Back-to-Basics Series: Part I

What’s the Difference Between Enterprise Resource Planning, Business Intelligence, and Enterprise Performance Management?

"The dashboard is the CEO's killer app, making the gritty details of a business that are often buried deep within a large organization accessible at a glance to senior executives." – Business Week 2006

Technology for Enterprise Resource Planning (ERP), Business Intelligence (BI), and Enterprise Performance Management (EPM) supports performance / process improvement initiatives to help organizations run more effectively.

This set of IT systems, applications, and tools allows organizations to improve planning and execution of initiatives by automating business processes, reconciling information about the state of its business, reporting results, and providing capabilities to forecast future scenarios; all within state-of-the-art integrated data models. For example, an organization might use SAP ERP to automate and manage its procure-to-pay processes as well as manage and reconcile its general ledger - reducing manual labor burdens and errors associated with performing transactions.

BI may be used to automate and improve reporting of valuable information contained in various IT systems. For example, a group of managers may want a report on Mondays containing all the previous week’s spending activity. They want the report in advance for a weekly review meeting held on Tuesdays. So, using BI reports, an automated report scheduled to run every Monday morning is generated and automatically distributed to those managers.

A good example of EPM is in the Office of the CFO, where leadership is responsible for tracking budget execution. Various systems may contain information relevant to communicating the results of programmatic spending. With EPM, users can pull information into a central repository and collect other data manually, then use built-in analytic capabilities to slice and dice and analyze the information to support decision making. This allows the CFO’s office to shift its focus from being a business’ "scorekeeper" and more towards being the business’ strategic advisor.

Utilization of ERP, BI, and EPM enabling technologies support enterprise agility, a culture of innovation, and focus on continuous improvement by allowing personnel to become "knowledge workers" - shifting workday activities from manual collection and consolidation of data. Customers always tell us, "Thanks to you we spend more time performing analysis and communicating results and projections to stakeholders." Dr. Peter Senge refers to this in his book, The Fifth Discipline, as a catalyst towards becoming Learning Organizations, a business culture of continuous growth and improvement.

These ERP, BI, and EPM systems can be very effective in support of better organizational management; however, they are often only as good as the underlying business processes. Management Consultants and Systems Integrators are key to successful implementations because they understand the underlying business processes as well as the enabling technologies, and often deploy sophisticated strategies to help organizations implement and adopt better ways to run their businesses.

Some of the most important aspects of this work include:

• Data architecture design and performance measurement frameworks
• Systems security and data validation
• Data integration and reducing manual data call burdens
  
• Performing strategic analyses to align activities with goals, and understanding current and potential gaps and variances
  
• Modeling and conducting analytics
  
• Designing and performing forecasting models and "what-if" scenarios
  
• Structuring and distributing prioritized reports to relevant stakeholders
  
• Creating and deploying dashboards and scorecards
  
• Utilizing repositories to minimize change management through superior knowledge management
  
• Strengthening user adoption with adult-learning based training to power users and end users
  
• Employing standards-driven project (PMI®) and process management (CMMI®)
  
• Leadership in communications, perseverance, and teamwork
  

There are many companies out there that do ERP, BI, and EPM. Here are some other big players in the industry that DMG has teamed with to deliver solutions.

• SAP / Business Objects
  
• Oracle / Hyperion
  
• IBM / Cognos
  
• Microsoft
  

"If the dashboard is the CEO’s killer app, then what is the CFO’s or COO’s? Next month’s column will help sort the different products for ERP, BI, and EPM into a cross-functional solution matrix based on title / job role. Part II of this story will also include step 1 in building a sound performance management system." – Standardizing on a Business Framework

For example, a business framework for government performance management may be the Government Performance Logic Model ™.

The schematic below offers a conceptual view of the main components of the Government Performance Logic Model. It depicts how strategy (top row) is performed using a "top-down" approach. The bottom row of the schematic illustrates the implementation "flow" of the planned strategy. The Logic Model presents a comprehensive view of a performance-based organization.

The Government Performance Logic Model is a trademark of the Performance Institute. It’s being used by DMG with verbal permission.

Written by Mike Morello, Senior Sales Manager