Back when I worked as the group controller for a Travel
Company, you know the one……”Don’t just book it……….” More clues??? OK, named after the bloke that invented
travel! We would periodically spend huge
amounts of money on teams of well dressed, perfectly groomed young men who
would come in, talk to a few people and then prepare a PowerPoint presentation
to the board full of incredibly long and grand sounding words or phrase that
had us all nodding in appreciation. It
got so bad that the only way to get through the presentation was to bring a
dictionary with you and try to follow as best you could.
I soon worked out that the whole point of these meetings was
to spend a good sum of money to leave the management team with a buzz word that
would be used over and over again until the next time we got some consultants
in.
One year, that buzz phrase was “ENTERPRISE PERFORMANCE
MANAGEMENT”.
Actually it might have been Corporate Performance Management
or Business Performance Management but basically same thing.
Now we knew our financial systems weren’t as good as they
could’ve been but we had no idea our
Enterprise Performance Management (EPM) was so bad. Mass panic ensued for a few weeks, we started
up a business case for some funding. We
had to improve our EPM and it would take a shed load of cash and maybe we
needed to call James T Kirk too.
The business case got rejected. Apparently those reviewing couldn’t
understand what we were asking for.
Apparently it was confusing, they had no idea what EPM was and no
concept of why buying a bunch of licences and consulting days could improve
profit.
Here lies the main problem………….What is EPM? Let us dispel the myth J
Here’s a definition I have pulled from various different
thoughts.
“Enterprise
Performance Management can be defined as a set of management processes, often
supported by information technology, that help to improve the management,
strategy execution and decision making in organisations. Performance management
processes help companies define strategic objectives, measure performance,
analyse and report performance as well as align people and culture.”
The starting point is obviously in the finance
function. Look at the main functions
carried out within a finance team and all tasks can be distilled into the
following three categories:
i)
Reporting
ii)
Planning
iii)
Control
Looking back to the definition and you can see these three
items firmly embedded. So is it Finance
Systems? Well………..no, although the
finance function is obvious a system, a system that includes IT, people,
processes and procedures. It’s no
limited to finance either, it’s across the business.
Clearer? Maybe not
yet…….in the next blog, I will take a look at how the big players are addressing
improving EPM to bring context to our new definition. See you next time!
