What is Enterprise Performance Management
Most business managers know that linking strategies to their execution is a challenging task. Enterprise performance management is a tool that helps organizations connect their plans to their implementation. EPM processes include modeling, forecasting, planning, consolidating, reporting and analyzing. In an environment full of constant shifts, ruthless competitors and economic turbulence, EPM provides a mechanism for businesses to manage their growth.
Although it is often associated with enterprise resource planning software, EPM works with ERP by coming up with control analysis mechanisms as well as operational information. In essence, EPM is all about analysis, forecasting and reporting.
Companies implement these tools in a "management cycle," which happens at least once every year or quarterly. The goal of EPM is to make sure strategic objectives are comprehensively understood by business leaders and are given consideration in their budget. Making all departments work towards the same objectives is a promising starting point.
The perks of modern EPM
Finance functions covered by EPM software
History of EPM and its systems
Of course, whether you use a large amount of the functionalities of Enterprise Performance Management (EPM), depends on what added value the use of software delivers. In the history of EPM this has increased dramatically. The most important elements for this increase are: usability, speed and the data quality. Usability encompasses elements like a user-friendly interface, project management features and system compatibility. The speed of the system is defined by the volume of data that it can manage and the resulting perfomance. Data quality is often endangered when data has to travel through many different systems or modules which was usually the case with traditional EPM suites.
From paper to spreadsheets
As long as there are businesses, the executive level has been searching for financial information. Before the computer, this was managed on paper and data was exchanged through phone calls, faxes etc. In the 1970s the first EPM software applications became available for accounting to collect budgeting and financial information for reporting purposes. Then in the 1980s, spreadsheet enabled finance teams to automate report creation and replaced paper-based worksheets.
From spreadsheets to point solutions
In the 1990s computer technology became more mainstream, like using e-mail and sharing spreadsheets for many uses. It is also the decade in which one most of successful EPM software vendors emerged: for example Hyperion. Then around the 2000s a shift appears. Cloud based EPM software becomes in demand (SaaS). This means the software is based on a network of remote servers instead of the company's servers and it is accessed through a browser.
From point solutions to platforms
Traditionallty, Enterprise Performance Management (EPM) solutions were focused on the automation of a specific finance function. For example, one tool would do consolidation, another account reconciliation and another tool would help finance with planning. The organizations ended up with multiple tools, with different ways to cope with their own copies of data, with different ways of deployment, and all have their own updates. This results in having different tools report different figures, high maintenance costs and loads of time spend on gathering (the right) data.
During the last decade new EPM platforms came onto the market that solve this problem by using a single platform for your data, meaning one copy of your data, one source of the truth, but being able to offer consolidation, reconciliation, advanced planning and analysis on the single data platform. From our great success over the last 5 years by working almost exclusively with such new EPM/CPM tools in the past 5 years we have become convinced that this single-platform approach is the most sustainable way forward for EPM systems.
Why would you modernize?
With an increasingly global and fast moving economy, information has become more important. Having insight in your business drivers is important to navigate change and will give you an eagle's eye view over your business' performance. Moreover, the speed of reporting enables you to look at relevant data that will empower your organization to make informed business decisions.
Do you want to know more?
We are keen to assist you in defining your EPM roadmap. Just leave your details below and we will be in touch as soon as possible.