EPM - systems approach offers strong differentiator, success factor

The quest is a familiar one, implementing a state-of-the-art piece of software on time and within budget.

However, this is the mere tip of the iceberg, one has to contend with the human factor - a target audience that is not 100% satisfied; change management therefore becomes a critical part of the above implementation process.

On the other hand, consultants feel business is not taking ownership - stating that the software cannot perform some of the business-critical functions while lacking to set clear perimeters and objectives from the start.

So, after several iterations of assigning blame, eventually an intervention or new initiative is attempted to correct the issues, often months or even years after the initial implementation.

Enterprise performance management (EPM) offers a real solution to the above issues and challenges. It provides an integrated business intelligence (BI) solution that gives companies a comprehensive view of their enterprise to in turn gain insights, make faster and better decisions, and ultimately achieve a competitive edge.

At the heart of EPM lies the ability to deliver a shared purpose, a consistent data model, real-time information, easy-to-use tools, and importantly, streamlined processes. This simplifies the alignment of operational procedures with company strategy.

However, EPM is first and foremost an integrated business process; the technology is only the enabler and an EPM solution based only on technology is destined to fail.

As they say, 'hindsight is perfect', however, a change in the initial approach should be considered. The question is, what should it be; after all, there are several project management approaches out there, these including Prince, ASAP, PIMBK and so on.

These project management approaches are usually applied by the consulting company focusing on the upcoming implementation, often exclusively from a technological perspective: “What is the effort required to implement this piece of software in the required period of time?”

In this simple statement the resultant disconnect between the systems integrator and the customer becomes clear. The integrator and its consultants are mostly interested in features while the customer is more interested in benefits.

Enter EPM, which includes not only a physical system implementation but really a change in culture.

The value of EPM lies in its ability to overcome holistic organisational issues. For example, a best of breed or integrated piece of software will not achieve the objects and required level of integration required for effective performance management within an organisation.

Rather, integration is achieved through setting the common organisational goals that drive business plans and ensuring that these goals are relentlessly and consistently driven down to the operations by linking them to the roles, competencies and performance measures in order to achieve the goals.

Effective EPM is about people first, then software. It will only be effective if it is ingrained in the organisational culture, and that can only be achieved if the goals and measures are judged to be fair and realistic, while consistently being applied.

However, one cannot ignore the role that decision support systems play in the success of an EPM roll-out.

According to surveys and studies, a certain percentage of high performance companies use visualisation, dashboards or other software. These claims are backed up with flashy graphs and statistics showing that specific EPM solutions are used prolifically in high performance companies.

It provides a nice headline for software companies to market their solution offering, enticing the business into believing that their product will offer them the same results as high-performing organisations.

The causality here rather lies in the fact that what made these high-performing organisations successful in the first place existed long before they used a particular piece of software.

The culture of the organisation makes it a top performer, which is enhanced by the software it uses, not the other way around.

Also, implementing a particular piece of software and placing it in front of a de-motivated and uninterested employee in an organisation that accepts mediocrity will not magically transform both into a high performing mega-team.

The good news is there is a way to view a software implementation to gain an alternative perspective to the implementation - software is supposed to fix the possible paths to failure. This alternative perspective can be gained by approaching any implementation from using systems theory.

At its essence, a system is usually made up of many smaller systems, or subsystems.

For example, an organisation features many administrative and management functions, products, services, groups and individuals. If one part of the system is changed, the nature of the overall system is often changed as well.

By definition, a system is systemic, meaning relating to, or affecting, the entire system. (This is not to be confused with systematic, which can mean merely that something is methodological. Thus, methodological thinking - systematic thinking - does not necessarily mean systems thinking.)

In the systems approach, concentration is on the analysis and design of the whole, as distinct from total focus on the components or the parts. The approach insists upon looking at a problem in its entirety, taking into account all the facets, therefore all the intertwined parameters.

It seeks to understand how they interact with one another and how they can be brought into proper relationship for the optimum solution of the problem. The systems approach relates the technology to the need and the social to the technological aspects.

It starts by asking exactly what the problem is and what criteria should dominate the solution and lead to evaluating of alternative avenues. As the end result, the approach looks for a detailed description of a specified combination of people and apparatus - with such concomitant assignment of function, designated use of material, and pattern of information flow that the whole system represents a compatible, optimum, interconnected ensemble yielding the operating performance desired.

It is quantitative and objective. It makes possible the consideration of all needed data, requirements, and (often conflicting) factors that usually constitute the heart of a complex, real-life problem.

That said, it should be remembered the systems approach will not solve substantial problems overnight or even solve all of them. No matter how broadly skilful is the systems team, the approach is no more than a tool. What it can do is to achieve orderly, timely, and rational designs and decisions.

Let us look at some of the benefits from the systems approach - some more subtle than others.

For example, a large international retailer has in the last two years greatly benefited from a data warehouse that records the sale of every individual item, every hour of every day at each of its stores. This information has in turn been provided to vendors in order for them to understand why, when, where and under what conditions their product sells.

In the context of the corporate culture, it is easy to understand why an EPM system such as Retail Link will succeed and why its competitors have copied the idea with 'mixed results'.

Applying the systems approach, relating the social and psychological (culture) to the technological, the organisations' readiness, level of maturity and its ability to accept and adapt to a new system can be evaluated.

The systems approach will indicate whether the culture will support the system and whether it will in turn support the organisation and its stated goals.