9 April 2021 · 6 min read

Everything You Need to Know About EPM: Definition and Guide to Choosing the Right One

This article will help you structure your research and compare EPM software effectively, with the key questions to ask and the pitfalls to avoid along the way.

Tout savoir sur l'EPM : définition et guide pour bien le choisir

How about a shortcut to choosing the right EPM? Follow the guide.

Choosing an EPM requires an analysis process that can be long and complex. That is perfectly normal: your choice of EPM affects the life of the company over the long term.

This article is designed to help you structure your research and compare solutions effectively. The payoff: an EPM that fits your company. To get there, here are the critical questions we will cover:

What is an EPM?
Why is EPM so important?
How do you choose the right EPM?
What EPM pitfalls should you avoid?

Managers discuss a guide to choosing an EPM.

What is an EPM and why is it so important?

EPM (Enterprise Performance Management) software is essential to managing an organization's performance. It connects financial and operational data. EPM solutions mainly cover the following features:

reporting,
forecasting and budgeting,
consolidation.

EPM solutions help align objectives with the company's strategy. They give every executive, manager and employee access to the information that matters for tracking their performance. This type of software is at once:

the engine of strategy,
an ally for planning and execution,
a source of improvement for company performance.

EPM is so decisive because it is used across the whole organization. Although the main user is usually the head of finance, people in different functions and roles use and consult it. The entire organization uses it, both horizontally and vertically:

Horizontal use (by function):

finance department,
HR department,
sales department,
logistics department,
etc.

Vertical use (by level of responsibility):

executive committee member,
manager,
employee,
etc.

Not sure how to prepare your data for effective financial reporting?

Discover the 4 key steps to follow:

Structuring the data,
Collecting the data,
Cleaning the data,
Visualizing the data

EPM also matters when it comes to sharing information. Finance leaders and top management are under heavy demand from their executive committee. They are expected to provide more and more information to steer the company. This information has become strategic because it shapes the company's strategy. EPM therefore has a role to play, since it helps centralize data.

How do you choose the right EPM?

Define your needs clearly

Keep in mind that your needs should be defined before the project starts or before you choose the software. To do it right, follow these two steps:

Find your business contacts: ideally include one person from each department involved,
Anticipate how your organization will evolve as best you can: so you can take it into account when defining your long-term needs.

To make sure nothing is forgotten, draw up a detailed list of the needs your departments foresee for the coming years. Then prioritize these needs by importance and group them into categories. For example:

department (sales, accounting, etc.),
most suitable type of solution (On-premise or Online),
users (number of users, etc.).

Software to sync with your EPM

An EPM benefits every department in your organization. As such, it must be able to integrate with the software you already use, as well as the software you plan to adopt. Here are a few examples of software to check your EPM's compatibility with:

accounting software
ERP (Enterprise Resource Planning)
CRM (Client Relationship Management)
time management software,
HRIS (Human Resources) software,
etc.

Structure and processes

For this step, let your company's vision and structure guide you. Keep these two points in mind and picture how your teams will use the EPM.

This step is important, because the scenarios your company has in mind can be decisive. For example:

A desire to modernize procedures may require you to adapt purchase order approval workflows.
Opening a new subsidiary in another country may mean managing another currency,
Reorganizing certain teams may require implementing new software.

Online, hybrid and On-premise

So-called On-premise EPM software runs on servers managed by your company or a subcontractor. In both cases, the data is stored in a way that does not depend on the vendor. This on-premise setup is becoming less and less common. Only organizations with substantial IT resources still use it. Maintaining on-premise solutions requires in-depth technical knowledge.

A hybrid environment can include any combination of on-premise, online and hybrid environments. In this configuration, data is stored in different types of environments. It is linked together by specific programs.

So-called Online EPM software is accessible only from your web browser. Your financial and operational data is stored by the vendor on its own servers. These may be located outside your organization's country. This approach has many advantages:

automatic updates,
no infrastructure costs,
data security,
fast startup,
etc.

Localization and legal compliance

Usability, features, integrations... EPM software offers many advantages. However, it does not always match the needs of your market, in particular because legal requirements vary from country to country. That is why it is essential to review the legal and functional aspects specific to your scope.

Software usability

Without EPM software, data entry is often tedious and time-consuming. The same is true if the solution you choose does not meet your needs. Certain details, such as:

keyboard shortcuts,
use of the tab key,
dashboard layout,

can make all the difference. These elements can have a positive or negative impact on your performance.

A free demo of the EPM solution you are considering is usually available. Take advantage of it! It is your chance to make sure its usability and features suit you.

What to avoid

You are now familiar with the right questions to ask to find suitable EPM software. Now let's look at the actions to avoid for an optimal EPM choice:

Ignoring business needs

EMASPHERE is easy to use, but that is not the case for every EPM. When you implement an EPM, keep in mind that defining your use cases is important. Each department has its own specific business needs, and therefore its own way of using the EPM.

By involving your teams in your project thinking, you greatly improve your chances of avoiding:

difficulties sharing information,
investing in a useless tool,
missing out on investment opportunities.

Underestimating how needs will evolve

Everything changes: your employees' roles, your company's level of maturity, and also its direction. Always anticipate future needs to get the best possible sense of your EPM requirements.

Compliance, sometimes overlooked

EPM software involves using a great deal of personal and confidential data. Check with your legal department to make sure you comply with the GDPR. You can also get support from a freelance DPO (Data Protection Officer).

Underestimating costs

Estimating your EPM costs as accurately as possible is essential, especially to know whether your planned actions fit your budget. Also consider training costs when you start using the software. This expense is an integral part of implementing an EPM. It is necessary for your teams to be trained and efficient. From another perspective, consider how costs are amortized. They will change over the usage cycle of your EPM software, as maintenance costs are generally much lower than implementation costs.

Forgetting to ask for a demo

Trying out your EPM software is essential. But having your business teams test it is even more essential. In practice, these are the teams who will work with the software every day. It must suit them first and foremost.

A manager writes down ideas on a whiteboard.