Business operations are multi-faceted. The success of any business is dependent on the smooth running of each business operation component. Although business owners make great efforts to hire the best staff to manage various commercial aspects, there is still a lack of organization and coordination between different business departments that restrict optimal growth and success of any business.
This is where enterprise performance management software comes handy. Businesses use enterprise performance systems to plan, build, monitor, and improve their overall business performance.
Let’s learn the fundamentals and advantages of using an enterprise performance management system.
What is the Enterprise Performance Management (EPM) System?
Enterprise Performance Management (EPM) systems are specially designed software products that manage the central tasks of any business. EPM systems are also called Corporate Performance Management (CPM), Financial Planning & Analysis (FPA), and Business Performance Management (BPM) systems.
It is a collection of technology and techniques required by any business enterprise to perform their functions efficiently, such as:
- Planning and forecasting budgets
- Evaluating the business model
- Merging results from different departments
- Analyzing business performance
For successful planning, measuring, and analysis of performance, there is an essential need for KPIs (Key Performance Indicators), such as operating costs, overload, sales, ROI, etc.
What are the advantages of using the Enterprise Performance Management (EPM) System?
There are three main advantages for a business when it starts using the Enterprise Performance Management (EPM) system. They are:
- Automating financial planning, reporting, and merging different business processes, as well as relieving labored work and removing errors.
- Speeding up cycle times, delivering realistic figures, and getting more time for value-added strategizing and analysis.
- Blending finance and operations within a single plan because integrated planning helps improve collaboration between different business departments.
The Enterprise Performance Management (EPM) systems mainly work to facilitate the work of the Finance and Controlling departments. It facilitates automatic planning and forecasting processes for faster and easier running of these important business operations. Other business departments also benefit from the use of EPM systems as these provide increased accuracy in sales, marketing, and procurement or HR (Human Resource).
Let’s check out the advantages that individual business units get with the use of EPM systems:
- Sales team can optimize the sales funnel – Modern sales tools generate figures that help derive sound sales plans. This helps the sales team reorganize an effective sales funnel or improve the performance of the existing funnel. With the incredible forecasting powers of EPM systems, the sales targets can be updated in real-time.
- HR can manage employees better – HRs need to identify the needs and requirements of the enterprise and plan for hiring new employees accordingly. EPM systems help HRs define goals and compare them with the existing data generated by sales tools. In addition, an EPM system can also help create feasible budgets for the HR department.
- Marketing teams can monitor marketing campaigns – Marketing teams work well when they have an integrated view of the performance of their marketing activities. This allows them to decide when to pursue, improve, or reject a marketing idea or campaign. EPMs help marketing teams by consolidating reports from several data points automatically.
- Procurement teams can control the supply network more efficiently – An EPM system provides an unbiased view of the capacities and quality of the required goods. This helps improve cost structure and instill transparency for procurement in the business. The EPM system helps keep the procurement team informed and well-prepared to handle increased prices.
An Enterprise Performance Management (EPM) system is extremely useful and has numerous advantages for a business organization. A business venture gets more organized, stronger, and able to promptly make sound decisions with the help of an EPM system.