Global research report reveals how firms can develop full value from Enterprise Performance Management
A new report from Cranfield School of Management, sponsored by the world's largest enterprise software company Oracle, has found that many global enterprises are struggling to capitalise on the full value of enterprise performance management (EPM).
The Global Enterprise Performance Management Study, carried out by Cranfield School of Management, is the largest global EPM study ever conducted. A number of common issues were identified in the analysis of the questionnaires from over 600 companies in the UK, USA, China, Japan and Australia. While there is evidence that EPM, when designed appropriately, delivers significant value; many companies report an execution gap.
Eight specific reasons as to why organisations have trouble executing EPM are detailed in the report under three broad categories: creating the passion shown by senior managers to deliver EPM across all parts of the organisation (advocacy and trust gaps); creating an enabling infrastructure (credibility, technology and alignment gaps) and finally, knowing what success is (perception, insight and performance gaps).
"One of the biggest surprises in this research was the extent to which people are still using measurement tactically. Many firms are still using EPM systems to monitor operational activity", said Professor Andy Neely, Director of Research at Cranfield School of Management and co-author of the report. "A strategic approach to EPM is needed where you are very clear on what you are measuring, why you are measuring it and how you are going to use the data."
Of the companies surveyed, 40% admitted that their performance measures were not based on good quality data. One of the reasons for this could be the lack of integrated technology.
In spite of investment in new performance management frameworks, the research confirms that financial measures still dominate. Relatively few companies track performance outside the boundaries of their own organisation which could include supplier, regulatory or environmental measures. Generally companies are still narrowly focused on those relating to customers and employees.
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