Differences Between Enterprise Performance Management (EPM) and Business Intelligence (BI)

In the realm of corporate strategy and data analytics, two terms frequently arise: Enterprise Performance Management (EPM) and Business Intelligence (BI). While both are crucial for informed decision-making and organizational success, they serve distinct purposes and functions. Here, we explore the key differences between EPM and BI to help businesses understand how to leverage each effectively.

What is Enterprise Performance Management (EPM)?

Enterprise Performance Management (EPM) is a suite of processes, methodologies, metrics, and systems used by organizations to plan, monitor, and manage business performance. EPM integrates strategic planning, budgeting, forecasting, and financial reporting, aligning organizational objectives with performance metrics. Key components of EPM include:

Strategic Planning: Setting long-term goals and defining the strategies to achieve them.

Budgeting and Forecasting: Allocating resources and predicting future financial performance.

Financial Reporting: Generating reports to provide insights into financial health and performance.

Performance Analysis: Monitoring key performance indicators (KPIs) to track progress toward strategic goals.

EPM tools often include capabilities for financial consolidation, scenario modeling, and regulatory compliance, ensuring that organizations can respond swiftly to changing market conditions and regulatory requirements.

EPM tools often include capabilities for financial consolidation, scenario modeling, and regulatory compliance, ensuring that organizations can respond swiftly to changing market conditions and regulatory requirements.

What is Business Intelligence (BI)?

Business Intelligence (BI) encompasses the technologies, applications, and practices used to collect, integrate, analyze, and present business information. The primary goal of BI is to support better business decision-making by providing stakeholders with timely, accurate, and actionable data. Key components of BI include:

Data Warehousing: Storing large volumes of structured and unstructured data from various sources.

Data Mining: Analyzing data to discover patterns and relationships.

Reporting: Creating dashboards and reports to visualize data insights.

Analytics: Applying statistical and quantitative analysis to interpret data.

BI tools enable organizations to transform raw data into meaningful insights, facilitating data-driven decisions across all levels of the organization.

Key Differences Between EPM and BI

Focus and Objectives:

EPM: Concentrates on aligning business activities with strategic goals, ensuring optimal resource allocation, and improving overall performance. It is strategy-centric.

BI: Focuses on data analysis and reporting to support operational decision-making. It is data-centric.

Scope of Use:

EPM: Primarily used by executives and finance teams for high-level strategic planning and financial management.

BI: Used across various departments, including marketing, sales, operations, and finance, for day-to-day decision-making.

Tools and Technologies:

EPM: Utilizes tools like NetSuite EPM, Oracle EPM, SAP EPM, CCH Tagetik, Anaplan or IBM Cognos TM1, which are designed for financial consolidation, budgeting, and performance management.

BI: Employs tools such as NetSuite Analytics Datawarehouse, Oracle Analytics Cloud, Tableau, Power BI, and QlikView, which are geared toward data visualization, reporting, and dashboard creation.

Outcome and Benefits:

EPM: Aims to enhance strategic alignment, improve financial planning accuracy, and ensure compliance.

BI: Aims to provide comprehensive insights into business operations, identify trends, and drive operational efficiency.

Conclusion

While both Enterprise Performance Management (EPM) and Business Intelligence (BI) are integral to modern business operations, understanding their differences is crucial for effective implementation. EPM focuses on strategic planning and performance management, whereas BI emphasizes data analysis and operational insights.

By leveraging both NetSuite EPM and NetSuite Analytics Datawarehouse, NetSuite ERP users can achieve a balanced approach to strategy and operations, ensuring sustained growth and competitive advantage.

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NetSuite EPM is ready for ESG

In today’s business landscape, Environmental, Social, and Governance (ESG) reporting has become a significant factor to foresee the capability for a company to adapt for change and uncertainty. While large corporations have long been the focus of ESG initiatives, midsize companies are increasingly recognizing the importance of integrating ESG practices into their operations. Here’s why ESG reporting is crucial for NetSuite users, and the benefits of implementing NetSuite EPM’s ESG by epm4ns.no module:

1. Enhancing Reputation and Trust

NetSuite EPM users that actively engage in ESG reporting can significantly enhance their reputation among stakeholders. Transparency in ESG efforts demonstrates a commitment to ethical practices, sustainability, and social responsibility, fostering trust among customers, investors, and employees. A positive reputation can lead to increased customer loyalty and attract top talent, both of which are vital for growth and competitiveness.

2. Climate warming will require new business models

NetSuite users are already usted to have a solid ERP to support their operations, but thanks to ESG by epm4ns.no NetSuite EPM users will have the capabilities to use their past data to have scenario modelling to plan for different future situations, and model new business models thanks to its “what-if” scenario modelling capabilities. Being ESG-ready means be ready for other uncertainties too.

3. Attracting Investment

Investors are increasingly prioritizing ESG criteria when making investment decisions. By demonstrating a strong commitment and implementation of ESG reporting, midsize companies can attract a broader range of investors, including those focused on sustainable and socially responsible investing. ESG by epm4ns.no reporting provides the necessary transparency that investors seek, potentially leading to better access to capital and lower cost of capital.

4. Regulatory Compliance

Governments and regulatory bodies worldwide are introducing stricter ESG-related regulations to public and enterprises. Midsize companies that proactively adopt ESG reporting practices are better positioned to comply with future regulations at their own speed. This not only mitigates the risk of penalties and legal issues but also positions the company as a leader in compliance and sustainability within its industry.

5. Operational Efficiency and Risk Management

Implementing ESG practices can lead to improved operational efficiency and risk management. For example, energy-efficient processes and waste reduction initiatives can lower operating costs and usually have a rapid ROI. Additionally, addressing social and governance issues can reduce risks related to labor disputes, regulatory fines, and reputational damage. A robust ESG strategy implemented with ESG by epm4ns.no helps NetSuite users anticipate and manage risks more effectively.

6. Meeting Customer Expectations

Consumers are becoming more conscious of the environmental and social impact of the products and services they purchase. NetSuite users that demonstrate a commitment to ESG principles can better meet customer expectations and stand out in a crowded marketplace. ESG reporting provides the transparency that consumers demand, which can drive brand loyalty and sales.

7. Long-Term Sustainability

ESG reporting is not just about immediate benefits; it’s about ensuring that your business will continue operating in the long-term. NetSuite users that prioritize ESG factors are better equipped to navigate future challenges, from climate change to social inequality. By embedding ESG principles into their core strategies, you will build company resilience and ensure sustained growth and profitability.

Conclusion

For NetSuite users, ESG reporting is no longer optional but a strategic imperative. By enhancing reputation, attracting investment, ensuring regulatory compliance, improving operational efficiency, meeting customer expectations, and securing long-term sustainability, ESG by epm4ns.no provides a comprehensive framework for success in the modern business environment. Embracing ESG principles positions NetSuite users to thrive in a world that increasingly values transparency, responsibility, and sustainability.

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NetSuite Offers New Capabilities for Planning and Budgeting, Account Reconciliation, Profitability and Tax Reporting

Over the past several years, NetSuite has been adding a series of enterprise-grade applications from Oracle to the Suite. NetSuite 2024 Release 1 brings these technologies together under NetSuite’s new What is NetSuite EPM (EPM) offering. NetSuite EPM connects planning, budgeting, forecasting, account reconciliation, financial close, and reporting processes from across the organization. Built on the foundation of Oracle Fusion Cloud Performance Management and integrated into NetSuite ERP, this suite of cloud applications helps increase business visibility, enhance decision-making, and improve finance team’s efficiency.

Plan better with AI-driven analysis and deeper insights

NetSuite Enterprise Performance Management (EPM) is composed of new and existing NetSuite solutions. The existing NetSuite Planning and Budgeting(opens in new tab), for example, is now augmented with Intelligent Performance Management (IPM). Leveraging data science and machine learning capabilities, NetSuite IPM uses predictive algorithms to continuously monitor and analyze plans, forecasts, and variances. The solution sifts through large amounts of data to uncover trends, anomalies, biases, or hidden correlations. The finance team can spend less time analyzing and take faster action on current, data-driven insights. 

NetSuite EPM also includes NetSuite Profitability and Cost Management Reporting, which provides detailed insight into which customers, products, and other segments of a business are most profitable. By combining data from the general ledger and other financial systems with operational systems, this solution gives finance leaders deeper understanding around profit drivers so they can decide where best to allocate resources.

Bring more speed and accuracy to the financial close

Two solutions in NetSuite EPM are specifically designed to lessen the time and tedium around the financial close. NetSuite Account Reconciliation(opens in new tab) automates the reconciliation process for accounts payable, accounts receivable, bank and credit card transactions, prepaid accounts, accruals and fixed asset accounts, intercompany transactions, and other balance sheet accounts. A new task management capability in 2024.1 increases the efficiency and accuracy of NetSuite Account Reconciliation by providing a centralized platform to assign tasks from the close checklist to team members and customize activities.  

The other solution, NetSuite Close Management and Consolidation, helps companies to comply with regulatory requirements and internal governance standards by providing a centralized platform for managing the consolidation and financial close process. Organizations can maintain data integrity throughout the consolidation process by automating the collection, validation, and consolidation of data from multiple sources.

New solutions deliver context and automation to reporting

Financial reporting is a process rife with challenges if organizations are using disconnected systems and manual tools. NetSuite EPM contains several solutions to ease the complexity.

NetSuite Corporate Tax Reporting automates tax reporting processes and enables organizations with multinational operations to efficiently comply with new OECD country by country reporting (CbCR) obligations. With this new range of workflow, task management, and transfer pricing capabilities, finance teams can improve the speed and accuracy of tax reporting.

NetSuite Narrative Reporting helps businesses contextualize financial data by providing narrative writing alongside financial statements and data in a single report, making it easier for stakeholders to understand and interpret the information. It also provides finance teams a central environment to collaborate across the creation and publication process for internal and external reporting.

Additional features to maximize profitability

Besides NetSuite EPM, the 2024.1 release also brings several new features and enhancements, including:

  • Additional transaction line distribution support: In addition to vendor bills and credits distribution, the NetSuite Transaction Line Distribution(opens in new tab) SuiteApp now also distributes expenses from purchase orders, expense reports, credit card transactions, and checks across benefitting subsidiaries or segments of the business. 
     
  • Added intelligence to NetSuite Bill Capture: Additional fields—including PO number, memo, posting period, discount date, and custom segments—have been added to the Review Bill page. These additional fields give NetSuite Bill Capture(opens in new tab) intelligence more data to work with, decreasing the likelihood of bill creation failure or needed edits after creation. The 2024.1 release also enhances the user experience in Bill Capture with added filters for vendor, upload source, and email source on the scanned vendor bills page. To learn more about the Bill Capture updates, check out our blog on the new AI capabilities in NetSuite 2024.1. 
     
  • NetSuite Benchmark 360: This tool helps organizations analyze key operational and financial metrics and understand how they are performing compared to similar organizations in their industry and region. The version launched in 2024.1 provides the following metrics:
    • Days cash on hand
    • Days sales outstanding 
    • Days payable outstanding 
    • Employee turnover rate 
    • Revenue per full-time employee
       
  • Enhancements to NetSuite Electronic Invoicing: The Electronic Invoicing SuiteApp now connects to national, international, and government e-invoicing platforms directly from within NetSuite, helping customers meet global e-invoicing mandates.
     

Further capabilities in NetSuite Analytics Warehouse: NetSuite Analytics Warehouse(opens in new tab) adds faster, more secure access with single sign-on, allowing people to log into NetSuite or NetSuite Analytics Warehouse with one set of login credentials. With the option to refresh both standard and custom data at a higher frequency, information in your data warehouse is near real-time. Lastly, a new financial analysis subject area in 2024.1 joins relevant financial datasets and incorporates other data sources like inventory and payroll, for faster reporting and better insight into spending.

Learn more about all the updates in NetSuite 2024.1

For many, the promise of AI has seemed unattainable due to cost and complexity. NetSuite 2024.1 brings the potential of the technology in reach. NetSuite 2024 Release 1 contains a host of other innovative new enhancements across the suite. Be sure to read more about what else is in the release on our Sneak Peek page(opens in new tab) or dive deep into the release notes(opens in new tab). Most importantly, don’t forget to request your Release Preview(opens in new tab) test account for hands-on access to see how new features will work with your data, workflows, and customizations.

*This post comes from this article: https://www.netsuite.com/portal/resource/articles/financial-management/netsuite-2024-1-delivers-enterprise-performance-management-and-more.shtml

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The Importance of Financial Planning & Analysis (FP&A) for Midsize Companies

Financial Planning & Analysis (FP&A) is a critical component for the success of midsize companies. In an increasingly competitive market, these organizations must leverage every tool available to maintain and grow their financial health. Implementing robust FP&A processes offers several benefits, particularly in improving cash flow management, which is vital for operational stability and growth.

Key Benefits of FP&A for Midsize Companies

1. Improved Cash Flow Management

Effective cash flow management ensures that a company has enough liquidity to meet its obligations and invest in growth opportunities. FP&A plays a pivotal role by providing accurate cash flow forecasts, identifying potential cash shortages, and optimizing working capital. By analyzing cash inflows and outflows, FP&A helps midsize companies make informed decisions about expenditures, investments, and financing needs.

2. Enhanced Decision-Making

FP&A equips management with detailed financial insights and predictive analytics. This enables more informed decision-making, allowing companies to navigate economic fluctuations and market changes with greater agility. With comprehensive financial reports and models, midsize companies can evaluate the impact of various scenarios on their cash flow and overall financial health.

3. Strategic Planning and Growth

FP&A is integral to strategic planning. It helps midsize companies set realistic goals, develop budgets, and allocate resources efficiently. By aligning financial planning with business strategy, companies can identify growth opportunities and invest in initiatives that yield the highest returns. This strategic alignment is crucial for sustainable growth and long-term success.

4. Risk Management

Midsize companies face numerous financial risks, including market volatility, economic downturns, and operational disruptions. FP&A helps mitigate these risks by providing early warning signals through financial analysis and scenario planning. This proactive approach enables companies to take corrective actions before potential issues escalate, thereby protecting cash flow and financial stability.

Conclusion

For midsize companies, FP&A is not just a financial function but a strategic asset. It enhances cash flow management, supports informed decision-making, facilitates strategic planning, and mitigates financial risks. By leveraging FP&A, midsize companies can achieve greater financial resilience, operational efficiency, and sustainable growth.

Netsuite EPM offers the best price/performance platform for cash flow management for NetSuite ERP users, so contact us to know more about NetSuite EPM writing us to info@epm4ns.no

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