The “enterprise” aspect of enterprise performance management (EPM) means that planning, modeling, and analytics capabilities should work closely together across domains to provide a holistic way of managing performance for the entire organization. However, our research indicates not enough “enterprise” use exists in most EPM deployments. The finance function dominates usage of data, analytics, and planning capabilities to create its own view of enterprise performance, and uptake of EPM outside of finance remains limited in most organizations. Since organizations rank finance metrics as significantly more important than all other metrics, EPM deployments usually start in finance, with plans to extend later into other domains. Despite these good intentions, many EPM deployments get “stuck” in finance. The “enterprise” element is sorely lacking.
Line-of-business leaders in many organizations will not wait for finance-led EPM deployments to reach their domains. Instead, they frequently implement domain-specific planning and modeling solutions to address the increasing impact of external forces. Such actions create a challenge for data leaders: how to balance planning and analytics needs across domains without creating silos of disconnected analytic applications.
The 2023 Dresner Advisory Services Supply Chain Planning and Analysis Market Study shows this challenge will impact product-centric organizations, which frequently make, manage, and move physical products. That makes supply chain planning and analysis an important capability in these organizations, especially as supply chain issues are an external force that can impact them negatively. However, finance function respondents rate supply chain planning and analysis capabilities of low importance, while the operations function respondents overwhelmingly view supply chain planning and analysis as a domain capability. Consequently, without appropriate guidance and governance, supply chain planning and analysis will be implemented as a siloed domain solution. Operations potentially wants to “do its own thing” with supply chain planning and analysis, and our data indicate that finance will happily let them do it.
However, the data also reveal some encouraging signs. Respondents from the BICC, IT and executive management tend to view supply chain planning and analysis as a top priority for the business, rather than just a priority for the supply chain organization. This shows these functions take more of an “enterprise” view of supply chain planning and analysis, compared to operations and finance.
More importantly, executive management considers integrated business planning as the most important capability in supply chain planning and analysis. Operational aspects of supply chain planning intersect with financial and strategic planning in integrated business planning, which can bring together finance, supply chain and other domains to build a truly enterprise-wide approach to performance management in product-centric organizations. Executive management appears to understand this.
Consequently, data leaders in product-centric organizations should focus on integrated business planning to prevent finance and operations from creating their own silos of disconnected EPM applications. Since financial planning and supply chain planning regard integrated business planning as relevant, arriving at consensus around shared processes in this area will be easier. A focus on integrated business planning also creates an opportunity to include the needs of other domains, such as sales and marketing, and manufacturing.You do not have permission to access this document. Make sure you are logged in and/or please contact Danielle with further questions.