So what the f*** is EPM?

Back when I worked as the group controller for a Travel Company, you know the one……”Don’t just book it……….” More clues???  OK, named after the bloke that invented travel!  We would periodically spend huge amounts of money on teams of well dressed, perfectly groomed young men who would come in, talk to a few people and then prepare a PowerPoint presentation to the board full of incredibly long and grand sounding words or phrase that had us all nodding in appreciation.  It got so bad that the only way to get through the presentation was to bring a dictionary with you and try to follow as best you could.

I soon worked out that the whole point of these meetings was to spend a good sum of money to leave the management team with a buzz word that would be used over and over again until the next time we got some consultants in.

One year, that buzz phrase was “ENTERPRISE PERFORMANCE MANAGEMENT”.

Actually it might have been Corporate Performance Management or Business Performance Management but basically same thing.

Now we knew our financial systems weren’t as good as they could’ve been but we had no idea  our Enterprise Performance Management (EPM) was so bad.  Mass panic ensued for a few weeks, we started up a business case for some funding.  We had to improve our EPM and it would take a shed load of cash and maybe we needed to call James T Kirk too.

The business case got rejected.  Apparently those reviewing couldn’t understand what we were asking for.  Apparently it was confusing, they had no idea what EPM was and no concept of why buying a bunch of licences and consulting days could improve profit.

Here lies the main problem………….What is EPM?  Let us dispel the myth J

Here’s a definition I have pulled from various different thoughts.

“Enterprise Performance Management can be defined as a set of management processes, often supported by information technology, that help to improve the management, strategy execution and decision making in organisations. Performance management processes help companies define strategic objectives, measure performance, analyse and report performance as well as align people and culture.”

The starting point is obviously in the finance function.  Look at the main functions carried out within a finance team and all tasks can be distilled into the following three categories:

i)                    Reporting

ii)                   Planning

iii)                 Control

Looking back to the definition and you can see these three items firmly embedded.  So is it Finance Systems?  Well………..no, although the finance function is obvious a system, a system that includes IT, people, processes and procedures.  It’s no limited to finance either, it’s across the business.

Clearer?  Maybe not yet…….in the next blog, I will take a look at how the big players are addressing improving EPM to bring context to our new definition.  See you next time!