Young Organizations Can Find Strategic Advantage in EPM

Young organizations (that is, operating for less than five years) consider enterprise performance management (EPM) an important technology. They rate its importance similarly overall to perceptions by older organizations. However, young organizations report lower EPM adoption compared to all older organizations, and greater tendency to view EPM as technology they may adopt in future. For many young organizations, EPM consequently becomes a perennial “to-do list” item, rather than being a key part of a strategic initiative to better compete by more effectively leveraging data and analytics.

This apparent deferral of EPM deployment may be because data leaders in young organizations feel their organizations need a certain level of maturity before proceeding with EPM. However, our data show that a higher percentage of young organizations have adopted financial consolidation, close management, and financial reporting solutions (FCCR) than EPM: 50 percent of young organizations use FCCR, while only 29 percent use EPM.

These data indicate a tactical approach to EPM by young organizations. Many likely adopt FCCR—a subsegment of the broader EPM market—to address the needs of the finance function, rather than approaching EPM as a strategic technology for the entire organization. Many data leaders may be unaware their young organizations already effectively deployed EPM tactically through the “back door” of finance.

Although such a tactical approach can quickly provide some benefits and value, data leaders in young organizations should build on FCCR deployments to accelerate deployment of broader, more strategic EPM solutions. A more-encompassing view enables young organizations to obtain greater benefits from EPM while leveraging the investments already made in FCCR.

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