Decision-making is sometimes considered an art, but good decision-making should involve more than just strong intuition. It also needs to be based on insights from data. Companies have access to a variety of tools to support decision-makers, but while spreadsheets and general-purpose relational or multi-dimensional databases may appear attractive in supporting financial processes due to their implied flexibility, they don’t have pre-built financial intelligence.
For years, Business Intelligence (BI) promised the types of insights companies needed to make better decisions. However, while BI has certainly helped provide an added level of depth to overall corporate decision-making, finance leaders need even smarter solutions in order to be able to mitigate the risk of making uninformed choices and improve the accuracy of strategic planning.
Effective decision-making must be based on data analysis, decisions (planning) and the execution and evaluation of the decisions and its impact (forecasting). In other words, effective decision-making requires intelligent EPM solutions.
Moving beyond the data
Modern organisations of all types collect data. Whether the data is generated by operational systems such as ERP and CRM, or by websites, marketing platforms, and market data, this information is only useful when it is collated and analysed in a way that allows for insights. While most BI systems support great insights, they were not historically designed to support the planning and forecasting processes.
A comprehensive EPM solution provides support for a variety of planning methods and needs, forecasting, and allows different types of data analysis. While a properly equipped EPM solution will have some built-in BI capabilities that meet some BI needs, it does not offer a full replacement for a truly enterprise BI solution. Similarly, BI systems do not fully replace EPM solutions since they do not have planning functionalities.
Many EPM solutions therefore use built-in BI and analytics capabilities to provide real-time data and insights that can be used to plan strategically. The biggest difference is that EPM has historically been limited to the domain of finance due to its role as the ultimate communicator of business performance. This is changing, as finance teams increasingly shift more towards being a strategic driver of business.
Organisations are moving beyond the description and discussion of what has already happened, where course-corrections occur primarily according to annual and monthly reporting and planning rhythms. Instead, they are making data-informed projections more frequently, taking timely action and iteratively learning to manage performance in a dynamic, ongoing, and pre-emptive way – and feeding these operational insights into the strategic decision-making process.
Intelligent solutions
These days, many EPM solutions do more than just consolidate data to help identify trends to inform planning and forecasting. With the incorporation of AI, EPM is getting smarter and revolutionising how businesses manage their finances. From financial planning and account reconciliation to predictive analytics, AI is streamlining processes that were once manual and labour-intensive, leading to a more efficient and agile financial ecosystem. This holistic adoption of AI enables organisations to enhance operational efficiency and gain a competitive edge through data-driven insights and strategic foresight.
With more information being generated than ever before, finance teams are using AI to unlock the hidden insights within this deluge of data. A powerful tool to streamline processes, identify patterns and unlock valuable insights, AI allows for the automation of repetitive and time-consuming tasks to enable finance professionals to focus on more strategic activities. For instance, AI-powered tools can automate planning, data entry and routine financial reporting, freeing up valuable time for analysis and decision-making.
In today’s dynamic world, it can seem hard to cultivate effective decision-making. Smart EPM solutions not only help distributed decision makers make choices that are consistently in the best interests of the organisation by making sure the right information is available to the right people at the right times in the right ways, they also help decision-makers plan with confidence through a single, unified platform, enabling smarter business across the organisation.
