Enterprise performance management (EPM) was born out of a need to innovate. As the world of business evolved, the spreadsheets that saved everyone from manual calculation now seemed clunky and out of date. A new era needed a new technology that could pace itself with rapid innovation and new demands, enter EPM.
EPM is a set of tools wrapped up in software that allows companies to link their plans to activities and execute. Typically enterprise performance management involves budgeting, planning, forecasting, and modeling software as well as tools to consolidate and report. All this data is integrated into the same software for comparison between years, geographics, or product lines.
Essentially, EPM is the medium through which finance teams can keep up with the rapid innovation of companies and the increased demand for growth. Alignment, unified data, and agile work are the secret to enterprise performance management’s success.
EPM software is a valuable tool for finance, but sometimes marketers need something more, a marketing performance management system that goes beyond the scope of finance-based enterprise performance management, like Allocadia. These two solutions in tandem supercharge your marketing and finance organizations. Below, we‘ll define what an EPM is, what an MPM is, and the differences between the two softwares.
How does EPM work?
At its core, the purpose of enterprise performance management is to communicate company goals to all levels of management to ensure that plans are aligned and effort is not misplaced. This communication is known as a management cycle and can occur yearly, quarterly, or even more often.
However, once the EPM processes are implemented the work continues. A solid EPM structure requires periodic checkups to ensure teams and activities remain aligned.
Key performance indicators are a financial responsibility and need to be analyzed through enterprise performance management software using the reporting and analysis functions we previously mentioned.
EPM software allows finance to budget, forecast, and model all without having to wade through incessantly complicated excel sheets and analyze on the fly. Processes like agile planning and budget allocation become possible when enterprise performance management software is involved. Plus, EPM software reduces the errors often found with manual reporting due to its automation.
What are the differences between EPM and MPM?
Marketing performance management (MPM) is a technology solution that supports the business process of run marketing. MPM platforms streamline financial data and marketing statistics to bring the entire marketing team together to ensure efficiency, visibility, and effectiveness.
Ever hear the phrase “when all you have is a hammer everything looks like a nail?”
Enterprise performance management is a revolutionary system built for finance, but when applied to marketing plans and budgets it doesn’t have the same impact.
When it comes to planning and budgeting, marketing performs a different function than finance. It must be possible to re-allocate budgets and switch plans depending on demographic changes and market trends. Marketing performance management software allows marketers to budget, forecast, and plan in their own language and then communicate that effortlessly to finance.
While both systems are intended to ease communication, what that communication consists of varies significantly. EPM is connecting high-level goals to activities and plans throughout the entire business process. Meanwhile, MPM is meant to convey a more specific metric, ROI.
ROI is a frequent topic of miscommunication between marketing and finance. For marketers it’s the impact they’re able to create with their marketing strategies whether it be pipeline revenue, new leads, or increased awareness.
EPM software, while incredibly efficient at automating business functions, fails to support marketing’s needs due to the niche nature of the metrics reported.
MPM software bridges this gap by providing a solution that fully encompasses the function of marketing while keeping communication lines to finance open.
Who should use EPM Software? Who should use MPM Software?
If you’re a mid-market or enterprise business still using excel spreadsheets to calculate budgets and forecast revenue, you need to make a change that supports your growth and scales with your organization. It’s doubtful that the finance department at an organization that size wouldn’t have an EPM solution already. While finance isn’t managing millions of dollars in a spreadsheet, marketers at the same organization are doing exactly that.
Those marketing spreadsheets won’t support company goals of scaling and growth.
EPM and MPM answer different questions for different departments and work best in tandem to develop business impact. Enterprise performance management software is beneficial to CFOs needing a way to streamline their budgets, and marketing performance management software is essential for marketing leaders seeking control and visibility into their budgets and plans.
Marketing performance management software creates a simple way to streamline data between finance and marketing departments. MPM software allows for a single platform to track performance, budget, and spend and is the most efficient way for businesses to track performance.
Not only will marketing performance management software be more reliable, but it will also save your business hours of manual reporting. Here are all the business units that would find MPM software useful:
The modern CMO is under constant pressure to prove marketing impact and justify budget changes. With MPM the process is streamlined. Budget data is directly connected to marketing strategies and return metrics are only a click away. MPM also drives out inefficiency by providing a clear connection between marketing functions and high-level plans.
Marketing operations must deal with the day-to-day needs of marketing managers. That means making sure goals are reached using the optimal amount of resources. MPM software gives a comprehensive overview of the assets needed for an activity so marketing managers can be efficient and prove that marketing is a revenue driver instead of a cost center.
For budget owners MPM is all about speed, it gives them the tools to quickly pivot plans when faced with changing budgets. Budget owners also can leverage MPM to gain insight into what programs are proving to be impactful through their alignment with company goals.
The MPM solution is all about data for finance teams. It gives insight into marketing spend and access to metrics that are used to optimize revenue growth. MPM gives finance a clear view into all things marketing, from exactly where money is being spent to how it is driving ROI.
Learn more about EPM and MPM here.