The Reporting Conundrum for Management
Most performance management tools focus on plans that become financial figures in the profit and loss statement. Not only are they restricted to the financial domain view of planning, but these tools are typically limited to only the planning process. However, organisations should be able to deal with not only profitability, budgeting, and financial planning, but also extend to a fully integrated business planning system across the entire organisation. Moving away from a central software solution suite frees up the organisational units from a total reliance on corporate finance to generate their analysis and reports.
Moreover, it takes more than just planning to achieve business outcomes. Enterprise performance reporting across the organisation should encompass not only a full set of planning processes but also turn raw data into insights for making better decisions. It should also assist management to execute with the right balance in the right timeframes. We have seen many companies struggle to get their enterprise-wide planning systems working effectively because they don’t understand how to integrate them together.
A ‘corporate' tool should be able to support a variety of business performance frameworks used in the various business domains. What about support for business frameworks for strategy, governance, risk, compliance, project management, quality, human resources, operations, etc.? Management domains across the entire organisation also need to be represented by the ‘Corporate' label. Ultimately, these solutions are to support the organisation by linking the strategic plan to the annual budget and the periodic forecast and all overarching plans and registers, using both bottom-up and a top-down methodology.
This is where Enterprise Performance Management (EPM) comes in. EPM was first introduced by IBM back in 2004 to provide an end-to-end solution for managing both strategic and operational aspects of your company's operations. This approach incorporated past, present, and forward-looking information in addition to business drivers for a more comprehensive method of both financial and operational planning. It helps you analyse, understand, and report on your entire organisation from strategy development through execution, including, but not limited to:
- e-commerce systems
- front-office and back-office applications
- data warehouses and external data sources and
- supports many performance methodologies such as the balanced scorecard.
EPM software is designed to integrate with Enterprise Resource Planning (ERP) systems to provide a management layer on top of the transactional ERP modules. EPM systems can support practices that align finance with operations for integrated business planning and establishes the foundation for aspirational, enterprise-wide integrated planning and reporting.
The key to surviving disruption is flexibility. Flexible software design in organisational structure, system templates, reporting periods and workflows is paramount, providing benefits such as robustness and flexibility in modelling, reduction in IT dependence, and superior management reporting capabilities.
A modern EPM solution provides this flexibility and enables organisations to understand how, when, and where to adjust to disruptions. Whether the disruption comes from outside forces (such as new regulations or global weather events) or market realities (one product skyrockets to success while the other flops), organisations that adopt EPM successfully can respond quickly and stay ahead of the curve.
Technology Trends in Enterprise Performance Management (EPM)
Some of the specific technology trends for EPM software solutions include:
The move toward cloud solutions vs. on-premises means that solutions such as Cascade Strategy can be implemented in a fraction of the time it typically takes to get an on-premises solution up and running due to the agility of the platform and the natural language syntax placing configuration in the hands of the organisation.
In addition to the move toward cloud solutions, straightforward data and metadata integration are critical to providing more meaningful reports. This extends the life of both existing legacy transactional systems and more recently implemented point systems such as project management, where summary data for management is captured by the EPM software.
Ease-of-use for users is critical, as adoption increases when accepted technology aids their work and drives efficiencies. A well-designed user interface with advanced features, hidden by techniques such as a customisable User Interface (UI) setup or a progressive disclosure approach, can bring the best of both worlds–easy enough for beginners and casual users, and sophisticated enough for power users.
In today's fast-paced world, organisational leaders require insight and flexibility in their planning to evaluate scenarios and deliver the best courses of action quickly. To say that data can be found in a variety of places would be an understatement. In fact, given that 2.5 quintillion bytes of digital data are being created every day, the more accurate observation would be that data can be found everywhere. This is good news for organisations, and it’s no secret that by capturing, organising, analysing, and interpreting data, many organisations have been able to improve their own processes, and better target their front-facing service efforts, as well.
Transparency and Collaboration
Collaboration is key when planning is to include the right people at the right time, allowing decision making to be fast and informed. Smart EPM software design and configuration encourages transparency and collaboration where employees facilitate the flow of ideas within their organisation and share things with people from other workplaces instantly. This results in improved communication, enhanced project management, speeding up work and higher employee satisfaction and engagement.
EPM and Overcoming Pain Points
Some of the specific pain points that an EPM fully integrated planning and reporting approach can help resolve for an organisation include:
Difficulty in measuring and managing performance
Goals are the basis of an effective performance management process. It involves a reporting structure to communicate progress as well as a structured timeline for a review, to ensure the goals and actions are met and still relevant. A lack of system flexibility leads to a duplication of effort, increased expense, and lost opportunities.
Inadequate or missing workflow governance
With e-mail and spreadsheets, collaboration is a challenge and a hindrance to developing plans and forecasts and improve reporting. With accessible EPM technology and appropriate workflows, stakeholders connect with not only one another, but with the information they need to achieve both short and long-term business objectives.
Lack of flexibility to connect financial models to planning
Numerical reports and presentations can provide insufficient insight into trends and performance indicators, in addition to difficulty in correlating financial, revenue, and operational results. EPM technology using integrated planning and reporting eliminates this kind of data density by providing clear business insights.
No alignment between finance and strategic planning
With more traditional tools, organisations could fall short of achieving long-term strategic goals. This is because planning and performance measures are customarily focused on controlling costs, rather than aligning with strategic plan imperatives.
Reliance on gut feeling rather than data-led predictive forecasting
Plans are often not agile enough to adapt to changing business conditions and support unexpected scenario modelling needs and lack planning accuracy and outcome predictability. With better analytic insights and modelling techniques provided through technology, organisations can drive more valuable performance outcomes.
Inability to adapt to changing industry and community conditions
We live in an era of risk and instability. Globalisation, new technologies, and greater transparency have combined to upend the business environment and give many CEOs a deep sense of unease. All this uncertainty poses a tremendous challenge for strategy making and execution. That’s because traditional approaches to strategy and outdated software—though often seen as the answer to change and uncertainty—assume a relatively stable and predictable world. This makes it impossible to adapt in a timely manner to changing industry and community conditions, especially at the pace demanded in the modern era.
A Relational Database
Organisations are increasingly using innovative technology solutions to implement performance management best practices and automate tedious manual processes. Cloud-based EPM systems are making advanced capabilities and technologies like machine learning, predictive analytics, and chatbot coaching affordable to companies of all sizes. These systems also offer quick implementation schedules, no IT support requirements, and automatic upgrades.
When selecting an EPM solution, make sure to do your research. Some solutions offer nothing more than an upgraded UI hiding an outdated set of modular databases, while others claim to offer complete best-of-breed performance and goal management. We recommend a system with a relational database that organises data into tables that can be linked—or related—based on data common to each. It also allows you and your business to better understand the relationships among all available data and gain new insights for making better decisions or identifying new opportunities.
A relational database consists of appropriately arranged tables from which data can be administered and operated in various ways without having to rearrange the entire set of database tables. It is the simplest model, as it does not require any complex structuring or querying processes. This makes the data to be non-repetitive with no chance for duplication of data.
This relational reliability amongst the tables in the database also helps in avoiding the records from being imperfect, isolated, or unrelated. Such data integrity aids in making sure of the relational database’s other significant characteristics like the ease of use, precision, and stability of the data. It facilitates levelling up and expanding for bigger data lengths, as it is endowed with a bendable structure to accommodate the constantly shifting requirements.
Easy access to data using join queries and conditional statements allows users to combine all or any number of related tables to fetch the required data. This facilitates the increasing incoming amount of data, as well as the update and deletes wherever required. This model consents to the changes made to a database configuration as well, which can be applied without difficulty devoid of crashing the data or the other parts of the database.
This all adds up to providing an informative single view on one page for the department managers to carry out their roles successfully, where all goals and progress is linked to the planning framework. Management has a clear line of sight for a truly integrated planning and reporting outcome. Executive stakeholders can focus and deliver on their corporate objectives aligned to the strategic plan. With EPM and fully integrated planning and reporting technology, bottom-up initiatives connect with top-down strategies to ensure total organisational alignment.
Enterprise Performance Management (EPM) Summarised
EPM is a system that measures the effectiveness of both our strategic efforts and routine work through performance metrics and includes the development, implementation, monitoring, reporting, and refinement of these metrics to support an organisation's mission and vision. It helps maintain a dynamic culture of greater accountability, transparency, stakeholder engagement, and collaboration.
If you would like more information or assistance in this area, please reach out to us at Horizon2Technologies. Get in touch today for a confidential chat on (08) 8311 3948 or alternatively send an email enquiry to firstname.lastname@example.org or Contact Us.