What is Enterprise Performance Management (EPM)?

1 October 2023

In a challenging business environment, thoughtfully developing and rebalancing corporate strategies is highly important. Sophie Van Lier is Senior Manager Management Information & Systems at TriFinance. In this article she explains the essence of Enterprise Performance Management, the benefits of automated EPM systems and how TriFinance can support your organization in an EPM journey.

The definition: what is Enterprise Performance Management?

EPM is the combination of process and technology used to monitor, plan and steer an organization's business performance. The goal of EPM is to help companies to achieve or exceed their strategic goals. Therefore, the strategic objectives will be translated into a set of KPIs and long term plans that measure the progress of the strategy execution. Typically, these KPIs are not limited to the financials. Often, HR, operational, commercial and environmental KPIs are also in scope. Once defined, targets will be set by the management top down for each of these KPIs. Since strategic KPIs are always linked to operations, it is crucial to translate these strategic KPIs into operational planning and reporting models. These bottom-up defined models will help the business to plan and steer their operations to achieve the strategic goals.

Hence, EPM processes and solutions will combine the operational planning and reporting activities with the strategic performance management. Therefore, EPM solutions will use data from different departments and systems in a manual and automated way. They will also support organizations with their planning, budgeting, forecasting and reporting processes via workflows, calculation engines, audit trails, data models, dashboarding and reports.

EPM is more than a tool. It is a methodology that enables you to achieve the defined strategies. This includes the right monitoring processes to oversee the connection between strategic KPIs and their operational translation, which allows organizations to flexibly make adjustments where necessary.

Sophie Van Lier (Senior Manager Management Information & Systems)

The scope of Enterprise Performance Management: from planning to reporting

The four main focal points of EPM (planning, budgeting, forecasting and reporting) together form a valuable flow. Since Enterprise Performance Management is not a one-off exercise and because of the inherent interdependence of the pillars, this flow might logically involve multiple iterations.

  • The planning element tends to feature a strong operational approach. In an EPM process, often operational drivers need to be planned as a basis for the budgeting process. Therefore, these operational plans can be included in the EPM process and solution. In a consulting company for instance, matching sales capacity with resource capacity is crucial. Implementing a workforce planning solution as part of the EPM solution will help to find this equilibrium.
  • Planning is the precursor to budgeting, which implies a translation into the financial side of the operational plans. Hence incorporating both in the same solution will help to automate the budgeting process. Often budgets are impacted by multiple parameters and drivers. Therefore EPM solutions will help to analyze the impact of changes in these parameters by providing ‘what if’ scenario analysis.
  • Forecasting refers to adjusting and thus actualizing budgets, in accordance with changing circumstances and based on progressive insights. In the fast changing world of today, the sequence of forecasting is increasing. Therefore an EPM solution will help to fasten up this process and make it more transparent and qualitative.
  • All this will naturally be reflected in reporting. While statutory reporting -to which the consolidation component is attached - quickly springs to mind, managerial reporting is definitely highly important as well. To be clear, not only financial parameters are relevant in this respect. Other KPIs that are instrumental in putting the strategic outlines into practice, are equally significant.

Enterprise Performance Management: from finance to the whole organization

EPM is moving from a finance led process and tooling, towards a methodology and concept that is applicable to the entire organization. All aspects relevant for the realization of the strategic goals are to be monitored via EPM processes and solutions. Therefore these tools and processes will also be used increasingly by other departments such as HR, ESG, Operations, …

Consequently, these departments will also need to be involved in the EPM journey of the company. Sharing knowledge about EPM processes and tools cross departments will also help companies to become better and more mature in monitoring their strategic objectives.

The benefits of enterprise performance management solutions

These are the main advantages of EPM tools:

  • Efficiency: more time for thorough analysis and strategic thinking, instead of number crunching and other repetitive tasks
  • Quality: less mistakes, more qualitative reporting, more informed and future-oriented strategic decisions
  • Data integration: the ability to merge diverse data streams securely and with ease, during the entire process. From importing data to exporting data to a central data repository.
  • Collaboration: a controlled environment stimulates and facilitates colleagues and departments to work together
  • Scenario analysis: simulating different scenarios based on parameters can become very complex without the support of an EPM solution
  • Transparency: tools create clarity in complex circumstances with several contributors, a.o. by version management, management of audit trails, use of status trackers to manage processes, …

How TriFinance can support you to maximize your Enterprise Performance Management

For efficient steering and planning, TriFinance helps design and build corporate, managerial and ESG reporting, including streamlining the reporting and planning process.

Our EPM experts help you to identify the right EPM solution for your company. We have a broad knowledge of the market and a profound understanding of functional and technical requirements of the EPM technologies on offer. This way, we ensure that the right solution and implementation partner is selected for your needs.

When it comes to implementing Enterprise Performance Management tools, TriFinance partners with Vena Solutions and Tagetik, while continuing to adopt a software-independent advisory role aimed at tailor-made solutions. As all EPM solutions come with a significant cost, we always focus on finding the best solutions for our clients' specific needs.