This week we are pleased to welcome one of our valued Jedox Partners in the USA as a guest to the Jedox Blog. Headquartered in Illinois, Pursuit IQ shares an overview of EPM history and their unique insight on its evolution.
Is EPM a methodology or a tool?
It is important to clarify that EPM is not strictly a piece of software, as many mistakenly believe. It is a business endeavor to seek effectiveness and measure and enhance performance in your business. It enables management to better respond to challenges as well as opportunities on a project, section, operational line, geographic area and on the corporate or enterprise level.
While EPM is not a just a piece of software, a robust EPM software solution is a crucial part of improving the EPM process and making it as efficient and effective as it can be. Given the important relationship between process and technology, EPM software solutions are commonly available.
A brief History of EPM
The concept of EPM has been around for decades. Before advancements in computer and cloud technology, EPM processes and solutions were managed manually via pen and paper, endless in-person meetings, phone calls, and the like.
In the 1970s and 80’s the first crude spreadsheet software tools such as Lotus 1-2-3 and VisiCalc became available, and it started to be used for accounting purposes as well as collection of budgeting and financial information for reporting and analysis. Spreadsheets allowed finance teams to improve budget and report creation and replace manual worksheets.
The functionality and reach of EPM solutions started to expand following the emergence of e-mail and other connected technologies, which in turn enabled multiple parties to collaborate on creation of joint financial reports. Connectivity has led to the establishment of more advanced software solutions for EPM which towards the end of the 1990s, enabled reporting and controlling automation and has simplified accounts consolidation efforts.
The “revolution” of EPM started during the Dot Com Era. Even though there wasn’t a true EPM technology in place yet, multiple software companies hypothesized how EPM could be designed, tailored to industry-specific needs and used to achieve a greater degree of reporting, controlling and analytic capabilities along with management automation.
From our perspective, the technology needed to advance this field further caught up with existing ideas around 1995 when technology-enabled benefits prompted companies to move away from paper-based practices, ditch old DOS-based systems and embrace newer and more efficient technology.
Over the past couple of decades, EPM solutions evolved from Windows-based client/server systems to Internet-enabled, web browser-based applications. Today, there’s an increasing demand for cloud based EPM software, also known as software as a service (SaaS). The cloud offers a more affordable alternative for EPM that lowers costs because it eliminates costs such as the need for companies to hire additional IT staff. With no costly infrastructure to support, resources can be invested in strategic growth opportunities, while employees can focus on more value-added tasks.
During the last decade, we have seen the emergence of EPM solutions with incredibly complex stand-alone, modular and cloud-based products that push the envelope of performance management. EPM is used to measure performance across all areas of the business in a consistent, efficient manner and deliver enhanced results. It also effectively links operational and business support functions together and consolidates information through financials.
Putting EPM data in the context of finance helps to put otherwise senseless and technical data into a simpler perspective and enables managerial decisions to be Explainable, Defendable and Executable. Being able to explain, defend, and execute decisions is key to improving long term business strategy, among other things.
Knowledgeable EPM consultants will tell you that implementation of the right solution that has been custom fit to meet the needs of your company takes time. However, this is where important conversations with your EPM solution provider are vital to success:
- Have the needs of your company been carefully factored into your EPM solution?
- Does your team need special coding or programming skills to use it?
- Are dashboards easily customized to fit your needs?
- Have you selected a solution with unrivaled flexibility to create your own model?
- Does the solution offer quick and easy connection to your existing databases?
- Does the solution offer industry-leading implementation times?
The evolution of Enterprise Performance Management brings us to today: A truly modern EPM solution provides your company a solid foundation to increase agility, flexibility, and resilience.