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Many organizations are far from where they want and need to be with improving performance, and they apply intuition, rather than hard data, when making decisions. Enterprise and corporate performance management (EPM / CPM) methods are now viewed as the seamless integration of managerial methods such as balanced scorecards, strategy maps, enterprise risk management, driver-based planning and budgets, rolling financial forecasts, activity-based costing (ABC), customer profitability and relationship management, supply chain management, lean and Six Sigma quality management, and resource capacity planning.
Each of the EPM methods should be embedded with business analytics (BA) of all flavors; such as correlation, segmentation, and regression analysis; and especially predictive analytics.
Regarding planning, the annual budget is often perceived as a fiscal exercise done by the accountants that is: (1) disconnected from the executive team’s strategy and risk management mitigation plans, and (2) does not adequately reflect future volume drivers. The budget exercise is often scorned as being obsolete soon after it is produced, and biased toward politically muscled managers who know how to overstate and “pad” their budget request.
Some organizations revert to rolling financial forecasts, but these projections may include similarly flawed assumptions that produce the same sarcasm about the annual budgeting process. Two components of the enterprise and corporate performance management (EPM / CPM) framework, strategy maps and activity-based costing principles, can be drawn on to resolve these limitations.
Building a core competency in strategy execution creates a competitive advantage for commercial organizations and increases value for constituents of public sector organizations. This competency links the strategy to the resources required to achieve plans.
This presentation will describe how to complete the full vision of analytics-based enterprise performance management to improve organizational performance.
To see Gary’s Bio, please click here – Gary Cokins Bio