able to communicate to upper and middle management their specific view of the performance data. This is not to say that the CPO individually briefs all middle managers. Instead, through his or her technology background, the CPO selects an appropriate delivery mechanism of upper and middle management performance data. This could once again be in the form of briefing books or executive information systems, but will most likely be in the form a reports and online applications.

In understanding his or her role of communicator, the CPO must be able to apply the proper business filters to the data. Mid-level managers will not be privy to the same data that is available at the CEO level. The CPO communicates at the needed level and needed detail, but always governed by confidentiality parameters set by executive management.

The common facet of all roles of the CPO is that the performance data is fact-based. Although business experience will guide some of the filtering of data, the CPO can fall into the trap of hunches and intuition. The CPO must remember that he or she is acting as the heads-up display and that the CEO uses the input for making far reaching decisions. If the CEO solicits opinion from the CPO, opinion should be given, but never should the CPO substitute opinion or hunches for facts.

Industry Specific or Industry Neutral

On the surface, the CPO role seems like a generic description to be applied to any industry. It is true that every organization in any industry needs a CPO. A question arises, though: Does a CPO need to be industry specific?

Comparing with other executive level positions lends some insight to this question. The CFO, who is responsible for financial operations, needs to have a strong foundation in finances and the techniques involved. Depending if the organization is growing organically or through mergers and acquisitions, different methods, techniques and skill are needed. Within the CFO field there are certain specialties within their practice, such as service organizations, public vs. private held, and local vs. multi-national reach which will impact the mix of needed skills. Generally, though, CFOs are industry neutral and can move between industries when changing companies.

The CIO or CTO, who is ultimately responsible for technology in an organization, must have a strong foundation in technology. Again, depending on the strategy of the organization, different techniques and skills may be used. Some CIO/CTOs will be very skilled in service contracts and outsourcing while others will be very skilled with in-house development and software package implementations. The CIO/CTO is very much a product of the organization’s industry, though. Certain organizations historically have gravitated towards certain technologies. For example, the insurance industry and public sector have historically used large mainframe systems and been traditionally aligned with IBM-centric architectures. The financial trading industry has traditionally used high availability and fault tolerant systems, which use a much different architecture. Hospitality and Food Services have traditionally been very mid-range centric. Each industry will have it’s own level of affinity with a certain technology or platform.

This is not to say that a CIO from one of these industries only would have experience in a particular set of technologies, but there is a higher chance of an affinity to certain technologies based on the industry.

If we look at the three required backgrounds of the CPO: business expert, technologist, and interpreter; industry experience does have varying levels of influence. The business expert experience has the highest affinity towards industry specific knowledge. The interpreter is closely tied to the business expert. Certain vocabulary is specific to industries and is required to be a proper interpreter. Certain individuals can demonstrate a chameleon-like ability with business vocabulary and terminology, but generally, real business experience instead of buzzword savvy is required. The technologist experience is probably the most industry transportable. This is further facilitated by standardization and ubiquitous technology trends such as databases, networks and the internet. When assessing an industry move, the CPO must take into account the learning curve which he or she will encounter from all three perspectives: business expert, technologist and interpreter.

Measuring the Measurer

With any role in an organization, measurement of success is critical. There are certain criteria that a CPO must be measured against. The criteria falls into three categories: Quality, Timeliness and Relevancy.

The CPO will be measured on the quality of the performance data presented. It should be obvious that poor data will lead to poor decisions. Similar to the jet fighter, if the heads-up display points to altitude of 5000 meters, but the actual altitude is 500 meters, decisions the pilot makes can be disastrous.

The CPO must ultimately take responsibility for the quality of the performance data being presented. This can put the CPO in a difficult situation of being held accountable for business data which he or she has no control over.