ENTERPRISE PERFORMANCE MANAGEMENT SYSTEMS
Learn How and Why Enterprise Performance Management has changed
The Bottom Line
Enterprise Performance Management (EPM) continues to see rapid change due to the emergence of Cloud-based EPM players, the use of Disclosure Management and Tax Management solutions, the integration of EPM with Business Intelligence, and the increased demand for Enterprise Performance Management from line-of-business sources. The usability and functionality that end users have received from EPM vendors in the 2014 Corporate Performance Management Technology Value Matrix has been evaluated.
Enterprise Performance Management has traditionally been seen as a suite of capabilities that support operational tasks including the combination of Planning, Budgeting, and Forecasting (PBF), Financial Close and Reporting, Profitability, Cost Management, Spend Management, and Financial Consolidation. Many vendors also provide a Strategy Management module, linking high level strategy to specific operational performance measures, and a Disclosure Management module, fulfilling the requirements of many global regulatory bodies. Many market surveys are elevating the profile of the CFO and the technologies that are being considered and implemented inside Finance organisations and across the enterprise to provide better visibility, strategic decision making, and productivity of the user community.
Despite the relative maturity of core EPM, a new generation of software solutions that are easy to use and quick to install have led to a new mid-market interest in EPM. The availability and deployment flexibility of Cloud-based solutions are growing in value to the customer representing a net-new opportunity for both emerging vendors and for larger, more traditional vendors to provide cost-effective solutions for the EPM market.
Over the past few years, a new set of capabilities have entered the EPM market that have significantly changed the ROI associated with solutions in this market including International Support, Tax Management, Cloud-based solutions, Mobility, Multiple device support, and Application Integration. There has also been an emerging need among customers to integrate EPM into a Business Intelligence (BI) architecture, to share common business foundations, and to provide more robust reporting and visualisation capabilities.
To understand how these changes have led to value, consider that the value of EPM can broadly be categorised into three different areas:
Commoditised value, differential value, and rare value.
By separating these three value propositions, it becomes much easier to define what separates Leaders from Core Providers.
Commoditised EPM value represents core capabilities that are expected, by definition, and provide no differentiation. At this point, EPM is expected to provide visibility and auditability for basic financial PBF, Consolidation, Financial Close, and Reporting processes that exceed the capabilities of basic spreadsheets.
Differential EPM value comes from capabilities that significantly differentiate EPM vendors from each other. A simple example is the ability to provide Cloud-based solutions, since it has been found that Cloud-based deployments typically provide greater value than On-Premise solutions. However, Disclosure Management, Strategy Management, and Project Management capabilities differ both in implementation and ease of use from vendor to vendor. Mobile applications, Profitability Management, Business Modelling, and Visualisation capabilities are increasingly important in differentiating leaders and experts from other vendors. As EPM continues to become more predictive and inclusive, the integration of Business Intelligence and EPM will continue to increase in importance as a key differentiator.
Rare EPM value comes from specific capabilities that vendors bring to market that are difficult or presently impossible for competitors to match. For example, a vendor providing a full application on a trial basis would have a significant advantage in driving usability and implementation. Mega-vendors can have the resources to provide specific line-of-business based EPM implementations to increase the functionality that is realised by end users. The vision to integrate EPM with parallel functionality such as Sales Performance Management, Tax Planning, or Human Capital Management applications can also provide unique or rare value propositions.