ERP Systems and Performance Management

Below is a continuation of the trascript of a Webinar hosted by InetSoft on the topic of Current Trends in Performance Management. The presenter is Mark Flaherty, CMO at InetSoft.

Weren't ERP Systems Supposed to Solve the Problem of Linking Performance Tracking with Your Planning?

Mark Flaherty (MF): Well, they continue to try to. Of course, SAP has made acquisitions, Oracle made acquisitions, so arguably they are getting close to be able to do much of this. Historically ERP, by itself, has offered reporting capabilities but not really performance management capabilities. And even within or across the various modules, sometimes you have inconsistent reporting tools, inconsistent views of information and KPI’s. So really it is incumbent upon the user to try to stitch it all together.

If the first step is acquire a business intelligence platform like InetSoft's, what the next step towards performance management?

After some months of active use of the platform, go back to the users and find out where they get value out of the system, what they’ve been using it for, and start to use those thought leaders, the folks that have been the most aggressive users getting this value out of it. Use them, perhaps, as a way to add the additional performance management capabilities into the organization.

For example, adding in modeling and planning processes. And when you talk about planning, it’s not necessarily budgeting, although budgeting is a form of planning. It can be anything. It can be operational planning. It can be almost anything that you do which allows you to document your assumptions about the business, and to start making commitments about what you think you’re going to be able to achieve. So it is drawing that line in the sand and using that to focus the business intelligence activities that they might already be doing.

Is performance management expensive?

There clearly are expenses associated with it. It’s not so much the technology. Good systems can be bought for tens of thousands of dollars. They don’t have to be hundreds of thousands of dollars. But what’s the cost associated with how you do things? Or how you look at things? The benefits are pretty extraordinary if you crack the code on that.

Performance management really shines you have a C-level executive, whether it be the CFO or the CEO, or in some instances, the CIO. But typically it’s the either the CEO or the CFO who have vision for performance management. They realize that they need to do things differently. And not just for things like compliance, but for real transparency. Then things can start to happen.

Learn about the top 10 features of embedded business intelligence.

What Do You Recommend for a Product Evaluation Methodology?

When embarking on the evaluation of an enterprise software product, it's crucial to adopt a comprehensive methodology to ensure that the chosen solution aligns with the organization's needs, objectives, and long-term strategy. Firstly, I recommend establishing clear evaluation criteria based on key factors such as functionality, scalability, ease of integration, user experience, vendor reputation, and total cost of ownership. These criteria should be defined in collaboration with stakeholders from various departments to capture a holistic view of the organization's requirements.

Secondly, I advocate for a structured approach to vendor selection, which involves conducting thorough research, soliciting proposals from multiple vendors, and rigorously assessing each solution against the predefined evaluation criteria. This process may include product demonstrations, proof-of-concept trials, reference checks, and site visits to existing customers. By systematically evaluating each vendor's offerings and capabilities, organizations can make informed decisions that mitigate risks and maximize the likelihood of successful implementation.

Lastly, I emphasize the importance of fostering collaboration and communication among key stakeholders throughout the evaluation process. This entails establishing a cross-functional evaluation team comprising representatives from IT, finance, operations, and other relevant departments to ensure that diverse perspectives are considered. Regular meetings, progress updates, and decision checkpoints should be scheduled to facilitate transparency, alignment, and consensus-building. By promoting collaboration and involving stakeholders early and often, organizations can increase buy-in, mitigate resistance to change, and lay the groundwork for a successful software implementation. Overall, by adopting a structured methodology grounded in clear criteria, thorough vendor evaluation, and effective stakeholder engagement, organizations can make informed decisions that drive positive outcomes and contribute to long-term business success.

“We evaluated many reporting vendors and were most impressed at the speed with which the proof of concept could be developed. We found InetSoft to be the best option to meet our business requirements and integrate with our own technology.” - John White, Senior Director, Information Technology at Livingston International

Why Do Companies Struggle with Information Access and Reporting from Their Legacy ERP Systems?

Companies often encounter significant challenges when attempting to access information and generate reports from their legacy ERP systems. One primary reason for this struggle is the inherent complexity and rigidity of legacy systems, which were often designed decades ago using outdated technology and architecture. These systems may lack modern data integration capabilities, making it difficult to extract and consolidate data from disparate sources across the organization. As a result, companies may face obstacles in accessing real-time, accurate, and comprehensive information needed for informed decision-making.

Moreover, legacy ERP systems often suffer from data silos, where information is fragmented and dispersed across different modules, databases, and applications. This fragmentation inhibits data visibility and hampers reporting efforts, as users must navigate multiple interfaces and manually reconcile data from various sources. Additionally, the lack of standardized data formats and structures complicates data aggregation and analysis, leading to inconsistencies, errors, and delays in reporting. Companies may find themselves spending significant time and resources on data extraction, transformation, and cleansing tasks, detracting from strategic activities and impeding agility and responsiveness.

Furthermore, as business requirements evolve and expand, legacy ERP systems may struggle to keep pace with changing needs due to their limited scalability and flexibility. Customizing reports or adding new functionalities often requires extensive customization and programming, which can be time-consuming, costly, and prone to errors. Additionally, legacy systems may lack support for modern reporting tools and analytics capabilities, further constraining companies' ability to leverage data for competitive advantage. As a result, companies may find themselves trapped in a cycle of dependence on outdated technology, hindering innovation and growth in an increasingly dynamic and competitive business landscape.