What is Enterprise Performance Management (EPM)?
Many organizations struggle with performance reporting and maintaining an effective budget due to a lack of financial insights. However, Enterprise Performance Management (EPM) software provides the technology you need to improve your planning, budgeting, forecasting, and financial analysis and improve business operations across the board. Here’s how EPM can help you become a more sustainable, scalable, and profitable business.
Introduction to Enterprise Performance Management (EPM)
EPM software has become an essential tool for operational excellence as it leverages valuable insights linking financial and operational performance. As a result, businesses can inform decisions, drive strategies, and increase efficiency in operational execution. The link between financial and operational performance is invaluable.
However, it is difficult to achieve when trying to converge findings from different business functions and manually analyzing data. An EPM converges data and makes it usable for forecasting and goal setting, allowing you to predict outcomes based on proven trends.
What is EPM?
EPM provides empirical evidence that helps inform decisions and create policies to improve performance. The core components of EPM include the following:
- Strategic modeling: Used for long-range strategic forecasting, EPM automates data gathering ideal for forecasting and trend analysis accuracy.
- Planning and budgeting: Improved forecasting makes it easier to plan and budget more flexibly to adapt to business growth and remain scalable.
- Close and consolidation: Business reporting becomes more confident with automated financial close and consolidation, making you more agile and able to adapt to changing requirements while delivering transparency with accurate data and insights.
- Reporting: Standardized reporting allows you to share financial data with key stakeholders in an easy-to-view format to inform decisions and improve forecasting
- Performance analytics: Accuracy is improved using automated data that allows managers to spot trends and use data to measure performance against goals to drive change.
EPM teases the silos of traditional management software. As a result, you have a more holistic picture of the business, with all departments sharing the same tools and using the same metrics designed to meet common goals
Benefits of EPM Software
There are several benefits of EPM software, including:
Improved decision-making
An EPM gathers, analyzes, and formats data across different departments making data more accessible. Through data accuracy managers can quickly decipher relevance and context to make better decisions that improve productivity, efficiency, financial allocation, and profitability.
Enhanced agility and adaptability
Through integration, companies overcome the challenges of department-oriented planning and consider all changes from an organizational perspective. Enterprise-wide decisions build agility and allow you to respond quickly to market, industry, and technological changes that would otherwise negatively impact your operations and profitability.
Increased efficiency and productivity
Integration capabilities also improve productivity by allowing all business functions to share the same information at the same time. Collaboration improves efficiency and creates smoother transitions to reduce costs with quick role-based access to data and information anytime, anywhere.
Better alignment of goals and strategies
Integration across existing systems and departments, whether in HR, finance, or customer service, avoids disruptions to operations while streamlining processes through improved communication. Everyone works from the same system and towards the same goals, using the same strategies.
EPM vs ERP: Key Differences
ERP software is designed to manage data across multiple departments, enabling companies to organize and standardize processes. The ERP stores data in a central hub and allows you to add various applications to manage different aspects, such as HR or financial software.
EPM software, on the other hand, is designed for in-depth analysis of the information stored in an ERP or other systems to gain insights into performance. The data and reports make it easier for companies to analyze outcomes across the enterprise, contributing to major decision-making that impacts the planning, goals, and outcomes of a business.
Integrating ERP into EPM helps create a single source of truth, eliminating oversights, redundancy, outdated information, and the risk of errors in the creation of business-critical reports.
Determining the Need for EPM Software
The need for EPM tends to lie in the reporting and analytic capabilities of current applications and how they work across different operating functions. If you find your reporting capabilities are failing, confusing, or redundant, you need to explore the deployment of EPM software. Key indicators of failing capabilities include:
- Use of confusing manual data collection such as MS Excel spreadsheets
- Multiple systems for business analysis and business reporting
- Reliance on manual evaluation using spreadsheets
- Manual processes to input and collect data
- Using spreadsheets to record data from multiple applications for data sharing and evaluation
- Inconsistent metadata across different systems that increases the risk of loss, mislabeled info, or unsearchable data
- Increasing security concerns regarding data access
- Reduced accuracy in analysis and reporting due to data collection silos
- No formal, dependable automatic data updates
- Lack of replicable processes and/or change-agility
Examples of EPM by Industry
Healthcare Sector
EPM in healthcare provides valuable insights through integrated financial and clinical views. Facilities can leverage electronic health records (EHR) and ERP systems to share information between frontline and operational staff to assist in decisions. It also provides access to critical information that can help save lives. EPM facilitates cost savings by efficiently managing business processes across different functions, including accounting, supply chain, HR, etc.
Cannabis Industry
Integration across finance, inventory management, production, sales, and customer relationship management provides secure data sharing to streamline processes and improve data accuracy. In an industry driven by compliance, businesses maintain a single source of truth to reduce errors and facilitate proper management to ensure compliance through accurate record-keeping “from seed to sale.”
Public Sector
Government agencies leverage EPM for federal budgeting to prepare budget books while also using it to improve efficiency through workforce planning and electronic workflows. The tool can be used across multiple functions of each government agency at all levels, integrating critical information and providing a single solution that stands up to security at all levels.
Nonprofit Sector
Nonprofit organizations use EMP to drive decisions and measure their impact, including the use of new fund-raising technologies such as online fundraising platforms, crowdfunding campaigns, and mobile donation apps as viable contribution drivers.
Hospitality Industry
EPM software can assist hospitality businesses in revenue management to ensure budget decisions drive guest satisfaction, including effective resource allocation so customers’ needs are always met.
Enterprise Performance Management with Paypro
Paypro’s enterprise performance management software provides all the data insights and performance metrics you need across your business-critical functions. As a result, you can identify opportunities to fill skills gaps, reduce payroll, eliminate compliance issues that lead to fines, improve your talent acquisition and retention, and more. Click here to request a demo.
About the Author
Kayla is the Marketing Manager at Paypro Corporation overseeing all inbound and outbound marketing and sales efforts. She has 7+ years of experience working within the B2B and SaaS based solutions space and thrives on creating messaging and campaigns that introduce products and services to those who need them most.