What is enterprise performance management (EPM)?
EPM is software that helps you better understand your business with analytics, reporting, forecasts, and consolidated financial results.
EPM overview
EPM software helps finance teams analyze data from systems, processes, and activities across their organization to identify business drivers and other insights. EPM lets finance teams lead and align with corporate strategy. It helps inform future decisions, drive efficiencies, and improve financial and operational performance. Companies use EPM to assess new opportunities, improve profitability, and respond with greater agility in the face of unexpected change and disruption.
What are the key elements of EPM?
EPM solutions provide:
Access to data across all business units and processes that cut across departments, with a full financial picture built on harmonized data from your entire organization
Enterprise resource planning (ERP) integration with your core business processes and transactions captured in a system of record, using the same semantics to help ensure accuracy, integrity, and security
Collaborative planning to drive company strategy across business units within one responsive process—fueled by AI insights—to achieve overall financial and sustainability objectives
Accelerated and integrated group close with consolidation functionalities embedded within your transactional accounting solutions, supported by commentary and analysis
Improved corporate tax management to optimize financial resources and help maximize returns on investment
Integrated sustainability capabilities with sustainability and carbon data available in the same quality and granularity as financial data—to improve decision-making in a de-carbonized economy
Democratized AI and analysis to review performance and profitability against your strategic plan, identify new opportunities, resolve areas of underperformance, and inform the next cycle of strategy
Benefits of EPM combined with ERP
Customers who implement EPM with ERP realize:
Increased profitability with stronger alignment to corporate objectives
Improved financial confidence by running continuous closing activities on trusted granular data
Increased tax effectiveness with optimized operational transfer pricing and tax transparency
Empowered professionals to make informed, data-driven decisions with insights magnified with relevant and reliable AI
Enhanced corporate reputation by incorporating sustainability and financial insights in performance objectives
The evolution of EPM—from the 1990s to today
Profitability and a strong growth trajectory are foundational to the success of any business. Traditionally, finance teams tracked progress and alignment with corporate goals using manual processes and spreadsheets.
Each line of business operated in a silo, and finance teams were challenged to consolidate departmental objectives, budgets, and data into a single, cohesive strategy for the business. This was time-consuming work prone to human error—made even more difficult by ever-changing regulatory and tax laws.
Stale and inaccurate data introduced additional challenges, making it impossible to respond quickly to changes in the business—with underperforming results not coming to light until much later in the cycle.
EPM systems came into use in the 1990s. Hosted on premises, these systems automated reporting and financial consolidation processes. While they required significant effort to extract, transform, and load the data, these systems eliminated many manual workflows and created significant efficiencies and consistency in reporting and regulatory compliance.
In the ensuing years, EPM systems migrated to the cloud, making the technology more accessible to organizations and departments that didn’t have the capability or budget to support the infrastructure on premises. Cloud-based EPM provided additional efficiencies—most importantly, access to real-time operational and financial data so that profitability and performance could be tracked in the moment.
Despite these improvements, EPM didn’t quite deliver on the vision of taking performance management and planning beyond the office of the CFO. Now, with solutions that deliver enterprise-wide planning and analysis—or extended planning and analysis, xP&A—companies can realize a holistic, integrated approach that brings all planning together in a seamless manner. Each business unit or department maintains the flexibility to manage its own plans but is part of an integrated view of financial and operational plans, creating a more collaborative approach to planning and performance management, and moving from a historical to a forward-looking view.
How is AI changing EPM?
Recent advancements in AI have enhanced the forward-looking capabilities of EPM solutions:
More accurate predictions
Automated analysis of external market data
Democratizing analysis with self-service capabilities
Pre-formulating insights and commentary
Personalized visualizations—without coding
Outlier identification to speed reconciliation processes
Enterprise performance management FAQs
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