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Why EPM solution with integration to ERP and built in GRC are critical?

Performance Management Process flow

The business process flow for performance management does not stop at laying out the strategy or creating detailed budgets, but goes through the entire cycle of identifying the strategy, constructing detailed initiatives to execute on the strategy, creating detailed financial budgets to support the initiatives, measuring the actual performance, and taking corrective actions if necessary based on the results.

EPM solutions integration to ERP

Considering the above continuous process flow, it is very important that there is a single set of integrated solutions to model the entire process flow. CPM solutions cannot be effective unless the actual information are tracked against budgets or if execution are not tracked against strategy. Since the entire actual information resides in ERP, it is very important that EPM solutions are tightly integrated to ERP systems. Many enterprise customers spend few days and enormous manual effort every month to bring the actual information in order to make meaningful comparison against the targets. This leaves out most of their productive time spent on manual non analytical tasks. With tight integration to ERP, EPM solutions would enable decision makers to spend more time on analysis of why budgets are not being met or why results are not happening as expected or what decisions should be taken to change the situation. Also in many situations the decision makers need to drill down to details of specific information, which would be available only in the ERP systems.

EPM solutions integration to GRC

Governance, Risk and Compliance has become very important both due to the statutory needs such as Sarbanes Oxley and also due to the growing internal and external risks that the companies face in this ever changing dynamic world. Due to this, there is a need to have GRC in built into every business process including performance management. The below chart reflects how different components of GRC should be built into the business process of performance management. image

Integrated offerings from SAP

As seen above only seamlessly integrated solutions can bring value to investment in EPM solutions. SAP vision is to bring out EPM solution offerings with full integration to ERP and GRC.image

The above vision would drive real time decision models within the core business process with Goverance, Risk and Compliance in built. This vision will effectively allow decision makers to spend their time more productively in analysis and enable faster decisions, with appropriate accurate information to support their analysis/decisions. Combined with the other objective of enabling ease of use and spreadsheet like interface, these solutions would be the best long term solution for performance management.

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  • Nice article. It definitely makes sense to leverage corp performance management with governance/compliance rules there by making an integrated suite. If everything comes under unified user experience it's going to be a killer solution...

    Best Regards,
    Ajith Prasad

    • All the products will be developed, enhanced and integrated in SAP Netweaver platform. The integration to ERP will happen seamlessly as the above CPM products will leverage SAP BI which is tightly integrated to ERP. GRC is already integrated into the ERP processes.
      SAP is planning to build integration between the Goverance area in GRC into SAP Strategy Management as the first priority. The next priorities would be build integration between complaince in GRC with consolidation/reporting in CPM and risk relating into the Planning piece in CPM.