Enterprise performance management (EPM), not to be confused with employee performance management, is increasingly popular thanks to technological advancements. The solution provides powerful functionalities with real-time data consolidation, predictive analytics, cloud-based applications, and better yet, ease of use.
In many cases, today’s enterprises are sitting on different versions of the truth that are not connected to each other. As a CFO, how do you cope with the influx of information from various systems? How can you link business decision-making to risk assessment?
What does Enterprise Performance Management (EPM) do?
An EPM system consolidates data from a variety of sources, such as your ERP system, front/back-office applications, external data sources, and basically the entire organisation on a regular basis. EPM then analyses these data and turns them into actionable insights.
EPM was designed to help organisation link their strategies to their plan and execution. A typical EPM system includes the following management process:
- Budgeting, planning, and forecasting
- Periodically consolidating results and closing the books
- Analysing and reporting to internal and external stakeholders
EPM’s purpose is to ensure the organisation’s goals and objectives are achieved and are reflected in its budgets and plans. Nevertheless, EPM needs frequent revision to make sure it still aligns with the organisation’s general visions.
EPM process also includes the monitoring and managing of key performance indicators (KPIs), which in turn, notifies managers about unexpected changes and thus allows them to respond quickly to the changes.
Is EPM the same as Financial Management?
Based on the list of EPM functionalities mentioned above, some may get confused as to what are the differences between EPM and a normal financial management system.
The functionalities of these two processes might intertwine but the key differentiation is EPM’s capability to provide a forward-looking vision to the C-suite, allowing forecasting and budgeting up to 5 years in advance or more.
Equipped with predictive analysis, you are able to pinpoint trends, and produce quick and accurate decisions using data accumulated from different departments. EPM allows you to perceive a single version of the truth, real-time data, and easy-to-read information right at your fingertips.
More and more EPM vendors make use of technology advancements to improve their offerings. EPM products nowadays are even more user-friendly than before with graphic visualisations on dashboards, thereby extending data access outside of the finance department.
Is EPM the same as Business Intelligence (BI)?
As mentioned above, EPM systems are generally used by the finance department but it has the potential to extend beyond its border and into business operations.
BI, on the other hand, is mainly driven by the IT department and is a platform, or sets of tools, serving the purpose of delivering information.
Having said that, BI plays an important role in EPM as it offers analysis and reporting functions that aid the decision-making process. Gaining access to a pool of data and drawing out only the most relevant one is not easy. We have discussed before, data in today's business world is enormous and chaotic, and the ability to handle such sheer volume quickly and effectively can give your organisation a better head start.
Products today, like Infor d/EPM, have built-in BI to address complex issues from multi-dimensional analysis through data mining to sophisticated predictive analysis via an Excel-feel, web-based interface.
EPM compatibility with ERP
It would make sense for businesses to invest in an all-in-one system that can do basic accounting. EPM can be a great addition to your current ERP system as it pulls transactional data from an ERP system and utilises them in performance management.
EPM can bring many business benefits but it cannot do anything without the data from external sources to support its key processes. The usual spreadsheet might be the normal way to keep track of your organisation’s financial situation. However, a web-based front end empowers you to take control of the data and when BI is added, you earn yourself a competitive advantage.
Read more: Why CFOs should be looking to the Cloud?
EPM system provides a centralised platform that boosts efficiency, eliminates errors due to editing spreadsheets, helps drive accountability across the entire organisation by aligning strategic goals to financial objectives, and provides actionable insights for operations.
Cloud-based EPM has all the functionalities of the traditional system but is deployed in the cloud thereby significantly reducing the cost of ownership, increasing speed and agility, and most important of all, enhancing cross-departmental collaboration.
To learn more about EPM and its capabilities in full, visit the TRG website or request a free demo today!