5 Benefits of Implementing Enterprise Performance Management
There are several benefits to an Enterprise Performance Management (EPM) system:
- It helps improve operational and financial planning. It also connects strategy and execution. It helps improve decision-making and drive business growth.
- It helps organizations improve their forecasts and budgets on the fly.
- EPM can help organizations improve their financial performance.
Here are five more benefits to EPM systems. Let’s look at each one in more detail.
Enhances financial planning
Investing in enterprise performance management (EPM) is an excellent way to improve financial planning and analysis. This process unifies planning and research across the business, incorporating data from the various business units into a single, unified view. It also improves cross-departmental collaboration. With the help of enterprise performance management software, financial planners can make more informed decisions in less time. To make the most of EPM, here are some fundamental reasons it’s necessary to implement it in your business.
Most organizations are still relying on spreadsheets for forecasting and budgeting. This results in many manual interventions, which reduces the time for value-added activities. By contrast, connected planning technology eliminates the data density issue and delivers clear business insights in real-time. Several technologies are also needed to support the connected planning process. These include cloud technology, multidimensional databases, and web-based visualization. Improves operational performance
An enterprise performance management system provides a way to track and analyze staff performance and workforce-related decisions. By doing so, organizations can get a clearer picture of capacity and improve transparency. The system also helps procurement teams plan for fluctuations in prices. The benefits of enterprise performance management are numerous. Using it effectively will help you make smarter decisions to improve operational performance and profitability. But how do you implement it? Enhanced planning: Enterprise performance management helps enterprises plan and make better decisions. With good planning and measurements, companies can anticipate problems before starting and preventing radical changes. Budgeting is also much easier, faster, and less expensive when using an EPM program. But what happens if the plans and measurements don’t turn out as expected? When a company cannot predict and measure its progress, it will experience a significant decrease in profitability. In these cases, a company should implement an enterprise performance management program.
Connects strategy to execution
Successfully connecting strategy to execution is crucial for organizations that wish to achieve their transformation and agility objectives. Without a strong connection between strategy and execution, they risk wasting time, money, and resources on projects that do not meet the organization’s goals. It is even more crucial in these times of turbulence when organizations must be continuously adaptive and resilient. Most companies have some strategic plan, but it is often not aligned with implementation. Despite this, most fail to connect strategy to execution due to a lack of tools, systems, and processes. This lack of alignment can lead to delayed decisions and misalignment of design and implementation. 440park helps organizations connect strategy to execution by using standardized tools and processes to help them achieve their goals. Helps align business strategy with business execution
In addition to delivering measurable results, EPM also improves strategic alignment across departments and functions. Clear goals and a cohesive view of current business conditions create a strong foundation for strategic alignment. By measuring and tracking performance, business leaders can determine opportunities and threats and make informed decisions to boost efficiency and profitability. EPM also helps business leaders forecast the profitability of future initiatives, allowing them to improve their company’s performance and drive profitable growth.
Traditional performance management processes are time-consuming and error-prone, leaving little time for value-added operations. Instead, organizations can use software-supported Enterprise Performance Management to generate forecasts based on fundamental analysis. You can use this type of planning software to measure the performance of all areas of the organization and help improve financial performance. However, some firms still use Excel spreadsheets to monitor performance. In any case, the benefits of Enterprise Performance Management are considerable.
Improves risk management
While organizations have made some progress in implementing enterprise risk management (ERM), many still lack a comprehensive framework that allows them to pursue risks and effectively manage them. The recent economic crisis is one example of the challenges associated with risk management. To successfully manage risks, organizations must strike a balance between preventing losses and generating value. Enterprise risk management, which combines risk and performance management, helps achieve these objectives.
Companies must build a culture of risk factoring, ensuring that it is ingrained into all decision-making processes. This requires a top-down approach that promotes risk-management processes, including risk-based incentives. The key to ensuring a robust risk management culture is to empower the chief risk officer to be a certified member of the executive team. By fostering an integrated risk culture, organizations can better assess risks and implement appropriate controls and mitigation measures. They should also reformulate incentive structures and rebalance their incentive structure to ensure long-term shareholder value is the primary goal.