EPM or Enterprise Performance Management definition

What is EPM or Enterprise Performance Management, also known as Performance Management? is a field of Business Performance Management or BPM. It considers the visibility of operations in a closed-loop model across all facets of the business.

What definition for the EPM or Enterprise Performance Management?

First, several emerging areas in the EPM domain are driven by corporate or organisational initiatives. But also by academic and technology research, and commercial approaches such as EPM solution vendors. Main historical ones are SAP BPC, Oracle Hyperion Essbase, IBM Cognos TM1, etc.

EPM and strategic needs

Moreover, based on the mission and vision of the organisation, the different strategic needs leads the EPM implementation. And how the EPM domains are primarily operated and promoted within an organisation. For example, a professional services firm based in France may become aware of the need to arrange the operations of a supply chain. This in an efficient and transparent way, very different from a clothing manufacturer with operations all around the world.

However, what remains common in the EPM approach is the closed loop model. Kaplan and Norton using their methods advocated the EPM for managing and formulating a business strategy.

The EPM hierarchy

Four disciplines exist to define and cover the six stages of the closed loop model. The four disciplines are: strategy development, business planning and forecasting, financial management and supply chain efficiency.

The six stages of the closed-loop model EPM process are:

  1. Strategy formulation
  2. Strategy translation
  3. Organisational alignment
  4. Operations planning
  5. Learning and monitoring
  6. Testing and adaptation

EPM strategy formulation

To go further, the strategy formulation refers to the activities of an organisation that determine the direction according to the agenda. The mission, vision, and strategic objectives of an organisation determines the agenda. Then the organisation monitors progress against its activities. And periodically takes corrective action to achieve a particular target.

Indeed, the execution is key to any business objective. However the formulation of the strategy surrounding execution must take place in the right context.

In recent years, organisations have integrated formal risk management approaches to address the market opportunities that organisations pursue. In this way, EPM alignes strategy and predict performance, and executives can make better decisions.