Almost all the documented case studies of companies benefiting from EPM solutions are still to do with the stand-alone silo solutions for planning and budgeting, (and sometimes rolling reforecasts), workforce planning, consolidations and cost management. There is nothing wrong with this and in most instances the organizations have benefited from real dollar savings in improved efficiency in the finance department yet alone the less tangible, but ultimately far more important benefits, of better decision making, greater agility and the like.
But where is the big picture? With the power of in memory computing such as SAP HANA that can eat up big data and spit out the results before you can blink, isn’t it time one of the vendors or analysts set out the big picture; the end game, so that companies can plan out the easily digestible chunks that will ultimately eat the elephant?
At the moment, the hot topic seems to be Integrated Business Planning, ( i.e. the seamless integration of annual budgeting with detailed sales and operations planning), and undoubtedly this will be transformed by the power of in memory computing. But sadly, the vision seems to have stopped there for the moment, when surely there is a laundry list of other pieces of functionality that ought to be included in scope. For instance what about:
- Full P&L, balance sheet and cash flow forecasts – in total and by business segment
- Dynamic cash flow, working capital and foreign currency forecasting – something SAP have already released with SAP Dynamic Cash Management
- Forward looking process costing and cost and profitability forecasts at category and product level
From the outside, it seems to me that the vendors are currently going through this type of laundry list and ‘clustering’ some of the obvious pieces such as cash flow, working capital and foreign currency forecasting together into new ‘uber’ solutions for clearly defined groups of users. Again, in my mind that’s all good and it will certainly be easier for the vendor to sell and the client to buy.
But surely the clusters still need unifying so managers can get quick answers about how changes to the sales and operations plan impact product profitability in future periods; determine how to utilize current capacity to optimize profits and how best to supply products to new geographies.
Given the technologies available at the time, the mega vendors did an excellent job in developing and delivering a vision for ERP. So I guess it’s back to the drawing board with the whole of operational and financial performance management in scope this time around.