Enterprise Performance Management (EPM)

EPM is a field of Business Performance Management (BPM) that considers the visibility of operations in a closed-loop model across all facets of the enterprise.

Several emerging areas in the EPM domain are driven by corporate or organisational initiatives, academic and technology research and commercial approaches such as EPM solution vendors (SAP BPC, Oracle Hyperion Essbase, IBM Cognos TM1, etc.).

Enterprise Performance Management (EPM) and strategic needs

Performance management is the steering and implementation of a strategy or business steering activity. It is the measurement of the degree of achievement of an objective, and is therefore part of the company’s short and medium-term vision and strategy. The subject of performance management in organisations has long been a source of applications and research.

Based on the mission and vision of the organisation, the different strategic needs can lead to the question of how the EPM areas are mainly exploited and promoted within an organisation. For example, a professional services firm based in France may become aware of the need to arrange supply chain operations efficiently and transparently in a very different way to a clothing manufacturer with operations around the world.

What remains common in the EPM approach is the closed loop model. This EPM process is advocated by Kaplan and Norton and their methods for managing and formulating business strategy.

The hierarchy of Enterprise Performance Management (EPM)

Four disciplines exist to define and cover the six stages of the closed loop model. The four disciplines are: strategy development, business planning and forecasting, financial management and supply chain efficiency.

The six stages of the closed loop model EPM process are:

  1. Strategy development
  2. Strategy translation
  3. Organisational alignment
  4. Operations planning
  5. Learning and monitoring
  6. and finally, Adaptation testing

EPM strategy formulation

Strategy formulation refers to the activities of an organisation that determine the direction of the agenda. This is usually built on the mission, vision, and strategic objectives of an organisation. Once the direction is established, an organisation monitors progress against its activities and takes corrective action to achieve a particular target.

While execution is key to any business objective, the formulation of the strategy surrounding execution must take place in the right context. In recent years, organisations have integrated formal risk management approaches to address the market opportunities that organisations pursue. In this way, strategy is aligned, performance is predictable, and executives can make better decisions.

Here is an article on the concepts of Big Data.

EPM and Management Control

Indeed, management control has undergone profound changes. Its new name reflects its new challenges, and professionals in the field now talk a lot about “performance measurement and management”. This change in name reflects profound changes. Indeed, the function and its integration into the management process play an increasingly strategic role.

Certain concepts now propose a thoughtful integration of methods and technologies oriented towards business processes and customers, within a perspective of continuous improvement, such as SOA, EAI, Strategic Information and Business Intelligence, Business Performance Management. Performance measurement is one of the most important points of the discipline (KPIs, BSC, Dashboards).

However, the issue would not be fully addressed if we did not look at the themes of sustainable development, governance, and technology management.

A modern vision of Business Performance Management

Lean management and the 6 sigma method also have a major role in performance management. However, not everything is transmitted via procedures, reports or lists. We are human and some information is best understood when theory is put into practice.

Moreover, we must stop thinking that a good manager is one who accumulates knowledge. The days when the manager ruled over his team because of his superiority in knowledge or because of an officially established authority are over. A good manager is someone who participates in bringing forward all the intelligence available in the company with a view to achieving the effectiveness of cumulative intelligence.

For an even more operational view, but closely linked to EPM, here is another definition, this time on the concept of Business Process Management: BPM.

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