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Enterprise Performance Management Maturity
ModelDonald Davis – SVP EPM
December 2008
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The Business ChallengeThe Business Challenge
Organizations are challenged with balancing Profitability and
Value while maintaining proper Controls and Regulatory Compliance.
ValueShareholderCustomer
Profitability
Control
Compliance
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Moving TargetMoving Target
Multiple internal and external factors affect an organizations ability to execute on this mandate.
Globalization
Capital Availability
International Climate Acquisitions / Divestures
Regulatory Mandates
Macro Economic Factors
Organizational Change
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In an environment where the CEOs is being asked to grow revenues with less manpower than ever before, new regulations are getting in their way of being effective.
Quality data can only be found by drawing data from a centralized data warehouse that contain every interaction with the customer as well as when and where it is appropriate to contact them.
The Business Challenge - Who The Business Challenge - Who Cares?Cares?
CEO CSOCFO CIO
The CIO is faced with both sides of the business; needs for growth and expansion and cost justification for each IT project.
Institutions are spending millions each year on IT but feel they have reached the limits that enable them to contain costs yet enable large-scale acquisitions.
In the post Sarbanes-Oxley environment where a CFO is asked to sign off on financial statements, the quality of data and the systems that produce that data are being scrutinized now more than ever before.
Growth can only come with efficient architectures and synergistic investments in technology.
Risk compliance in financial institutions has become more complicated by a number of regulations such as Basel II accord and USA Patriot act.
A siloed approach to compliance is no longer valid, significant savings can be found in the pooling of initiatives around risk.
EnterpriseEnterprise
Pressure
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The EPM Value PropositionThe EPM Value Proposition
Enterprise Performance Management solutions embody the
standards and controls to assimilate Information and
institute the processes necessary for reporting,
predicting, and capitalizing on business and economic events.
“The mind revels in conjecture. Where information is lacking, it will gladly fill in the gaps.” - James Geary
In order for Value to be realized it must be
,
and
.
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What is EPM?What is EPM?
“Enterprise performance management (EPM) includes not only the processes used to manage enterprise performance (such as strategy formulation, budgeting and forecasting), but also the methodologies that may drive some of the processes (such as the balanced scorecard or value based management), and the metrics used to measure performance against strategic and operational performance goals.”
– Gartner: Rayner, Buytendijk, Geishecker
“Business performance management consists of a set of processes, frameworks, and systems for planning, measuring, communicating, and monitoring business results. These activities are typically closely linked to corporate strategies and objectives and might be driven down to many individuals within an organization to encourage accountability and control.”
– Forrester: Hammerman, Leaver, Donnelly
“EPM is all about the alignment of corporate goals with departmental execution to achieve optimal performance. It’s not just about better reporting.”
– AMR Research: Durocher, Hagerty
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EPM / BI Architectural StackEPM / BI Architectural Stack
Forrester Aug 2008 Fortune 1000
Planning Major EPM / BI Investments: 50%
6.5% increase from 2007
Largest Increase in IT Expenditures in 2008 & 2009
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Bus
ines
s P
roce
ss O
ptim
izat
ion
Bus
ines
s P
roce
ss O
ptim
izat
ion
Mas
ter
Dat
a M
anag
emen
t & G
over
nanc
eM
aste
r D
ata
Man
agem
ent &
Gov
erna
nce
ETL (Extract Transform Load)ETL (Extract Transform Load)
For
mal
Mon
itorin
g an
d A
dmin
istr
atio
nF
orm
al M
onito
ring
and
Adm
inis
trat
ion
General Ledgers
Consolidations & Financial
Reporting
Consolidations & Financial
Reporting
Financial ReportingFinancial Reporting
Corp. Accounting
SEC, Regulatory, GAAP
ERP, Sales,
Operational
Business Planning
Business Planning
Reporting, Variance Analysis
Reporting, Variance Analysis
FP&A
Strategic, Operational
Management Reporting & Profitability
Analysis
Management Reporting & Profitability
Analysis
Analysis; Slice & Dice, Drill Downs
Analysis; Slice & Dice, Drill Downs
FP&A, LOB’s
Product, Customer
Profitability
EPM RoadmapEPM Roadmap
Common User InterfaceReporting -> Spreadsheet -> Web -> Dashboards -> Querying -> Self Sufficient Users
Common User InterfaceReporting -> Spreadsheet -> Web -> Dashboards -> Querying -> Self Sufficient Users
Data Mart(s)
Operational Analytics
Operational Analytics
Near to Real Time Analysis & Monitoring
Near to Real Time Analysis & Monitoring
LOB’s, Ops
Sales & Marketing,
Supply Chain, MFG.
Enterprise Information
Consumption
Enterprise Information
Consumption
Ad Hoc, BI End User Tools, Mass Access
Ad Hoc, BI End User Tools, Mass Access
Enterprise wide
Focused Reporting &
Querying
Data WarehouseGeneral Ledgers
EPM Organizational Culture
Strategic Goal Aligned with Operational Measurements
Performance Appraisals & Incentive Compensation aligned with Operational Measures
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EPM Maturity ModelEPM Maturity Model
Level 3 - Optimizing Clear metrics drive the business Companies strategic rollout
performance optimization strategies
Level 4 - Innovating Accountability at all levels Models shift based on changing markets Enterprise scale investments
Level 2 - Integrating Business process focus Measurable benefits harder to identify
Level 1 - Operating Bottoms-Up approach to managing
performance Low risk, High reward
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EPM FrameworkEPM FrameworkArchitecture, Strategy & Planning-Systems architecture strategy-Systems/0rganizational assessments & roadmaps-Organization roles & responsibilities-Business process change management-Data strategies-Data governance-Application management & support processes
Enterprise Performance Management-Financial consolidations & reporting-Regulatory reporting & compliance-Budgeting & forecasting-Costing & profitability-Management reporting & analysis-Data Integration & Audit
Data Management & Business Intelligence-Enterprise reporting & information delivery-Data management practices-Multidimensional analysis-Master Data Management-BI Rationalization
Performance Engineering-IT performance center of excellence-Performance testing-Operational monitoring-IT quality assurance-Infrastructure management-IT governance & portfolio management
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Trends in EPM / BITrends in EPM / BI
Mature Computing Environments
Convergence of EPM and BI &
COE’s
Master Data Management
Data Integration
Enterprise Strategies
