The superpowers of a stellar performance management solution
Best-in-class organizations are 79 percent more likely to have an enterprise performance management solution and 75 percent more likely to use predictive analytics. What’s their secret? Taking advantage of data in the right ways and effectively employing analytics acts as a superpower. Read on and you, too, can learn from their practices to become a performance management superhero.
Your data isn’t working for you if it isn’t visible. To have the greatest effect, information needs to be available to the right people at the right time, across all business functions and at all levels. A developed enterprise performance management (EPM) solution integrates the information from all departments to make it available at times of need. Decision makers have laser vision into the operations affecting financial outcome at any given time, enabling them to more accurately budget and forecast. In their report “Information, Technology and Innovation in Business Management, Part 1: Schumpeter’s Gale,” Steve Morlidge and Steve Player say, “Many companies today sit on terabytes of data of which they use only a small fraction ... you will find sophisticated information systems lying idle or doing little more than exporting data to spreadsheets where most of the work is done.” With market volatility requiring swift response to change, access to accurate information in real time can prove a huge advantage.
By automating processes, an EPM solution reduces the amount of time and resources spent on manual budgeting and forecasting. According to a study conducted by the Aberdeen Group, best-in-class organizations are 40 percent more likely than others to use budget templates and are 42 percent more likely to guide participants through the process automatically. In addition to reducing the time spent in manual spreadsheet entry, manipulation and sharing, this can dramatically decrease the time required to have an effective view of your company’s performance and the factors affecting it. And you can save even more time by managing your solution in the cloud. Will it all happen at the speed of light? If not, then certainly at the speed of business.
Even with the most careful and diligent planning, unexpected conditions arise. Perhaps you shifted your supplier to a different country only to see an unexpected drop in product demand? The key to being able to successfully pivot in the face of unplanned shifts is risk planning. The Aberdeen study found that organizations that include predictive analytics in their enterprise performance management solutions are 3.6 times as likely to include risk data in their planning. When, inevitably, the unexpected arrives, risk planning allows your organization to stay flexible and profitable.
Vision into the future
Predictive analytics allows your organization to assess decisions for the future based on causal relationships and data trends of the past. It allows you to run what-if scenarios, a capability that organizations that use predictive analytics are 79 percent more likely to have. Releasing a new product line? Run as many scenarios as you like to see how they affect your forecast. Or look into the future to create contingency plans. Stay always a step ahead by taking advantage of your stellar EPM solution.
Where does your organization stand on the path to a super performance management solution? What’s your next step to take it to the next level? Learn from the best in class in Aberdeen Group’s report “Improving Planning, Budgeting and Forecasting with Advanced Analytics.”