I am excited to be here today to speak to such an intelligent and esteemed group of people. What you do everyday as relates to strategic planning (think . . . plan . . . act) is more relevant today than ever before.
Strategic planning is increasingly being categorized within the broad performance management market. Strategic planning is too frequently performed in a vacuum – a stand-alone annual project. I think of strategic planning differently when I view it in this broader perspective.Performance management, whether BPM, CPM, or EPM means different things to different people. There’s no common definition and this creates confusion. I developed this diagram to help get folks on the same page.There are tools and vendors that provide solutions that can increase the effectiveness of strategic planning.
BPM: Not to be confused with the other BPM (business process management) – workflow automation tools out in the marketAlienates the public sector because they don’t run a businessLeast tracked nuance by analysts and consultantsBut, it’s the most Googled search term - -catch-allCPM: Gartner-driven market segmentOffice of finance (budgeting, forecasting) and now Gartner is driving an evolution that spans beyond this office)Software vendors that coin this nuance are typically spreadsheet replacement vendors (Prophix, Tagetik, Adaptive Planning, etc.)EPM: Adopted by the biggest vendorsInfers big, multi-national/multi divisional (enterprise size)Alienate small to mid-size organization
Good time to solicit audience for feedbackStreamline the time to get key information needed while uncovering your own research and due diligence
As EPM evolves, so have the tools you can leverage to streamline and automate.Maturity curve where everyone is on a different part of the curve. And it is important to understand your current state in reference to your desired visionary stateERP started out as a financial point solution and in time has progressed to extended ERP with a host of modules, acquisitions.
What the chart statesKey point – growing by double digits, lots of attention in the marketplace
The fastest growing segment of EPM is strategy management – 18% Compound Annual Growth Rate – Why is thatvolatile market conditionsSlowest growth is occurring in “office of finance, spreadsheet on steroids area” primarily because there is no ROI in budgeting and forecasting. Our time has come – natural evolution process
Why are the $billions being investedOrange bar – who’s really voting here. How can a better historical report be more important than performance
How do you ever know that these metrics (which drive behavior) are aligned or not.
What needs to happen is the integration of performance managementalignment
Simplifying the Complex Enterprise Performance Management Market
The Holy Grail of Enterprise Performance Management<br />Lee Mashburn<br />Chief Marketing Officer, Cogniti<br />April 12, 2011<br />
Agenda Overview<br />Strategy Management: We Must Close the Gap Between Costs and Returns<br />Enterprise Performance Management; Where Strategy Fits<br />The Need for a” Holy Grail” of Enterprise Performance Management<br />Defining and Realizing the “Holy Grail” of Enterprise Performance Management<br />About Cogniti<br />
Key Strategies are Not Being Executed . . . And at great cost<br />90% of U.S. organizations fail to execute their strategies successfully<br />Estimated that U.S. managers spend more than $10 billion annually on strategic analysis and strategy formulation – which means . . . <br />$9 billion wasted annually on strategy that is not successfully executed<br />Another statistic: Fortune 1,000 companies spend an average of $7 million per organization per year<br />
The Importance of Building Accurate Plans has Increased<br />Source: Accenture – Authors Bergstrom, Batchelor, and Marcotte<br />
The Need for a New Planning Approach<br />Traditional Planning<br />Flexible, Dynamic Planning<br />Driven off historical performance and internal operations.<br />Schedule-driven annual exercise.<br />Weak link to operations.<br />Labor-intensive data collection.<br />Emphasis on short-term profitability.<br />Grounded in market expectations and external trends.<br />Probabilistic scenarios including risk factors.<br />Real-time adjustments. <br />Planning tightly integrated to front line.<br />Broader planning scope to cover balance sheet and cash flow.<br />Source: Planning for Success in Dynamic Environments, Accenture, 2009<br />
Accenture Conclusions<br />Embed Flexible and Dynamic Planning Processes<br />Focus on what matters most – tie it to financials<br />Incorporate a range of scenarios<br />Involve your operating staff in planning<br />Renew the Focus on Strategic Planning<br />Helps to prioritize bets<br />“Forecasts are 33% more accurate when Operations is an integral part of the process”<br />
BPM, CPM, EPM: Simplifying a Complex Market Place<br />Flavor<br />Nuances<br />Adopters<br />Relative Public Mindshare per Google Search<br />
BPM, CPM, EPM: Simplifying a Complex Market Place<br />Enterprise Performance Management<br />Corporate Performance Management<br />Business Performance Management<br />Flavor<br /><ul><li>Often confused with business process management.
Just a budgeting and forecasting exercise</li></ul>Results<br />
To Compound the Problem<br />Gartner 2011 BI Magic Quadrant<br /><ul><li>BI is being increasingly promoted as a performance management tool.
Big mega-vendors are failing to properly integrate BI acquisitions with the many performance management modules they offer.
Improving performance is not being reached by measuring, analyzing, and reporting everything.
Historic performance results are not helping to achieve business objectives.</li></ul>“Ongoing dissatisfation among IBM, Oracle, & SAP Business Intelligence (BI) customers suggests that chronic dissatisfaction may be the new normal.”<br /><ul><li>High cost of ownership
About Cogniti<br />“Cogniti gives you all the pieces in one place to pull together strategic, operational, and financial plans and then follow through with the execution and management of those plans.”<br />Craig Schiff <br />President & CEO, BPM Partners<br />