Over the past 15+ years, working with numerous clients has revealed a common issue: organizations are not fully leveraging their Enterprise Performance Management (EPM) tools. But why is this the case?
To understand this, we need to examine the evolution of organizational planning. Early EPM tools were designed to replicate Enterprise Resource Planning (ERP) systems, offering intuitive reporting and robust planning capabilities that ERPs often lack. While ERPs serve as the backbone of organizations—managing transactions, customer details, and journal entries—their rigidity ensures reliability and makes them challenging to adapt for future planning.
EPM tools emerged to offer flexibility, enabling faster and more fluid planning, and reporting. However, they came with their own challenges: requiring technical resources or external consultants for any changes, which take time and money. Additionally, these tools often mirrored ERP systems too closely, limiting their modeling capabilities to reporting rather than forward-looking planning.
This gap led to the widespread adoption of Microsoft Excel, a solution that allowed users to model all types of planning: headcount planning, operating expenses, revenue (without needing any technical expertise). Even today, Excel’s flexibility makes it a favorite across all types of organizations, from small businesses to fortune 500 corporations.
Despite significant investments in EPM tools, organizational planning often remains confined to Excel. This is primarily because EPM tools may lack the flexibility and agility required to accommodate rapid changes to plans. It is not uncommon for planners resorting to managing multiple spreadsheets, leading to version control issues, potential formula errors, and a lack of agility. This process becomes even more cumbersome as updates made in Excel must be manually uploaded to the EPM tool. As a result, the value of EPM systems (e.g. standardization, collaboration, and accountability) is underutilized, reducing these tools to more of data repositories rather than dynamic planning environments.
In closing, while Excel fills the gaps left by traditional EPM tools, it’s not without its drawbacks. To truly extract value from an EPM investment, organizations need modern solutions that combine the flexibility of Excel with structured, real-time capabilities to augment decision-making. This enables organizations to model changes dynamically, maintain version control, and streamline the planning process without losing the agility people enjoy with Excel.
Author: Jason Sangworn
