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Issue of February 2006 
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Driving organisational performance with strategic BI

Organisations are adopting enterprise performance management (EPM) to optimally utilise corporate information. EPM can help capture and mine information into a BI solution to strengthen your organisation. by Lee Boon Huat

They say you can never have too much information—but you do. You’ve got dozens of reports and e-mail messages on your system—marketing campaigns, product recalls, Q2 revenue targets—and prioritising this information presents a real challenge. Meanwhile, you still haven’t opened those sales forecast spreadsheets from October. Your quarterly report is due on Friday. Your phone is ringing again. You’ve got a meeting in 10 minutes.

Then there’s the $64,000 question: How is my organisation performing today? It’s a simple question, but amid the chaos of a normal workday, one that’s almost impossible to answer. There is little solace in the fact that you are not alone. Your colleagues are probably in the same boat. In many companies, executives and managers are suffering from a severe case of TMI (too much information). TMI is hazardous to your health, and, if ignored, can trigger a meltdown of your business. Which is why many organisations are turning to enterprise performance management (EPM) as the solution to these issues.

EPM is a strategic approach to improving business performance. Gartner defines EPM as “an umbrella term that describes the methodologies, metrics, processes and systems used to monitor and manage the business performance of an enterprise. It is an important concept and represents the strategic deployment of business intelligence solutions.” EPM has three fundamental ingredients.

METRICS: A DASHBOARD ON BUSINESS PERFORMANCE

With dashboards, metrics, alerts, real-time data integration and analytic tools, EPM makes information available at a moment’s notice— as opposed to the lag time of a week or longer associated with ancestral EIS systems

Simplicity is fundamental to EPM. It begins with the most basic questions—how is our organisation doing today? Is everything running according to plan? If not, how do we get back on track?

EPM can intelligently sort through the vast amount of data in your enterprise to provide simple answers to each of these questions. To answer the questions and benefit from EPM, you need a Web-enabled dashboard that serves up highly-visual, easily-understood metrics and key performance indicators (KPIs). EPM dashboards are configured to zero in on the metrics that matter most to an executive or manager. Problem areas are red-flagged for the user’s immediate attention.

THE DEVIL IN THE DETAILS

Metrics and KPIs are critical indicators, but are usually just that—indicators. A manager will often want to know more about the business dynamics behind those data points: Why are sales up? What’s our fastest-growing product? Why are inventory costs rising?

To answer these questions, the EPM dashboard lets you drill through to underlying data for analysis, comparisons and answers. Today’s BI tools make it simple for non-technical users to run queries and generate reports that are easily shared with colleagues. You can explore details of the who, what, when, where, why and how for the insights you need to fine-tune processes for maximum performance.

Critical to any EPM solution is an integrated, enterprise-wide view of data drawn from various sources—finance, sales, supply chain and more—that would otherwise have to be cherry-picked by hand.

PROCESS DRIVES PERFORMANCE

With a minimal learning curve, EPM gives managers a proven and consistent framework from which to track, understand and manage business performance

Captains of industry, the board of directors, the executive team, and managers at all levels plan a course and set goals. Those goals and objectives are spread throughout the entire organisation and cascade down to individual employees in each department. Every employee has to support certain goals and targets that drive his daily activity, and the organisational course is evaluated on a regular basis and adjusted as needed.

EPM brings this process to life and closes the performance loop between high-level strategies and daily execution. Executive-level goals can now be translated to department and functional area metrics and measures to keep the organisation in alignment and drive consistency between annual plans and daily activity.

EPM OBSERVATIONS

There are two interesting facts about EPM.

  • EPM is harder than ever. Your organisation has more information than ever before. It’s scattered across different applications, business units, subsidiaries and geographic locations. Information is unprecedented in volume and complexity, and growing by the day. The overpopulation principle described by the 18th century English clergyman Thomas Robert Malthus is in play here—if population increases unchecked, the inevitable result is breakdown, poverty and chaos. This Malthusian theory now confronts all organisations, not in regards to unchecked growth in numbers of people, but unchecked growth in the volume of data.
  • EPM is easier than ever. EPM reflects more than a decade of development and refinement of business management and BI products. Over the years, the technology that enables EPM has become more powerful, more reliable, and easier to use. With dashboards, metrics, alerts, real-time data integration and analytic tools, EPM makes information available at a moment’s notice—as opposed to the lag time of a week or longer associated with ancestral EIS systems.

EPM also incorporates best practices that industries and consultancies have developed through years of trial and error. Each company chooses a methodology or combination of methodologies that suits its needs. With a minimal learning curve, EPM gives managers a proven and consistent framework from which to track, understand and manage business performance.

EVOLVING FACE OF EPM

Organisations are gradually building EPM systems based on a strategic deployment of BI across the enterprise. As systems mature and companies synchronise among sales, supply chain, finance and other systems, business performance as a whole will improve.

Customers will expect to see better service, operations will continue to get more streamlined, and investors will reap greater dividends from businesses across all industries. All of this is the result of an improved process to connect top-line goals to day-to-day activity across the organisation.

To sum up, EPM can help position your company to capture and mine information into a business intelligence solution that will strengthen your organisation by developing and sustaining meaningful competitive advantage. Embracing EPM can help match the performance of your IT infrastructure to your strategic business goals.

This integrated cross-functional discipline of EPM—as opposed to one-off reporting systems in different divisions—is a big step towards prosperity, today and in the future.

Lee Boon Huat is Vice President, Asia-Pacific, Business Objects Asia Pacific.

 
     
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