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How Enterprise Performance Management Is About More Than Just Watching

EPM is gaining in popularity, are you doing it?

14Nov

Enterprise Performance Management (EPM) is the practice of monitoring the performance of the different business units across the enterprise, to give a full holistic view of the performance of the business as a whole rather than just the sum of P&L.

This involves finding KPIs for each department and then monitoring these to establish control and fluctuation.

An interesting aspect to this is that EPM requires a baseline from which these KPIs can be measured. For traditional aspects of a business such as sales and accounting, this can be relatively straightforward as their primary function is selling and finance, which are KPIs based purely on numbers. It may be more difficult to pinpoint KPIs for newer or less numerically based roles such as web management and marketing, making these harder to create a control point from.

The key to successful EPM is therefore, not only having the processes in place that allow KPIs to be measured, but to know the baseline from which success can be gained. For instance, if a sales department sells $1 million in one year, how does that compare to previous years? How does it roughly compare to any competitors? It is more complex than simple measurement and needs to utilise historical data and competitor intelligence.

EPM is also about more than simply reporting on how well a department and the enterprise is doing, it also needs to try and pinpoint why a result (either positive or negative) has happened. Therefore, KPIs are going to show only the end results, it will be up to business analysts to decipher the actual reasoning behind them.

This will require in-depth analysis of deeper metrics and trends within each division, to help establish the reasons behind each result.

So from this, we can establish that EPM is not simply a practice in finding out how each department is performing, but in identifying how each could be doing better. 

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