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Enterprise Performance Management - Cycle II
A comparative index across 8 geographies,10 months on
By: Quocirca
Published: March 2010
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Much progress has been made since the first cycle of the EPM Index was carried out in early 2009. However, this progress seems to be around awareness; actual implementation and integration of the various underlying processes of EPM is still not widespread.

  • The overall EPM index for the geographies covered is 7.04 out of a maximum score of 10, compared with 5.13 in cycle I: Whereas this leap in the overall index seems to indicate a massive improvement, other findings show that this is mainly around the understanding of what EPM is, and how it can help, rather than in actual implementation of tools and formal processes. Elsewhere, it can be seen how the various processes that underpin and define effective EPM are still being carried out in isolation.
  • There has been a major improvement in the belief that the various EPM processes need to be consistently interlinked: In cycle I, only one fifth of respondents felt that the six core EPM processes needed to be regarded as interlinked. In cycle II, this has improved to nearly one third. Those believing that the processes can be regarded in total isolation have dropped from over one quarter to less than five percent.
  • In cycle I, it was predicated that countries with "soft touch" governance expectations would suffer in cycle II: Italy, in particular, has fared badly in cycle II. From being a top performing country in cycle I, it is now at the bottom of the table in cycle II. The recession seems to have uncovered basic failings in Italian organisations' approach to EPM, and these organisations are now struggling to come to terms with how this impacts their existing processes.
  • Inclusion of stakeholders in the EPM process chain remains relatively poor: In cycle I, the lowest sub-index score was for stakeholders at 4.77, against an overall main index score of 5.13. In cycle II, the stakeholder sub-index score stands at 6.44, against 7.04 overall. Organisations are still not maximising the opportunities for increased value through encouraging and using inputs from very important constituents such as suppliers and customers, nor from employees, shareholders and others.
  • New geographies or new channels still fare badly as areas to exploit for growth: In cycle II, the emphasis has firmly moved towards looking for new customers and keeping existing customers. In cycle I, there was a focus on new products and services: this has been pushed back as the recession forces organisations to look at maximising the revenues from existing lines, rather than taking the riskier approach of investing in something completely new.
  • The view of Business intelligence (BI) has changed markedly: In cycle I, only 12% saw BI as being an important means of monitoring, measuring and reporting on the overall health of a business. However, 40% were either unsure as to what BI was, or saw it as an expensive waste of time. Now, only 12% see BI as being a waste of time or are not sure, whereas over 60% see it as being a major tool in running their business. As in cycle I, those who see BI as a critical tool scored better in the overall index than those who did not.

In just 10 months, the views of organisations on EPM have changed markedly. However, the greater level of understanding and acceptance of what EPM stands for has not, as yet, resulted in hard improvements in implemented approaches. Quocirca expects that organisations will spend the next 12 months building on their new understandings, and that a more rigorous, connected and integrated approach to EPM will be seen in the coming months.

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Published by: IT Analysis Communications Ltd.
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