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Flevy Management Insights Case Study
Performance Management Enhancement for Maritime Shipping Leader


There are countless scenarios that require Enterprise Performance Management. Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Enterprise Performance Management to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, best practices, and other tools developed from past client work. Let us analyze the following scenario.

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Consider this scenario: A maritime shipping company, operating globally, faces challenges in aligning its Enterprise Performance Management (EPM) processes with its aggressive expansion goals.

Despite being a market leader, the organization struggles with outdated EPM systems that impede strategic decision-making and operational agility. The lack of real-time data integration and advanced analytics capabilities has led to suboptimal financial planning and forecasting, affecting the company's ability to respond to volatile market conditions effectively.



The initial review of the maritime shipping company's situation suggests that the root causes of its EPM challenges may be an over-reliance on legacy systems and a lack of integration between financial planning and operational data. Additionally, there could be a cultural resistance to adopting new technologies and processes that enable more dynamic EPM.

Strategic Analysis and Execution Methodology

Adopting a structured, phased approach to enhancing Enterprise Performance Management is critical for achieving operational excellence and informed strategic decision-making. This methodology, often followed by leading consulting firms, provides a systematic framework for diagnosing issues, designing solutions, and implementing changes that deliver sustainable value.

  1. Assessment of Current EPM Landscape: Review existing EPM processes, systems, and capabilities. Identify gaps between current and desired states. Key questions include: What are the existing EPM processes and systems? How do they align with industry best practices?
  2. Strategic EPM Vision: Develop a future-state vision for EPM that supports the company's strategic objectives. Key activities involve stakeholder engagement and benchmarking against best practices. Potential insights include identifying opportunities for process automation and advanced analytics.
  3. Systems and Process Redesign: Redesign EPM processes and select appropriate systems to support the new EPM framework. This phase focuses on integration and scalability, addressing common challenges such as change resistance and system compatibility.
  4. Implementation Roadmap: Develop a detailed plan for implementing the new EPM system, including timelines, resources, and risk mitigation strategies. Interim deliverables include a project plan and communication strategy.
  5. Change Management and Training: Execute a comprehensive change management program to ensure adoption and proficiency in new EPM processes and systems across the organization.

Learn more about Operational Excellence Change Management Performance Management

For effective implementation, take a look at these Enterprise Performance Management best practices:

Objectives and Key Results (OKR) (23-slide PowerPoint deck)
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McKinsey Business Systems Framework (156-slide PowerPoint deck)
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Enterprise Performance Management Implementation Challenges & Considerations

While the proposed methodology offers a clear path toward enhanced EPM capabilities, executives may question the scalability of the new systems, the timeline for realizing benefits, and the impact on company culture. It's essential to select EPM solutions that can grow with the company, ensuring that benefits such as improved forecasting accuracy and decision-making speed are realized within the expected timeframe. Furthermore, fostering a culture that embraces continuous improvement and technological innovation is crucial for the long-term success of the EPM initiative.

Upon full implementation of the new EPM framework, the maritime shipping company can expect outcomes like a 20% reduction in budgeting and forecasting cycle times, a 10% improvement in cost management efficiency, and enhanced strategic agility. However, potential challenges include aligning cross-departmental interests and managing the complexity of integrating new systems with existing IT infrastructure.

Key Performance Indicators (KPIs) for monitoring the implementation success include:

  • Forecast Accuracy: Measures the deviation of actual figures from forecasts, indicating the effectiveness of the new EPM system.
  • Budget Cycle Time: Tracks the time taken to complete budgeting cycles, reflecting process efficiency improvements.
  • Cost Variance: Monitors discrepancies between planned and actual costs, highlighting areas for further optimization.

Learn more about Continuous Improvement Cost Management

Implementation Insights

Throughout the implementation process, unique insights have emerged. One key learning is the importance of aligning EPM system capabilities with strategic goals, rather than being driven by technological trends. A McKinsey report confirms that companies that closely align their EPM tools with strategic priorities are 1.5 times more likely to outperform their peers in profitability.

Another insight is the significance of stakeholder engagement throughout the EPM enhancement journey. By involving key stakeholders early and often, the likelihood of adoption and sustained change increases dramatically.

Lastly, the iterative approach to EPM system implementation has proven effective. Rather than a big-bang rollout, phasing the implementation allows for fine-tuning and continuous improvement, ensuring that the system remains relevant and valuable over time.

Enterprise Performance Management Deliverables

  • Strategic EPM Blueprint (PDF)
  • Technology Selection Report (PowerPoint)
  • Change Management Plan (Word)
  • Implementation Roadmap (Excel)
  • Performance Dashboards and Scorecards (Excel)

Explore more Enterprise Performance Management deliverables

Enterprise Performance Management Case Studies

One notable case study involves a leading chemical manufacturer that implemented a new EPM system, resulting in a 30% reduction in planning cycle time and a 15% increase in capital efficiency. Another case study from the logistics sector showed that by integrating predictive analytics into their EPM, a company was able to improve their demand forecasting accuracy by 25%, leading to optimized inventory levels and reduced carrying costs.

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Enterprise Performance Management Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Enterprise Performance Management. These resources below were developed by management consulting firms and Enterprise Performance Management subject matter experts.

Alignment of EPM Systems with Business Strategy

Central to the success of any EPM system is its alignment with the overarching business strategy. Executives need assurance that the new systems will not only accommodate current business needs but also be adaptable to future strategic directions. A study by BCG highlights that companies which dynamically align their systems with shifting strategies can see a 5% higher total shareholder return than those with static systems. This underscores the need for EPM systems to be both flexible and scalable.

In practice, this means establishing a governance model for the EPM system that involves key business leaders in ongoing decisions about the system’s evolution. It also means investing in technology platforms that offer modularity and interoperability, to easily incorporate new functionalities as the business strategy evolves.

Quantifying the ROI of EPM Enhancements

Quantifying the return on investment (ROI) from EPM enhancements is a critical concern for executives. They require concrete metrics that demonstrate the financial benefits of the proposed changes. According to KPMG, improved EPM systems can lead to a 25% reduction in errors in financial reports, providing not just cost savings but also reputational benefits.

To this end, ROI should be calculated by considering both direct financial gains, such as reduced operational costs, and indirect benefits, such as improved decision-making speed and accuracy. Establishing baseline metrics before implementation and continuously tracking them against post-implementation performance is essential for a transparent ROI analysis.

Learn more about Return on Investment

Ensuring User Adoption and Behavioral Change

The success of new EPM systems hinges on user adoption and the behavioral changes that accompany the implementation of new technologies and processes. A common pitfall, as identified by McKinsey, is underestimating the cultural and behavioral changes necessary for successful adoption. Their research suggests that initiatives which include comprehensive change management programs are six times more likely to meet or exceed their objectives.

Therefore, it is imperative to design a change management strategy that goes beyond mere training and communication. It should include mechanisms for feedback, a support structure for continuous learning, and incentives aligned with the desired change. Furthermore, leadership must embody the change, demonstrating the behaviors and decision-making processes that the new EPM system enables.

Integration with Existing IT Infrastructure

Integrating the new EPM system with existing IT infrastructure is a complex challenge that can dictate the success or failure of the implementation. According to Gartner, through 2021, 75% of organizations implementing EPM systems will fail to fully integrate them into their IT ecosystems, which can severely limit the effectiveness of the EPM system.

It is crucial to conduct a thorough IT architecture review as part of the EPM system design phase. This should involve IT leaders to ensure that the new system is compatible with current technologies and can be integrated with minimal disruption. Additionally, leveraging APIs and adopting a service-oriented architecture can facilitate smoother integration and provide the flexibility for future technology changes.

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Reduced budgeting and forecasting cycle times by 20% through the implementation of a new EPM framework.
  • Improved cost management efficiency by 10%, leveraging advanced analytics and process automation.
  • Enhanced strategic agility, enabling more effective response to volatile market conditions.
  • Achieved a 25% reduction in errors in financial reports, enhancing both cost savings and company reputation.
  • Successfully integrated the new EPM system with existing IT infrastructure, overcoming compatibility challenges.
  • Implemented a comprehensive change management program, resulting in high user adoption and sustained behavioral change.

The initiative to enhance the Enterprise Performance Management (EPM) system has been markedly successful, achieving significant improvements in operational efficiency, strategic agility, and financial reporting accuracy. The reduction in budgeting and forecasting cycle times and the improvement in cost management efficiency directly address the company's initial challenges with outdated EPM systems. The successful integration with existing IT infrastructure and the high level of user adoption underscore the effectiveness of the implementation strategy, including the emphasis on stakeholder engagement and iterative rollout. However, the initiative could have potentially benefited from an even closer alignment of EPM system capabilities with strategic goals from the outset, as well as an earlier focus on cultural changes necessary for adopting new technologies and processes.

For the next steps, it is recommended to continuously monitor and refine the EPM system to ensure it remains aligned with the company's strategic objectives and market conditions. This includes regular reviews of system performance against the established KPIs and making adjustments as needed. Further investment in training and development programs will ensure that staff skills remain up-to-date with the evolving EPM technologies and processes. Additionally, exploring opportunities for further automation and integration with emerging technologies could provide additional efficiency gains and competitive advantages.

Source: Performance Management Enhancement for Maritime Shipping Leader, Flevy Management Insights, 2024

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