‘Enterprise Performance Management: unlocking business potential’


Q&A with Francis Han, General Manager,

EPM-BI-Exalytics, Oracle Corporation, ASEAN

Francis Han is General Manager for ASEAN Applications at Oracle Corporation speaks on Enterprise Performance Management and unlocking its business potential". Francis is responsible for the sales of Business Analytics solutions within ASEAN, and is part of the Hyperion team and has been working on the same solution set ever since.

1. Share the state of today's business market. -Discuss on the core business objectives for enterprises?

Despite the slow economic growth, business cycles are becoming more rapid. Enterprises are finding new ways to stay relevant and competitive due to the quickly changing business environment.The increasing amount of both structured and unstructured data generated as a result of disruptive technologies such as Cloud, Mobile and Socialis also becoming a serious concern for planning and reporting.

In order to survive and thrive in today's market, organizations need to consider investing in and leveraging new technological trends which drive in novation, reduce costs, and improve anenterprise's performance. For instance, investing in the technology available helps an organization to analyze the exploding amount of structured and unstructured data to help in decision-making, developing more accurate forward-looking models and supporting risk-based decisions.

Through Oracle's work with customers and partners around the world, there are some recurring themes that emerge regarding the objectives that are top of mind in today's market:i) Achieving profitable growth, ii) Delivering consistent business performance, and iii) Standardizing processes for greater efficiencywhile enabling business innovation.

However, the majority of business executives are finding it a challenge to achieve their business goals and objectives under the current market conditions.

2. What do you see as the obstacles/barriers that are hindering enterprises in achieving their goals?

There are certainly barriers in achieving these goals, which are largely due to the current market conditions as above mentioned. This includes economic uncertainty and volatility, increasing expectations from stakeholders, inefficient business processes and IT complexity.

Firstly, the uncertainty and volatility in today's economic environment is making it difficult for enterprises to plan and forecast accurately.

Then, there are increased expectations from stakeholders that are stretching the limits of many enterprises. The external stakeholders ask for more quantitative and qualitative disclosures about the organizations they are investing in, as well as the internal management stakeholders who are demanding for more frequent insights into financial and operating results.

Thirdly, IT complexity is driving up the costs and limiting the ability of enterprises to invest in business expansion. Plus, the workforce is ever evolving. The Gen-Y and Millennial have been raised to depend on technology and have less patience for systems that are outdated or do not respond quickly.

To remove these barriers, many enterprises are looking into an integrated enterprise performance management (EPM)approach that supports the needs of Finance and ITin order to unlock business potential and deliver profitable results.

With EPM, enterprises can effectively eliminate or invest more into the under-performing products, provide more focus on under-served customer segments, and better utilize existing staff and capacity.

3. How would you propose the midmarket organizations and medium enterprises to approach Enterprise Performance Management?

In order to leverage EPM to break down the mentioned barriers to success, mid-sized organizations can look for EPM to help provide several key outcomes:-

i) Aligned Objectives

The linkage between the long-term business strategy with the annual financial budgets is critical for enterprises to ensure alignment across the organization and optimal use of resources.

Best practices in the area of strategy management and aligning objectives include; leveraging balanced scorecard or other management methodologies, employing cascading scorecards through the management chain, aligning KPIs to strategic goals, using both leading and lagging indicators, and leveraging predictive modeling to incorporate risk into strategic planning.

However, an effective strategy management process that includes these best practices can be challenging when using spreadsheets or manual processes to execute. An EPM system can help.

ii) Accurate forecasts

Globally, we observed that finance managers are drowning in spreadsheets and this was especially true in the area of budgeting, planning and forecasting. Relying on spreadsheets has been shown to lengthen planning cycles, introduce errors, and limits the ability to adopt best practices in planning and forecasting.

Ideally to ensure higher accuracy in forecasting,enterprises should shorten the annual budget cycle by spending less time on the budget and including fewer details in the budget. Enterprises should opt for rolling forecasts to refresh budget assumptions on a regular basis such as every quarter or month,or to use driver-based plans and forecasts to reduce manual inputs.

iii) Confident close

A recent article in the Wall Street Journal¹ highlighted that earnings restatements in large organizations increased by 21% in 2012, and 60% between 2009 and 2012. The main drivers of these restatements included: errors in tax accounting, cash flow statement classifications and revenue recognition issues. Restatements are the biggest nightmare for a CFO as the market doesn't look favourably on companies that have to restate their earnings due to issues in the financial closing and reporting process. Enterprises should look into streamlining the closing process while improving accuracy and confidence in the results delivered.

iv) Creating an Accountable enterprise

Having insight into financial and operational performance is critical to effective decision-making. Based on our recent conversations with customers across the industries, we found that many companies are lacking visibility into profitability across their business. While most have visibility intoprofits at a corporate or division level, they don't fully understand the profitability by products, services, channels, customers, brands or projects. When managers don't havefull visibility into the impact of their efforts, then it's difficult to make them accountable for their results.

To improve management accountability and the metrics used to gauge success in this area, enterprises can perform full allocations of overhead on a regular basis, drive costs down to more detail - products, services, customers to better understand profitability at the line of business level, and leverage mobile information delivery to empower managers with timely insights.

4. Other highlights for the readers on Enterprise Performance Management?

In summary, an integrated EPM platform helps organizations break down the barriers to success, linking business goals to results and unlocking business potential. With a world class EPM platform organizations can deliver the desired outcomes needed to succeed in today's market; Aligned Objectives, Accurate Forecasts, Confident Close and a more Accountable Enterprise. Plus they can address the needs of Finance, IT, as well as line of business managers to ensure more consistent decision-making.

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