How has the volatile economy affected the way businesses monitor their performance and efficiency?

Are businesses, which are making a greater effort to keep tabs on resource allocation, and review plans and budgets during tough trading times, being helped or hindered by the latest technology applications and packages?

“Two years ago,” says Bill Soward, chief executive of Adaptive Planning, “most companies considered budgeting and planning as an annual exercise. What we see now is that organisations have moved into much more frequent re-forecasting.” (http://www.ebizq.net/blogs/guest_session/2010/06/business-performance-management-talking-with-adaptive-planning.php)

This increase in frequency means businesses are looking for slicker and more effective ways to monitor their performance and efficiency. Being able to react quickly to changing circumstances, being able to forecast cash flow dips or the effectives of legislative changes are all now vital for short-term planning.

“Having good measurements can greatly improve an organisation’s ability to identify problems and opportunities and obtain tangible results from its improvement efforts,” says Computer World. (http://blogs.computerworlduk.com/computerworld-archive/2009/06/measuring-the-performance-of-business-analysts/print.html)

“The right measures can provide feedback to change behaviour and the necessary guidance for determining priorities and optimising resource allocation.”

This clamouring for clarity is having an impact on IT providers. “Ever-growing demands are driving IT organisations to ensure the performance and availability of business-critical applications for end users,” said Tim Grieser (http://www.oracle.com/us/026987.pdf)

The question is, how can mid-sized businesses access these often complex, expensive and fast evolving performance packages?

One option, added Soward, is to move such applications to the cloud. It’s become the fad in 2010 for solutions that were seen as the preserve of the big companies to have a cloud-based offering for smaller businesses.

“Companies have to make decisions quickly. The advantage of an SaaS solution is that customers are up and running within two to three weeks. On-premise alternatives take many months to implement.”

With SaaS, he added, the benefits were that speed of implementation – time-to-value, its relative low cost – its pay-as-you-go, and its simplicity – there is no internal IT skill or resource required. “Many mid-market companies don’t have a lot of IT resources, maybe even less this year than last,” added Soward.

So is the cloud the answer for a quick fix when it comes to performance, efficiency and resource planning?

“It is far from clear how the major ERP suppliers will charge for cloud-based ERP,” said Greg Griffith, Project Manager at Panorama Consulting Group. “The significant ongoing revenue they receive from annual software maintenance from on-premise applications makes it harder for established ERP companies to offer considerably cheaper software licensed on a monthly subscription basis. (http://panorama-consulting.com/erp-systems-provide-a-platform-for-business-excellence/)

Improving planning and monitoring, however, requires more than simply imposing a new technological infrastructure. There is also the soft implementation to consider – the necessary changes in company culture, practices and procedures.

“Even the most wonderfully intuitive technology isn’t going to improve the bottom line if you’re attempting to graft it onto a culture which isn’t going to change entrenched ways,” says Oliver Marks. (http://www.zdnet.com/blog/collaboration/how-to-accelerate-business-performance-with-20-technologies/1501). “The underlying technology implementation should always be informed by and achieve business specific, clearly identified performance goals.”

One key component is to get previously disparate teams to work together. “A key strength of high performing organisations is high-performing people working collaboratively,” said Soward. “ERP systems are the foundation for high-performing work. They enable collaboration across boundaries of function, geography, product group, market focus, and language group.

“This allows teams to excel because they have the best information and best tools. An ERP system is only a tool, but in the hands of your company’s high-performing workforce, it is a catalyst for excellence.” Moving ERP to the cloud, therefore, makes sense.

Yet despite its apparent mission-critical nature, some still have doubts over ERP’s ability to make the migration. “Some believe it is unlikely ERP will move wholesale into the cloud,” says Richard Cushing on his blog. (http://geewhiz2roi.blogspot.com/).

“The major ERP systems tend to be architected as large homogenous IT systems, which may not be such a good fit for delivery via the cloud. Licensing major ERP systems to deploy via the cloud is still immature. Instead, niche software companies are likely to build cloud-based services that do many of the functions of ERP.”

Do you think performance and efficiency monitoring systems will now become so essential that, to meet the limited budgets of mid-sized businesses, cloud-based solutions are the only answer?

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