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Oracle EPM Index

Cycle II, January 2010 – results and conclusions

Oracle launches Cycle II of the Oracle EPM Index

• Jan 19 - Oracle launches the next cycle of research into Enterprise Performance Management (EPM)– Cycle I was launched in March 2009

• The Oracle EPM Index has risen from 5.13 to 7.04 on a scale of 0 to 10

• This figure is derived from research into the execution of six critical EPM processes by 800 organisations in Europe and North America– Processes are: Stakeholder environment; Market Model; Business

Model; Business Plan; Business Operations; and Business Results See the Journal of Management Excellence for more information

– Numeric answers for each process area provide a sub-Index– Aggregated number across the processes is the Oracle EPM Index– Sub-indices for country, region, industry each tell a story about progress

Global Businesses Battle Recession with Enterprise Performance Management

• The Oracle EPM Index investigates the progress of business towards Management Excellence

• On a scale of 0 to 10, the overall Index for all of the surveyed countries has leapt by 38% from 5.13 in the first report to 7.04 in Oracle EPM Index II.

• The increase reflects an improvement in performance management confidence across all geographies, sizes of organisations and all verticals.

• Oracle attributes this rise in confidence about enterprise performance management to the global business climate. The first EPM Index was conducted in January 2009 as businesses grappled with a deteriorating economic outlook.

• Rather than signifying any major material improvements, the stronger performance in Oracle EPM Index II reveals that the majority of businesses now feel more confident about their ability to address their own performance.

Looking behind the overall number…

• Along with increased confidence about progress towards Management Excellence, results from the six key areas assessed in EPM Index II reveal that businesses:– Increasingly accept the need to adhere to the principles of enterprise

performance management (EPM)– Perceive significant improvements in their planning and reporting

processes– Are still too internally focused, at the expense of wide-ranging

stakeholder expectations, and have comparatively weak levels of integration between the operational areas

– Have an increased focus on customer loyalty to drive growth as opposed to new products, services or geographies

– Now generally acknowledge the importance of Business Intelligence as a key tool in the execution of EPM

EPM Progress is positive everywhere since March 2009

• Business Plan and Market Model have made the greatest increase – shows businesses have focused on business planning and core competencies

• Organisations have tightened up the way they plan and approach the market in response to recession

• Financial reporting (Business Results) is now the strongest process

Business Results

Business Operations

Business Plan

Business Model

Market Model

Stakeholder

Overall

0 1 2 3 4 5 6 7 8

Cycle II, Jan 2010

Cycle I, Mar 2009

Still much work remains to be done

• Engaging with stakeholders continues to be weak– Those countries which showed best stakeholder engagement

have come out better overall

• More focus needed on business models– Better market analysis and more responsiveness to changing

market conditions is needed

• More integration needed across the six EPM processes– Those countries with better alignment of the processes also

showed better overall progress

Geographical changes

• Iberia, Germany, Switzerland and Benelux have all improved• Italy was second, but has dropped to last– Foreseen in previous Index– Not fully aware of issues in conducting EPM– Still, however, an improvement since March 2009

Italy

Nordics

North America

UK

Iberia

DE/CH

France

Benelux

0 1 2 3 4 5 6 7 8

Cycle II, Jan 2010

Cycle I, Mar 2009

Index

Position, Cycle I Position, Cycle II1

2

3

4

5

6

7

8

Italy

Italy

Nordics Nordics

North America

North America

UK

UK

Iberia

Iberia

DE/CH

DE/CH

France

France

Benelux

Benelux

Changes in Industry rankings

• Utilities have made most progress, followed by Industrial and High-Tech

• Retail, CPG and Finance all losing ground – perhaps most affected by economic circumstances

• Healthcare and Public Sector still lag– Perhaps difficult to apply commercial terms to these industries

Public Sector

Healthcare

CPG

Retail

Finance

Telecommunications

High-tech

Industrial

Other

Utilities

0 1 2 3 4 5 6 7 8

Cycle II, Jan 2010

Cycle I, Mar 2009

Index

Position, Cycle I Position, Cycle II1

2

3

4

5

6

7

8

9

10

Utilities

Other

Industrial

High-tech

Telecommunications

Finance

Retail

CPG

Healthcare

Public Sector

The Importance of Business Intelligence (BI)

• Over half of organisations now regard BI as an important reporting tool (up from one-fifth)• Organisations who understand the importance of

Business Intelligence tend to manage their performance better

Not sure

Expensive visualisation tool

Tool to see what has happened

Important reporting tool

Major means of monitoring

0 1 2 3 4 5 6 7 8

Importance of BI vs Index

Index

Not sure

Expensive visualisation tool

Tool to see what has happened

Important reporting tool

Major means of monitoring

0 10 20 30 40 50 60

View of role of BI

Cycle II, Jan 2010

Cycle I, Mar 2009

Percent

Other findings from the research

• Evidence of more focus on customer loyalty!– Companies’ focus to drive through the recession shifts from new

products and services to reducing customer churn– i.e. maximising what they already have, rather than higher-risk

activities such as new products/services or geographies

New customers

Managing churn

New services

New products

New geographies

New channels

0 1 2 3 4 5 6 7 8 9

Focus areas for growth

Cycle II - Jan 2010

Cycle I - Mar 2009

Index

Cycle I - Mar 2009 Cycle II - Jan 20101

2

3

4

5

6

Rank

New customers

Managing churn

New services

New products

New geographies

New channels

Other findings from the research

• Higher recognition of the importance of the six Management Excellence processes – Fewer than 5% of businesses now think that the six processes

could be viewed in isolation (was over a quarter in Cycle I)– Nearly a third of companies now see that the six processes are

interlinked and require an integrated approach (up from one-fifth)

– Those countries with better alignment of the processes also showed better overall progress

Oracle’s recommendations

• To maintain the momentum towards Management Excellence:– Engage more with stakeholders– Aim for more consistent attention to all of the six processes– Aim to react more quickly to changing business and market

conditions

• For more details on the research, visit the Oracle EMEA Media Centre: http://bit.ly/5wbib1

COUNTRY ANALYSISAppendix I

Analysis of Country Data

• France– Continues to perform well– Benefits from extra attention paid to Stakeholders and

monitoring business performance against plan– Needs more attention to integration across the processes

• Iberia– Good progress from Cycle I, where it was a poor performer– Fairly close to average for every Index – Best progress on Business Plan and Business Model– Only country to put “managing customer” churn as top priority

as growth strategy– Very even scores across the Indices – well-integrated

approach to executing the processes

Analysis of Country Data – cont’d

• Belgium/Netherlands– Is now top performer– Good improvement on Stakeholder engagement– better external focus, better business planning and execution

and a good general view of the processes

• Germany/Switzerland– Like France, good performance on Stakeholder engagement– Best for integration across processes– Now towards the top of the table

Analysis of Country Data – cont’d

• Italy– Has made least progress overall among the countries– Much more focus on stakeholder needed– Business planning has improved the most– Much progress needed in recognising and addressing EPM

Issues

• Nordics– Very modest progress– Stakeholder engagement is the weakest improvement– Not well-integrated across the processes– Alone among the countries, Nordics have “managing

customer churn” towards the bottom of their growth priorities

Analysis of Country Data – cont’d

• North America– Somewhat below average in its improvement– Except for Stakeholder, which is its best area of progress– Business Planning relatively weaker – not the best for today’s

economic climate

• UK– Modest progress– Stakeholder engagement is relatively the weakest

improvement since Cycle I, but Business Planning stronger This inward focus appears to be the response to tough

economic circumstances– Important to pay attention to all the processes