The financial landscape is evolving at breakneck speed, driven by big data, globalisation, and digitisation. The pressure on finance leaders to deliver strategic insights and ensure compliance is mounting in this dynamic environment.
This makes Enterprise Performance Management (EPM) a powerful ally for CFOs. Gartner defines it as “the process of monitoring performance across the enterprise to improve business performance.”
Integrating and analysing data from various sources—including e-commerce systems, front-office apps, back-office applications, data warehouses, etc.—offers much-needed clarity for CFOs. Advanced EPM systems can also support performance methodologies such as balanced scorecards, offering users real-time feedback on their organisations' financial performance.
“EPM seeks to align departments, product lines, resources, systems and employees to strategic objectives and corporate priorities. It is a critical function for companies that are looking to proactively make agile decisions that are responsive to market dynamics,” says Chee Kien Loh, the ASEAN regional business manager for CCH Tagetik at Wolters Kluwer.
EPM is becoming especially critical as organisations become bigger data-minded. “In an increasingly global market and increasing digitisation of the world, it is essential to a company’s ability to organise, match and report on performance across a company,” Chee adds.
From reactive to proactive: Embracing the power of insights
CFOs do not lack data. The challenge is making sense of the myriad of data insights and drawing relevance to the current situation.
In reality, modern CFOs navigate a labyrinth of towering data silos, each whispering fragments of information but offering no clear path forward.
One primary culprit that adds to this growing complexity is outdated processes. Imagine data trapped in Excel spreadsheets, a relic of a bygone era. Manual tasks drag like an anchor, hindering efficiency and insights.
Then you have on-premises legacy systems that are now creaking at the seams. After all, many were not designed with the cloud or collaboration in mind. These inflexible, siloed solutions often struggle to keep pace with the ever-expanding sea of data and the tides of changing needs.
A significant side effect of legacy systems, especially legacy databases, is the heavy reliance on humans to process data and insights. The increased workload can hobble finance team productivity and limit their scope of analysis.
“Finance teams end up spending so much time manually collecting, reporting, analysing and assuring the accuracy of data, manually, that they have little time left to derive from that data the kind of insights that can help them improve financial and operational performance,” says Chee.
Integration challenges can also blindside CFOs. Juggling data from various sources and formats—spreadsheets, databases, applications—can sometimes feel like trying to solve a Rubik's Cube blindfolded. Inconsistent systems across departments and regions create data integration nightmares, requiring a small army of analysts to untangle the mess.
"Oftentimes, various businesses, teams, and regions within a company will use different technologies and systems that don't integrate, which then requires a great deal of human intervention to untangle and process.”
Chee Kien Loh
These challenges create three major issues that every CFO is familiar with. First are fragmented data islands. It becomes nearly impossible to traverse or navigate these silos to develop a holistic map of organisational fiscal hygiene. This limited visibility, like peering through a foggy window, can severely hinder strategic decision-making.
Next, the loss of visibility does not only mean reduced agility and inability to explore new revenue streams or create strategic business pivots; it also exposes the organisation to regulatory challenges that today threaten to engulf even the most prepared.
"Additionally, CFOs are now required to oversee compliance beyond traditional financial reporting, which extends to new areas such as ESG," Chee adds.
These challenges, like tangled vines, impede progress. At the same time, the ever-shifting sands of regulations threaten to swallow the organisation and the budget. In this daunting landscape, agility and strategic foresight can seem like distant mirages.
Beyond compliance: Embracing EPM as a strategic lever
This is one reason savvy CFOs turn to EPM solutions as game-changers. These platforms offer more than just compliance tools; they empower finance teams to become strategic partners, driving growth and competitiveness.
One major benefit is that EPM can act as a central hub, consolidating financial and non-financial data from diverse sources into a single source of truth. For CFOs, it means having all compliance-related data readily available, organised, and accessible at their fingertips.
Data-driven insights empower informed decision-making, enabling finance teams to optimise compliance processes and resource allocation. This allows the CFOs and their teams to make strategic choices that ensure compliance and drive efficiency and cost savings.
EPMs are designed to streamline manual tasks through automation, freeing up valuable time for analysis and strategic thinking. This allows the finance team to focus on high-value activities instead of being bogged down by data entry. It also allows the team to broaden their scope of analysis as needed.
With all the data insights in place, EPMs can provide a holistic view of your organisation's performance. CFOs can drill deeper into their insights into areas like ESG metrics and potential compliance risks. It allows them to shift from reacting to pitfalls and becoming more proactive in addressing potential issues before they become major ones.
With access to comprehensive data and insights, CFOs can anticipate future regulatory changes and proactively develop compliance strategies. It can also help the finance team to take advantage of new compliance and position the organisation to take a more advantageous path.
“More importantly, they’re realising that the right transformational technologies can take them beyond compliance, so they can seize the opportunity for better, faster, more informed organisational decision-making, which can, in turn, be transformed into a competitive advantage.”
Chee Kien Loh
Finding your path: Navigating the EPM maze
The modern CFO's journey towards a unified and efficient finance function is rarely linear.
Faced with a plethora of point solutions, each promising integration and magic bullet, selecting the right EPM solution can feel like navigating a labyrinth blindfolded. But there are best practices in figuring out the right path forward.
As you embark on your EPM journey, Chee asks CFOs to prioritise solutions that embody these key characteristics:
Finance-Owned: Look for EPM solutions designed and supported by finance teams, minimising reliance on IT and ensuring user adoption. This allows finance professionals to take ownership of their data and processes.
Unified Platform: Look for a single platform encompassing planning, reporting, and disclosure, eliminating data silos and disparate workflows. Ditch the Frankenstein monster of solutions that struggle to talk to each other and embrace a unified command centre.
Reliability: Choose EPM solutions with robust implementation support and training, ensuring a smooth transition and optimal user experience. Essentially, you need a dedicated guide navigating the complexities of implementation.
Open and Extensible: Choose an EPM platform that seamlessly integrates with existing systems and readily adapts to future needs. Such a solution must also grow with your organisation, not against it.
Cloud Flexibility: Consider cloud and on-premises options to optimise cost savings and align with your IT strategy. This gives CFOs flexibility and the ability to balance cloud agility with on-premises security.
Seamless Integration: Ensure easy integration with all your current data sources, regardless of the underlying technology. Imagine effortlessly accessing and analysing data from SAP HANA, Oracle, or Microsoft SQL Server.
AI-Powered Insights: The new EPM needs to leverage the power of embedded AI for predictive analytics and proactive decision-making. Harnessing AI can uncover hidden patterns and future trends and empower CFOs to confidently navigate change.
Chee adds that independent analyst reports and studies offer valuable insights into the strengths and weaknesses of various EPM solutions.
For example, third-party analysts, including Gartner, Dresner Advisory Services, and Nucleus Research, consistently recognise CCH Tagetik as a leading EPM solution.
“These reports can give you visibility into the strengths and weaknesses of various EPM platform options, and some also provide you with feedback from your peers who have implemented various solutions.” Chee Kien Loh
Arguably reflecting the Gartner Peer Insights Voice of the Customer report, Wolters Kluwer CCH Tagetik was voted by subscribers to FutureCFO as Best FP&A Partner at the FutureCFO Excellence Awards 2024.
However, Chee does not think all organisations need to rip and replace their current systems with a modern EPM. Instead, organisations should analyze legacy tools and systems—and determine which should be replaced, which should be kept, and what types of functionalities can be performed by the new EPM system.
"It is a great example of why it's so important to select an EPM provider that is committed to working side-by-side with customers and bringing the right implementation partners to the table to ensure a rapid, efficient, smooth, and successful implementation," he explains.
“It is one of the first steps that your new CPM provider’s implementation team should take.”
Stepping out of the shadows: A major financial institution's journey to modern EPM
Imagine navigating a financial labyrinth armed with outdated tools and manual processes. Data silos cast long shadows, hindering visibility and agility. Hyperion, once a dependable guide, nears its end of life, leaving the path forward uncertain.
This was the reality for a major financial institution in the APAC region, their arduous journey a stark reminder of the challenges faced by many in the industry. The institution's reliance on Hyperion and tedious manual workarounds created a perfect storm of inefficiencies.
They included limited capabilities because of the ageing architecture, repetitive, error-prone manual tasks that consumed valuable time, disconnected systems that impeded holistic analysis and reporting, and creating a fragmented view of the organisation.
These inefficiencies lengthened planning and budgeting cycles left little room for strategic analysis and business reviews. It also made it cumbersome for the institution to adapt to changing business needs. The choice was clear: remain tethered to the limitations of the past or step into the light of a modern EPM future.
After a comprehensive evaluation, the institution selected CCH Tagetik as its new EPM partner. Tagetik's solution addressed their immediate needs and offered a platform for future growth.
From the onset, the platform consolidated planning, reporting, and analysis into a single source of truth while automating repetitive tasks to improve efficiency and accuracy.
It also broke down data silos and fostered a collaborative planning environment, making it easier for the institution to adapt to evolving needs and future regulatory requirements.
Advanced analytics drove data-driven decision-making with real-time insights and robust forecasting capabilities while allowing the institution to future-proof the platform with the ability to quickly add consolidation, BEPS Pillar 2 reporting, and ESG reporting functionalities.
The institution's journey with Tagetik extends beyond mere efficiency gains. It represents a strategic shift towards a data-driven, agile finance function that empowered teams, enabled data-driven decisions from real-time insights, shorted planning cycles, and built a competitive advantage.
EPM and the modern CFO: A strategic leader, not a data miner
The tightrope of finance modernisation stretches precariously between the desire for cutting-edge tools and the fear of disrupting productivity and jeopardizing performance. As CFOs navigate this delicate path, the question arises: How can we achieve the "best of all worlds"—enhanced reporting, improved efficiency, and harmonious implementation—without sacrificing any one element?
The answer lies in recognising that progress requires investment. High-value financial and ESG reporting, demanding transparency and traceability, necessitate technology that shatters data silos, simplifies complexity, and guarantees data auditability.
As Chee notes, an "open and extendable" platform also helps. It can allow an organisation to seamlessly integrate with any existing system, be it SAP HANA, Oracle, MS SQL Server, or others.
However, simply choosing any EPM solution won't guarantee a smooth ride. The critical factor lies in selecting a partner who can build or customise the right platform, which is built with adaptability and extensibility in mind.
“Another key to ensuring a smooth EPM implementation is to select an EPM solution provider that is passionate about collaborating with and providing full implementation support to customers,” says Chee.
"At Wolters Kluwer/CCH Tagetik, we are agile and entrepreneurial—a global company with the spirit of a start-up," he continues. "We stand side-by-side with our customers, configuring the optimal software and providing outstanding support so customers gain the greatest value today and tomorrow. We also offer continuous training to maximise customer."
These will matter in the coming years as organisations navigate an increasingly regulatory-minded and AI-driven market where incidents in a remote location can immediately ripple through local and global markets.
A robust EPM solution and partner can help CFOs step out of the shadows and chart a course toward a brighter, more strategic future.
* Editor’s note: Wolters Kluwer CCH Tagetik is the recipient of the first Readers’ Choice Award in the category of FP&A Partner at the 3rd annual FutureCFO Excellence Awards 2024.
