EPR Enterprise Performance Reporting A Fundamentally Better Way

EPR Enterprise Performance Reporting A Fundamentally Better Way to do Business TM

Performance Reporting u u The need for up-to-date information on the financial and non-financial performance continues to increase. Accounting departments are expected to close the books in shorter time frames. Working faster or even smarter is no longer enough. Management and owners are expected to manage the business to the benefit of different, often conflicting, stakeholders.

Why Measure Performance? u Strategic Alignment of Objectives u Clear Responsibilities and Objectives u Effective Control u Optimized Resource Allocation u Anticipation of Trends

Problems with Most Measurement Systems u Too much data that no one uses u Lack of relevant detail u Measures that drive the wrong performance and discourage teamwork u Incongruent goals across the organization

The Keys to Effective Measurement u Less is More (K. I. S. S. ) u Linkage to Vision, Values and Key Success Factors u Data must be available, consistent, complete, timely and reliable u Metrics should flow down to all levels u Metrics must be manageable

Measuring Financial Performance u Financial reports must contain the data that managers need to manage u Financial reports are useless if they aren’t read or acted upon u Timing is of the essence

Incorporating non-financial measures u Link to long-term organizational strategies u Identify drivers of success u Better indicators of future financial performance u Non-financial measures are less susceptible to external noise u Need to understand causal links

Non Financial Measures u u u Customer Satisfaction Quality Process Performance Supplier Performance Employee Satisfaction

EPR Enterprise Performance Reporting is: u u u A unified view of the organization Top-down in concept / Bottom-up in achievement Cost-Effective Focused on the fundamentals Incrementally implementable

EPR Achieves: u u u Lower operating costs Higher profitability Working together towards common goals Focus on goals and growth Everyone knows where the company is going Match between Accountability and responsibility

EPR Implemention u u u Select the Right Measurements Link to vision and strategy Establish Goals Translate Measurement into Action Communicate Performance

Selecting the Right Measurements u Start with the Vision and Strategy u Categorize into Groups or Perspectives u Define objectives u Define meaningful metrics that will help to measure the performance against objectives u Understand Cause and Effect

Linking to Vision and Strategy u Vision and Mission Statements should change the way a company works u Define goals from the strategy u Define performance measures to understand performance against goals u Be careful of deceiving measures

Business Goals u Goals should include a measure u Avoid short-term goals inconsistent with strategy u Avoid inconsistent goals at different levels

Data Acquisition u Data must be accurate u It must be timely u It must be consistent u It must be cost-effectively collected

Using Performance Measures Effectively u Accountability must link to performance measures u Regularly review and analyze the measures u Use metrics for more than just keeping score u Communicate performance information u Establish priorities

Avoid the Pitfalls u Keeping results at the top u Development process too long u Treating EPR as an IT project u Using EPR only for compensation

Conclusions u Start with the Vision and Strategy to develop a balanced set of relevant metrics and dimensions u Base business performance measurement on a unified view of the organization u Think Information, not Data u Select an application that will facilitate analysis, & promote communication u Follow measurement with action

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