Simplifying the Complex Enterprise Performance Management Market
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The document discusses the need for improved enterprise performance management (EPM) to close the gap between costs and returns in organizations, highlighting that 90% of U.S. companies fail to execute strategies effectively. It critiques traditional planning approaches, advocating for a flexible and dynamic planning process that includes input from operations and integrates financial considerations. Cogniti is presented as a solution that offers comprehensive tools for aligning strategic, operational, and financial planning to enhance execution and management.
Simplifying the Complex Enterprise Performance Management Market
- 1. The Holy Grail of Enterprise Performance ManagementLee MashburnChief Marketing Officer, CognitiApril 12, 2011
- 2. Agenda OverviewStrategy Management: We Must Close the Gap Between Costs and ReturnsEnterprise Performance Management; Where Strategy FitsThe Need for a” Holy Grail” of Enterprise Performance ManagementDefining and Realizing the “Holy Grail” of Enterprise Performance ManagementAbout Cogniti
- 3. Key Strategies are Not Being Executed . . . And at great cost90% of U.S. organizations fail to execute their strategies successfullyEstimated that U.S. managers spend more than $10 billion annually on strategic analysis and strategy formulation – which means . . . $9 billion wasted annually on strategy that is not successfully executedAnother statistic: Fortune 1,000 companies spend an average of $7 million per organization per year
- 4. The Importance of Building Accurate Plans has IncreasedSource: Accenture – Authors Bergstrom, Batchelor, and Marcotte
- 5. The Need for a New Planning ApproachTraditional PlanningFlexible, Dynamic PlanningDriven off historical performance and internal operations.Schedule-driven annual exercise.Weak link to operations.Labor-intensive data collection.Emphasis on short-term profitability.Grounded in market expectations and external trends.Probabilistic scenarios including risk factors.Real-time adjustments. Planning tightly integrated to front line.Broader planning scope to cover balance sheet and cash flow.Source: Planning for Success in Dynamic Environments, Accenture, 2009
- 6. Accenture ConclusionsEmbed Flexible and Dynamic Planning ProcessesFocus on what matters most – tie it to financialsIncorporate a range of scenariosInvolve your operating staff in planningRenew the Focus on Strategic PlanningHelps to prioritize bets“Forecasts are 33% more accurate when Operations is an integral part of the process”
- 7. BPM, CPM, EPM: Simplifying a Complex Market PlaceFlavorNuancesAdoptersRelative Public Mindshare per Google Search
- 8. BPM, CPM, EPM: Simplifying a Complex Market PlaceEnterprise Performance ManagementCorporate Performance ManagementBusiness Performance ManagementFlavorOften confused with business process management.
- 9. Alienates the public sector.
- 10. Least leveraged by consultants and analysts.
- 11. Most widely embraced by the “office of finance.”
- 13. Pushed heavily by Gartner, a leading industry analyst.
- 14. Widely embraced by largest management consultants and software “mega-vendors.”
- 15. Alienates SMB.
- 16. Infers large, multi-national.NuancesBPM Partners
- 17. Capgemeni
- 18. Gartner
- 19. Infor
- 20. Prophix
- 21. Tagetik
- 22. PwC
- 23. E&Y
- 24. Aberdeen
- 25. Oracle
- 26. SAP
- 27. IBM
- 28. Cogniti
- 29. Accenture
- 30. CSCAdoptersLots of Google search resultsRelative Public Mindshare per Google Search23% of business performance managementAttracts larger organizations
- 31. EPM, CPM, BPM . . .At the end of the day, it’s all really the same!
- 32. The Evolution of EPM – Where are you on the maturity curve?Gartner estimates that 40% of large organizations and up to 75% of mid-size organizations still heavily on spreadsheets
- 33. EPM Market . . . Large and Growing FastCompound Annual Growth Rate (CAGR):Subscription: 15.7%Maintenance: 14.2%License: 9.5%TOTAL: 12.7%Source: Forrester Research, Inc.
- 34. EPM Market Size by ApplicationStrategy Management:PlanningScorecardsStrategy MapsObjectives and Goal SettersPerformance MeasurementFastest growing EPM application:Projected CAGR of 18%Source: Forrester Research, Inc.
- 35. Top Reasons for EPM ProjectsSource: BPM Partners 2010 Pulse Survey
- 36. The Need for the Holy Grail of EPM
- 37. Conventional Planning – Types, Traits, Tools, ResultsOperational PlanningFinancial PlanningStrategic PlanningPlan TypeTypically an annual C-Suite exercise
- 39. No common toolset to tie the pieces together
- 41. Prior year results plus 10%
- 42. Manual grind for cash impact
- 43. Jam down operations’ throat
- 44. Wait for the bad news
- 45. Bet on last year plus 10%
- 47. Prepare to assign blameTraitsSpreadsheets
- 49. Strategy maps
- 50. SWOT analysis
- 52. Spreadsheets
- 54. BI tools
- 56. Email, intranet
- 57. Spreadsheets
- 59. E-mails
- 60. Conference calls
- 61. Sales and Ops PlanningStandard ToolsHigh cost, low return
- 62. Difficult to assign value
- 66. Little to no collaboration
- 67. Financial plans cannot be executed
- 68. Business processes not improved
- 69. High cost, low return
- 72. Just a budgeting and forecasting exerciseResults
- 73. To Compound the ProblemGartner 2011 BI Magic QuadrantBI is being increasingly promoted as a performance management tool.
- 74. Big mega-vendors are failing to properly integrate BI acquisitions with the many performance management modules they offer.
- 75. Improving performance is not being reached by measuring, analyzing, and reporting everything.
- 76. Historic performance results are not helping to achieve business objectives.“Ongoing dissatisfation among IBM, Oracle, & SAP Business Intelligence (BI) customers suggests that chronic dissatisfaction may be the new normal.”High cost of ownership
- 77. Poor Performance
- 79. Not achieving intended business objectivesThe Holy Grail of EPM
- 80. CorporateGeographical LocationsDivisionsDepartmentsSuppliersEPM Must Help You Manage the Ripples
- 81. Aligned EPM (Marketing Example) . . . The Metrics Must Roll-UpRolePerformance MetricsStrategic Value to CompanyCEO, CFO, COOEPS, ROIC, shareholder valueHead of MarketingROMI, return-on-sales, retentionMid-ManagementSales pipeline, win/loss ratio, h/c costsFront-LineLeads, emails opened, event attendeesTactical Value to CompanyEvent ManagementCRMTime ManagementEmail ManagementBIData Sources
- 82. Achieving the Holy Grail of EPM – An Integrated Continuum 2. ALIGN & MERGE1. PLAN & ASSIGN VALUEStrategicOperationsOperationsFinancialFinancialStrategicProcesses3. MEASURE4. EXECUTE & ADJUSTAlert Off-Plan PerformanceProject Forward ConsequencesAdvise Corrective ActionExtract Key Measurements
- 83. Conclusions
- 84. About Cogniti“Cogniti gives you all the pieces in one place to pull together strategic, operational, and financial plans and then follow through with the execution and management of those plans.”Craig Schiff President & CEO, BPM Partners
Editor's Notes
- #2: I am excited to be here today to speak to such an intelligent and esteemed group of people. What you do everyday as relates to strategic planning (think . . . plan . . . act) is more relevant today than ever before.
- #8: Strategic planning is increasingly being categorized within the broad performance management market. Strategic planning is too frequently performed in a vacuum – a stand-alone annual project. I think of strategic planning differently when I view it in this broader perspective.Performance management, whether BPM, CPM, or EPM means different things to different people. There’s no common definition and this creates confusion. I developed this diagram to help get folks on the same page.There are tools and vendors that provide solutions that can increase the effectiveness of strategic planning.
- #9: BPM: Not to be confused with the other BPM (business process management) – workflow automation tools out in the marketAlienates the public sector because they don’t run a businessLeast tracked nuance by analysts and consultantsBut, it’s the most Googled search term - -catch-allCPM: Gartner-driven market segmentOffice of finance (budgeting, forecasting) and now Gartner is driving an evolution that spans beyond this office)Software vendors that coin this nuance are typically spreadsheet replacement vendors (Prophix, Tagetik, Adaptive Planning, etc.)EPM: Adopted by the biggest vendorsInfers big, multi-national/multi divisional (enterprise size)Alienate small to mid-size organization
- #10: Good time to solicit audience for feedbackStreamline the time to get key information needed while uncovering your own research and due diligence
- #11: As EPM evolves, so have the tools you can leverage to streamline and automate.Maturity curve where everyone is on a different part of the curve. And it is important to understand your current state in reference to your desired visionary stateERP started out as a financial point solution and in time has progressed to extended ERP with a host of modules, acquisitions.
- #12: What the chart statesKey point – growing by double digits, lots of attention in the marketplace
- #13: The fastest growing segment of EPM is strategy management – 18% Compound Annual Growth Rate – Why is thatvolatile market conditionsSlowest growth is occurring in “office of finance, spreadsheet on steroids area” primarily because there is no ROI in budgeting and forecasting. Our time has come – natural evolution process
- #14: Why are the $billions being investedOrange bar – who’s really voting here. How can a better historical report be more important than performance
- #20: How do you ever know that these metrics (which drive behavior) are aligned or not.
- #21: What needs to happen is the integration of performance managementalignment