| Few today dispute the need for Enterprise | | | | lack of accountability, and (b) lack of readiness to |
| Performance Management solutions - with greater | | | | support a measurement driven system of |
| than 65% of US companies and 62% plus European | | | | management. Ironically, it is very often for these |
| companies deploying Balanced Scorecard or strategic | | | | reasons that organizations attempt to introduce EPM |
| EPM systems within their organizations. As with all | | | | systems, and in so doing bury themselves in internal |
| enterprise systems solutions however, the hyperbole | | | | conflict and significant IT and consulting costs overruns. |
| from consultants on value add has been prodigious | | | | Therefore, it's vital to know your limitations before you |
| and at times stupefying. | | | | invest - to build the foundations for accountability |
| What really matters for new investors in Asia, and for | | | | before investing in the technologies. |
| SMEs throughout the world, is understanding what | | | | LEARN HOW TO USE INFORMATION |
| evidence there is of the ROI, of these, oftentimes, | | | | As important as the availability of the right data at the |
| significant systems infrastructure investments? | | | | right level, is learning how to use data to effect |
| PERVASIVENESS - IT COSTS, BUT IT DELIVERS | | | | decisions. Will your dashboard system enable a |
| A 2007 survey of 200 large companies by the | | | | hierarchical view of your business? Will it enable 'drill |
| Hackett Group of Atlanta, found that organizations | | | | through' to key performance drivers at operational, |
| deploying 'world-class' EPM systems (defined as | | | | financial and market - sales levels? Do you meet |
| companies in the top quartile for efficiency and | | | | regularly (virtually or otherwise) to review key data? |
| effectiveness) enjoyed equity market returns of 2.4 | | | | Are workers at all levels aware of 'performance data' |
| times of their peers in their industry (including stock | | | | which is relevant to work they control? Is your EPM |
| price and dividends). This study also revealed a critical | | | | system linked to your performance appraisal and |
| success factor in successful deployment was | | | | rewards systems? Without consideration of how you |
| 'pervasiveness' - that is to say, many more operations | | | | will use your EPM system prior to your investment, |
| managers had access to the online reporting tools that | | | | there will be no ROI - but there will be ever increasing |
| in their peers in the industry. It is thus where PM | | | | costs. |
| permeates throughout the organization that we see | | | | BUILDING ON SOLID GROUND |
| the real business performance gains (equity and value). | | | | The implications? We suggest before you invest, you |
| Pervasiveness comes with a cost. Many organizations | | | | consider the following: |
| have driven PM from the ERP or from the Finance | | | | 1. READINESS - Conduct a 'EPM or BSC Readiness |
| systems, often drowning their Reporting systems in | | | | Assessment' - know where you have weaknesses, |
| data and remaining 'information poor'. In so doing, mid to | | | | and do not invest until you have established the right |
| large sized companies across the USA, Europe and | | | | foundations; |
| Australia continue to spend heavily in re-aligning, | | | | 2. CEO COMMITMENT - ensure you have the buy in |
| simplifying and consolidating their EPM models. In so | | | | off the Senior Executives before you begin - no buy-in |
| many cases, implementation has failed, due to both | | | | is a RED LIGHT; |
| 'poorly-planned deployments' of simplistic Balanced | | | | 3. ROAD MAP - clearly map out the pathway to |
| Scorecards, and as a result of monumental | | | | deployment over a 18 month to 3 year horizon - know |
| complexities imposed by 'poor-fit' EPM systems | | | | where and when you need to invest, and who to |
| invariably add-ons to major ERPs (they shall remain | | | | involve at different stages; |
| nameless). Thus knowing what to measure from the | | | | 4. BUSINESS CASE - invest time in understanding the |
| inception is vital - get it right at the top and build the | | | | total spend and the potential 'total cost of ownership' |
| 'decision architecture' from the top down. | | | | of this system - and quantify the benefits before you |
| Pervasiveness does not mean saturation. Making the | | | | begin; |
| right data available at the right level will require the | | | | 5. MAP THE INFORMATION ARCHITECTURE |
| construction of individual dashboards for each 'entity' in | | | | BEFORE YOU INVEST - know what information key |
| your measurement hierarchy - it must also mean | | | | decision makers need before you build your system; |
| additional costs in both selecting the best 'dashboard' | | | | 6. MAKE IT PERVASIVE - know that for this to |
| software, and in acquiring the expertise to oversee | | | | deliver real ROI, you will need to make it pervasive - |
| and control the deployment. Targeting the decision | | | | making meaningful data available at all decision making |
| makers - not the analysts is vital - put information into | | | | levels - plan for these costs; |
| the hands of those have the power and influence to | | | | 7. MANAGE IT - Reporting without an effective |
| enact change. | | | | Performance Management Process is worthless - |
| GET THE CULTURE RIGHT BEFORE YOU BEGIN | | | | structure and control your management processes to |
| Another key variable in determining the potential ROI | | | | fully align with and support EPM deployment. |
| of EPM initiatives is the 'Culture' of the organization. A | | | | In articles to follow, I will review some of the |
| 2007 BRWS survey found that the two largest | | | | technology options and considerations, to ensure the |
| obstacles to successful EPM deployment were; (a) | | | | optimal ROI on your EPM investment. |