Gary Lee, Global Head of Leadership and Organisational Development, Sivantos Group
What does it mean when we say, “Enterprise Performance Management”? Each function will have their own interpretation of the term. Finance will tell you that it is primarily for financial planning and analysis while operations will emphasize on how it impacts their supply chain through demand and supply forecasting. Add in the quality team’s tenacity for stringent audits together with the sales teams’ target to chase numbers and you get a multifaceted description of what enterprise performance management.
Most enterprise performance management (EPM) platforms come with the following features:
1. Budgeting, planning, forecasting and reporting of function relevant data
2. Interactive, accurate and preferably real time dashboards and data visualization
3. Financial consolidation of different objectives
4. Collaborative sharing of data analytics – how does each data set correlate with others?
To increase overall business performance by monitoring, informing and predicting business outcomes. This helps business leaders make more timely, disciplined and objective decisions relevant to market conditions.
Now that we have defined the scope of EPM, what are some considerations to ensure that it actually works in an organisation? Most EPM publications available online tend to focus their attention on processes, the features of the systems and how it connects with one another. When implementing EPM systems, it is important to take 2 other Ps into consideration which completes the equation below.
Business Profitability = Purpose + People + Process
Processes are perfect, but people are not, that is why processes fail. If people do not have a purpose why organisations do what they do, it becomes significantly harder to get their buy-in to implement any change initiative. These 3Ps have to work together in unison to achieve increased profitability. Here are 4 considerations to ensure a successful EPM implementation:
1. Change is bad, no matter what
Regardless of the nature of change, any deviation from the status quo will usually elicit a “why”, “why do we need to change?” Or “why change now?” from the employees. Before implementing, it would be a good idea to conduct a litmus test where employees are in terms of change readiness (Attitude & aptitude).
Every successful implementation must have a communication plan
In some organizations, change has become such a constant that employees experience change fatigue. Understanding your employees’ baseline and appetite for change will determine your implementation approach (big bang or phase by phase), speed of implementation and the level of workforce involvement (top-down, bottoms-up or consensus building).
2. Communicate, communicate, communicate
How important is workforce communication when it comes to EPM implementation? Without timely relevant information, it can derail the implementation resulting in financial losses and resource wastage. A common challenge with most EPM implementations is that communication tends to happen at the very end.
This could be because communication workstream occupies a low priority in the bigger scheme of things or that in the midst of implementation, communication becomes a forgotten element until time to launch. Every successful implementation MUST have a communication plan:
Who needs to know what by when and how will this be communicated?
These questions have to be answered from the very beginning and integrated with the overall implementation plan. Doing this will ensure that change resistance from employees is lowered due to surprise or groupthink occurrences. This will also give different stakeholders opportunity to provide timely inputs to align implementation with changing business needs.
3. 1 + 1 doesn’t always equal to 2
As they say, cutting an elephant in half does not give you 2 small elephants. Implementing an EPM system requires the organization to work across different functions and integrate differing objectives and work practices. This adds additional layers of complexity and complications to the implementation. This is why this most would prefer a dedicated project manager and a committed steering committee to remove these obstacles and make swift decisions. Doing this in additional to one’s existing job role is a recipe for failure.
4. Make HR your strategic partner
From a HR perspective, we can play a strategic role in supporting the
enterprise implementation by providing people insights from a pragmatic and behavioral perspective. Beyond headcount, attrition and payroll, HR can provide analysis in the following areas:
• Performance levels of different functions: This can help guide how you plan to prioritize the implementation. Should you work with high performance teams as they have the ready capabilities, or should you work with the low performance teams as “low hanging fruits”?
• Culture of the organisation: HR can advise on who are the change advocates, the leadership path of least resistance and ways of working across different functions. This can help save significant time and effort during implementation as you are able to bypass formal channels.
• Organisational design: This is important information that HR can provide to guide the implementation sequence. Are there certain functions which need to be implemented first before others or if more resources are required due to levels of complexity and complications within and across the function?
I hope this article provides more insight about EPM beyond just definitions and emphasizes the importance of considering the employee element in this. Ultimately the workforce are the end users and any change WILL always bring about resistance at different levels.