What is Enterprise Performance Management (EPM)?
Enterprise Performance Management (EPM) is the process of monitoring an enterprise’s performance, with the specific goal of improving business performance.
A brief summary of Enterprise Performance Management (EPM)
In a nutshell, EPM helps you analyse, understand and report on your business. It’s one of the central management tasks of a business, and when done correctly, it should include management processes such as:
- Budgeting, planning and forecasting.
- Modelling how the company creates value.
- Consolidating the results
- Analysing performance
A good EPM system collates and analyses data from multiple different sources, such as e-commerce systems, front-office and back-office applications, data warehouses and external data sources. EPM processes are designed to help plan, budget, forecast, and report on business performance as well as collate and finalise financial results. They’re primarily used by CFOs and the finance team, but other teams such as HR, Sales, Marketing, and IT use EPM for operational planning, budgeting, and reporting.
The EPM Cycle
EPM is about managing, analysing, understanding, and reporting on the business, and nowadays, EPM software is critical for managing all types of organizations by linking their financial and operational metrics to insights—and ultimately driving their strategies, plans, and actions.
With EPM software, managers can improve performance across the business by monitoring financial and operational results against forecasts and goals and by using analytics to spot trends and predict outcomes.
In today’s environment of constant change, new competitors, and economic uncertainty, EPM helps businesses stay agile businesses.
The History of EPM
The concept of EPM has been around for decades, and certainly from before the widespread use of computers. EPM processes and solutions were managed manually via meetings, phone calls, and discussions, and in the 1970s, the first EPM software applications became available, with accounting solutions collecting budgeting and financial information for use in reports.
Spreadsheets were introduced in the 1980s with software such as Lotus1-2-3 and VisiCalc, and they allowed finance teams to automate the process of creating budgets and reports creation as they finally replaced manual worksheets.
Once email became widespread in the 1990s, businesses became able to share spreadsheets, which helped them to collaborate more efficiently and helped them collect budgeting and reporting data more quickly from different people across the business.
Around the same time, the first EPM software packages such as IMRS Micro Control began automating the processes for financial consolidation and reporting.