How Is the Management Process Called?
ERP systems have had a huge impact on the way organizations are run. ERP systems have streamlined many fragmented systems landscapes; they have driven the cost down of business processes; they have introduced operational excellence in many companies. In short, ERP systems have helped us integrate and get a grip on our business processes.
The name and nature of many business processes is clear. We all know processes such as "procure to pay" and "order to cash."
So if our business processes are that clear, surely we have benefited from that in our management processes! Unfortunately that is not the case. Many of the components of what is needed for a complete management process exist in an organization already, but they usually happen in isolation.
There is a fair bit of variance analysis, but how deep can you drill down if actuals and plans don't match?
Scorecards are a key requirement for many businesses, but the data is often disconnected from other systems; no alignment.
Every Line of Business has its own BI systems, but can your analysis flow from domain to domain?
Financial Consolidations are work for specialists, but can you move towards a fast close without deep integration with transactional systems?
Many organizations move from an annual budget to a rolling forecast, but how do you assess changes in the market?
Scenario analysis is an incredibly powerful tool, but do we really have an understanding of external trends that impact our business?
This is concerning. The downside is that most organizations have ERP systems. In many cases operational excellence is not a competitive differentiator anymore. In the words of fellow-strategist at Oracle, Thomas Oestreich: "Operational Excellence makes you play, Organizational Excellence makes you win." Competing is about being faster, more agile, or by having superior insight. What these trends have in common is that they require strong management, being "on the ball." Competitive differentiation is not in running the company, but managing the company. Competing on Analytics by Prof. Thomas Davenport is an excellent book that describes numerous organizations who have done that.
So the next big thing for business systems is to define management processes as clear as business processes, something we call EPM (Enterprise Performance Management). Tell me, how would the management process(es) be called?
frank
