Enterprise Performance Management (EPM) systems are becoming more powerful, user friendly and more accessible - that is the core theme of an article published recently by CFO Magazine. Advances in technology allow EPM systems to process larger quantity of data on-demand and thus increase their analytical capabilities. Wider choice of specialized products and new features such as compatibility with Excel, predictive analytics, cloud computing or mobile access are transforming the way users interact with the applications and thus help advance many traditional functions and business processes.
While IBM, SAP and Oracle command about 70% of the market, there are plenty of sophisticated systems to choose from in the remaining 30%. Reversing a prior trend of industry consolidation, more companies are entering the market and provide interesting capabilities that are often tailored to a specific market or industry segment. Examples of such focus areas include budgeting, forecasting, profitability optimization or scenario modeling.
Gartner categorizes EPM solutions into two main buckets: Office of Finance Processes and Strategy Processes. Most of today's solutions, however, aim to combine financial and operational data across the company and provide a fullly integrated view of the company's performance. Such increased transparency and insight into underlying trends and drivers facilitates a higher focus on key factors affecting financial performance. This in turn helps to more effectively execute a company's business strategy.
There are three primary drivers that are currently changing the way people and companies interact with and deploy EPM solutions:
Speed – with the increased use of in-memory computing, systems are more nimble and flexible to complete calculations in real time and are able to handle the ever increasing quantity of data. The improved performance facilitates a number of benefits such as usability, collaboration, integration and others. These capabilities are further changing the role of Finance and help it to be a more effective facilitator of change, trusted advisor to the business and a driver of value.
Usability – there have been great advances in user friendliness and usability of the tools as vendors continue to make significant investments into more intuitive and easier to understand user interfaces. Dashboarding, visualization, integration with Excel, web-based capabilities and templates are some of the key focus areas. Cloud computing plays an important part in increasing adoption through better flexibility of use. Finally, mobile computing facilittes more distributed data collection and reporting with the abiltiy to drill down directly on the mobile device, typically an iPad.
Integration – EPM systems are becoming increasingly more integrated with solutions expanding far beyond the traditional financial planning and reporting. Operational planning, sales performance management, strategic planning are only a few examples of such new use cases. Integration of these systems and processes provides a higher quality output and facilitates collaboration across groups and departments, which yields more efficiency and improves performance. Predictive Analytics, while still in early stages, is further pushing the frontier on the type of insight and depth included in financial information involved in decision-making.