The EPM marketplace is a volatile place and innovations follow each other at light speed. For most Corporate financials it’s hard to keep up or truly understand why this next generation EPM technology is far more advanced then systems they acquired only a couple of years ago.
Because of this we hear the following statement a lot: Everything works fine we don’t need new EPM technology!
Sounds like you? Then keep this in mind: it’s like saying no to a smartphone when you are currently using a Nokia 3210.
Want to know if your current EPM tool is that Nokia 3210? Look out for these 7 signs!
1. Updating your EPM tool takes weeks or months instead of hours.
Until recently you had to buy multiple tools for things like consolidation, planning, integration, CAPEX reporting and Statutory reporting. When one of these tools needs an update, it affects every other tool that connects with it therefore the necessity to update the whole suite. Otherwise you will risk failure of the systems which support your core business.
For multi million or billion euro companies this means a lot of risk but also huge amounts of money and FTE wasted to keep the systems going.
To address this some vendors are pushing their cloud products strongly, but you could be simply shifting the same problem to the cloud, especially if the ‘new cloud offering’ involves many different cloud products which contain the same risks inherent with a suite solution platform.
2. You require multiple tools for data integration, consolidation, planning and reporting.
The status quo offers a variety of solutions for Enterprise Performance Management but many of the major vendors are a suite solution which equates to a different product for the different functionalities.
On top of the complexity mentioned above with upgrades, multiple applications come with multiple licenses (cost), multiple foundations (incompatibility) and multiple coding languages (additional FTEs to support platform). It is sad that these vendors continue to push their suite solution although in reality vendors with a visionary strategy are making suites a thing of the past.
Think of this as the Nokia 3210 and you want to shoot pictures for business purposes. You need to buy a separate camera integrate it with you Nokia and buy and integrate a new additional database where you save your pictures.
A lot of work right?
Now imagine you want to add a flashlight and calendar where everything connects and works together. Hello smartphone! Bye bye Nokia & integration hell.
3. Your reporting staff don’t trust the data
In order for CFO’s and Group Controllers to let business thrive they rely on reporting staff and the recommendations and reports they supply. In today’s fast paced financial environment speed is key to stay ahead of the competition, especially at organizations conducting frequent mergers and acquisitions. When staff don’t trust data they either spend many hours figuring out if the numbers are right or they are unable to provide managers the right advice in time thus wasting time and adding no value to your business.
From our experience, a majority of faulty data originates from integration processes and the inherent issues they bring. If your data has to be copied and transformed between several different products then you must spend time keeping the data in-sync and reconciling all these products. If there is only one slight bump in the road data gets corrupted and staff is unable provide essential insights
4. You can’t re-use metadata
Requirements for different processes sometimes present various levels of granularity regarding metadata. And as stated before with multiple applications comes multiple integration issues and high maintenance and cost.
With the majority of legacy EPM tools you can’t simply vary metadata by process or business unit in one application. Planning would be another application to build, maintain and sync data with (unless metadata for Planning was exactly the same as actuals which is almost never the case).
The latest technology allow you to re-use one copy of your metadata, structures and data, for many different purposes from statutory consolidation to driver-based planning without the need to build multiple applications.
Sounds like music to your ears right? Well it is!
5. You can’t easily control non-financial (relational) data and financial (cube) data from the same application
This is really important if you want to plan payroll costs, driven by named-staff details. Or you want to do Capex planning based on a central register of business cases and planned projects.
With many ‘market leading’ EPM products (even new cloud EPM products) you have to integrate every named staff member or every identifiable project within the main ‘chart of accounts’ (i.e. metadata). This results in data cubes with thousands or even millions of metadata members. Imagine a chart of accounts with a million lines. We believe this is not the solution.
Next generation EPM tools combine detailed data (such as staff details from an HR system, or a projects register) with financial cubes. This provides much more efficient, sustainable and flexible design and optimal system performance. You can keep your analytical cubes small, yet drill back to named staff or individual projects which come from large central registers of information.
6. You are using Excel spreadsheets as workaround
This usually happens when either
- Your current EPM system has functionality which isn’t aligned for your organization’s specific requirements and you fall back on excel for its flexibility and almost universal understanding within Finance departments.
- Out-of-the box modules often enable specific functionality but require additional duplication and transformation of data; and sometimes the purchase of an additional license. For this reason, users often instead resort to doing ‘special functions’ in Excel.
- You resort to using Excel because need to do data blending (see point 5 above)
Next generation EPM tools let you tailor out-of-the-box components eliminating the need to build Excel workarounds.
7. Your license costs are going up each year, for the same number of users
Status quo EPM vendors have a solution for everything. From IFRS15 or IFRS16 specialty product, to a disclosure management product, to additional products to make sure the core products work together properly.
With all these separate EPM products, apart from duplicating your data everywhere, you will need to purchase and maintain licenses for more and more EPM products, even if they are from the same vendor.
With next generation EPM tools additional functionality will stay under one and the same license.