An AMEinfo exclusive
According to Gartner, the purpose of enterprise performance management (EPM) is to monitor performance across the enterprise by integrating and analyzing data from many sources, including e-commerce systems, front-office, and back-office applications, data warehouses, and external data sources.
With the ever-changing business landscape post-COVID-19, Andreas Simon, Director Sales MEA at Jedox, an EPM software used for planning, analytics, and reporting in finance and other areas, spoke with AMEinfo, revealing the trends that will shape this landscape in 2022.
Q: What are the trends to look out for Enterprise Performance Management Solutions Landscape in 2022?
In late 2020, Gartner signaled the emergence of Extended Planning and Analysis (xP&A) which has been rapidly gaining momentum through 2021. Best practices from Financial Planning and Analysis (FP&A) are now being extended across the enterprise to drive benefits across the entire value chain. This means that data collection and forecasting are no longer limited to the realm of the finance department. Rather, it opens up other departments such as sales, marketing, IT, and HR to more efficient planning and data management. The full potential of xP&A is realized when there is seamless integration between all departments as it enables more effective collaboration across the business. This unification of data and processes across departments by consolidating on a single Enterprise Performance Management (EPM) solution.
We’re also seeing a fundamental change in the approach to enterprise planning. The pandemic rendered the most commonly used approaches to budgeting almost entirely obsolete. A single, annual budget isn’t sufficient anymore. Instead, many businesses have begun to adopt rolling forecasts with higher frequency. From being conducted on a quarterly basis to then transforming into a monthly activity, the concept of continuous, unified planning is now tangible and within reach. Given the volumes of data involved, and the accuracy of the analysis being dependent on multiple, often granular factors, supporting this business requirement requires technology that can support streamlined and automated forecasting through the use of Artificial Intelligence (AI) and Machine Learning (ML).
Q: What factors will drive these trends?
Ongoing globalization, and the resulting increase in competition, promotes the need for business strategies to be frequently adapted. Today, even the very largest organizations can see their market share being eroded by more nimble players that are capable of rapidly evolving in line with fast-changing markets. Leveraging automation supports greater agility. So, where planning and forecasting were previously characterized by laborious, error-prone manual processes; recent advancements in automation and AI and ML are driving what we refer to as the digital enterprise.
Q: How will these trends enhance business operations / CFOs’ everyday practices?
Presently, finance functions spend a significant portion of their time working on data, reporting, and analysis. This has to shift in order to remain competitive in a very fast-moving world. The key to impacting value creation in the company is being able to obtain get better insights and drive better decisions. The CFO can no longer afford to just be the cost controller. Instead of focusing solely on historical data, becoming a strategic partner to the business is now a vital part of the modern CFO’s role.
A unified EPM solution breaks down the silos between departments and provides a holistic, real-time view of the digital enterprise. This empowers CFOs to adopt best practices that shift from FP&A to xP&A, such as rolling forecasts. This supports the finance function’s transformation from cost center to profit driver.
Q: Why is it important to adapt to these trends?
The purpose of implementing and utilizing EPM should be built around value creation. Modern EPM software supports functionalities across the organization and provides seamless integration to other key systems such as the CRM and Business Intelligence tools. Today, employees are spread across remote locations. A unified solution that extends planning across company functions enables data to be collected and analyzed from this dispersed workforce and provides a comprehensive view of all organizational data.
The ability to identify trends in market dynamics and customer behavior also enables organizations to react faster, and thus become more resilient. In the current economic environment, resilience and agility are among the most important factors in long-term business success. If you are agile, then the size of your organization no longer constrains your ability to compete on the global stage.
Q: What other things will govern the EPM landscape in 2022?
Momentum in the EPM market will be driven by the need for organizations to shift from periodic to continuous, unified planning and forecasting. Continuous planning offers a real-time view of business performance. Understanding operations and driving factors allows business leaders to more accurately model future outcomes. Artificial Intelligence will of course play an increasingly important role in 2022 as it enables this analysis to take place at a highly granular level. Using cutting-edge solutions to improve business performance is much more within reach than most organizations realize.