Enterprise Performance Management Pressure To Perf

Copyright©Accenture2005.AllRightsReserved.Accenture,itslogo,andHighPerformanceDeliveredaretrademarksofAccenture.EnterprisePerformanceManagementPressureToPerform2AgendaAccentureOverviewOurPointofViewonEnterprisePerformanceManagementImplementationframeworkHowtogetstarted3IntroductiontoAccentureAccentureOverview•Globalmanagementandtechnologyconsultingorganisation,withrevenuesof$13.7bninFY2004•Morethan100,000peopleworkingin48countries•Operatesasaglobalorganisationservicingclientsinfiveindustrybasedgroups,FinancialServices,CommunicationsandHi-tech,Products,ResourcesandGovernment•Globallyserves87oftheFortuneGlobal100andmorethantwo-thirdsoftheFortuneGlobal5004Accenturecredentials–OurpositioninFinancialServicesandourspecialist“ServiceLines”AccentureOverviewComms&HighTechResourcesProductsGovtFinancialServicesSupplyChainManagementTechnologyResearch&InnovationStrategy&BusinessArchitectureFinance&PerformanceManagementHumanPerformanceSolutionsEngineeringSolutionsOperationsCustomerRelationshipManagement5AgendaAccentureOverviewOurPointofViewonEnterprisePerformanceManagementImplementationframeworkHowtogetstarted6EnterprisePerformanceManagement(EPM)iscriticaltomanagenear-andlong-termperformanceHigh-performancebusinessesuseEPMto:IdentifyandpredictvaluedriversthatwilloptimizepositioninthevaluechainLinkstrategywithplanning,budgeting,forecastingandperformancereportingcapabilitiesCaptureinformationthatcangenerateinsightandturnthatinsightintoactionSetbetterstrategicgoalsandmakemoreinformeddecisionsIdentifyissues/threatsfaster,andreacttothemmorequicklyEPMPointofView7CommonGapsSatisfactionRate(%)0255075100Alignmentbetweencompanystrategyandplanningprocess(40%)Focusonkeybusinessdrivers(24%)Amountoftimerequiredtocreatetheannualplan(47%)Speedandaccuracyoftheforecastingprocesses(48%)Abilitytoproducebusinessmodelsandtestimpactofchanges(31%)Speedandaccuracyofthemonthlyfinancialreporting(63%)Reportingofnon-financialmeasures(28%)Businessusersviewandanalyzeperformancereportsatwill(25%)IntegratedITsystemstocollectandmanagetheinformation(41%)Visibilityintocurrentresults(29%)Understandingoffutureperformancetrends(30%)Source:October2002surveyof245companiesconductedbyCFOResearchServicesFact:ManyorganisationsarenotsatisfiedwiththeircurrentEPMcapabilityEPMPointofView8Accountingearningsbasedfinancialmanagementhasbecomelessrelevantasthemajorityofvalueisinthefuture…CurrentValueversusFutureValueRussell3000(May2003,$trillions)EnterpriseValueFutureValue$13.1$7.613100%58%CurrentValue$4.9242%4.2%$0.6FirstYearRemainingYears•FutureValueisasignificantcomponentoftotalEnterpriseValueformostorganisations•FutureValueistheexpectedincrementalvaluebeyondthevaluedeliveredbycurrentoperationsEPMPointofView9…NeitherdoestheBalanceSheetadequatelytracktheassetsthataredrivingvalue.010203040506070809010019801990Peak(3/2000)PostCrash(8/2002)~80%~55%~25%~20%~45%~75%MarketValue(%)AccountingBookValueUnexplainedValue~15%~85%19801990Peak(3/2000)Post-Crash(8/2002)Sources:Lev,Baruch.“Intangibles:Management,Measurement,andReporting,”BrookingsInstitutionPress,2001Lev,Baruch.“RemarksontheMeasurement,Valuation,andReportingofIntangibleAssets”.EconomicPolicyReview(FederalReserveBankofNewYork),September2003AccentureAnalysisMarkettoBookValueOverTimeS&P500–(1980–2002)EPMPointofView10HoweverfeworganisationsextendEPMbeyondtraditionalfinancialmeasurement•CreditRatings•BorrowingCapacity•ReceivablesCertainty•AccrualsConvertibilityCashInvestmentsReceivables/DebtorsPayables/Creditors•PlantFlexibility•PlantModernity•AccessRights•BalanceSheetStrengthPropertyPlantEquipmentInventoryValue•CustomerLoyalty•QualityofContracts•StrengthofStakeholders’Support•Networks•RegulatoryImposts•CustomerContracts•FormalAlliances,JVs,SupplyAgreements•StructureAppropriate•InformalProcesses•OrganizationReputation•BrandMeaning•ProductivityofR&D•Systems•FormalizedProcesses•CodifiedKnowledge•Patents•Brands•TopMgmtQuality/Experience•AbilitytoExecuteStrategy•LeadershipCapabilities•ProblemSolvingAbility•EmployeeLoyalty•ManagementContracts•DocumentedAccessibleSkillsInventoriesIntangibleTangibleMonetaryPhysicalRelationalOrganizationalHumanTraditionalscopeoffinancial/accountingmeasurementEPMPointofView11AgendaAccentureOverviewOurPointofViewonEnterprisePerformanceManagementImplementationframeworkHowtogetstarted12StrategicPlanRefineCorporateVision&StrategicObjectivesTargetSetting&BusinessPlanCascadeTargetstoLowerLevelMetrics/OrganizationSetTargetsforKeyMeasuresofAccountabilityOperateDevelopPlanstoAchieveTargetsAllocateResourcestoAchievePlansReview,Challenge&FinalizePlans&ForecastsMonitorDevelopActionPlans,Re-allocateResourcesandUpdateForecastMonitorKeyMeasuresofBusinessPerformanceDetermineKeyMeasuresofSuccessCloseandConsolidateBooksandReportActualsPortfolioValueAssessmentEnablersCommonDataStructuresIncentivesandRewardsPolicies&ProceduresIntegratedITArchReviewPerformancewithExecutiveManagementDetermineKeyBusinessDriversControlsWeworkwithourclientstoimplementaholisticframeworkforEnterprisePerformanc