Is a Single Tool Still the Future of Enterprise Performance Management (EPM) Software?

Today’s EPM tools are cumbersome, costly and complicated
As compared to just ten years ago, Enterprise Performance Management (EPM) has gotten even more complicated. Today, we have fewer vendors but numerous function-specific tools are required to meet the performance management needs of most organizations.

Processes and technologies have grown increasingly complicated and licensing costs have only gone up. It feels like data is all over the place (because it is) and a small army of funcno-technical people may be required just to get through a month end close or a planning cycle. Many of us working in the EPM space cumulatively hold our breath that nothing breaks with every software release. Might be safer just to NOT upgrade… Now we have to re-invest in systems we already have to move to the cloud or we will lose support and/or functionality. Ouch…There has to be a better way.

How did we get here? Are we going anywhere anytime soon?
To answer that, let’s take a look back at the last ten or so years. Industry consolidation of EPM, Data, BI, and Reporting tools resulted in a few primary EPM software vendors. With SAP, IBM, and Oracle snapping up many of the best of breed EPM software vendors, the hope and promise was for a single tool with automated ERP integration, improved analytical and reporting capabilities, and one that would simplify EPM processes, support and administration. Expectations were for significantly reduced Total Cost of Ownership (TCO). For those of us who live in the EPM space, it was pretty exciting dreaming about a single tool that would handle all close, consolidation, planning, reporting and analysis. Mainly we just wanted our weekends back, but seriously, that would make all of our lives a lot better.

In most large organizations today, separate tools are still required to perform various performance management functions (data management, data integration, consolidations, planning, business intelligence and reporting). One vendor can now supply that, but only via multiple products that are not well integrated. Most thought these mega vendors would at least nail the ERP system integration. Unfortunately, if you lift up the hood, that is still somewhere between vaporware and manual.

Data management and movements are still unnecessarily complicated and require lengthy efforts to support and reconcile. Licensing costs are high and companies are devoting a lot of resources to supporting and upgrading all of the moving parts. For the most part, the separate software components are still licensed separately.

To make matters worse, to support this spaghetti map of a system architecture, specialists are required to implement and maintain each software component. Keeping the models and data aligned requires yet another tool or the whole model breaks. This leaves companies at risk. If key resources leave for a 10% raise across town, vital business processes and functions and maybe even your career are exposed. To say the least, CFO’s, and finance and business leaders are not happy with the current state of EPM technologies.

Has there been any progress?
Clearly EPM tools have improved over the last ten years. Many of the individual software pieces have enhanced functionality. Better architecture and database platforms and more powerful reporting tools have significantly improved performance and have opened up more efficient designs and advanced analytical capabilities. Connectors, mapping tools, master data management and shared services can (debatably) reduce administrative burden. Vendors are also offering hosted/cloud based or managed services which can shift work to specialists and reduce certain costs and risks.

These improvements help, but unfortunately, in many ways they still miss the mark. They don’t address the root cause and are not getting to the heart of what customers really want….a single EPM tool.

Imagine for a moment the possibilities of a simplified single tool architecture; one repository for all data, one set of master data, streamlined processes, simplified administration and support, and upgrades. While we’re at it…how about lower software costs too…

Where did the dream of a single EPM tool go…is it dead?
If you followed the strategic direction of the EPM software space, you may have wondered where all the buzz about a single tool went. You heard about it for at least a decade, but you probably haven’t heard much about it lately. It has been replaced by “everything in the cloud”.

The cloud based platform and offerings do serve a productive purpose (beyond distracting us from the real issues with EPM tools). For some companies, a hosted or outsourced solution will undoubtedly result in cost savings and potentially a reduction of work. However, for many others, it primarily shifts the work to the software / technology vendor; more of a lift and shift and not an elimination of work.

The cloud architecture, in and of itself, does little to integrate the different software pieces. The root of today’s EPM challenges remains: having disparate software tools for different EPM functions/processes creates non-value added work. Additionally, the mere thought of another system re-implementation to get on a new “cloud based platform” has many cringing, and for others, questions remain on the viability and soundness of outsourcing a vital management function.

Why aren’t the leading EPM vendors doing more to integrate?
The answer is simple and really quite predictable. There is no compelling business case or competitive need. After buying up the smaller, best of breed vendors, there was less of a threat to the remaining vendors’ market position. With less competition, the remaining players realized that the model of independent software products and revenue streams was too lucrative. Unless one of them came out with a truly integrated product, why should the others…..sort of like a game theory chess match.

Even though the first mover advantages are high, none of the large EPM vendors is making a concerted effort to consolidate its products; unless of course you consider forcing clients to cloud-based products a means of product rationalization. If anything, in the last five years, the three leading vendors have introduced additional products and complexity. With all of these separate tools and platforms, we have arguably moved further from the single EPM tool architecture vision that clients have long sought. Until the competitive landscape changes why would they develop an integrated EPM tool that cannibalizes their current revenue model?

Is the dream of a single EPM platform dead?
At first blush it may seem so. Even Gartner gave up on the vision of a unified EPM tool and split apart its Corporate Performance Management “Magic Quadrant” into two separate quadrants. Financial Corporate Performance Management evaluates close and consolidation and reporting tools and a second magic quadrant, Strategic Corporate Performance Management, evaluates tools used for planning and more strategic modeling.

Hold on….Not so fast…. About 5 years ago, when the leading vendors started shifting away R&D spend from developing a single tool to developing cloud applications, a few leading minds began to question if the new direction had the best interest of customers in mind. Some of the very technologists that built the likes of HFM and Upstream/FDM, had a better idea. They separated from Oracle to pursue the very vision that Oracle and the other mega vendors seemed to be abandoning.  Enter OneStream. https://www.onestream.com.

Two years later and approximately three years ago, OneStream’s unified EPM platform quietly emerged and was ready for the market. Called OneStream XF, the single EPM platform meets the Consolidation, Planning and Reporting requirements of large complex global organizations while also delivering a compelling solution to mid-size organizations due the lack of complexity to own and maintain. It must be seen to be fully appreciated and the appreciation is enhanced if you have ever had to manage or support the many components of an Oracle, SAP or IBM EPM solution.

What are the benefits of a single EPM tool?
The list of benefits of a single EPM tool, and OneStream’s intelligent platform is long, so I’ll just summarize a few.

• Single software platform/tool for all EPM functions. This simplifies maintenance, security, and HW/SW administration, which saves time and money.
• OneStream’s open platform concept (think iphone) allows and encourages sharing of ideas and product extensions between customers and partners. It also includes the MarketPlace with additional pre-defined models for various needs such as capital, project or people planning.
• Single user license typically results in a reduction in up front and annual software licensing costs.
• In the case of OneStream, the full Software platform is consistently offered via multiple technical platform options (cloud, hosted, SAAS, On premise). This allows flexibility as business needs change. No reimplementation required.
• Upgrades completed in minutes instead of weeks or even months. No massive project and testing plan for an upgrade.
• One data repository and single set of master data eliminates maintenance, data movement, management and reconciliation. Saves more time and money.
• Standard functionality meets or exceeds competitors’ (account recs, IC Elims, currency translations, built in data integration and controls, calculation rules engine, workflow, reporting tools, etc.).

Cool new functionality!
OneStream also has impressive new features the competition doesn’t. Extensible Dimensionality® allows hierarchies to be used at different levels and by different users or for different processes i.e. actual vs. budget. This offers the first solution with a single point of master data maintenance which reduces administration and allows more flexible processes for users or business units with different needs. Extensible Dimensionality fundamentally eliminates the concept of separate application silos that need to be integrated together to get a single view of the business.

XF is built on an entirely Microsoft platform. This degree of partnering with the leading business software company in the world has many benefits. It reduces technical complexity and introduces a whole new level of integration with Microsoft office products.

The Excel add-in does everything it should. The reporting tool has built in integration and intelligence that allows for a more repeatable and automated reporting process.  XF is also integrated with Word and PowerPoint to help facilitate the narrative for business and financial leadership. This saves or shifts resource time to more value added activities.

In short the XF platform costs less, meets the requirements of any company I have ever worked with, and vastly simplifies processes and administration.  In general, it makes life better for finance and IT.

What’s next?
The XF unified platform meets the most challenging close/consolidations, planning, and reporting requirements and scales from middle market to the most complex global companies. OneStream has more than 100 customers performing EPM on its XF platform, all with 100% customer satisfaction.

Find another software vendor that can say that!

OneStream seems destined to grow and will inevitably continue to expand into traditional Fortune 500 client bases of SAP, IBM and Oracle.  The pressure will soon be on to see how the established vendors respond.  Time will tell, but one thing is certain, the vision for a single EPM platform is alive and in good hands with OneStream.

-Edward Cole

Edward Cole is the owner and managing partner of CBC LLC, a financial and management consulting firm based out of Grand Rapids MI.  Edward has over 20 years of financial consulting and enterprise performance management experience with Deloitte Consulting, Archstone Consulting and Ernst and Young.  Edward can be reached at: [email protected]  |  www.colebc.com