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EPM is a set of integrated, closed-loop management and
analytic processes, supported by technology, that addresses
financial as well as operational activities.
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EPM is an enabler for businesses in defining strategic
goals, and then measuring and managing performance against
those goals.
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Core EPM processes include financial and operational planning,
consolidation and reporting, modeling, analysis, and monitoring
of key performance indicators (KPI's) linked to organizational
strategy.
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As defined by the EPM Standards Group
An old accounting adage states that "you can't manage
what you can't measure." EPM encompasses the processes
and tools that allow
you to manage and measure your business.
Without EPM, you are at risk - visibility into historical
financial results is no longer enough. Internal demands
for strategic planning as well as external factors like Sarbanes-Oxley
require forward-looking analysis. Without a good EPM
strategy, you may be operating blindly in today's fast-paced
and unforgiving world.
EPM is critical if you are going to respond to the following
types of challenges:
Market pressures
Regulatory and competitive pressures
in today's market have intensified the need to implement an
effective EPM solution. These
solutions are essential to your company's survival and success.
Need for repeatable and predictable processes
The need
for repeatable and predictable processes for managing performance
is a key reason why many business leaders have pursued best-in-class
performance management solutions with renewed vigor. EPM
technology systems can help you establish these processes.
Consolidation of data
EPM software helps your company break through data silos by
consolidating information in one repository, enabling everyone
to work from the same set of data.
Need for non-financial metrics
It has become increasingly
important to track non-financial aspects of corporate performance. Companies have grown
acutely aware of the importance of non-financial metrics such
as customer satisfaction, product or service quality, and operational
performance, as either critical or important drivers of success. EPM
solutions allow you to accumulate and analyze this data.
Aligning workforce with corporate goals
A EPM system can help your company strengthen the links between
its strategic objectives and the metrics that support them;
improve communication among your departments, for example by
leveraging web-based functionality; and tie individual employees'
efforts more tightly to your organization's overall goals.
Sarbanes-Oxley Act
Because of the complexity of the
Sarbanes-Oxley Act, many companies are turning to EPM as well
as other technologies to help manage their compliance activities.
Specifically,
strong EPM processes are critical to meet the demands of
Section 302, which requires certification of financial reports,
and Section 404, which mandates that companies publish a detailed
description and assessment of their internal control structure
and financial reporting procedures.
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available here.
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