Guest View: Are Your Apps Effective? See What Users Are Doing

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AS OF 11/22/2008 3:06AM EST

Guest View: Are Your Apps Effective? See What Users Are Doing
By Thad Eidman

July 1, 2008 — What do you say when the CEO is asking why your company didn’t reduce the “order-to-cash” cycle time as planned? Even if your company has a robust corporate performance management (CPM) system, chances are you won’t have a good answer.

CPM is 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, score-carding, and querying results and variances through business intelligence. Each of these tactics transforms data collected by transactional systems (such as CRM and ERP) into insight about top-line performance objectives.

But CPM doesn’t give the business stakeholders any visibility into what’s actually happening. It’s the end users who execute the transactions that drive the processes that drive the business. Are employees actually using the right transactions to execute the business process? Are they using them 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?

There’s a new generation of solutions that can give you those answers and not leave your CEO hanging: end user performance and management (EPM). EPM solutions give organizations a new focus on end user adoption, utilization and performance, uniquely capturing a complete picture of the end user experience and behavior, including user-experienced response time for key system transactions; comprehensive error metrics, including system and application errors, and user-created errors; and comprehensive application utilization (which transactions are used, in what sequence and for how long)

Order-to-Cash
To understand the impact of this insight, consider the following scenario concerning a billion-dollar heavy equipment manufacturer in Georgia.

One core priority for this manufacturer was to improve the order-to-cash process. This process 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 enterprise applications and departments, including sales, order entry, order fulfillment and accounting. Therefore, it is important for each department to complete its part of the overall process error free and transfer correct information across functional boundaries.

Eighteen months after this company had implemented new software applications to improve process efficiency, the order-to-cash cycle had not improved. Upon implementing an EPM system, executives within weeks discovered that the OTC process was compromised by ineffective and inefficient transactional execution.

What was going wrong?

The sales reps weren’t using the CRM system to manage their pipeline. Instead, they created prospect records near the end of the lengthy sales cycle. That meant materials management wasn’t getting long-term visibility into upcoming demand, adding six days to the OTC time.

The order-entry processes of the new application were cumbersome. Although it had been heavily customized, it didn’t give the customer service associates a streamlined way of calculating the shipping cost. Associates were actually exiting the application and using a spreadsheet to calculate the shipping cost. This inefficiency dampened productivity, and each day ended with a backlog of un-entered orders. Add one day to the OTC cycle time!

To ensure no backlogs in the fulfillment process, the company assigned each employee a unique user ID, with two dedicated workstations for each inventory associate. However, it had become normal for the employee with the first transaction of the day to sign on, and everyone else used that active workstation to execute his or her order and fulfillment transactions. That led to a perpetual queue, and each day would end with a number of unfulfilled orders. Add one day to the OTC time!

Experience and Performance Metrics
Consider what happened when we added end user experience and performance metrics to the mix. In sales, utilization metrics about sales reps’ use of the activity management transactions of the CRM application quickly showed management how little the reps were using the system—and which reps, managers and geographies hadn’t fully adopted the application. With this knowledge, management was able to take remedial action.

The EPM solution identified the precise point when the order-entry associates exited the primary application to execute the user-defined workaround. Once this ineffective function was identified, the application engineering team modified the application and obviated the employee-invented workaround.

With order and fulfillment, EPM utilization statistics exposed the fact that the employees were sharing a single user ID, and managerial oversight soon put a stop to it.

And in finance and accounting, EPM workflow and end user error metrics made it obvious that everyone had adopted the application and was using 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.

Peter Drucker, one of the most influential business thinkers of the past century, said, “You cannot manage what you cannot measure.” The phrase has become a common business bromide, but at the time, 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.

Thad Eidman is CEO at Knoa Software, which makes performance management software.

Related Search Term(s): CRM, ERP management

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