Enterprise performance management (EPM) and OKRs, Objectives and Key Results are both effective methods of aligning teams toward business goals, making them the perfect match to work together in a hybrid system. However, there are some critical differences between the two that should be noted so that you can use each method most effectively in your organisation. Let’s look into this further to ensure you get the best of both worlds!
OKR stands for Objectives and Key Results. It’s a term coined by Intel co-founder Andy Grove in his book, High Output Management. An OKR system is about setting specific, measurable, achievable goals, relevant, time-bound SMART), agreed upon by multiple stakeholders. Put simply, it is a way of quantifying objectives and measuring progress.
Enterprise performance management refers to monitoring performance across an entire enterprise to improve business performance. It helps you track performance against objectives, which are agreed-upon goals for an entire enterprise that can be broken down into smaller, achievable goals for each department or individual. To achieve these goals, frameworks such as OKRs, Objectives and Key Results are often used. They divide big plans into small pieces so they become more manageable; it also relies on tools like analytics to provide insight into how well those departments perform. Enterprise performance management also works hand-in-hand with CRM (Customer Relationship Management) software so that customer feedback can be used as another way to measure how well departments are doing.
OKRs set your company up for real-time performance tracking by creating goals based on what you are trying to accomplish over a short-term period of time. For example, if your objective is to reduce the product defect rate by 10% in one month, this would be broken down into a series of actionable steps, known as key results, to help make this reduction happen.
Once a system is in place, enterprise performance management will help ensure that each employee knows how their work contributes to overall business success. Enterprise performance management supports the theory of OKRs. It allows you to track data about specific goals, helping managers see where there might be opportunities for improvement or which teams are succeeding. Enterprise performance management software makes it easy to visualise how every part of your organisation impacts business goals and keeps everyone on task toward those objectives. You can use metrics like ROI, NPS scores, sales conversion rates, profit margins and more to track OKRs and see whether an employee or team is meeting expectations at any given moment.
OKRs and enterprise performance management share some characteristics and rely on similar principles, but there are also critical differences between them. OKRs focus on short-term objectives, while enterprise performance management is concerned with long-term development strategies. The former is designed for individual teams, while EPM is meant for large organisations that need scalability. Also, EPM usually addresses strategic planning instead of process improvement. Finally, EPM involves a top-down approach to goal setting, whereas OKRs can be top-down with a degree of bottom-up autonomy and tends to be more decentralised. It’s essential to consider these key differences to assess how objectives and goals would be set and worked towards within your organisation.
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