Written by Florent Janssens Transforming business insights into competitive advantage
In today's fast-paced business environment, large enterprises continually seek ways to streamline their operations and enhance their financial planning & budgeting capacities to remain competitive. One powerful tool that has emerged to address these needs is Enterprise Performance Management (EPM) solutions. In this two-part blog series, we'll explore the multiple benefits of EPM software and their requirements for a proficient implementation, all while emphasizing strategies for overcoming challenges during implementation.
The versatile benefits of EPM Solutions
EPM solutions (including Anaplan, Tagetik, or Oracle Hyperion, to quote three big names from the industry) offer integrated platforms that harmonize critical processes such as budgeting, forecasting, financial consolidation, and reporting. At first, financial streams were the north star of those solutions. EPM had the end goal of avoiding many Excel sheets that are a burden to consolidate. This would ultimately help reduce the workload of the Finance function during the challenging budget exercise for the next fiscal year. (We’ve all seen those V22_final_realfinal.xls versions that are validated the night before the start of the fiscal). They achieved it thanks to access to real-time insights and a more efficient way to approach the budget process with better decision-making across the organization as a result.
But in the meantime, these tools evolved towards a more connected approach, touching upon MRP for supply chain, strategic workforce planning for HR, and now even ESG is coming into play. For the past few years, we've shifted from just Financial Planning & Analysis (FP&A) to a broader approach called Extended Planning & Analysis (xP&A). This integrates financial, strategic, and operational plans, breaking down organizational silos and promoting collaboration among various departments and teams.
In addition to integration, EPM tools now enable businesses to respond swiftly to market changes, regulatory shifts (e.g ESG), and competitive pressures. By using scenario modelling, sensitivity analysis, and "what-if" simulations, organizations can assess potential outcomes and adapt strategies with agility.
These platforms also offer robust performance measurement and KPI tracking capabilities, enabling organizations to closely monitor their progress toward strategic goals, identify areas for improvement harnessing the power of AI & machine learning, and allocate resources effectively. Additionally, EPM solutions automate repetitive tasks, reducing the risk of errors and increasing efficiency throughout the organization.
Integration of an EPM is far from being simple and requires a robust data-driven culture in the company
A crucial factor for a successful implementation is the quality of data. Many customers believe that deploying an EPM system will resolve all their issues with data coming in and going out of their systems. However, the reality is quite different – as the saying goes, "garbage in, garbage out." Some companies are even unaware of where their primary source of truth resides within their systems. That's why the implementation of such solutions typically begins with a few discovery weeks. This involves conducting assessments of both data and business needs, defining the scope of the project, and potentially creating an entire data track. During this phase, data experts develop a roadmap to establish data governance, conduct data cleansing, transformations, and ensure accuracy. Having reliable data is crucial for making informed decisions that ultimately drive success.
Moreover, EPM solutions rely on seamless data integration from various sources. A robust database simplifies the process of integrating data from ERP systems, CRMs, and other sources, providing a comprehensive view of your organization's performance.
Stay tuned for our next blog post in this series, where we'll explore the challenges of implementing EPM solutions in complex IT environments and offer strategies to overcome them. In the meanwhile, if you have any questions or needs in scanning your current data maturity, please contact our expert Koen Vanbrabant who has led many initiatives in his career and for all EPM and digital transformation related matters, contact Florent Janssens or Sven Van Hoorebeeck.