E P R E nterprise P erformance R eporting A Fundamentally Better Way to do Business TM

 The need for up-to-date information on the financial and non-financial performance continues to increase. Accounting departments are expected to close the books in shorter time frames. Working faster or even smarter is no longer enough.  Management and owners are expected to manage the business to the benefit of different, often conflicting, stakeholders. Performance Reporting

Why Measure Performance?  Strategic Alignment of Objectives  Clear Responsibilities and Objectives  Effective Control  Optimized Resource Allocation  Anticipation of Trends

Problems with Most Measurement Systems  Too much data that no one uses  Lack of relevant detail  Measures that drive the wrong performance and discourage teamwork  Incongruent goals across the organization

The Keys to Effective Measurement  Less is More (K.I.S.S.)  Linkage to Vision, Values and Key Success Factors  Data must be available, consistent, complete, timely and reliable  Metrics should flow down to all levels  Metrics must be manageable

Measuring Financial Performance  Financial reports must contain the data that managers need to manage  Financial reports are useless if they aren’t read or acted upon  Timing is of the essence

Incorporating non-financial measures  Link to long-term organizational strategies  Identify drivers of success  Better indicators of future financial performance  Non-financial measures are less susceptible to external noise  Need to understand causal links

Non Financial Measures  Customer Satisfaction  Quality  Process Performance  Supplier Performance  Employee Satisfaction

EPR Enterprise Performance Reporting is:  A unified view of the organization  Top-down in concept / Bottom-up in achievement  Cost-Effective  Focused on the fundamentals  Incrementally implementable

EPR Achieves:  Lower operating costs  Higher profitability  Working together towards common goals  Focus on goals and growth  Everyone knows where the company is going  Match between Accountability and responsibility

EPR Implemention  Select the Right Measurements  Link to vision and strategy  Establish Goals  Translate Measurement into Action  Communicate Performance

Selecting the Right Measurements  Start with the Vision and Strategy  Categorize into Groups or Perspectives  Define objectives  Define meaningful metrics that will help to measure the performance against objectives  Understand Cause and Effect

Linking to Vision and Strategy  Vision and Mission Statements should change the way a company works  Define goals from the strategy  Define performance measures to understand performance against goals  Be careful of deceiving measures

Business Goals  Goals should include a measure  Avoid short-term goals inconsistent with strategy  Avoid inconsistent goals at different levels

Data Acquisition  Data must be accurate  It must be timely  It must be consistent  It must be cost-effectively collected

Using Performance Measures Effectively  Accountability must link to performance measures  Regularly review and analyze the measures  Use metrics for more than just keeping score  Communicate performance information  Establish priorities

Avoid the Pitfalls  Keeping results at the top  Development process too long  Treating EPR as an IT project  Using EPR only for compensation

Conclusions  Start with the Vision and Strategy to develop a balanced set of relevant metrics and dimensions  Base business performance measurement on a unified view of the organization  Think Information, not Data  Select an application that will facilitate analysis, & promote communication  Follow measurement with action

EPR Enterprise Performance Reporting Only from