What do you say when the CEO asks why your company didn’t reduce its order-to-cash cycle time as planned or why the multimillion-dollar ERP system has not yielded the anticipated ROI? Even if your company has a robust corporate performance management (CPM) system including Business Process Management (BPM) and Business Intelligence (BI), strong chances are you won’t have a good answer.
These technologies comprise the strategy, methods and processes that an organization deploys to direct its employees, partners, suppliers and customers to achieve a common set of goals. Companies measure performance through various mechanisms, including budgeting, scorecards and query results and variances through business intelligence.
Each of these tactics transforms data collected by transactional systems (CRM and ERP) into insight about top-line performance objectives. But CPM, BPM and BI don’t give visibility into what’s actually happening – from the end user perspective. Stakeholders are often left with questions such as:
- Are employees actually using the right transactions to execute the business process?
- Are those employees using those transactions in the right way?
- Are the employees efficient, or are they making significant errors?
- Are the transactions effective, or are they cumbersome, requiring employee-invented workarounds?
It has become apparent that it’s the end users who execute the transactions that drive the processes that drive the business. But how do you measure each and every transaction?
End User Performance Management (EPM) gives organizations a new focus on end-user adoption, utilization and performance. It does so by uniquely capturing a complete picture of the end-user experience and behavior, including user-experienced response time for key system transactions; system and application error metrics as well as user-created errors; and application utilization, revealing which transactions are used, in what sequence, and for how long.
Better process improvement – save time, save money
Activities won’t be executed upon if the tools provided aren’t being used appropriately. To understand the impact of this insight, consider the following scenario.
A heavy equipment manufacturer wanted to improve its order-to-cash process, which comprises a number of unique business processes from order entry to cash receipt. Because most companies are functionally managed, the order-to-cash process usually touches multiple applications and departments — sales, order entry, order fulfillment, accounting and more. Therefore, it is important for each department to complete its part of the process in an error-free manner and to then transfer correct information across functional boundaries.
Eighteen months after this company implemented an ERP system to improve process efficiency, the order-to-cash cycle had not improved. The company implemented an EPM solution to take the guesswork out of managing its applications. Executives discovered within weeks that the order-to-cash process was compromised by ineffective and inefficient transactional execution.
- The sales reps weren’t using the CRM system to manage their pipeline. Creating prospect records near the end of the sales cycle caused delays because materials management were not able to see long-term visibility into demand.
- The order-entry processes were cumbersome. Despite heavy customization, the software didn’t give the customer service associates a streamlined way of calculating shipping costs. Associates used workarounds, dampened productivity and causing a backlog of un-entered orders.
- User ID malfeasance became the norm. Although the company assigned each employee a unique user ID, once the employee with the first transaction of the day signed on, everyone else used that active workstation to execute his or her order and fulfillment; causing lags in order fulfillment.
Based on just these three issues, order-to-cash cycles were extended by as much as seven days. Once the issues were identified via the EPM solution, the company took immediate action to remedy the situation and get the order-to-cash processes back on track.
EPM metrics make it obvious whether everyone adopts an application and uses it efficiently and effectively to execute the core business processes. Knowing where you don’t have problems is as valuable as knowing where you do.
Customer service – the first line of defense
Customer contact centers have increasingly become the primary channel to deliver a company’s value and can often be the first line of defense in ensuring customer satisfaction, repeat business and maintenance of brand integrity. Despite the importance of each and every transaction, recent industry research indicates that the quality of customer interactions demonstrates a disappointing lack of performance. However, EPM solutions have helped many businesses to turn the tide.
As an example, a worldwide telecommunications provider wanted to improve contact center productivity. The company was currently working with more than 16,000 agents and wanted to get a view into how its CRM systems were being utilized.
By implementing EPM, within a few weeks, it became apparent that one contact center seemed to be 25 percent more productive than other centers. Upon closer inspection, it was identified that the agents were indeed leveraging the technology but were using it a different way, a more productive way than originally intended.
Based on this discovery, the telecommunications provider implemented this best practice company-wide. Almost immediately, the EPM system was able to record that 300 agents were positively affected, increasing overall productivity – ensuring customer inquiries were satisfied appropriately, in a timely manner. Based on this single productivity enhancement, the company identified approximately $3 million in overall labor cost savings.
Security and compliance – end users are the key
Enterprises today spend millions of dollars to set up systems, processes and policies to ensure they are meet a multitude of governance, risk, and compliance (GRC) requirements. Over the course of the last five years, due to the increasing number federal, state, and international requirements, GRC is increasingly becoming a critical concern for CIOs, chief security officers and lines-of-business executives.
While there are a large number of enterprise applications and systems that are dedicated to achieve desired GRC and security objectives, the employees who use the mission-critical applications remain an area that is yet to be leveraged. In particular, an ability to collect source information at a very granular level regarding an individual user’s interaction with mission-critical applications such as, Oracle, SAP, Siebel and custom applications. By tracking these interactions in real time, compliance and security managers have a powerful new tool to identify and remediate compliance and security threats within the end-user community.
As an example, enterprises use a very complex set of policies to define the security profile for the employees to provide them access to read and edit high-security data such as,HR records, customer data and financial information. While there are GRC systems available that provide a means to implement these security profiles, CIOs/CSOs do not have an independent mechanism to proactively identify the instances when an end user tries to access information outside their security profile, which results in “authorization errors.”
By using end-user experience management tools, CSOs can track all end users who have received authorization errors through attempted access to transactions that are not within their approved security profile. While many of these accesses will be benign in nature (security profile not yet updated or data entry mistake), repeated instances or instances at off business hours raise serious security concerns.
By capturing the actual EPM metrics, now enterprises have an opportunity to proactively resolve these issues as well as prevent damage due to the malicious attempts. Per the estimates of savings for enterprises, by implementing end-user performance management tools, an enterprise would be able to save $10 million in reduced compliance-related costs.
The business of intelligence
In the last 18-24 months enterprises have been focusing on the importance of business intelligence as a way to drive value for the organization. Along with that, some issues have become apparent. Primarily, many large organizations are realizing that they have multiple or antiquated BI systems in house (usually attained through acquisitions.) Therefore, there is a need to standardize and/or upgrade a single platform to be used throughout the organization. But there are often pain points that come with this process:
- Which system should we standardize on?
- How are we going to update our customized reports for the new system?
Through countless discussions with industry experts and customers, it has been demonstrated time and again that EPM can aid in addressing these costly issues. For example, by monitoring the usage of multiple BI systems, EPM can provide metrics to identify which systems are used most frequently and which yield the best results.
In the case of upgrading to a new system, a Fortune 500 organization had more than 80 custom reports that needed to be upgraded as part of a large-scale BI implementation. Each report took IT approximately four hours to update periodically, adding a significant amount of time and cost to the rollout. Unfortunately for them, after the upgrade, the company implemented EPM and quickly learned that only 20 of the 80 reports were in use. Had the company implemented EPM prior to the undertaking, it would have saved millions in time and resources while still accomplishing the business targets.
Peter Drucker, one of the most influential business thinkers of the past century, once said, “You cannot manage what you cannot measure.” That’s become a common business bromide; but when Drucker first coined the phrase, it was the kind of insight that raised the bar for professional corporate performance management. It’s time to raise that bar once again — by delving deeper and measuring the experience received and the performance achieved by the end users of the enterprise applications that deliver the business results.
Mohit Bhatnagar is Executive Vice President, Strategy and Product Management, at Knoa Software. His background blends a strong technology foundation with hands-on experience across all key management roles in a high-tech company. Prior to joining Knoa, he worked at Symantec’s Endpoint Virtualization (SEV) business unit where he was responsible for business development and sales functions. During his sales tenure, he helped the SEV BU achieve 100% YoY revenue growth. Earlier Mohit served in a gamut of product management and corporate strategy roles at Cadence. He was also an Engagement Manager with McKinsey and Co., where he helped the clients in high-tech and telecom space solve their strategy, product development and operational issues.