Key findings from interviews with 800 organisations in Europe and North America show that the recession may have actually had a positive effect on firms - forcing them to integrate and improve management performance processes and recognise the benefits of treating key management performance processes as a whole, not as disparate parts.
Oracle EPM Index IIBusinesses Combat Recession with Enterprise Performance ManagementSOFTWARE. HARDWARE. COMPLETEUntitled Document3 Introduction: Achieving Management Excellence4 Key Findings from Oracle EPM Index II6 Acceptance of Principles of EPM and Rise of BI8 Interests of Stakeholders Overlooked with Businesses Too Internally Focused9 Business Model: Customer Loyalty To Drive Growth10 Confidence in Planning, Positioning and Reporting12 Business Operations: Less Focus on Responsiveness 13 EPM across Vertical Sectors14 Geographical Analysis17 In SummaryContentsUntitled DocumentIn March 2009, Oracle released its first Enterprise Performance Management (EPM) Index, which assessed the ability of businesses in Europe and North America to unite management processes and information systems to form a consolidated view of business performance. On a scale of 0 to 10, the 800 organisations surveyed attained an overall score of 5.13. The results of the study revealed that there was much work to be done in developing an accurate and up-to-the-minute enterprise-wide picture of current performance. The report highlighted a number of other areas for improvement. Most organisations lacked the flexibility to respond to changes in the business and market, and had a low level of competitive insight. Overall, there was a lack of integration between processes and systems, with wider variations in reporting standards. Few organisations had a consolidated view of performance across the business as a whole.Almost a year later, we wanted to understand the progress that organisations had made in their quest to achieve Management Excellence. The results are contained in this, the second cycle of the Oracle EPM Index. Once again, the research has provided us with much food for thought. We hope you will find much in the following pages to guide your thoughts about how the performance management of your business could be further enhanced. Background What is Management Excellence ?Irrespective of the sector in which they operate, businesses today are subject to an unprecedented rate of change in economic and market forces. Whether it is the impact of global competition, new regulatory requirements, market disruption or emerging technologies, businesses must adapt to, and capitalise on, rapidly changing circumstances in order to prosper. In this increasingly volatile climate, operational excellence the concept of driving cost and waste out of the business is, while crucial, no longer sufficient to guarantee success in the short, medium and long term. Increasingly, strategic advantage comes through an ability to manage the overall performance of a company rather than just its transactional processes. At Oracle, we term this new imperative Management Excellence. The principles of Management Excellence enable an organisation to be more agile and intelligent in its response to changing business and market conditions. In improving alignment and collaboration between individual business units and external stakeholders, Management Excellence ensures that an organisation works collectively towards the fulfilment of strategic goals. Our strategists at Oracle have devised a framework to support organisations in their drive towards Management Excellence. This Management Excellence framework consists of a number of inter-related steps: we need to understand the stakeholder environment, scan the market, strategise about the business model, manage the business plan, run the business operations, and provide feedback on all levels by measuring the business results. The six processes then which govern Management Excellence are:To operate at their most effective, the six processes of Management Excellence should be underpinned by Enterprise Performance Management (EPM) technology. EPM brings together the information held within the various operations to provide a comprehensive picture of how the business is performing. It facilitates and automates the effective exchange of information between departments so that the figures produced by one department inform the calculations and decision making of related functions. Using EPM, organisations can carry out a continual assessment of the effectiveness of forecasts and budgeting, enabling them to respond to variations and evaluate the chances of success for alternative courses of action.Introduction: Achieving Management Excellence3Untitled DocumentAn Increase in Business Confidence about EPMThe results of Oracle EPM Index II show that there has been a significant increase in business confidence about enterprise performance management across the board.Calculated on a scale of 0 to 10, the overall Index for all of the surveyed countries has leapt by 38 per cent from 5.13 in the first report to 7.04 in Oracle EPM Index II. The increase reflects an improvement in performance management confidence across all geographies, sizes of organisations and all verticals.Along with increased confidence about progress towards Management Excellence, results from the six key areas assessed in EPM Index II reveal that businesses:Increasingly accept the need to adhere to the principles of " enterprise performance management.Perceive significant improvements in their planning and " reporting processes.Are still too internally focused, at the expense of wide-ranging " stakeholder expectationsHave comparatively weak levels of integration between the " operational areas.Are prioritising customer loyalty to drive growth as opposed " to new products, services or geographies.Now generally acknowledge the importance of Business " Intelligence as a key reporting tool.We ll explore these headline findings and their significance in more detail throughout this report.The Oracle ViewThe rise in confidence about enterprise performance management can largely be attributed to the global economic climate. The first Oracle EPM Index was conducted in January 2009 as businesses grappled with the deteriorating economic outlook. The consequent assessment of operational efficiency highlighted the lack of integration and the poor quality of information exchange between key business functions.The findings from Oracle EPM index II reveal that businesses feel more confident about how to handle the new reality of today s economy. Rather than signifying any particular material advances, the renewed confidence reflected in the improved Index figure creates the preconditions for real improvement to take place. As a rise in consumer confidence precedes a spending increase, so this increase in performance confidence will precede new projects and improved ways of working. Finance departments have spent 2009 fixing broken processes and information flows. The findings from Oracle EPM Index II reveal that businesses now understand that key management performance processes need to be treated as a whole, not as disparate parts.Overall though, it is extremely encouraging that businesses are more confident about the progress they re making in the quest for Management Excellence. The main source of progress appears to be mainly in the planning field, as finance departments get to grips with better understanding other areas of the business as part of the input to the overall business plan. However, it does appear that the focus has been more internal and short term than external and strategic. For instance, stakeholder engagement has not improved as much as other areas.Businesses still need to work on improving the integration between the various EPM processes, although, as we will see in the next section, there is also increasing acceptance of the need for this. Key Findings From Oracle EPM Index IIEPM Index II, Jan 2010 EPM Index I, Mar 2009OverallStakeholderMarket ModelBusiness ModelBusiness PlanBusiness OperationsBusiness Results4Untitled DocumentPEArsOn UKPearson, an international media company operating in 60 countries, is committed to satisfying the growing demand for knowledge by helping customers live and learn in the world of education, business information, and consumer publishing. Pearson is also the publishing company for the Financial Times Group, one of the world s leading business information companies and Penguin. ChAllEngEsGain a single, centralised environment of business knowledge" Streamline and integrate processes and reporting" Cut close times significantly" Facilitate compliance with International Financial Reporting " Standards (IFRS) Achieve consistent, meaningful business knowledge flowing " throughout the organisation to improve management information and decision-makingKEy BEnEfITs AChIEVEd ThrOUgh OrAClE 300 managers in 60 locations are now able to consolidate 80 " ERP environments for compliance, regulatory and stockholder flingsStandardised group policies and KPIs " Real time visibility of financial performance across full reporting " cycle Simplified processes, ability to identify bottlenecks rapidly and " number of subconsolidation points have been reducedAchieved progressive reduction in monthly submission times " from day 12 to day 5 Reduced licensing costs and support costs" Enable each business and region to carry out scenario " modelling and what -if analyses to gain in-depth operational insight Key Findings From Oracle EPM Index II Oracle s Hyperion solutions give us consistent, accurate, timely, user-centric intelligence that helps increase our resilience to challenging economic conditions through proactive agile financial management. Michael Benjamin, Senior Vice President and Controller (Americas), Pearson5Untitled DocumentBusiness Acceptance of the Principles of EPMThe Oracle EPM Index II shows that businesses increasingly recognise the need for close integration and a consolidated view of the six processes supporting enterprise performance management and progress towards Management Excellence: Nearly a third of companies now " consider that the six processes are interlinked and require an integrated approach (up from one-fifth).Previously, over a quarter of businesses " thought the six processes could be viewed in isolation. This is now down to under 5 per cent.The Oracle ViewThose countries which have a more consistent level of attention across all EPM processes indicated by low variations between the six sub-indices generally have better overall performance. Organisations need to pay attention to all their critical Management Excellence processes to ensure that they are best placed to adapt to, and capitalise on, ever evolving economic and market conditions.While the Index demonstrates that an increasing number of businesses recognise the need for integration between the six Management Excellence processes, there are still a significant number which don t. EPM creates a competitive advantage for those organisations that adopt it by enabling them to anticipate and respond to changing business conditions faster than their peers. An increasing number of industries are subject to globalisation, deregulation, re-regulation, new technologies, and e-commerce. The capabilities of EPM can make the difference between an organisation s growth or decline, profitability or loss, survival or extinction.BI revealed to Be a Key reporting Tool for Management ExcellenceThe first report showed a strong correlation between organisations who considered BI an important reporting tool and their overall Index score. This suggested that organisations which recognise the capabilities of BI had made better progress towards Management Excellence.This correlation is even clearer in Oracle EPM Index II. Those organisations which rate BI as an important tool or a major means of monitoring and reporting have overall Index scores well above the overall average (7 .4 and 7 .5 respectively the amount by which they exceed the average has roughly doubled between the frst report and EPM Index II).Acceptance of Principles of EPM and Rise of BI Oracle Business Intelligence Enterprise Edition has replaced a labor-intensive reporting process that provided limited data to a restricted user base by 11 a.m. on weekdays only with a process that delivers accurate, contextually appropriate, interactive intelligence to hundreds of users by 7 a.m., seven days a week. Martin Bell, Business Intelligence Analyst, Manchester Airports Group plc 6Untitled DocumentAcceptance of Principles of EPM and Rise of BIMore generally, there is increased recognition of BI s capabilities and the role it plays in attaining Management Excellence:Over half of respondents regard BI as an important reporting tool (compared with " one-fifth in the previous report). The number of respondents dismissing BI as an expensive visualisation tool or who " are not sure about it has decreased from 40 per cent to 12View of role of BIThe Oracle ViewBusiness intelligence (BI) is a broad category of application programs and technologies for gathering, storing, analysing, and providing access to data to help enterprise users make better business decisions. Historically, BI focused on reporting and information delivery. We still need query and reporting capabilities; however, the focus has shifted to solving business problems. BI is being used to underpin both strategic and operational decision-making processes across the enterprise. The goal of BI has evolved to support the business user with actionable insight. This means that we must change the focus to move users toward performance management and get more eyes on key metrics. BI extends the information management and production abilities of an organisation to new and more sophisticated levels. The strong analytical capabilities that BI brings to the table can provide the competitive advantage necessary for organisations to be successful. With over half of respondents now considering BI an important reporting tool compared to a fifth in the first report, Oracle EPM Index II shows that there is a growing realisation of BI s capabilities. These companies should consider how they can extend BI throughout the business to enable more employees to play their role in supporting the drive towards more effective performance management. Those companies that have yet to appreciate what BI can do would do well to newly assess what it can bring to decision making capabilities for employees across an organisation.MAnChEsTEr AIrPOrTs grOUP PlC (MAg)MAG is the largest British-owned airport operator. Each year 29 million passengers travel through its four airports, which between them serve 200 airlines offering fights to 345 destinations. ChAllEngEsMaximise operational efficiency and " profitability of aviation services, retail outlets, car parking, transport, airport advertising and passenger facilities at MAG s four airportsExceed customer expectations at all " touch points KEy BEnEfITs AChIEVEd ThrOUgh OrAClE Real-time, interactive, self-service " intelligence tools created for all decision makersDelivered a single integrated view " 15 pre-defined, top-level bulletins " delivered each night Timely, personalised insights allowing " decision makers to track trends and make fact-based decisions Analysts provided with drill-down " and slice-and-dice functionality into performance metrics, enabling them to identify intelligence for enterprise reporting and strategy planning Saved 60 hours each week by " automating data extraction and report generation and distribution0102030405060Major means of monitoringImportant reporting toolTool to see what has happendExpensive visualisation toolNot sureEPM Index II, Jan 2010EPM Index I, Mar 20097PercentageUntitled Documentstakeholders Overlooked with Businesses Too Internally focused and lacking Integration Despite the increase in confidence about tackling enterprise management as whole, other findings from Oracle EPM Index II do show that businesses are still too internally focused and have poor levels of integration between operational areas.Stakeholder engagement, the process of connecting corporate strategy with the interests of key stakeholders (employees, customers, suppliers, regulators, society, and investors), has worsened in relation to the other indices and the average. At 6.44, the Stakeholder Environment is by far the weakest Index. Overall, although each Index has made a marked improvement on the previous cycle, the variation between the indices has increased, which suggests that little focus appears to have been put on integrating between areas of the business to further improve overall performance.Interests of Stakeholders Overlooked with Businesses Too Internally FocusedThe Oracle ViewThe comparatively weak result for the Index on Stakeholder Environment would indicate that there is still too much focus on internal business matters in organisations finance departments. As we ve mentioned previously, an organisation operates in a network of different stakeholders. Each of those contributes to the performance of the organisations. We need to map those contributions and requirements and use that as the basis for a performance management strategy.For long term health, a company should solicit contributions from its stakeholders to drive business performance a key part of meeting stakeholder expectations. Those countries which paid most attention to their stakeholders such as France and Germany - also made the most progress in achieving Management Excellence.EPM must help connect all the performance management processes enterprise-wide. It is no longer acceptable solely to connect the processes within an organisation, because value chains often cross organisational borders and involve multiple stakeholders.CEVA lOgIsTICsCEVA Logistics provides end-to-end design, implementation, and operational capabilities in freight forwarding, contract logistics, transportation management, and distribution management. It has more than 54,000 employees and offers integrated supply chain management to more than 40,000 customers. ChAllEngEsIntegrate two, disparate, legacy, " consolidation and reporting systems following recent mergerImprove financial reporting and " consolidation processesKey benefits achieved through Oracle " Project completed in only six months " globally to more 400 users on time and on budgetClosing and consolidation procedures " shortened from four weeks to 10 daysSaved time and improved accuracy" Enhanced user satisfaction with " reporting tools Enhanced transparency and reliability of " fnancial dataProvided a single consolidating system " across the globe, which saves the customer time and money Oracle s Hyperion Financial Management is more modern, faster, secure, and user friendly than our previous system; and it consolidates information from more than 240 entities. Alan dempsey, Group Controller, CEVA Logistics8Untitled DocumentIncreased focus on Customer loyalty to drive growthThe Business Model Index reveals an increased focus on customer loyalty to drive growth. Although winning new customers still ranks as most important overall, a comparison of what companies will be concentrating on to drive growth as we emerge from recession shows a move from new products and services (from second and third in the first report to third and fourth in EPM Index II) to reducing customer churn (from fourth to second).As a whole, the performance for the Business Model Index corresponded exactly at 7 .04 to the overall figure for Oracle EPM Index II.The Oracle ViewReducing customer churn has become a much higher priority, indicating that businesses are looking to maximise what they already have, rather than investing too much in higher-risk activities such as new products/services or attacking new geographies. New geographies and new channels, while still growing in overall importance, remain down the list of priorities for organisations.There are many different strategic options that you have for shaping your Business Model: Customer Loyalty To Drive GrowthJsC KAzPOsTJSC Kazpost is Kazakhstan s national postal services operator. It provides more than 400 types of services and operates in more than 3,200 post offices across the country. ChAllEngEsCreate a centralised, automated " budgeting system with a common Web interface Implement a modern and efficient " planning system Streamline time-consuming process of " collecting data Reduce the total time required for " fnancial planning and budgetingKEy BEnEfITs AChIEVEd ThrOUgh OrAClE Reduced total time needed for planning " and budgeting by 30 per centReduced the time required to collect " budget data by 80 per centAchieved 80 per cent increase in the " level of detail of budgeting dataImplemented fully online planning and " analysis, with all budget-related key performance indicators (KPIs) Average - New customersAverage - Managing customer churnAverage - New servicesAverage - New productsAverage - New geographiesAverage - New channels JSC Kazpost chose Oracle s Hyperion Planning due to the application s user-friendly interface and convenience for our financial staff in regional offices. The budgeting automation features enabled us to standardise all planning procedures in a single, integrated approach, leading to a significant increase in budgeting efficiency. In the first year of operation, we cut budget preparation times by 30 per cent . Aiman r. Ishmukhambetova, Chief Financial organisation and to identify the business model and the best stakeholders within this business model to maximise your success. Would you like to innovate and grow by introducing new products yourself, or should you find partners? If you need to downsize, do you divest a business unit or reduce capacity throughout the business? Which activities do we outsource, and which activities do we keep? These questions cannot be answered by calculating the return on investment, but by aligning them to what the market needs. Scenario analysis, popular in the 1970s and 1980s, has re-emerged as a strategic performance management initiative. Oracle EPM Index II shows that businesses are gaining confidence in their ability to analyse different scenarios to gauge future success.9Index Scoregrowth strategies vs Index scoresEPM Index II, Jan 2010EPM Index I, Jan 2010Untitled DocumentConfidence in Business Plan, Market Model and Business resultsThe Oracle EPM Index II reveals that businesses perceive significant improvements in their planning and reporting processes.The largest proportional increases in overall values in the EPM Index II are in the areas Business Plan (44 per cent) which assesses the capacity of business planning to respond to changing operational circumstances and market conditions and Market Model (40 per cent), which assesses the ability of organisations to fully understand and thus capitalise on their position in the sector and changing market dynamics.In absolute terms, the Business Results Index at 7 .32 has become the strongest which reflects the increased pressure on being able to report solidly on actual results.The Oracle View How do you prioritise investments and allocate capital to optimise the return on your product portfolio? To answer this question, you must go beyond simply looking at top-line growth and expenses. Instead, you must estimate expected cash flows and determine if there is a fnancing surplus or deficit. Does your capital structure support this strategy? Do you have enough cash to make investments? If not, is there enough capacity to take on additional debt or issue more shares? Will you generate sufficient cash to service the debt and provide a solid shareholder return? What is the impact on your credit rating or your bank covenants such as interest coverage ratios? These questions must be answered so managers can make the right decisions that impact the company s business value.Confidence in Planning, Positioning and ReportingInhOllAnd UnIVErsITy Of APPlIEd sCIEnCEsINHolland University of Applied Sciences is a higher education institution in the Randstad, a coastal strip that forms the main population centre of the Netherlands. It has close to 2,800 members of staff and provides education for approximately 33,000 students across 11 sites. ChAllEngEsReplace existing legacy Excel-based " solution to ensure more accurate budgeting and forecastingAchieve tactical and strategic forecasting " capabilities across financial operations Connect with existing systems and " applications, allowing central retrieval of process and student informationImplement the solution in four months " and within budgetKEy BEnEfITs AChIEVEd ThrOUgh OrAClE Various levels of authorisation to " employees granted easily Multi-year budgeting process made " more consistent with the yearly planning and control cycleStreamlined the planning and " control cycle enabling faster budget consolidation and more rapid identification of potential errors Decreased planning and control cycles " to two months and reduced error rates by 95 per cent The solution was implemented in less " than four months Oracle s Hyperion Planning is a central environment for our planning and control processes. We are now seeing a considerable saving in terms of man hours since we no longer need to make changes in multiple places. Instead, they are implemented centrally in a single system. This has also greatly reduced the risk of errors. Arie statt, Head of information Management, INHolland University of Applied Science The high level of confidence reflected in the improved Index for Business Plan demonstrates that businesses are beginning to tackle these kinds of questions. This underlines how businesses are taking more care in their business planning process to make best use of available resources. The improved Index for Market Model also emphasises the focus businesses are placing in more effective planning and positioning firms are applying more rigour to the process of identifying the best opportunities, determining competitive differentiators and ultimately creating a competitive advantage.10Untitled DocumentConfidence in Planning, Positioning and ReportingAMEC PlCAMEC plc is a focused supplier of high-value consultancy, engineering, and project management services to the world s energy, power and process industries. The company designs, delivers, and maintains strategic and complex assets for customers.ChAllEngEsStreamline and centralise global " consolidation, statutory and management reporting, and complianceGain in-depth insights into performance " metrics in multiple dimensionsDevolve data management, mapping " rules configuration, and validations to key financial users worldwide KEy BEnEfITs AChIEVEd ThrOUgh OrAClE Replaced spreadsheet-based financial " reporting solutions in each region with a single global implementationAbility to interrogate and report on 12 " dimensions instead of eight Ability to extract enterprise data from " all corporate information sources via simplified user interface Cut three days (20 per cent) off month-" end reporting at business unit levelCompleted corporate reporting several " days faster Hyperion Financial Management lets us lock down the numbers and gain timely, relevant insights for enterprise-wide performance monitoring. nicola O Keeffe, Group Finance Manager, AMEC plc UnIPOl BAnCAUnipol Banca, created by the Unipol Group in 1998, is the chief company in the group, with a network of more than 288 branches in 18 regions and 75 provinces of Italy. Unipol Gruppo Finanziario, part of Unipol Banca, offers a variety of products and services including insurance, banking, merchant banking, leasing, and supplementary medical insurance.ChAllEngEsSupport rapid growth with careful " monitoring of profitabilityEnable the completion of income " statement within the last 10 days of the following month Allow analysis of the income statement " by product, channel, commercial area and branch, clientele segment, and insurance agency Improve collection process management " Enable monitoring capabilities " KEy BEnEfITs AChIEVEd ThrOUgh OrAClE Oracle has ensured that company data " is available enterprise wide Supplied an effective overview of " market trends to 600 usersOptimised the process of preparing a " guided top-down budgetDecreased the time required to generate " income statements and detailed reports from three weeks to one week Enabled profitability analysis" We now organise our detailed analyses in a single week, a process that used to take three weeks to complete. Oracle has allowed Unipol Banca to organise its data in a highly structured, unified manner, residing in a single environment, to ensure maximum uniformity. Carlo Trifir , Head of Programming and Management, Unipol Banca11Untitled Documentroom for Improvement in Operational responsivenessExcepting Stakeholder Environment, which provided a particularly weak Index compared to other results, Business Operations at 6.97 was the only other Management Excellence process that performed worse than the overall Index figure. Whilst improvements have been made in organisations overall ability to react to deviations from the plan, this area has not improved as much as elsewhere.The Oracle ViewThe proof of the pudding for every strategy is in the execution, in the business operations step. Insight, strategies, and plans need to be practicable and put into action. Execution should be closely monitored. But performance management needs to do more than monitoring single processes. Performance management needs to overlay the various business domains, creating insight in causal relationships. For example, if the days-sales-outstanding (DSO) increases and the call centre registers a spike of complaints, it might be because customers are unhappy, because they are not serviced well. This may be the result of a cost-saving initiative by paying suppliers later.Analyse-to-Adjust, the Management Excellence process governing Business Operations, lets you analyse your performance and take appropriate action. It analyses trends in your business and deviations from your goals and helps you identify their root causes. You can then benchmark this insight against the market, to see if it s a sector-wide trend or unique to your business. Depending on what you find, you may then decide to take appropriate preventive or corrective action. Finally, you can create a new, up to date forecast. Analytical tools are crucial to this process. But for the process to work properly, you need to be able to analyse your entire value chain. It s like a relay race. Each team member always runs as fast as they can. The difference lies in the way the baton is handed over. The team that does that the best usually wins the race. To make sure your value chain is working at full efficiency, you need to analyse performance across the board. A minor issue in one spot may be causing huge problems elsewhere.But without proper analysis, you may never make the crucial connection - and the problems may just get worse. You probably already have a lot of analytics in your business. Unfortunately most analytics are fragmented. To gain true insight, you need to bring all of these together and get an accurate view of the business as a whole. That kind of insight lets you analyse and adjust performance on the fly - making your business more agile than the competition, and more successful.Business Operations: Less Focus on ResponsivenessInVEnsys UKInvensys plc is a global technology group, supplying solutions, software, consultancy and equipment to monitor, control and automate processes in a wide range of environments. ChAllEngEsCondense end-of-period consolidation " and reporting cycle for 200 globally dispersed businessesSimplified intercompany accounting and " eliminate mismatchesProvide executives with timely, at-a-" glance performance dataGain broader, in-depth intelligence to " enhance planning and improve flexibility KEy BEnEfITs AChIEVEd ThrOUgh OrAClE Consolidated statutory and management " reporting on a single, universally available platform Ability to run summary financials " immediately, which previously took 24 hoursReduced the number of intercompany " mismatched by 90 per centStreamlined strategic planning by " replacing spreadsheet planning tools with prebuilt modeling capabilities Automated extraction of data for " management dashboard Hyperion Financial Management is our single, globally trusted source of intelligence for statutory and management reporting. With Hyperion solutions we have reduced mismatch by 90 per cent just what we need to keep costs down. Catriona harrison, Group Reporting Systems Manager, Invensys plc12Untitled DocumentIn the verticals, as for the countries, the spread of Index scores has widened slightly, again pointing to a divergence of performance management capabilities across the industries, rather than a convergence. Utilities have moved from 4th to 1st. With a 43 per cent improvement in Index " scores, it has the largest proportionate improvement among the identified industriesRetail, Consumer Packaged Goods (CPG) and Finance have all dropped five places. " Proportionately, Retail shows the smallest improvement, of 29 per cent between the first report and Oracle EPM Index II, compared with an average improvement of 37 per centIndustrial, Telcos and High-Tech are relatively unchanged in ranking, although the " Industrial sector has improved proportionately by 42 per cent - almost as much as the Utilities Industry.Public Sector and Healthcare remain the poorest performers in EPM. Although " these industries have made some progress in absolute numbers, proportionately they are just as far behind (10 per cent and 15 per cent below the average) as they were for the first report. But they have not slipped any further below average than they were previously.The Oracle ViewOne could infer a success story in the Utilities industry as it makes the move from public to more private ownership and it gets to grips with key issues such as business planning and relating results back to process.Retail, CPG and Finance have all lost a considerable amount of ground in comparison to other industries, arguably a reflection of economic circumstances with these industries most heavily impacted. Healthcare and Public Sector still lag behind other industries, perhaps a reflection that these industries, facing less intense competition, are less adept at the calculated commercial decisions and processes required of EPM.Oracle EPM Index - Industries scoresEPM across Vertical Sectors012345678UtilitiesOtherIndustrialHigh TechTelecommunicationsFinanceRetailCPGHealthcarePublic Sector, , Utilities Other Industrial High-tech Telecommunications Finance Retail CPG Healthcare Public Sector 1 2 3 4 5 6 7 8 9 10 Position, EPM Index IPosition, EPM Index II13Index ScoreUntitled Documentgeneral Comparison between the MarketsIberia, Germany and Switzerland have performed well in Oracle EPM Index II, with Italy doing relatively badly, moving from a top player to being bottom placed overall. However, this was predicted in last year s analysis, as it was felt that many Italian organisations were not truly aware of the issues involved with managing EPM effectively it would appear that the recession has now uncovered these issues, forcing Italian organisations to become more circumspect in recognising what is needed.The Importance of stakeholder Engagement to Management ExcellenceAs noted above, those countries which have shown the best progress in the Stakeholder Index have generally performed the most strongly overall. Integration between the Management Excellence ProcessesThose countries which have the lowest spread of values across the sub-indices Geographical Analysis012345678Progress Made by geographies in Oracle EPM Index IIBenuluxFranceDE/CHIberiaUKNorth AmericaNordicsItalyCycle II, Jan 2010Cycle I, Mar 2009(implying a more consistent level of attention to each process) generally have better overall performance. It thus seems important for organisations to pay attention to all of their critical Management Excellence processes to keep them as much as possible in step. A Country by Country BreakdownfranceHas continued to perform well and is " still near the top of the tableAbove the overall average (7.29 vs the " overall average of 7.04)All Indices above the average except " Business Model (3 per cent below the overall average)Best Index performance was " Stakeholder (12 per cent over average)Most progress made since the " frst report in Business Results and Business Plan; worst in Business Model and Business OperationsExtra attention to Stakeholders appears to have kept French organisations among the strong performers in Europe, alongside continuing strong performance in monitoring business performance versus plan. The data imply that French businesses should maintain this good discipline and add to it a little more attention to the way the marketplace is behaving and their ability to react to changes in the market. Generally, integration across the Management Excellence processes has worsened slightly since the first report and we feel that this is an area which French organisations must pay attention to in order to keep performance levels high.IberiaGood progress from the first report, " where it was a poor performerFairly close to average for every Index " Stellar progress on Business Plan and " Business ModelVery even scores across the Indices" Although it features only in the middle of the table, Iberia is one of the success stories of Oracle EPM Index II. In the first report, the region performed very poorly, and actually held the overall average of the other countries down. In Oracle EPM Index II, organisations across the Iberian peninsula have raised their game across the board, particularly in the business planning areas, so that its performance overall is near the European average. 14Index ScoreUntitled DocumentGeographical AnalysisAlso interesting to note is the low spread of values for its sub-Indices which indicates that organisations are much better integrated across their business processes a crucial step on the road to Management Excellence.BeneluxTop performer above average in all " Indices and solid progress since the frst report, when it was thirdGood progress on Stakeholder " Environment 13 per cent above averageMost progress in Business Plan and " Business Operations since the first reportAs for France, a strong focus on stakeholder engagement appears to be one of the cornerstones of the success of the Benelux organisations surveyed. Also, among the geographies surveyed Benelux shows nearly the lowest spread of values across the sub-Indices for the Management Excellence processes and this has actually improved marginally since the first report. Benelux is top of the table for Oracle EPM Index II, and we feel that the country s businesses are benefiting from better external focus, better business planning and execution and a good general view of the processes critical to Management Excellence.germany and switzerlandGood solid performance, taking it " towards the top of the table (3rd place)Above average in all Indices except " Business Model, in which also least improvement was made from the first reportBest performance (13 per cent above " average) and progress from first report (60 per cent improvement) in Stakeholder EnvironmentAs with France, a steady focus on stakeholder engagement appears to be one of the cornerstones of success for the organisations surveyed in Germany and Switzerland. Also, among the geographies surveyed, Germany and Switzerland show the lowest spread of values across the sub-Indices for the Management Excellence processes, a significant improvement since the first report. The geography s move of three places up the table for Oracle EPM Index II shows that the businesses there are benefiting from improved external focus, better business planning and execution and a good general view of the processes critical to Management Excellence.ItalyPoor overall performance bottom of " the table, dropping from second place in the first reportItaly s worst Index, Business Plan (9 " per cent below average) also represents its best progress from the first report with an increase of 55 per cent Although its overall Index score has improved since the first report, Italy has done relatively poorly, moving from second place to bottom overall. However, this was predicted in last year s analysis, as it was felt that Italy was not truly aware of the issues involved with managing EPM effectively Oracle EPM Index II indicates that the recession has now uncovered these issues, forcing Italian organisations to become more circumspect in recognising what is needed. One of the key messages from Oracle EPM Index II is the importance of acknowledging the role of the Stakeholder Environment. We feel that Italian organisations must take this to heart as part of addressing their business performance. There are some positive signs the country s businesses are planning better but overall it has a long way to go in recognising and addressing the issues attached to Management Excellence.nordicsOverall, results indicate that there is " work to be doneMost progress in Business Model " and Market Model, but overall Index dragged down by very poor showing in Stakeholder Environment (30 per cent below average and relatively little absolute progress since the first report)Nordics is the only region in which " managing customer churn figures low in the priority list for growth strategies. In all other countries or regions it is placed first or second.15Untitled DocumentIn the Nordic region, we see that an overall poor Stakeholder Index is the significantly weakest aspect of an overall performance that can best be described as modest . There has been progress in some of the planning processes, notably Market Model, but generally a widening of the spread of the Index numbers indicates that Nordic businesses are not paying consistent attention to each of the Management Excellence processes. The Oracle EPM Index II data point to the importance of the Stakeholder and of integration across business processes and these are the areas of urgent focus for Nordic organisations.north AmericaSomewhat below average in all Indices " except Stakeholder Environment, where it has made the most progress since the first reportBusiness Planning has been the " weakest areaNorth America has been leapfrogged by more European countries in Oracle EPM Index II. The Stakeholder Index has improved most since the first report, possibly demonstrating the importance to North American businesses of corporate social responsibility and its attendant external focus. However, Business Planning has weakened North America has gone from top to bottom of that Index. In today s tough economic circumstances, focusing on business planning appears to have served European businesses well and there s perhaps a message there for organisations across the Atlantic, too.Geographical AnalysisUKNot a stellar story on or below " average across the boardRelative to the average, weakest " performance in Stakeholder EnvironmentBest progress since the first report is in " the Business Plan IndexThe UK s reaction to today s bleak economic outlook appears to have been an inward focus, on Business Planning, at the expense of a more outward-looking mode Stakeholder index values have not increased as well as elsewhere in Europe. There has also been a widening of the spread across the indices, indicating lessening integration across the critical business processes which underpin Management Excellence. Whilst this fragmented attention to specific parts of the business can be understood in a time when resources are tight, the clear message to UK businesses must be to widen the span of attention to include all the critical business processes and to make special efforts to understand and involve the Stakeholder communities.16Untitled DocumentAs we noted in our introduction, the first iteration of the EPM Index revealed a number of weaknesses in the Management Excellence processes among businesses in Europe and North America. First and foremost, the vast majority of organisations failed to see the importance of integrating the six key processes. There were also concerning fndings about levels of competitive intelligence, the ability to react to market changes and the quality of information feeding in to financial reports. In summing up the first report, we looked ahead to the production of Oracle EPM Index II, in which we hoped to see a greater level of achievement in the realms of EPM. The findings from Oracle EPM Index II show that business have certainly delivered in many measures on that aspiration. There is increasing acceptance of the need to integrate the processes and information flows governing stakeholder engagement, business models, planning, forecasting and reporting. Furthermore, many of the weaknesses from the first report are wholly absent from Oracle EPM Index II. However, there is still room for improvement in maintaining the momentum towards Management Excellence. In the first report, the Index for Stakeholder Environment was the lowest of the six areas and this is repeated, even more markedly, in Oracle EPM Index II. By sharing information about performance, goals and results, organisations can make stakeholders feel involved and valued, which can have a hugely positive impact on the organisation. Effective stakeholder engagement can minimise investor turnover, inspire employees, keep customers informed and show partners In Summaryhow great you are to do business with. In turn, stakeholders become motivated to contribute more to business success. It s a virtuous circle.Organisations can also do more to respond quickly to changing business and market conditions. To ensure that organisations continue to deliver on its commercial objectives, being able to spot deviations and their root cause and take corrective action is vital.While there has been some significant progress in individual Management Excellence processes, particularly in planning and reporting, the findings from Oracle EPM Index II also clearly make the case for paying consistent attention to all of the six processes. The global recession has forced businesses to re-evaluate and, where necessary, repair their systems and processes. As we stated in our assessment on page four, the strong overall Index performance reflects growing confidence in the quality of the information and feedback shared between functions.With the repair work now done, the next step is to make performance management even more effective. Technology can be a great enabler for guaranteeing the quality of data and increasing the efficiency of EPM by automating information exchanges across the operational areas supporting Management Excellence. An EPM system should provide a simple way for organisations to support all components of the management process.An organisation that adopts EPM ultimately will expect improvements in its financial performance. This is reflected in a variety of financial ratios, including return on assets (reflecting relative competitiveness), profit margin (relative efficiency), and price-to-earnings ratio (relative risk). Improvements in these fnancial indicators are signs of increased frm profitability, leading to a higher business valuation and higher rewards for the contributing business managers.We hope you have found in this report much to learn about how EPM could drive your organisation towards Management Excellence and improved financial performance. Quocirca conducted the research in November and December 2009. 800 organisations were interviewed in the following countries/regions: Belgium/Netherlands; France; Germany/Switzerland; Iberia; Italy; Nordics; North America; UK. 100 organisations were interviewed in each group to give statistical validity. Interviewees were senior personnel involved with finance processes. Large (> 100M) and very large (> 1Bn) organisations were selected by Quocirca for interview.17Untitled DocumentFor further information on Enterprise Performance Management please visit www.epmtv.eu, an online forum for the exchange of news, views and resources on the subject and details of the latest events.For information on EPM and other issues as they affect the office of the Chief Financial Officer, visit oracle.com/cfoIf you would like to speak to a member of Oracle s EPM team, then please get in touch using the following contact details: Copyright 2010, Oracle and/or its affiliates. All rights reserved. Published in the UK. This document is provided for information purposes only, and the contents hereof are subject to change without notice. This document is not warranted to be error-free, nor is it subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document, and no contractual obligations are formed either directly or indirectly by this document.This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission.Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.Germany+49.800.1.816.161 firstname.lastname@example.orgItaly+39 .800.783.584 email@example.com Netherlands+31.800.023.2286 firstname.lastname@example.orgFrance+33.800.906.650 email@example.comSwitzerland+41.800.561.226 firstname.lastname@example.orgBelgium+32.800.78555 email@example.comSweden+46.20.794.583 firstname.lastname@example.orgUK+ 44.870.8.768.737 email@example.comIrelandfirstname.lastname@example.org Spain+34.900.992.922 email@example.com Portugal+351.800.853.027 firstname.lastname@example.orgOracle CorporationEMEA hEAdQUArTErsRoute de Pre-Bois 29 CH-1215 Geneva 15.Switzerland Phone +41.22.799.9900