Enterprise Performance Management Market Trends

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Enterprise Performance Management
Market Trends

by James G. Barr

Docid: 00018939

Publication Date: 1911

Report Type: MARKET


Enterprise Performance Management (EPM), also commonly called Corporate
Performance Management (CPM), Business Process Optimization (BPO), and Business
Performance Management (BPM), combines the functionality of business
intelligence software with that of Enterprise Resource Planning (ERP) systems. EPM provides a way for businesses
to extract data from unrelated enterprise systems and use it to measure
actual performance against goals. Many vendors offer integrated
product suites that combine financial features – such as budgeting, planning,
and forecasting – with scorecard applications and reporting modules. However,
cloud applications are proving to be the most important factor in vendors’
success. This report discusses
the benefits of implementing EPM products, identifies the key players and
trends, and provides guidance to organizations evaluating a variety of

Report Contents:

Executive Summary

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Enterprise Performance Management (EPM) has many names. In addition to
Corporate Performance Management (CPM), it is also known as Business Process
Optimization (BPO) and Business Performance Management (BPM). EPM combines the functionality of
business intelligence (BI) software with that of Enterprise Resource Planning
(ERP) systems. 

EPM provides a way for businesses
to extract data from unrelated enterprise systems and use it to measure
actual performance against goals. Many vendors offer integrated
product suites that combine financial features – such as budgeting, planning,
and forecasting – with scorecard applications and reporting modules. These
suites monitor and manage an organization’s performance according
to key performance indicators (KPIs) such as revenue, return on investment
(ROI), overhead, and operational costs. Additionally, EPM systems make it possible to create
year-round performance reviews as opposed to the traditional annual reviews
and reports.

Acquisitions have strongly affected this market. As a consequence, it is
possible for a single vendor to be selling numerous EPM-related
products that are not compatible with each other. Enterprises need to be
wary of that fact. 

Many customers are only
utilizing EPM in a tactical manner, usually to improve the metric views of
their financial operations. In order to implement an EPM system successfully
and achieve ROI, a company must have a strong commitment to both management
practices and methodologies that support EPM, as well as a technology
infrastructure with enterprise software serving all of its key business

Market Dynamics

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intended for use within finance departments, EPM software is now applied
enterprise-wide, often as a complement to business intelligence (BI) systems. EPM and BI are already starting to
move towards each other, and analysts expect them to fully converge within
several years.

The most important aspect to affect the market has become cloud computing.
Cloud accessibility has transitioned from a trend available from only a few
vendors to a functionality considered necessary; most large vendors now offer
this capability. Those that do not offer it must add other innovations in
order to impact this market.

EPM is a combination of all the “ingredients” needed to manage an enterprise’s
performance, and it can include systems as well as processes and
metrics. Many companies use BI software or Enterprise Resource Planning (ERP) software to
gather information on specific business processes. Disparate systems present
such information in silos, slowing down the performance of enterprise
software and making it hard for business activities to be analyzed across the
organization as a whole. EPM software
tends to merge BI and ERP; it incorporates the data gathered by other
business process systems and provides a complex view of critical business
performance factors across the enterprise.

EPM software generally
consists of a group of applications that not only measure business performance,
but also help users to define, develop, manage, measure, and analyze
business processes, the methodologies behind some of the processes, and the
metrics used to assess performance against goals. Methodologies inside an EPM
solution are often aimed at translating business strategy into actions. As the truism goes, “If you can’t measure
it, you can’t manage or control it.”

It is important to note
that a true EPM solution is not simply a software package. EPM is actually a
practice within an organization that is a combination of three major
elements: management methods that are conducive to EPM, defined metrics (i.e.
numerical measurements) for measuring enterprise performance, and EPM

Interest in EPM systems
has risen largely from the need to create thorough and accurate reports. The
demand for these reports stems in part from a desire to better plan and manage
resources in today’s highly competitive market. EPM systems can be used to
comply with regulations that require corporations to provide better
disclosure and to speed the publication of quarterly and year-end earnings
reports. "Material events" must be reported, executives must verify
the truth of the reports, and the reports must describe how the reports
themselves were generated. The combination of advanced financial analytics
with deep business intelligence, however, offers clear benefits beyond
meeting regulatory requirements.

A powerful EPM suite
supports the following capabilities:

  • Budgeting, forecasting, and planning
  • Profitability modeling
  • Financial

  • Specialized financial reporting

EPM systems present information as a collection of Key Performance Indicators (KPIs). KPIs can be drawn from
any area that is relevant to corporate strategy, such as:

  • Reductions in manufacturing deficits compared to past performance and

  • Net profits on product lines compared to forecasts
  • New business
    for product lines compared to forecasts

  • Employee turnover

software typically includes forecasting, budgeting, and planning functions, as
well as graphical scorecards and dashboards to display and deliver corporate
information. Some companies use established management methodologies with
their CPM systems, such as balanced scorecard or Six Sigma.

A dashboard is a means of
displaying information on a computer screen using graphical representations
of instruments such as dials, gauges, and lights. Once data has been
collected, the status of various KPIs is graphically presented on the
dashboard. This allows operations managers to drill down in order to view
performance data at a granular level. At the same time, the EPM system can
"roll up" the data to provide a broad overview of enterprise
performance for senior managers. This information can then be compared to
goals, past performance, competitive benchmarks, or any other metric.

Scorecards are another
important component of EPM systems. Scorecard systems are intended to compare
actual business performance with goals in financial, customer service,
quality, and other areas. The logic behind the comparisons made by scorecards
is based on a methodology. The most well known of these methodologies is the
Balanced Scorecard. Dashboards are one feature of scorecards that allow the
scorecard to indicate KPI status. Scorecards also allow users to link KPIs to
a strategy map. This map includes hierarchical cause and effect relationships
between the KPIs.

EPM ensures that its own
metrics match those in the systems being analyzed. This creates the ability
to go beyond annual plans to plans that can be continually revised throughout
the year in response to the latest intelligence.

Large corporations spend
as much as 40 percent of their resources on projects intended to streamline
operations and cut costs. Pressure is strong to achieve bottom-line results
within a year. EPM systems can pinpoint which efforts are succeeding and which
are obsolete, redundant, or misdirected. As a result, EPM vendors claim that
their customers can cancel 10 percent or more of their failing projects and
redirect their resources to those that better support corporate goals.


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The most prominent EPM vendors are IBM, Oracle, and SAP


IBM offers IBM Planning Analytics, an
integrated planning solution designed to promote collaboration across the
organization. Deployable on the cloud or on premises, it automates
manual processes and helps enable users to perform in-depth,
multidimensional and scenario analyses.

Key features include a Microsoft
Excel interface for easy adoption, easy-to-use self-service reporting and
visualization tools, and unlimited what-if scenario modeling in a personal


Oracle offers Oracle EPM Cloud, a
solution which delivers purpose-built solutions for every EPM business process. All processes are connected for complete alignment
– within finance and with operational lines of business (LOBs). Oracle EPM Cloud connects with core ERP systems for 360-degree integration and

Artificial intelligence and machine learning have the potential to redefine EPM,
and Oracle is investing heavily in these areas.


SAP offer SAP Analytics Cloud, a single cloud analytics
solution that augments the value of business intelligence (BI) and
enterprise planning.

In terms of business intelligence, SAP Analytics Cloud helps inspire
audiences with interactive visualizations and stories. As for enterprise
planning, the solution integrates financial planning (by combining transactions,
analytics, and planning with SAP S/4HANA), and leverages predictive forecasting
and machine learning tools

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Market Size

Reporthive Research reports that the global enterprise
performance management market, which was valued at $4,738 million in 2016, is
projected to reach $12,562 million by 2024, expanding at a compound annual
growth rate (CAGR) of 11.70 percent from
2019 to 2024.

Market Regions

According to MarketResearch.biz, the North American market is – and should
remain – dominant through 2027. Europe is expected to witness "significant
revenue growth," while the Asia-Pacific sector will see the "highest growth."

Market Drivers

The primary factor driving the adoption of enterprise performance management
solutions is enterprise complexity. Today’s enterprise operations feature
elements unknown or unused a decade ago, including cloud computing,
software-define networking (SDN), and virtualization.1 Measuring and managing enterprise performance in this multi-modal environment requires modern-day EPM tools. Cloud-based solutions are especially in demand owing to their ability to collect, curate,
and help analyze performance data from multiple operational and geographic sources. 

Market Inhibitors

Factors slowing the growth of enterprise performance management solutions

  • A general reluctance among some prospective clients to shift their EPM
    workload from on-premise systems to the cloud.2
  • A general lack of awareness regarding the advantages of enterprise
    performance managment.3
  • The high cost of some EPM solutions.4

Strategic Planning Implications

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Enterprise performance management is a multi-layer discipline, encompassing
business intelligence, enterprise resource planning, and more. Before
engaging an EPM vendor, a prospective client should understand what an effective
EPM solution should deliver.

According to MorganFranklin Consulting, an ideal EPM solution is:

  • "Efficient – Makes efficient use of stakeholders’ time and is not
    burdensome to the organization.
  • "Insightful – Delivers meaningful insights into relevant drivers
    of performance.
  • "Accurate – Ensures the numbers are correct.
  • "Actionable – Provides insight into how business performance can
    be improved.
  • "Integrated – Provides a single source of information to unify
    understanding of enterprise-wide performance."5

EPM Infrastructure

In planning an EPM
implementation, organizations as a whole – across all levels and
departments – should commit to adopting an all-encompassing performance
management infrastructure in order to glean accurate data and reap the benefits
from it. This includes management practices and methodologies, supportive
technologies, and identification of performance indicators and metrics. A
software package alone cannot provide a real picture of enterprise
performance. Part of this equation includes changing the mind-set of
once-per-year performance reviews for employees, processes, and strategies.
EPM tools allow an organization to constantly monitor, evaluate, and improve
business performance. They should be used in that manner to help the
enterprise remain competitive and compliant in today’s business environment.

Solution Integration

While EPM software solutions continue to improve, it is rare that any off-the-shelf
software package can handle all needs. Some additional programming will
probably be needed to fully integrate all related systems and process all
required data. It is also highly advisable for organizations to have a solid
data warehouse infrastructure in place before implementing an EPM system. Enterprises implementing EPM technology should take care to carefully
integrate the EPM applications with the requirements of the solutions users
employ daily. If the entire package is tightly integrated, practical value
will be delivered to the entire process.


The widespread adoption
of enterprise software has captured great amounts of data for organizations.
Extracting that data and putting it to use for something more than simple
reports is a challenge that EPM is intended to meet. The use of data to meet
business goals and to help manage performance is clearly a valid need. The
incredible potential behind EPM to allow businesses to improve performance
daily on a granular level shows promise for some corporations, as vendors
continue to improve features and integration of their products and businesses
build on EPM-based philosophies and infrastructures.


1 HTF Market Intelligence.

2 Reporthive Research.

3 MarketResearch.biz.

4 Ibid.

5 "Enterprise Performance Management (EPM) 101." MorganFranklin
Consulting. 2019.

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About the Author

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James G. Barr is a leading business continuity analyst
and business writer with more than 30 years’ IT experience. A member of
"Who’s Who in Finance and Industry," Mr. Barr has designed,
developed, and deployed business continuity plans for a number of Fortune 500
firms. He is the author of several books, including How to Succeed in
Business BY Really Trying
, a member of Faulkner’s Advisory Panel, and a
senior editor for Faulkner’s Security Management Practices. Mr.
Barr can be reached via e-mail at jgbarr@faulkner.com.

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