Enterprise Performance week 5 DQ

Module Introduction

Readings

Required

• Chapter 6 in Enterprise Performance Management Done Right: An Operating System for Your Organization

For Your Success

It is essential that business intelligence professionals have a firm understanding of the foundational elements of enterprise performance management (EPM) and apply this knowledge by distinguishing among and evaluating the different types of EPM strategies and solutions such as one would encounter in a business intelligence career.

A Module 5 Critical Thinking Activity (CTA) is due before midnight Sunday. The assignment applies current learning to the enterprise scenario students have developed for the Portfolio Project and applied in the Modules 2 and 3 CTAs. As per these earlier CTAs, this exercise will inform your work on the Portfolio Project due at the end of the course, so be sure to keep this final assignment in mind as you complete this week’s CTA.

Learning Outcomes

. Compare and contrast the inputs and outputs of the commit process.

. Explain the components of accountability that should be expressed in an organization’s plan (what, by whom, and when).

. Compare and contrast the different types of enterprise planning and forecasting (strategic, financial, operational, forecasts).

. Describe the nine areas of forecast accuracy.

(Source: https://www.youtube.com/watch?v=046p8rQZvaY)

ISM543 Module 5

Page 2 of 3ISM543 - Module 5: Getting Commitment

9/19/2016https://coursecms.csuglobal.edu/file/81b3caed-02a1-4a93-9dc9-3ac1d7d7862f/3/production/ISM543_5/ISM54...

Enterprise Performance Management

Module 5: Getting Commitment

1. Accountability, Planning, and Forecasting

You would be surprised by how many enterprises want to grow revenue but have not come up with a number to strive for. How will they know they have grown, by how much, and if the growth factor achieved is enough? Accountability in an enterprise performance management plan is imperative. Not knowing who is responsible for what, when, and how much makes a plan worthless.

Dimon (2013) suggests that every organization’s plan should include the following three components:

. What

. Who

. When

The what depends on what is being committed. Examples of the what include sales volume, percent change, dollar levels, etc. By who is meant country or region, team or individual, or even business unit. The when means how often—weekly, monthly, quarterly, etc. When forecasting, it is a good idea to have several versions of the forecast because it is difficult to forecast exactly. Dimon (2013) suggests some common forecast versions include downside, upside, and commit. Upside means the potential for gaining, downside means the probability or possibility of downward movement, and commit means the level of confidence.

Enterprise Planning and Forecasting

Any type of enterprise plan should consider what a plan is supposed to accomplish, the audience, and the detail of plan. For example, some common types of EPM plans include strategic, financial, and operational planning. Strategic plans can include balance sheet planning, annual budgets, and cash-flow forecasts. Financial plans might include sales plans, revenue/expense plans, and capital expenditure plans. Operational plans include project financial plans, workforce plans, and demand plans. Forecasts can estimate sales, expenses, demands, and/or projects. Some aspects of different plans and forecasts might complement one another.

Regardless of the type of plan, the big question is always “what moves the needle?” What are the drivers that will move things in a positive direction? Dimon (2013) presents an excellent example regarding average sale conversion, which outlines a scenario where a sales rep has three face-to-face meetings with a client and provides two demos before sealing a deal. This scenario does not necessarily describe a means to move the needle in a positive direction. Constraints may prevent three face-to-face meetings and two demos might lead to fewer, not more, sales. Management always has the option of determining a different driver for a plan.

ISM543Table of Contents Tools

Page 1 of 2ISM543 - Module 5: Getting Commitment

9/19/2016https://coursecms.csuglobal.edu/file/81b3caed-02a1-4a93-9dc9-3ac1d7d7862f/3/production/ISM543_5/ISM54...

2. Ingredients of your EPM Roadmap

Figure 6.6 below outlines a high level planning architecture. This is just one example of an enterprise performance management planning architecture.

The user layer includes the planning and forecasting areas we discussed earlier in this module.

The video below describes the SAP enterprise management roadmap for finance—only one aspect of the planning architecture mentioned above. (Note: minute 23 provides discussion about the road map while the rest of the video discusses enabling technologies that support enterprise performance management.)

The following SlideShare presentation, entitled Improving Enterprise Performance Management, gives another perspective using a Hyperion product.

http://www.slideserve.com/brigette/improving-enterprise-performance-management (http://www.slideserve.com/brigette/improving-enterprise-performance-management)

Click to Enlarge

(Source: Dimon, 2013, p. 95)

(Source: http://youtu.be/t6PwTdod9kM)

The SAP Enterprise Performance Managment (EPM) Roadmap with Performance Analytics

Page 2 of 3ISM543 - Module 5: Getting Commitment

9/19/2016https://coursecms.csuglobal.edu/file/81b3caed-02a1-4a93-9dc9-3ac1d7d7862f/3/production/ISM543_5/ISM54...

No two enterprises are created equal; thus no two EPM roadmaps look the same.

Conclusion

Planning is critical for deploying a well thought out, realistic, and appropriate enterprise management system. Plans help the enterprise ensure there is a solid understanding of constraints, provide opportunities for questioning assumptions, and ensure resources are prioritized.

Click Here to Begin

Check Your Understanding

References

Dimon, R. (2013). Enterprise performance management done right: An operating system for your organization. Hoboken, NJ:

Wiley.

Page 3 of 3ISM543 - Module 5: Getting Commitment

9/19/2016https://coursecms.csuglobal.edu/file/81b3caed-02a1-4a93-9dc9-3ac1d7d7862f/3/production/ISM543_5/ISM54...