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Enterprise Performance Management: Back To The Future
In this ever-changing and competitive landscape, businesses fight to outpace competitors, understand and adapt to trends, and effectively plot growth through an unpredictable future. Adopting or relying on ‘Enterprise Performance Management’ (EPM) to fuel success is a commonly expressed sentiment, but exactly what is Enterprise Performance Management and how does EPM software integrate data, systems, and strategy to help plan execution across an enterprise? Let’s start at the beginning with a quick journey from basic budgeting and forecasting and track the needs that EPM seeks to fill within an organization.
Back to the Future
Step into a time machine and imagine you are transported to an office building, specifically the finance and accounting wing. Talk about a productive use of a time machine and a fun vacation!
As you look around you notice not too much is different. Some obligatory small talk, sports chatter, snarky political commentary, some office drama. Now that you’re all caught up, you grab a coffee and find an open desk in the corner office. Congrats! You’re the CFO!
You notice a stack of papers on your desk which just happens to be printouts of all the company’s financials for your review. It is the end of your company’s fiscal year, so you’ve inherited this job right in the middle of preparing for year-end close and finalizing next year’s budget. Lucky you!
For the next few weeks, the scene will be much of the same. Intra-office mail is wheeled around on a roller cart to periodically collect and distribute portions of notes and handwritten models. A dusty leather book is protected by a group of analysts to maintain the fabled green sheets. An overwhelming number of Post-Its litter the desks, cubicles, and hallways reminding everyone of the important tasks at hand. Intuition and water cooler conversations play a crucial role in decision-making.
What year do you think you were transported to?
You may be guessing sometime in the 1950-1970s. This is an informed guess given the context; it might seem like the distant past, but believe it or not, some companies still operate in this mode today. While it might suffice for a small business in the short term, the scale and complexity of modern data and processes often call for something more sophisticated.
There is some nostalgic charm to the "mad-men" era. Boardrooms full of whiskey bottles, couches, and leisure suits. Not to mention, no one would recognize the Slack notification sound. You would also encounter some elements we were happy to leave behind: cigarette smoke-filled hallways and shag carpeting, to name a couple. As much as that era might have its allure, there is one thing no one misses above all else - the manual, paper-based processes that defined basic financial planning, consolidation, and analysis tasks.
Enter the missing link for the FP&A and Accounting division, bridging the gap between the recent past and today. We're talking about the superhero of finance professionals - Excel!
A beloved tool among financial experts, Excel allows for multiple spreadsheets, linking data, creating macros, using pivot tables, making charts, and seemingly doing anything you need to adjust, calculate, and analyze data. Yet even Excel has its limitations. As companies expand globally, maintaining consistency in planning across multiple sites, consolidating data, and ensuring formula accuracy becomes an overwhelming challenge.
This is where EPM comes into play. A game-changer that combines collaboration, complex calculations, and the sophistication finance teams crave. With EPM, finance professionals can bid farewell to the manual headaches, embrace data-driven decision-making, and unleash their true potential. And not just that, it's a delight for IT, audit, and governance as well - everyone wins!
So, what is Enterprise Performance Management?
Sometimes in the financial technology space, it is easier to define things in terms of what they are not.
EPM Is Not
Although EPM Does
An Enterprise Resource Planning (ERP) tool
Interface and layer on top of ERPs
A Data Warehousing tool
Have Staging and ETL capabilities
A Visualization or Dashboarding tool
Offer Analysis and Dashboard functionality
An SEC reporting or Filing tool
Have Narrative Reporting and Comment Capture
EPM is a suite of software tools and models, wrapped into a platform, designed to help the finance and accounting office plan, manage, and analyze their performance across various business functions. This is also commonly known as Corporate Performance Management, or CPM. EPM software enables companies to align their strategies with operational plans, monitor progress, and make data-driven decisions to achieve their financial and operational objectives.
EPM software is meant to integrate seamlessly with existing enterprise systems, such as ERPs (Enterprise Resource Planning), CRMs (Customer Relationship Management), HR systems, and more. EPM enables budgeting, forecasting, consolidating, and reporting processes by using financial, operational, and management data from one or more sources.
Enterprise Performance Management Software Can Help Your Organization With:
Integrations & Interoperability
Budgeting & Planning
Reporting & Analysis
Overall, EPM is a cost-effective way to reduce the time and effort required for integration, planning, consolidation, and reporting activities allowing for more focus on strategic tasks.
EPM applications are centralized solutions to support the offices of Finance and Accounting in a way that allows for more flexibility and scalability now and in the future. With EPM as a cornerstone of enterprise strategy, organizations can confidently embrace the future and seize opportunities for continued success.
Back to the 21st Century
The world of EPM is constantly evolving, and staying ahead of the curve is crucial for organizations to thrive in today's dynamic business landscape. EPM applications play a vital role in helping businesses plan, manage, and optimize their performance across various functions.
It is important to also acknowledge that several comparable options contribute to the dynamic landscape of EPM solutions.
Our vendor partners, among others, provide a diverse array of EPM solutions, each with its unique strengths and features, catering to the varying needs of organizations in their pursuit of optimized performance management.
So, whether you find yourself still chasing paper trails or trapped in Excel's web, consider stepping into the modern era of EPM. Embrace the efficiency, the insights, and the power it brings to your financial processes. Trust us - you'll never look back at those shaggy carpets the same way again.
Do you need help finding the right EPM platform? We have a guide for that - click the button below to get our comprehensive guide on how to select the right EPM platform for your organization, and how to frame your thoughts around the selection process.