Using Data, Not Guesswork

Cloud computing, database management services, and mobile devices have transformed the business world and reinvented how data is created and managed. While there is more data available to companies than ever before, and that data is more easily accessible, too many companies are basing their decisions off of hunches, guesswork, or intuition. In reality, hard data is the best tool for making strategic and operational decisions and for understanding current trends. Luckily, enterprise performance management (EPM) analytics can help increase your company’s performance and minimize financial risks at the same time. So what exactly is EPM and how it does it work? Here is an introduction based on a webinar from 2013.

What Are Enterprise Performance Management Analytics?

EPM analytics are a type of business analytics. In short, analytics are the practice of methodically exploring your organization’s data and looking at statistics to improve forecasting and cost-saving abilities. The statistics and data will usually consist of everything from financial figures to sales reports, with specific industries relying on specific information.

However, the definition of analytics does not necessarily explain the purpose, and that purpose is to help you make better decisions about how to run and manage your company. In a sense, EPM will allow companies execute better strategies and make better decisions. Using EPM will help you have more accurate information available at all times. While analytics deal with data and information in middle management, the effects will be felt throughout an entire company.

Who Can Benefit from EPM Analytics?

Harnessing the power of data analytics can transform a company, but only if the power is given to the right individuals. Middle management stands to do the most with the information because they are the ones directly accessing and using everything from financial spreadsheets to expense reports on a daily basis. Senior management can benefit, too, though more as supplemental help to the middle management (as they are usually occupied with specific company-wide tasks). Analytics are the realm of managers and all changes made with EPM should be focused directly on individuals who deal with financial decisions on a daily basis.

What Do I Need to Know?

Analytics produce new results from information that you already have. It means accessing what you have and using it in contexts and situations that will make it easier to forecast and take action. The basic flow of information is to take the reports and information your company already has or produces and then:

  • Analyze the statistics and information found in your reports
  • Forecast what will happen (or the results of what you want to happen)
  • Make a predictive model (which involves the marketing phase of any plan)
  • Optimize your strategy based on information you already have

Specialized EPM Solutions

If you currently manage budgets, data, invoices, or other vital information in a program like Excel, you are likely dealing with complicated spreadsheets that cannot adapt to changes. Archaic management solutions might force you to create supplemental budgets when you find sales or client information after an initial budget has already been completed. Using a system like Excel will make it extremely difficult to combine the original and supplemental documents without making numerous errors. In order to unify both budgets you will need to check formulas and links across both documents, a process which is is both time consuming and likely to result in mistakes.

It is possible to find specialized solutions and software that are designed to report information in a way that you can analyze and use it effectively. Many solutions allow you to connect accounting software directly into the program to visualize expenses and revenues.

How Do I Implement a New EPM?

There are 4 basic steps to implementing a new EPM system into your company:

  • Convince your team, department, and upper management that a change must be made. While it might not be difficult to convince upper management, finding widespread willingness throughout a company can be difficult. This step must be approached with time saving and cost savings in mind, as few people can argue against seeing more profits.
  • Implementing your analytic system is the next step. How long this process takes directly depends upon the size of your company and the type of system you were using prior. Expect to spend most of the time setting everything up (including installing new software), followed by training and education, and finally troubleshooting.
  • Next you will need to expand your chosen system throughout the rest of the company and for more products (starting one at a time). An initial rollout of analytic systems should be small scale and focus on an individual department or project.
  • Finally, ongoing training will allow everyone to adapt to new technology as well as change their methodologies to be more efficient when using analyzing data.

Putting EPM to Use

The primary reason EPM is not more popular throughout the business world is a simple one—behavior. The technology is in place to make analytics more available and useful than you might think. The problem with actually using EPM comes from individuals who are set in their ways and resistant to change. If individuals have a hard time changing, but organizations can find it almost impossible. But if you can make the changes within your company and take advantage of enterprise performance management analytics, you will find there is less labor involved with managing data because the process will be automated, and your company’s ability to forecast and plan for the future will be unmatched.