Blog

What is Enterprise Performance Management (EPM)?

Share Button

city buildings

Enterprise performance management (EPM) is a process and system designed to help organizations link strategy to plans and execution.

All organizations go through a cycle where they are setting goals and budgets, defining plans, closing the books, and reporting the results to stakeholders. Organizations perform a variety of analytics to understand why the results are above or below expectations and model various business scenarios that can impact future performance.

Modeling questions include, for example:

  • What if we raise prices?
  • What if we move resources from one region or product line to another?
  • What’s the impact on revenue and profits?

It’s a iterative and necessary process that organizations go through on a regular basis – monthly, quarterly, and/or annually – to allocate capital and operational funding. When it’s done right, an EPM  can improve efficiency by eliminating spreadsheets and making your planning and reporting processes go faster. It can also improve accountability by getting more line managers involved in the planning process and empowering managers with self-service access to financial and operating results. Finally, it can provide insights into the business that maybe aren’t visible on the surface and which are actionable, so that there’s greater business agility.

It can also improve accountability by getting more line managers involved in the planning process and empowering managers with self-service access to financial and operating results. Finally, an EPM can provide insights into the business that maybe aren’t visible on the surface and which are actionable, so that there’s greater business agility.

It can also improve accountability by getting more line managers involved in the planning process and empowering managers with self-service access to financial and operating results. Finally, it can provide insights into the business that maybe aren’t visible on the surface and which are actionable, so that there’s greater business agility.

Why should I consider an EPM application?

Year-end financial results rarely match up exactly with the budget that was set at the beginning of the fiscal year. This is simply because business activities are highly dynamic and unexpected things happen over the course of the year. Economic conditions change, industries are disrupted, competitors change tactics, employees turn over and the list goes on. It is challenging for companies to operate on static financial budgets with outdated business assumptions.

Running a business on spreadsheets and e-mail may work fine when there are a handful of people in the company, but when the company grows to 50 people or more, things start to come apart at the seams. Version control creeps in, conflicting versions of the truth arise, calculation errors cause inaccuracies in reporting and planning, and the finance team gets stuck reconciling all of the gaps.

Managers need to have real-time insights into key performance metrics that are delivered through interactive dashboards and reports. These can be addressed with a well thought-out EPM solution.

To learn more about how an enterprise performance management suite can help your business make better decisions quickly, contact us today.

Share Button