EPM or ERP – Which to Implement First?

EPM or ERP – Which to Implement First?

Finance organizations in growing enterprises often reach a point where they need to upgrade or replace both their ERP and EPM software systems. Here, they face the dilemma of deciding which to upgrade or replace first – ERP or EPM? This dilemma occurs in one of two scenarios:

Scenario 1 – A fast-growing company has outgrown its ERP system and needs to upgrade to a more scalable solution. The company is also looking to replace the Excel spreadsheets it’s using for financial reporting, planning, and forecasting with a packaged EPM solution.

Scenario 2 – A medium to large company has multiple legacy ERPs to upgrade, replace, or consolidate. It also wants to replace legacy EPM applications for financial consolidation & reporting and budgeting & planning.

The dilemma: Which system should the company implement first, a new ERP or the EPM solution?

In both cases, the goal is to have integration and alignment between the ERP and EPM solutions. This will enable efficient transaction processing as well as faster, more accurate financial and management reporting, planning, and forecasting. The natural inclination in both scenarios above is to focus on the ERP upgrade first, re-engineering core financial business processes and often revamping the chart of accounts and organization structures as part of the project. But ERP upgrades and implementations typically take 6 – 12 months. Worse, they can wreak havoc on a company’s financial and management reporting capabilities during the process.

On the other hand, implementing a new EPM solution – before doing the ERP upgrade – is a viable way to quickly improve financial and management reporting. It also provides end-users with a stable, consistent platform for reporting, as well as budgeting & planning, during the ERP upgrade. Most modern EPM solutions can integrate data from a variety of ERP systems and bring flexible, powerful, multidimensional reporting and analysis capabilities that shorten reporting and planning cycles and improve decision-making.

EPM implementations are typically much shorter than ERP implementations – in fact, they can be as short as 3 months for cloud-based EPM solutions. As part of this process, the organization can design and implement a corporate chart of accounts and reporting hierarchies that meet current and future business needs. These also can be aligned with current and future ERP systems.

Finance organizations considering ERP and EPM system upgrades or replacements should plan these projects carefully. They should use this opportunity to improve core financial processes. They should take an approach that will minimize disruption to financial and management reporting. Many companies have found that upgrading or replacing their EPM systems, before an ERP implementation, effectively minimizes disruption and can drive the design of the underlying ERP systems. In some cases, implementing a new EPM system can even alleviate the need for an ERP replacement.

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Tt the link below, you can find case studies highlighting how Planful customers have chosen to forego a lengthy ERP implementation in favor of a quick EPM implementation. See how they improved their financial close, reporting, and planning processes and extended the life of their ERP systems

Planful Customer Case Studies

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5 Steps to Agile Finance

5 Steps to Agile Finance

January through March can be a stressful time for Finance executives and professionals. With the year-end close, regulatory filings, audits, and tax work, there are constant deadlines and limited time to spend on new initiatives.

But now that the dust has settled on the 2014 year-end, spring is a great time to start improvement initiatives and consider new processes and systems that can help Finance improve its agility and value-add to the rest of the organization.

With that in mind, here are five recommendations, or steps you can take to create a more agile and productive Finance organization in 2015:

Step 1 – Reduce Reliance on Spreadsheets

Microsoft Excel is a great personal productivity tool, but when organizations rely on it to support corporate processes – such as budgeting & planning, financial reporting, or complex financial modeling – its shortcomings become evident. These include limited scalability, lack of security, no controls, no workflow, and high risk of errors.

Many organizations that have outgrown spreadsheets have successfully implemented packaged enterprise performance management (EPM) applications to replace spreadsheets and improve the accuracy and reliability of their financial reporting and planning processes. And some of the leading EPM solutions allow users to leverage Excel as a front-end to their EPM applications, taking advantage of their Excel skills, but with a more secure and scalable back-end.

Step 2 – Leverage Cloud-based EPM Solutions to Accelerate Time to Value

When it comes to EPM, new applications are increasingly being deployed in the Cloud. In fact, Gartner and Forrester and other IT analyst firms see the cloud as the primary model for EPM applications over the next 3-5 years. The primary reasons for the accelerated adoption of cloud-based EPM solutions are the benefits cloud EPM offers vs. on-premises solutions – namely, faster time to value and lower cost of ownership. While cloud-based EPM is especially attractive for small and mid-sized organizations, its adoption is also increasing in large enterprises, according to Gartner.

Here’s an article referencing a Gartner report on cloud adoption of CPM solutions.

Step 3 – Streamline the Financial Close

The ability to improve key financial processes is one of the key benefits of moving from spreadsheets to packaged EPM software solutions. An important one for improving Finance agility is the financial close process. Companies that are able to reduce the financial close and reporting process from 25 days to 5 or 10 days can deliver financial results faster internally. This, in turn, allows more time for review and analysis before reporting results to external stakeholders. And many are finding that faster delivery of financial results to external stakeholders can also be beneficial – especially when the news is positive.

Step 4 – Adopt Dynamic Planning Processes

With the pace of change in business constantly accelerating, organizations can no longer rely on static budgets to guide their investment and resource allocation decisions. So while most companies still have an annual budget, they’re putting less reliance on the budget and augmenting it with rolling forecasts on a quarterly or even monthly basis. This allows them to review actual results vs. the original plan and incorporate the actuals, along with updated forecasts from management, into their projections for future periods. This more dynamic approach to planning is critical to being able to respond quickly to changing business conditions and to reallocate resources as needed to capitalize on new business opportunities.

Step 5 – Embrace Mobile Technology

Lastly, most managers now have mobile smartphones or tablets, but many don’t fully leverage these for business purposes. This is a great opportunity for Finance to embrace mobile technology to deliver financial as well as operating results and KPIs on a timelier basis to key executives and managers. You can even go beyond mobile information delivery to enable mobile workflow and approvals for budgets and forecasts, as well as data entry via mobile devices. This is a great way to improve the agility of the organization and for Finance to be a true business partner to line of business executives and managers by delivering critical information anytime, anywhere.

Where to Start?

For small or mid-sized organizations that are growing rapidly, Step 1 and 2 in this sequence are critical to improving Finance agility and having more scalable business processes. But whether you focus your improvement efforts on the financial close or the budgeting & planning process depends on your own situation and priorities. Adopting mobile technology can be done in parallel with the financial close or planning process steps, or it can be focused on after the fact as a next step.

Many companies have already taken some or all of these steps to improve the agility of their Finance organizations. To learn more about these best practices and the benefits our customers have achieved from adopting them, feel free to visit our customer case studies and videos.

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Hybrid EPM: Accelerating Delivery of New EPM Applications

Hybrid EPM: Accelerating Delivery of New EPM Applications

Does this scenario sound familiar? Your division of a large enterprise has outgrown Excel spreadsheets and is in dire need of a more robust solution for budgeting, planning, forecasting and financial reporting.

Your division’s planning and reporting processes take too long and are prone to errors, and your Finance team spends too much time collecting and correcting data and not enough time on analysis.

Moving to the Cloud with Hybrid EPM

Add Some “Pep” to Your Business

However, your corporate Finance and IT groups are heavily invested in a legacy, on-premises set of EPM applications that haven’t been deployed to your division or are unable to meet your specific needs. And with an upcoming upgrade and many other priorities, they don’t have the time, resources or budget to support a divisional rollout of the existing EPM applications. Even if IT is available, the time it will take them to complete the project, as well as the associated costs, makes it an unreasonable option. So you are stuck!

View the Cloud EPM Infographic

If this sounds familiar to you, have no fear — there is a solution. Many organizations are adopting a “Hybrid EPM” or “co-existence” strategy that enables them to deploy a cloud-based EPM solution at the divisional level, with the ability to integrate the new solution with their existing corporate EPM system, such as Oracle Hyperion or SAP BPC. The beauty of this approach is that cloud-based EPM solutions don’t require an up-front investment in hardware, don’t require internal IT resources to deploy, and don’t require a big up-front license fee or high levels of on-going maintenance. The benefits companies are achieving through this approach are impressive:

  • Rapid deployment of new planning and reporting applications (weeks/months vs. quarters/years)
  • Elimination of error-prone spreadsheets
  • Reduction in planning and reporting cycle time
  • Increased accuracy of divisional plans and forecasts
  • Integration and alignment with corporate EPM applications

While Planful is the first company to deliver technology specifically for a Hybrid EPM deployment, the approach is not unheard of. Leading industry analysts such as Gartner have written about the emergence of Hybrid EPM (link requires a Gartner account for free access). In fact, a number of Planful customers have deployed our EPM Cloud solutions in exactly this fashion and have achieved these benefits. And to make the process even easier, Planful recently announced its “CloudLink for Oracle Hyperion” solution.

The Planful CloudLink technology seamlessly moves data and artifacts like metadata, templates and dimensions between the Planful cloud-based EPM environment and Oracle Hyperion Financial Management (HFM) as well as Hyperion Planning. CloudLink is designed to solve the problem I described above, typically when an acquisition or divisional deployment needs new EPM capabilities that must work with the legacy on-premises Hyperion instance at corporate. Planful excels in these situations because it delivers the complete EPM functionality of Hyperion’s EPM applications, in a unified, cloud-based suite that can be implemented at a fraction of the time and cost.

To learn more about Planful CloudLink for Oracle Hyperion, check out these resources:

Press Release: http://www.hostanalytics.com/about/news/press-releases/2015/03/host-analytics-introduces-cloudlink-for-oracle-hyperion

View the Cloud EPM Infographic

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