Balanced
Scorecard Technical EPM
Let’s
understand the Balanced Scorecard Technical EPM inside-out.
PeopleSoft’s Enterprise Performance Management (EPM) is a suite of
analytic applications that can be purchased and implemented on a
piece-meal basis. The objective of the EPM product suite is to
provide business intelligence through the enrichment of data by
analytic applications such as Activity Based Costing (ABC), Funds
Transfer Pricing (FTP), Risk Weighted Capital (RWC), Workforce
Analytics, and Profitability Planning and Simulation (PPS). The
business intelligence is intended to address and resolve strategic
and analytic business issues.
The foundation
of EPM is the Enterprise Warehouse, a data warehouse that can be
purchased and implemented as a standalone product. All of the rest
of the analytic applications are essentially add on modules in that
they rely upon and must be implemented “on top” of the Enterprise
Warehouse.
In addition to
the warehouse and analytic applications, EPM includes over 400
templates, which involve application and/or industry specific
standards for providing information like Balanced Scorecard
Reporting, Merchandise Management, Project Analysis, Enrollment
Analysis, and Customer Profitability. Other engines including a
multidimensional attribution engine, a cash flow generator, a yield
curve generator, a financial calculator, and a stratification engine
are also built into the product.
Balanced
Scorecard Technical EPM incorporates data management tools and
techniques such as relational database management systems,
multidimensional database management techniques (cube builders),
operational data stores (a technique for structuring the way data is
stored and managed), and star schema (another technique for
structuring the way data is stored and managed) to facilitate the
availability and presentation of data. It also permits the use of a
variety of reporting tools and techniques to facilitate the
reporting process considering factors such as data volumes,
presentation format, preparation frequency, and user
accessibility.
The current
release of EPM is with PeopleTools 8. Accordingly, the user
interface is a browser.
Business
Solutions: Collectively, the Enterprise Warehouse, Analytic
Applications, and Templates are intended to deal with business
principles and issues including the
following:
|
Business
Issue |
EPM
Enabler |
|
Product Costing
|
ABC approach to product cost
build |
|
Cost
Reduction |
ABC identification of non value add
activities |
|
Pricing and Customer Strategy
|
Customer Profitability Reporting –
using Workbenches and ABC |
|
Product/Service Rationalization
|
Product Profitability Reporting – using
Workbenches and ABC |
|
New Product/Service Analysis
|
Target Costing/ABC build up of
costs |
|
Process Costing
|
ABC – “stringing” activities together
as processes and using cumulative activity costs to determine
process costs |
|
Process Improvement
|
ABC and Process Analysis – simulation
of processes using activity based
information |
|
Driver Analysis
|
Identification and measurement of
driver data using ABC techniques to understand cost
behavior |
|
Forecasting |
ABC techniques to develop Activity
Based Budgets; Profitability Planning and Simulation analytic
application |
|
Risk Management
|
FTP, RWC – determining the costs
associated with interest rate risk and credit rate
risks |
|
Management Reporting
|
Enrichment of data using rules based
analytic applications, presentation of data using
multidimensional database tools and techniques, and
development of reports using a variety of reporting tools such
as nVision, Actuate, Cognos,
etc. |
|
Customer Relationship Management
|
Customer Profitability Workbenches, ABM
(through definition of customer as cost object), Balanced
Scorecard Reporting (Customer focus), Enterprise Warehouse
(through capture and reporting of revenue data and patterns),
Vantive Integration |
|
Business/Industry Process
Management |
Industry specific
workbenches |
Balanced
Scorecard Reporting: Balanced Scorecard Reporting is one of the
better understood and publicized Workbenches available with the
early release version of the product. Its characteristics are as
follows:
·
Based on ideas and teachings of Kaplan and
Cooper dating back to the 80’s
·
Perspective extends beyond traditional
financial measures; focus on four “equally weighted” (hence
balanced) areas
-
Customer
-
Financial
-
Internal
- Learning and
Innovation
·
Identification and capture of measures
(generally no more than five for each of the four areas) on which to
evaluate performance
- Customer
(percentage of on time delivery based on customer feedback, number
of preferred vendor ratings issued by
customer)
- Financial
(return on net assets, earnings per
share)
- Internal
(identification and number of internal processes successfully web
enabled, number of days required to close the
books)
- Learning and
Innovation (number of profitable products in existence two years
after their launch, percentage of staff members that know
html)
·
Provides the opportunity to view the company
strategically (the measures can be defined in terms of successful
implementation of new strategies)
·
ABC is the cost management practice of
choice
·
Provides the opportunity to successfully
utilize benchmarking and other forms of external information (based
on definition and reporting of
measures)
·
Effectively permits use of key performance
indicators (KPI) through definition and capture of
measures
Skills required
for Balanced Scorecard Technical EPM:
·
Skills required to effectively work with EPM
include but are not limited to:
·
PeopleSoft technical and application
skills
·
Relational database management
skills
·
Data warehouse
skills
·
Internet skills
·
Multidimensional database management
skills
·
Broad business
skills
·
Activity Based Costing
skills
·
Data structure, storage, management,
manipulation and movement skills
·
Network and communication
skills
·
Industry skills
·
Reporting skills
