Planning and forecasting are the two major aspects today for the growth of any business. Increasing competition results in growing demands to automate different operations in a business organization. Although there are several different office automation software available to ease the workload, the main requirement is to ease the strategizing and predicting aspects of the business. This is where Enterprise Performance Management Solutions become the right choice.
What is Employee Performance Management (EPM) Solution?
An Employee Performance Management (EPM) system is the software that combines planning and reporting with business intelligence for an enterprise to enable it to create practically applicable strategies with optimal planning and execution.
Ideally, Employee Performance Management solutions help organizations monitor the business’s performance and fine-tune the process to improve it. An EPM solution helps businesses become more agile with streamlining the company’s operational and financial performance. The EPM system can integrate and analyze data from various sources, including database, external data sources, front-office and back-office applications, business intelligence, e-commerce websites, etc. An EPM will determine if the allocated resources for a particular business department will help achieve the desired results.
The major uses and functions of an EPM solution from leading providers, such as KPI Soft, are:
- Business Planning and Consolidation
- Spend Performance Management
- Strategy Management
- Financial Consolidation
- Disclosure Management
- Intercompany Relationship
- Profitability and Cost Management
- Supply Chain Performance Management
The functions mentioned above are extremely helpful for an organization to streamline its reports and ensure that the efforts of the departments are focused on achieving feasible business goals.
In short, an EPM solution is a diagnostic tool that monitors the operations of a business organization with the help of different processes, frameworks, and systems to ensure optimal planning, measuring, communicating, and analyzing business goals. Businesses tend to bunch these activities together with corporate strategies and goals and require extensive accountability and control. Thus, EPM solutions are software aimed at supporting these activities.
Role of Employee Performance Management (EPM) Solutions in Business Organizations
These are the specific roles in which an EPM solution is deployed within a business organization:
1 – Measuring strategy and performance
An application to manage strategy is extremely useful to support conventional business strategies, which are different for different businesses. The applications use a number of visual maps to define the best strategies. Regular reporting lets managers note the business’s progress towards the set goals and objectives within the business strategy. The performance dashboard shows detailed information and allows finding the root cause of obstacles and problems in achieving the set goals.
2 – Enhancing planning, budgeting, and forecasts
Many times, budgeting fails to support performance initiatives because of some inflexible process, despite it being aimed at controlling expenses. This is not the fault of an EPM system. Planning solutions also support various situation-based planning activities and forecast value-added processes that are more than that provided by conventional budgeting processes.
3 – Providing detailed analysis to improve profit margins
The complex strategies of an EPM solution help businesses analyze production, development, and operating costs in view of revenue from products, customers, and businesses. Activity-based costing is the preferred methodology used by cost and profitability management software to develop advanced cost and profitability prediction strategies.
4 – Deriving financial statements with financial reporting and consolidation
Applications focused on financial reporting and consolidation deliver financial statements based on accounting results. Compulsory consolidations help comply with regulations and GAAP (Generally Accepted Accounting Principles) needs. Internal financial reporting is also supported by the most advanced EPM solutions today.