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Enterprise Strategies
Manufacturers adopt aspects of performance management, but singular path to EPM remains elusive
The path to enterprise performance management, or EPM, is convoluted-and it doesn't always begin where you thought it would start. Just ask John Yahres, vice president of finance and information technology (IT) at paper manufacturer Southworth Co., Agawam, Mass. "Back in the mid-1 990s, we put in a system that today would be called an ERP [enterprise resources planning] system," he recalls. "It did everything we wanted, but left something to be desired in the area of reporting-specifically, sales reporting."
As it happens, he continues, the ERP vendor in question had a partnership agreement with business intelligence supplier Silvon Software, Westmont, Ill., and put Yahres in touch with Silvon's Chief Executive, Michael Hennel. So began a relationship between Southworth and Silvon that continues to this day.
While the focus of EPM within Southworth still remains close to its sales reporting beginnings, it turns out that in the capital-intensive paper business, that's a focus that lies at the heart of the company's business model, addressing such questions as forecast effectiveness, customer profitability, and order management. "It's used throughout the company," says Yahres. "The salespeople might use it one way, the operations people another way, and finance people still another way. Within Southworth, we don't tend to use the term enterprise performance management-but that's what it is."
To Silvon's Hennel, this approach to EPM is familiar. "In 90 percent of our implementations, we see people start with the sales and marketing applications," he observes. "As the recent economic slowdown has highlighted, a lot of companies' demand planning and forecasting processes are very weak-and understanding how well your demand planning and forecasting processes are working is a key means of improving things on the shop floor."
Welcome to the world of EPM: a catch-all term for what Bostonbased analyst firm AMR Research describes as "an emerging superset of applications and processes that cross traditional department boundaries to manage the full life cycle of business decision-making, combining strategic goal setting and alignment with planning, forecasting, and modeling capabilities." In other words, if it's telling you about performance, and it's focused at a slightly higher level than an individual machine or function, it's...