An enterprise performance management (EPM) system provides a foundational technology for performance management and enables enterprise planning / budgeting capabilities. Yet, only 26 percent of organizations perceive EPM as a strategic capability. A majority of organizations (61 percent) view EPM primarily as a finance-led capability or a system for the management team. This makes most EPM deployments tactical in nature, not delivering all the potential benefits of an enterprise business application.
Performance management represents one of the highest priority technology investment categories, with 65 percent of organizations planning to increase their investments in performance management. Enterprise planning / budgeting—a key capability for performance management—ranks 11th out of 59 technologies and initiatives strategic to business intelligence (BI) rated in the 2023 Wisdom of Crowds® Business Intelligence Market Study. Therefore, EPM projects likely can attract new funding.
However, the danger is that most of these new investments in performance management will go toward tactical projects, mostly driven by the finance function. Although the needs of the finance function should be addressed, data leaders need to overcome the barriers that prevent organizations translating tactical success in the finance department into a strategic enterprise deployment.
Our research shows that not having the right cross-functional team represents the biggest barrier to success. As a result, many organizations find it hard to extend EPM beyond a tactical deployment in either the finance function or supporting specific needs of the management team.
However, organizations that consider their BI initiatives completely successful approach EPM differently. They take a more strategic view of EPM capabilities outside core finance functions, and more highly value capabilities such as operational budgeting and planning, which are key enablers of a cross-functional approach to EPM.
Consequently, data leaders can prevent EPM from becoming another siloed analytic application by expanding its focus to include capabilities such as operational budgeting and planning. Doing so elevates EPM from a tactical capability to a key element of a successful BI strategy. It also provides the right foundation for closed-loop insight creation and execution processes that are key to achieving higher levels of maturity in the Dresner Advisory Services Hyper-Decisive® Maturity Model® (see the Research Insight “Leverage HDMM to Improve Risk Planning and Make More Data-Driven Decisions”).
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