EPM vs. ERP: Optimize your account and finance operations
The industry of business management is filled with different systems and software. These are to help organizations improve their operational performance.
Enterprise resource planning software (ERP) and enterprise performance management software (EPM) are topping the diversity of this industry. These are distinct business solutions to optimize your management processes and performance.
ERP solutions are designed to streamline and automate core business management processes. EPM solutions, on the other hand, focus on improving performance by letting you see what's going on now and helping you make better decisions.
Here is a comprehensive look at these two solutions—their specific features and their differences. Finally, you'll see what to consider before choosing between ERP and EPM for your business processes.
What is ERP (finance)?
Enterprise Resource Planning (ERP) is a crucial business component. At its core, it's a set of integrated software applications designed to help manage different parts of your business's financial operations.
ERP software includes tracking customer orders, inventory and account management, and more. Also, it helps to incorporate all your financial data into one place, easing accessibility and analysis for you.
Benefits of ERP for your business
With ERP implementation, your business can better coordinate and communicate between departments, make everyday tasks more efficient, and analyze data more accurately.
ERP solutions can help you save money and time by streamlining some processes. It also helps cut the need for multiple and separate Excel spreadsheets.
Enterprise resource planning software is often integrated with enterprise performance management systems. This is to help you monitor and analyze financial and operational results. Also, it gives more precise insight into ERP data.
Key features of ERP
Here are some of the key features of ERP software that make them so valuable to your business:
Integration: ERP systems combine financials, sales, operations, customer service, and more. It reduces mistakes and improves efficiency.
Automation: ERP systems automate processes, reduce manual labor, and boost efficiency. Automate order processing, billing, and inventory management.
Data analysis: they analyze and report data. It helps organizations analyze data and make decisions.
Security: ERP systems include authentication, authorization, encryption, and data-loss prevention. It safeguards sensitive info.
Scalability: they are adaptable and scalable, allowing them to adjust to changing demands. Businesses can develop without switching systems.
What is EPM (finance)?
Enterprise performance management (EPM) is a suite of financial management solutions. Its design is to help you or your finance department manage your business's finances and monitor its performance.
It's often incorporated into a company's multiple ERP systems for easy scalability and efficiency.
Benefits of EPM
EPM systems give a better understanding of your financial performance. This insight into your financial activities allows you to make more informed decisions.
It helps identify opportunities for improvement. This enables you to increase your profits and reduce costs.
Key features of EPM
The key features vary by EPM software. EPM systems usually offer;
Financial analysis: EPM processes help companies plan, analyze financial data, and assess finances.
Risk management: EPM data helps companies identify and manage financial risks. It aids financial departments in risk analysis and risk mitigation.
Performance optimization: EPM helps companies optimize their financial procedures. It improves financial efficiency and profitability.
Data visualization: EPM visualizes financial data and provides performance insights. Interactive charts and graphs help uncover financial data patterns and abnormalities.
EPM vs. ERP
Choosing the best system for your organization can be a daunting decision. Hence, understanding the differences between the two software is essential for decision-making.
Below are the factors that distinguish them from each other;
ERP systems are more expensive than EPM systems owing to their sophistication. ERP activities include manufacturing and customer relationship management.
EPM systems focus on financial and operational processes. This makes them simpler and cheaper to deploy. Also, they coordinate financial planning and ensure financial consolidation.
ERP solutions scale well for larger firms that need to handle various processes. Modern EPM solutions help small businesses and teams enhance financial and operational performance.
When choosing between ERP and EPM, consider security. ERP systems are more secure than EPM systems since they are suitable for large firms. Smaller companies may deploy less secure EPM systems.
ERPs are trickier to modify than EPMs. EPMs are more customizable since they focus on financial reporting and operational results. ERP systems oversee many corporate processes and tasks, making modifications difficult.
EPM systems are ideal for scaling and adapting to changing demands due to their flexibility. EPM systems are customizable and focus on financial departments and operational performance. ERP systems, however, could be more flexible due to their complexity.
ERPs are designed to integrate with multiple systems, while EPM systems are limited to financial and operational data. ERP systems can also integrate with other ERP systems, whereas EPM systems are limited to the organization's systems.
However, it's essential to know that none of the two programs has a hundred percent efficiency. So, you can incorporate both ERP and EMP into your business to gain more scalability and maximum efficiency.
Questions to answer before choosing between ERP and EPM
Finding the right financial management software for your business takes time and effort. Some key questions to help you decide include;
- Does the solution support business operations, supply chain management reporting, and other areas?
- Does the system enable organizational resource tracking and monitoring?
- Does the solution support many business functions, from raw materials to resource allocation?
- Does the solution manage financial statements, reporting data, and human capital management?
These are critical questions to consider when evaluating which system suits your company.
ERP and EPM software systems are great for businesses looking to streamline operations and improve performance. An ERP system offers you a centralized system to manage essential business functions. At the same time, EPM helps you better understand your financial performance.
To get the most out of either solution, consider the key features and capabilities offered by each. Also, consider the complexity of your organizational structure before selecting.
It is also crucial to understand that there is no perfect management software. So, you can combine both ERP and EMP for optimal performance and more accuracy.
Whichever solution you choose, ensure it works with your existing supply chain systems. Also, it should provide access to data and reporting functions to streamline your business's finances and operations.