Value-Based Management in Government

CHAPTER FIVEExceptional EPM Systems Are an Exception

TWO POPULAR TERMS FROM the last fifteen years are corporate performance management (CPM) and enterprise performance management (EPM). They are synonymous terms. The only difference is that the public government community prefers the latter because the former refers to “corporate,” a word that can alienate government professionals because it appears to refer to commercial businesses. So, we will only use the term EPM.

In Figure 2.6, the enterprise performance management (EPM) methods were represented by an ellipse in “The Mechanism” floor of “The House of VBM.” The depiction of EPM in this figure was intended to illustrate the role of EPM with the balancing of the three scales (results/resources/risks) required to maximize the delivery of stakeholder value. In this chapter we build upon that simple depiction to more completely describe the role EPM plays in ensuring this essential balancing of management considerations.

MANAGEMENTS' DELUSION THAT THEY HAVE EPM METHODS

Many organizations overrate the quality of their EPM methods and their IT systems, both in comprehensiveness and the degree of integration among the EPM methods. For example, when you ask executives how well they measure and report either costs or nonfinancial performance measures, most proudly boast that they are very good. This conflicts with surveys where anonymous replies from mid-level managers candidly score them as “needs much improvement.” Every organization ...