NEUBRAINER, the official blog of Neubrain

Enterprise Performance Management (EPM) is an umbrella term used to describe the methodologies, metrics, processes, and systems that help enterprise companies monitor and manage their business’s performance.

Executives seeking deeper insights into business trends and potentially ambiguous opportunities utilize Performance Management. Sub-components of EPM include: Enterprise Planning, Performance Monitoring & Measurement, and Enterprise-Wide Reporting. 

Benefits definitely outweigh the challenges in deploying an EPM capability. These benefits include:

• Enterprise-wide visibility
• Strategic “red-zone” monitoring
• Improved resource planning and allocation
• Agile decision-making
• Predictions for future performance
• Delivery of a broad spectrum of critical business data (Note: this data is generated through monitoring, analyzing, and controlling organizational performance.)

Failing to properly manage or dedicate your company to continuous improvement of your performance management capability can lead to undesirable outcomes. Organizations must be aware of common ways that performance management initiatives can be undermined, causing business performance to stall or decline, instead of thrive.

Here are 10 ways you could be undermining performance management and suggestions on ways to avoid these pitfalls:

After many years observing organizations' budgeting and forecasting software selection and buying processes, we have discovered that many organizations, no matter their size, often jump into the buying process under that assumption that new software will be the answer to all of the organization's budgeting woes. While software can help improve an already well-established budgeting and forecasting process, software in and of itself is never the solution.

Budgeting, forecasting and performance management is a difficult process for organizations, not to mention reporting on results can be challenging, regardless of size or industry. Enterprise planning is critical for managers that contribute to the overall success or failure of a program, project or product, especially in good and bad economic times. Despite the importance of accurate forecasting, budgeting is often seen as a demanding and inefficient process. Yet forward-thinking organizations see integrated planning and performance management solutions necessary to compete.                                                                                                                   

Earlier this month, Aberdeen Research released the results of their 2014 Financial Planning, Budgeting, and Forecasting and Enterprise Performance Management Benchmark Survey. The survey sought to discover the best practices and technologies used by organizations that are successfully navigating the financial planning, budgeting and forecasting process. So, what did the survey reveal?

Many government agencies and private corporations are nearing the end of the 7-10 year average lifespan of most budgeting and performance management software systems, causing more and more CFOs to explore new budgeting and performance management technologies. In fact, according to the “2013 Gartner Financial Executives International (FEI) CFO Technology Study,” nearly 60% of CFOs indicated that investing in analytics and decision-making was their top priority, as it should be. 

In the past decade, budgeting and financial planning technologies have transformed from error-prone manual data entry tools to an array of advanced analytical, integrated, and sophisticated real-time budget management software solutions, improvements that are only making the software selection even more difficult. Recent independent research revealed the top three software acquisition impairment factors:

• Lack of user input
• Incomplete requirements and specifications
• Changing requirements and specifications

To overcome software acquisition impairment, it is imperative to put time, effort and thought into your software selection process and establish quality requirements. 

Click on the infographic and discover just how important detailed, thought-through QUALITY requirements are to your budgeting software selection process or read the complete list here.