In the Internet economy, changes in strategic focus are taking place on a daily basis. Compare this with the traditional strategic horizon which was measured in months and years. Share-holder expectations require constant management attention in order to sustain shareholder value growth, especially in the face of increasingly competitive markets. Enterprise management systems will prove to be essential enablers for keeping management attention on business operations as they relate to improving business performance.
Driving Enterprise Performance
Enterprise management systems deliver information on a real-time basis that allows senior management to derive insight into business performance on an enterprise-wide level. Executives need information that shows how the organization is performing in terms of its strategies, alignment between strategies, performance relationships (e.g., production per plant), customer service, resource management and quality. This information assists executives as they formulate, monitor and adjust strategic direction. Historically, most reporting solutions have been at the departmental level (e.g., in finance, sales and marketing, purchasing). The emergence of the Web, however, has accelerated the ability to deploy enterprise reporting solutions, which let companies harness data from multiple data silos. In this environment of integrated performance management, the value of key performance data moves beyond the executive suite to the entire enterprise and out through the entire business value chain. These cross- functional links and inter-enterprise connections should be structured around an organization's central business issues: those issues that are crucial to the execution of the organization's strategy. Enterprise management systems are quickly expanding throughout the ranks of enterprise managers and executives. This is due not only to technological advances which have improved the usability of these decision-making tools, but because more and more executives and managers are moving to a self-service model of gathering data and performing analysis on their own rather than relying on their staff for assistance. This is squarely attributable to the faster decision-making requirements of today's marketplace.
Providing Business Context
Delivering status of key measurement information provides management with a view into the state of the business and motivates a behavior response. In order to effect the desired response, enterprise management systems should provide information within the context of the business agenda. An effective enterprise management system must lead users down a path of discovery that allows them to view the root cause of issues brought to their attention. Information must be described in terms of achievement of strategy as opposed to review of results. The actions proscribed by the enterprise management system should also consider environmental factors such as trading partner performance, regulatory trends and competitors' posturing. Enterprise management systems can also offer industry baseline knowledge so that company performance data can be compared to industry benchmarks and best practices.
There is a definite need for information that provides assistance in strategic decision making and strategy execution. Be mindful that the increased visibility and distribution of key data will escalate the importance for companies to rationalize naming conventions, standardize data definitions and source quality data. The decision-making landscape will continue to increase in complexity, in large part due to factors such as globalization and e-business. These issues and other variables have expanded the roles of today's senior managers, creating constant pressure to change and to improve the business, making it more important than ever to:
- Continuously access and monitor information that covers the spectrum of the enterprise;
- Identify and explore the factors that are driving the business; and
- Evaluate relationships among the various operations including production, purchasing, distribution, customer service, sales and marketing, finance and human resources.
Leveraging information that relates to the measurement and targeting of specific goals within a given strategy, allows an executive to manage current business performance and encourages more proactive changes that can create long-term improvement. Enterprise performance can best be improved when enterprise management systems enable users to learn about their organization, its work processes and its interaction with the external environment. Enterprise management systems should monitor multiple key processes over time, rather than focusing on specific decisions and the information necessary to make them. By doing so, the system can remain flexible and adaptable as a company's strategic focus changes and can serve as an early detection system rather than simply a conveyor of final results.
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