SAP

It was an interesting question that triggered a healthy discussion on the essence of EPM – Is it only about putting together KPIs in dashboards? Providing good analytics and analysis trails of how you are running your business? Is it just another fancy term for BI? Or, is there more to it?

To answer this best we will need to consider two aspects of your business – strategy and execution, while optimizing the execution makes your business more efficient, optimizing the strategy makes it more effective. In order to ensure value creation through aligned action, an organization’s strategic initiatives need to be integrated with the execution processes while the results from execution need to be fed back to strategy formation for further improving effectiveness. This closed loop management of the strategy to execution cycle is what EPM is all about and it would not be possible without the constant visibility and insight into the performance of the organization that BI provides.

Consider that you are a part of the CEO’s office of a food product company and have planned for growth through major exports to a developing neighboring country, there is sudden political turmoil in this country and import policies are changed. You now need to look at domestic growth and head-on competition with smaller local players i.e. change your strategy and execute it perfectly to ensure that you can tackle this business challenge and come out winning. Your need to quickly react to changes in the business landscape with strategic adjustments by evaluating different strategies èassessing risks è select the right strategy èplanning for execution at all levels èconsolidating results of execution èfeeding results back to strategy. This business agility would be very difficult to achieve without a robust and well integrated EPM and BI landscape.

The immediate next question that comes up is how EPM ensures this and what it comprises of? Please watch this space for the next part of this blog!