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Why data pros care about enterprise performance management

A recent conference discussion about the topic of enterprise performance management confirmed for me that the well-document divide between IT and business is eroding. What some may disagree on is the pace at which this is happening, and what that means for data management.

My sense is it is narrowing more quickly than most people believe. This is a good thing because the better that IT analysts, data scientists, and software programmers understand the needs of business and the users of digital information, then the quicker they will create effective solutions to support better decision making.

My conclusion that this divide is now quickly narrowing is based on recent experience. For example, IT conferences are traditionally attended by IT professionals. Some of the presentations may not be of interest to business managers.

Examples of presentation topic titles have included “Handling Large Stream Files with the @ ‘string’ Feature,” “Calculating Duration via the Lagged Values of Variables,” and “Using PROC SQL List Processing with Dictionary.Columns to Eliminate Macro DO Loops.” You get the idea of how technical these sessions can be.

But consider new topic titles popping up at conferences. There are now non-technical industry focus session presentations. Presentations are now being given by executives and senior managers, the types whose children continue to teach them how to use their laptops. Examples of these presentation topics are “Increasing Revenue and Brand Loyalty in a Multichannel World” and “Customer Managed Relationships.”

One of the liveliest discussions I participated in was during the question and answer period following one of my own presentations, on the topic “Analytics-based Enterprise Performance Management.”

I apparently stimulated one of the attendees in my talk when I observed that while many organizations have a balanced scorecard (of which there is little consensus on what a balanced scorecard is), few have developed their strategy map from where the balanced scorecard’s key performance indicators (KPIs) should be derived from.

For organizations without strategy maps, I asked “Are your KPIs the ones you can measure or the ones you should measure? How do you know those KPIs reflect the strategic intent of your executive team?”

This comment apparently struck home with this technical attendee. I could tell he was a “techie” by the large number of pens in his shirt pocket. He ranted that he believed his senior management was improperly measuring things without fully appreciating the impact or effect on improving their organization. He felt the KPIs did not align the managers and employees with the executive team’s strategy. He also revealed that his own IT department was applying KPI measures.

In another example, the organization was placing more emphasis on driver-based rolling financial forecasts with less emphasis on the annual budget which is typically obsolete a few months after it is published and often insensitive to demand volume when it was created. IT specialists provide a key variable for rolling forecasts – the forecast of unit level demand volume of products and service-lines from which to calculate the needed capacity – headcount levels and spending – to match the demand.

These two examples are validations that the technical world increasingly understands the issues of the business world.

My general observation here is that IT professionals do care about how their organizations are led and managed. They realize that the integration of the various enterprises performance management (EPM) methods is creates the synergies compared to simply implementing the EPM methods in isolation of each other which is typically the case.

The simple fact that you are now reading this column is evidence to all of us that the divide is narrowing between IT and its business users.

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