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AMR
Research Signals the Death of Budgeting as we Know It
AMR Research announced, in a new European E-Business Service report,
that there is a fundamental flaw in organisations’ budgeting
and management processes in that they neglect the constantly changing
nature of business.
The report defines a new application layer, called Enterprise Performance
Management (EPM), as the solution for the broken budget problem
and as the ultimate goal and point of convergence for all other
application categories.
AMR Research explains in the report that the failure to adapt and
synchronise operations like budgeting makes the actual performance
of an organisation immeasurable against both spending and strategic
targets.
EPM melds the deepest tactical reports with the highest-level business
objectives and uses powerful analytics to help organisations change
their priorities.
EPM is the ultimate end-game for business applications, said Simon
Pollard, VP & Service director, European Research at AMR Research.
By setting the performance goals and applying EPM principles, operational
and tactical decisions like budgeting can be adjusted to cope with
the inevitable tradeoffs that are a part of doing business.
AMR Research identifies different levels of performance management
as well as a number of performance accelerators that will help organisations
achieve measurable performance gains more quickly. These include
depth of analytics, real-time monitoring, incentives and accountability.
The mistake most companies make is looking at tactical performance
measurement rather than thinking about holistically managing performance
as it is happening, said Pollard. This way of thinking is dying
quickly and giving birth to the highest possible level of software
application.
Other Highlights
• Company benefits of using EPM can extend as far as exposing
errors running into hundreds of percentage points
• User adoption is still with the thought leaders and evangelists
but mass adoption is only two years away
• Organisations should embrace EPM but start small by looking
at areas that need immediate support and improvement.
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