Enterprise Performance Management Key Success Factors
One of the significant reasons for the under-performance of a business, beyond the relevance of its strategy, is its inability to execute it in an integrated manner across the enterprise. Among the most frequent issues, there are challenges around the implementation of the strategy itself, the monitoring and the analysis of its results in order to be able to adjust the course of action when required. Enterprise Performance Management (EPM) aims at addressing those challenges.
As a Finance Leader across various industries and continents, I can testify that a successful implementation of EPM also comes with its own challenges. Here are some of the key points of attention for one should pay attention to when deploying an EPM program:
Strong Executive Sponsorship
Strong Executive Sponsorship to drive the buy-in across the organization. EPM is a business performance enhancer. It is based on an integrated approach as far as the strategy, business and financial planning are concerned. It is crucial that top management positions the implementation of EPM as an enterprise priority and a driver of its performance improvement.
Connecting the Dots
The quality of an EPM relies on the ability of an organization to translate its strategic initiatives into relevant business and financial drivers with clear KPIs. This exercise, which could appear as cumbersome, is a necessary condition for success. It will ensure that the established business performance monitoring is meaningful for business partners. This is necessary to ensure that the corrective actions are impactful. Do not underestimate the effort it takes to align the organization.
Enterprise Data Management and Integration
EPM is the backbone of an effective decision-making process based on fact-based insights and analytics. Enterprise data management and integration across multiple platforms and sources are, in my experience, one of the key challenges. Without reliable and relevant data, EPM is dead in the water! Indeed, it will not trigger the right “business conversations” and lead to ineffective or even detrimental business decisions.
The competitive and changing environment in which businesses operate requires enhanced capabilities such as automated reporting, predictive forecasting as well as agile data-driven analytics. Understanding the business needs and identifying the right tools and technologies to meet those requirements is an essential role of the IS/IT function. It is not a one-time task. It requires a continuous and well-synchronized process between IS/IT and the various functions (Sales, Operations, Finance, etc.).
Governance and Change Management
The governance around EPM needs to be clearly defined and well communicated across the organization. It is vital not to underestimate the change management that this initiative will require. A proper budget and sufficient resources should be assigned, including for post-mortem reviews and any additional training and corrective actions needed.
People and Organization
The emergence of new technologies (AI, Big Data, Cloud, Business Intelligence software, etc.) allowing for advanced analytics, scenario and predictive modelling will require new competencies and new profiles amongst our teams. Business Solution Architect and Data Scientist roles will become key roles in our organizations. Managers need to anticipate and build the right talent pipeline for the needs of tomorrow.
EPM is a great opportunity to improve the collective performance of the enterprise. EPM should be business-led and technology-enabled initiative. CFO and CIO should partner together to ensure a customer-centric approach to this initiative as well as continuously enhance the capabilities of the enterprise.