What is Enterprise Performance Management?

Enterprise Performance Management (EPM) is a comprehensive approach that encompasses various technical and functional processes aimed at planning, measuring, and optimising business outcomes. It can also be referred to as Corporate Performance Management (CPM), Business Performance Management (BPM), or Consolidations, Financial Reporting and Financial Planning & Analysis (FP&A). EPM involves enterprise-wide processes primarily used by executive leaders and finance managers and teams.

The role of EPM in enterprise organisations

The primary goal of EPM is to assist executive leaders in aligning their business strategies with planning and execution through the performance management of various business verticals, such as finance, sales, marketing, manufacturing, and other lines of business. EPM achieves this by supporting critical operations and helping managers control revenue and manage resources effectively.

Coordinating the various roles and departments within a company to collaborate effectively can be quite challenging. Often, teams work in isolation, each with its own objectives and data sources. This can result in misaligned strategies and missed opportunities, hindering overall productivity, and diluting the company's vision. This is Continuously true when those organisations have multiple business lines, regional diversity and have or will acquire or divest operations.

However, Enterprise Performance Management (EPM) software can help overcome these challenges. EPM systems integrate data from different departments, align objectives, and provide actionable insights. The powerful tools are designed to centralise, analyse and present data in meaningful ways across an organisation. This ensures that every team works together smoothly towards common goals, bridging operational gaps and enhancing overall performance.

Streamline business operations at all levels — from executives to interns — with the analytical power of enterprise performance management.

Why is modern EPM important?

In today's fast-paced business environment, it's crucial for organisations to have a clear understanding of their costs, resources, and operational dynamics. This insight is essential for analysing various scenarios and making informed decisions promptly.

Many organisations find that their traditional enterprise performance management (EPM) processes and/or systems are no longer sufficient to meet these demands. These legacy systems are often characterised by siloed data, inflexible structures, and complexity that makes customisation for evolving planning needs challenging.

Common risks with aging EPM applications

• Aging infrastructure often leads to critical failures at key moments, such as month-end processes. This lack of flexibility has forced many processes offline into Excel, requiring manual efforts to load and manipulate data due to limited functionality in existing tools.
• Reliance on a single point of knowledge for critical reports and processes. This reliance often leads to bottlenecks, where the flow of information and decision-making is slowed or halted due to the dependence of that individual or group.
• The loss of key staff, frustrated by outdated technology and manual processes, further exacerbates these challenges, hindering the ability to add value through analysis.

Benefits

Initially, Enterprise Performance Management (EPM) systems aimed to transition finance departments from spreadsheets to platforms with enhanced data analysis and reporting capabilities. Today, organisations can leverage modern EPM platforms to perform more through artificial intelligence (AI) and machine learning (ML) that ultimately automate routine tasks like data entry and data management. Systems can also facilitate insightful decision-making by detecting complex patterns in data. For instance, contemporary EPM platforms provide instant visibility into various business areas, including financial metrics (e.g., revenue growth, expense tracking, profit margins) and operational metrics (e.g., supply chain efficiency, production downtime, customer satisfaction rates).

As a result, businesses are increasingly seeking modern EPM solutions that offer greater agility, integration, and ease of configuration. These advanced systems are designed to provide a comprehensive and real-time view of the organisation's performance, enabling more effective decision-making in today's rapidly evolving business landscape.

Utilising efficient EPM systems enables organisations to enhance productivity and streamline decision-making. These platforms provide pre-built reports and integrated analytics tools, empowering proactive responses to market changes, minimising risks, and seizing emerging opportunities. Key benefits include:

• Flexibility enables rapid onboarding of new drivers, enabling them to quickly grasp their impact on the business. EPM software can compare transaction records from different sources, identify mismatches and alerts users for review. This automation and flexibility minimise the risk of human errors and accelerates the reconciliation process.
• Accuracy and automation empower businesses to enable real-time monitoring and automate data movement freeing up teams to concentrate on deriving insights rather than manual data processing.
• Unified visibility to effortlessly provide information to senior executives. This adds tremendous value to Finance by converting data into actionable information and offering a consolidated view for understanding business outcome drivers.
• Integration and usability with other organisation wide applications like Enterprise Resource Planning (ERP). Modern EPM systems also integrate easily into business functions like HR, Sales, and Marketing and drive intelligent models that can help identify business outcomes.
• Data centralisation in a single location reduces the need for data reconciliation efforts. Centralising data and KPI’s allows multiple departments and employees to view how their tasks align with the organisational goals and vision.
• Consolidation of disparate charts of accounts and businesses and ownership of those businesses into a single cohesive management and statutory (and tax) system to report to boards and exchanges alike.

Achieving the benefits of effective Enterprise Performance Management requires an investment in an EPM platform. When considering an EPM implementation, organisations must build an EPM business case that goes beyond outlining the pain points and benefits of an EPM. The business case needs to look at associated costs, benefits and opportunities and risks of implementation.