Enterprise Perance Management Pressure To Per

Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,Click to edit Master title style,23,Enterprise Performance Management,Pressure To Perform,Agenda,AccentureOverview,OurPointofViewonEnterprise Performance Management,Implementationframework,Howtoget started,IntroductiontoAccenture,AccentureOverview,Globalmanagementandtechnologyconsulting organisation,withrevenuesof,$,$13,.,.7bn in FY2004,More than100,000peopleworkingin48countries,Operatesasa globalorganisationservicing clientsinfiveindustrybasedgroups, FinancialServices,Communicationsand Hi-tech, Products,Resourcesand Government,Globallyserves87ofthe FortuneGlobal 100andmorethan two-thirdsofthe FortuneGlobal 500,Accenturecredentials,OurpositioninFinancial Services andourspecialist,“,“ServiceLines”,AccentureOverview,Agenda,AccentureOverview,OurPointofViewonEnterprise Performance Management,Implementationframework,Howtoget started,Enterprise Performance Management,(,(EPM)iscriticaltomanagenear-andlong-term performance,High-performance businessesuse EPMto:,Identifyandpredictvaluedrivers thatwilloptimizepositioninthevaluechain,Link strategy withplanning, budgeting,forecastingand performance reportingcapabilities,Capture information thatcan generate insightand turnthatinsight intoaction,Setbetter strategicgoalsandmakemore informed decisions,Identifyissues,/,/threats faster,and react to themmorequickly,EPMPointofView,CommonGaps,SatisfactionRate,(,(%),0255075100,Alignmentbetween companystrategyand planning process(40,%,%),Focusonkeybusinessdrivers(24,%,%),Amountoftimerequiredtocreatetheannualplan(47,%,%),Speedandaccuracyoftheforecastingprocesses,(,(48%),Ability to producebusinessmodelsandtestimpactofchanges,(,(31,%,%),Speedandaccuracyofthe monthlyfinancialreporting(63,%,%),Reportingofnon,-,-financial measures(28,%,%),Businessusersview andanalyzeperformancereportsatwill (25%,),),Integrated IT systemstocollect andmanagethe information (41%,),),Visibilityinto currentresults,(,(29,%,%),Understanding offutureperformancetrends,(,(30%),Source,:,: October2002surveyof245 companiesconductedbyCFO Research Services,Fact:Manyorganisationsarenot satisfiedwith their currentEPM capability,EPMPointofView,Accounting earnings based financialmanagement hasbecomelessrelevantasthemajorityofvalueisinthe future,Current Value versusFutureValue,Russell 3000,(,(May2003,$,$ trillions),Enterprise Value,Future Value,$13.1,$7.6,1,3,100%,58%,Current Value,$4.9,2,42%,4.2%,$0.6,First Year,Remaining Years,FutureValueisasignificantcomponentoftotalEnterpriseValueformostorganisations,FutureValueisthe expected incremental value beyondthevaluedelivered by currentoperations,EPMPointofView,Neitherdoes theBalance Sheet adequatelytrackthe assetsthat aredriving value.,MarkettoBookValueOver Time,S&P500 ,(,(1980,2002),EPMPointofView,However feworganisationsextendEPM beyondtraditionalfinancialmeasurement,Credit Ratings,Borrowing Capacity,Receivables Certainty,Accruals Convertibility,Cash,Investments,Receivables / Debtors,Payables / Creditors,Plant Flexibility,Plant Modernity,Access Rights,Balance Sheet Strength,Property,Plant,Equipment,Inventory Value,Customer Loyalty,Quality of Contracts,Strength of Stakeholders Support,Networks,Regulatory Imposts,Customer Contracts,Formal Alliances, JVs, Supply Agreements,Structure,Appropriate,Informal Processes,Organization Reputation,Brand Meaning,Productivity of R&D,Systems,Formalized Processes,Codified Knowledge,Patents,Brands,Top Mgmt Quality/ Experience,Ability to Execute Strategy,Leadership Capabilities,Problem Solving Ability,Employee Loyalty,Management Contracts,Documented Accessible Skills Inventories,Intangible,Tangible,Monetary,Physical,Relational,Organizational,Human,Traditionalscopeoffinancial,/,/accountingmeasurement,EPMPointofView,Agenda,AccentureOverview,OurPointofViewonEnterprise Performance Management,Implementationframework,Howtoget started,StrategicPlan,RefineCorporate Vision,&,& StrategicObjectives,TargetSetting,&,& Business Plan,Cascade TargetstoLowerLevelMetrics/Organization,SetTargetsfor,KeyMeasuresofAccountability,Operate,Develop Plans to AchieveTargets,AllocateResourcestoAchievePlans,Review, Challenge,&,& Finalize Plans &Forecasts,Monitor,Develop ActionPlans,Re,-,-allocateResources andUpdateForecast,Monitor KeyMeasuresofBusinessPerformance,DetermineKey Measures of Success,CloseandConsolidateBooksand ReportActuals,PortfolioValueAssessment,Enablers,CommonDataStructures,Incentives andRewards,Policies,&,& Procedures,Integrated IT Arch,ReviewPerformancewithExecutiveManagement,DetermineKey Business Drivers,Controls,Wework withour clientstoimplement aholisticframework forEnterprise Performance Management,EPMImplementation,TargetSetting,&,& Business Plan,Cascade TargetstoLowerLevelMetrics/Organization,SetTargetsfor,KeyMeasuresofAccountability,PortfolioValueAssessment,Typical EPMissues,targetsetting,EPMImplementation,StrategicPlan,RefineCorporate Vision,&,& StrategicObjectives,Operate,Develop Plans to AchieveTargets,AllocateResourcestoAchievePlans,Review, Challenge,&,& Finalize Plans &Forecasts,Monitor,Develop ActionPlans,Re,-,-allocateResources andUpdateForecast,Monitor KeyMeasuresofBusinessPerformance,DetermineKey Measures of Success,CloseandConsolidateBooksand ReportActuals,Enablers,CommonDataStructures,Incentives andRewards,Policies,&,& Procedures,Integrated IT Arch,ReviewPerformancewithExecutiveManagement,DetermineKey Business Drivers,Controls,Targetsettingwrapped intothe budgetingprocess slowandresourceintensive,StrategicPlan,RefineCorporate Vision,&,& StrategicObjectives,TargetSetting,&,& Business Plan,Cascade TargetstoLowerLevelMetrics/Organization,SetTargetsfor,KeyMeasuresofAccountability,Operate,Develop Plans to AchieveTargets,AllocateResourcestoAchievePlans,Review, Challenge,&,& Finalize Plans &Forecasts,Monitor,Develop ActionPlans,Re,-,-allocateResources andUpdateForecast,Monitor KeyMeasuresofBusinessPerformance,DetermineKey Measures of Success,CloseandConsolidateBooksand ReportActuals,PortfolioValueAssessment,Enablers,CommonDataStructures,Incentives andRewards,Policies,&,& Procedures,Integrated IT Arch,ReviewPerformancewithExecutiveManagement,DetermineKey Business Drivers,Controls,Typical EPMissues,enablers,EPMImplementation,Inefficientuseofresource,&,&poor controlfromover-reliance on spreadsheets,Lack of commonbusinesslanguageleadstomisinterpretationofnumbers,StrategicPlan,RefineCorporate Vision,&,& StrategicObjectives,TargetSetting,&,& Business Plan,Cascade TargetstoLowerLevelMetrics/Organization,SetTargetsfor,KeyMeasuresofAccountability,Operate,Develop Plans to AchieveTargets,AllocateResourcestoAchievePlans,Review, Challenge,&,& Finalize Plans &Forecasts,Monitor,Develop ActionPlans,Re,-,-allocateResources andUpdateForecast,Monitor KeyMeasuresofBusinessPerformance,DetermineKey Measures of Success,CloseandConsolidateBooksand ReportActuals,PortfolioValueAssessment,Enablers,CommonDataStructures,Incentives andRewards,Policies,&,& Procedures,Integrated IT Arch,ReviewPerformancewithExecutiveManagement,DetermineKey Business Drivers,Controls,Typical EPMissues,linkage to strategy,EPMImplementation,Lack of broad understandingofkey value drivers,Current reportcontent doesnot align withstrategy,EXAMPLE :Determiningkey business driversusingavaluetree fortheorganisation,EconomicProfit,Variances,ExistingBusiness,NewBusiness,Capital Charge,Persistency,Distribution,Other,ProfitMargin,Average ProductProfit Margin,TotalAPE,APEbyProduct,Commission,DistributionMargin,DirectlyControllableCosts,AllocatedOverhead,Commission Variance,+,+,-,X,+,+,-,-,BUSINESSDRIVERS,DistributorProfitability,Cost of Servicing,SalesforceRemuneration,Product Design,Quality of Servicing,Brand,SalesforceCalibre,IllustrativeexampleforLifeInsurance,ValueTree,BusinessDrivers,EPMImplementation,EXAMPLE:Usingbusinessdrivers to developstructuredreportingrequirements,SalesforceCalibre,ActualAPEvsTargetbyConsultant,PriorityDrivers,KeyMeasures,% of Consultants withBasic,/,/AdvancedSkillsTraining,InformationRequirements,Prioritisationofdrivers by their Economic Value sensitivity,Mapping ofKPIstoprioritisedbusinessdrivers,with identification of additionalnewKPIswhererequired,Linking accountability forbusinessdrivers andtheiroutcomestoindividual business roles enablesamatrixofinformationrequirements to be developed,Matrixincludesclassificationofinformationpriorityand required reportingfrequency,IllustrativeexampleforLifeInsurance,EPMImplementation,Agenda,AccentureOverview,OurPointofViewonEnterprise Performance Management,Implementationframework,Howtoget started,Implement,Implement,Implement,Implement,CONCEPTUAL DESIGN,DETAILEDDESIGN,IMPLEMENT,Implement,DetailedDesign,&,&Plan,BusinessCase Development,High Level,ArchitectureDesign,ImplementationPlan,SoftwareEvaluation,Conceptual DesignofSolution,REVIEW,High Level Plan,&,&BusinessCase,Assesscurrentstatetoidentifygaps/ PerformDiagnostic,StakeholderEngagement,Leading practice is to break EPMinto anumber of discrete stages,DetailedDesign,&,&Plan,DetailedDesign,&,&Plan,DetailedDesign,&,&Plan,DetailedDesign,&,&Plan,Getting started,Organisationalalignment,Justification of investment,Implementationblueprint,Realisationofbenefits,OurEPM Diagnosticenablesissuestobeconfirmed /identifiedina structuredapproachover4 8weeks,Copyright,2004Accenture,.,.Patent Pending,.,.AllRights Reserved.,Getting started,TheDiagnosticispre,-,-populated withleadingpracticeforeachofthemainbuildingblocksofthe EPMframework,Opportunityandriskassessment,Investorexpectations,Keycompetitorandexternalinformation,Current business performance,Current strategicplan,Agreeduponbusinessassumptions,Well-understoodbusinessstrategy,&,&objectives,Revised andprioritizedvaluedrivers andcauseandeffect maps,Identified strategicinitiatives,Updated scorecardswithrevised keymeasuresforeachbusinessunit,Defined keymeasures,KeyInputs,KeyOutputs,DetermineKeyMeasuresofSuccess,DetermineKey Value Drivers,RefineCorporate Vision,&,& StrategicObjectives,Clearly defined,Communicatedtoall levelsoftheorganization,Consistentlyunderstood,Identified,Prioritized,Well-understood,Clearly linkedtostrategy,Criticalfewkey metrics,Aligned withshareholdervaluecreation,Clearly definedcommon definitions,Alignedwith measures reported up andused to managedown,EXAMPLE:StrategyFormulation,&,& Planning,Copyright,2004Accenture,.,.Patent Pending,.,.AllRights Reserved.,Getting started,Wecapture an assessmentfromkeystakeholders to determinethevalueofaddressingeach gap,Copyright,2004Accenture,.,.Patent Pending,.,.AllRights Reserved.,Getting started,ThebusinesscaseforEPM shouldconsidervaluethrough three perspectives,Effectiveness,Efficiency,Risk Mitigation,Perspective,Example Benefits,Definition,Ability to makebetter decisionsbasedonvaluethroughoutorganisation,Ability to detectissuesfor managementattention on timelybasis,Ability to provideinformationwithoptimal balanceacross cycle time, effortandquality,Ability to managewithinfinancial andoperationalrisk parameters,Salesforceincentives alignedwithmaximisingvalueacrosschannel,/,/ productmix,More accurate business plans andforecastsbuildcredibilitywithstakeholders,Cycletimesforinternaland external reportingreduced,FTEsavingsthrough reductionofmanualeffort,Compliance withexternalregulations,Enhancedinternalcontrolsthrough automationand cleareraudittrails,Getting started,