Something my avid readers may not yet know about me is that I have always had a particular interest in the world of Enterprise Performance Management (EPM) – in particular, the role of quality data within this space. In fact, I actually present a detailed lecture on the topic of ‘the role of Business Intelligence and Analytics in EPM’ as part of the Masters of Business Analytics programme at a local university in Australia.
It is with this in mind that an article addressing the results of an Enterprise Performance Management Market Study caught my attention recently. It provides a solid outlook for this space and talks to a few points of interest that sparked my thinking and to my mind, further emphasises a very valuable role the traditional Business Intelligence (BI) process plays to achieving largely successful EPM. And so, I simply couldn’t resist sharing my views.
The piece notes that according to the study, 38% of organisations already use EPM software, while a total of 30% percent are either currently evaluating, or may use enterprise EPM software in the future.
Point of interest #1: Basing EPM off the back of solid BI
While valuable EPM software packages exist, in my experience, many organisations tend to run EPM using typical strategic performance management frameworks, such as Balanced Scorecard, implemented using ‘conventional’ BI dashboards, which obtain data from the enterprise Data Warehouse.
This way of implementing or running EPM is something I strongly advocate, as it offers a win-win situation – for the organisation’s management, as well as for its BI competency.
You see, if an organisation can manage to successfully run their EPM off their data warehouse, using their BI tools, it means the data warehousing and BI teams are working together to provide management with that key business critical element – trust in the data and information resource. Likewise, doing so shows a very good return on that investment made into BI.
Within my lecture, I emphasise these points by stating that:
- Properly implemented EPM considers the critical role of quality data and can lead to a larger return on investment from the organisation’s BI technologies.
- Synergies between EPM and BI can lead to the improved strategic performance of the organisation, to aid the organisation in achieving its set KPIs and objectives.
Point of interest #2: Technologies of the future
Operating in a digitally driven world, which creates more data on a daily basis, makes it is only natural to wonder what impact emerging and/or disruptive technologies will have to this EPM process. And when we talk about the latest in technology innovations, just like this article points out, Artificial Intelligence (AI) and Machine Learning (ML) comes to mind.
When asked about the potential impact of these technologies to EPM, the article highlights that 29% of respondents see significant potential in AI and ML, while 21% feel that users will resist its adoption and 50% remain undecided.
But I see this stretching a little further, and in bringing it back to data (as a core component to successful EPM), also wonder how advancements in analytics will impact EPM – especially if it is being implemented off the back of the organisation’s BI solution.
The reality is that as analytics advance, many organisations have started using advanced forms of analytics, especially in planning, budgeting and forecasting. Doing so is allowing the organisation to achieve the following key criteria:
- Create measures and assess soundness
- Spot trends, identify relationships, calculate rations and quantify variances
- Model new operational metrics and raise alerts when conditions diverge
- Communicate analytical results and impacts (e.g. through visualisation)
These outputs are all valuable to the broader EPM process and can add significant value to the business bottom line. But it doesn’t end here. In taking this even further, we are starting to see a discipline of analytics, called Performance Analytics, or Analytical Performance Management, emerge. This is focused on using sophisticated mathematical, statistical, or econometrics methods for understanding and exploring the dynamics of performance factors – and is simply ‘life changing’ to the standard EPM process.
In applying Analytical Performance Management, an organisation can:
- Discover new or often hidden business dynamics at both strategic and/or executional levels
- Deliver crucial information to drive decisions and actions within performance management
- Effectively support the understanding, exploring and exploiting of business dynamics and opportunities
Traditional EPM tools will always have a place in business, but as the world of technology innovates, so EPM should evolve, to support an organisation in planning today and well into the future. Data is the glue that holds successful EPM together – but it has to be managed and rolled out within the appropriate manner to achieve the results that can move the organisation beyond great and towards exceptional.
