Avoiding EPM implementation failure: Three rules for CFOS

Absolute EPM discusses the importance of understanding the differences between Enterprise Performance Management (EPM) and Enterprise Resource Planning (ERP) in order to avoid pitfalls in digital transformation projects

“How do I stop it ending up like Birmingham?” This was the first question posed to me at a conference where I was presenting on the advantages of performance management software to empower CFOs to own and drive organisational restructuring.

For any readers who missed it, Birmingham Council made the BBC news in 2023 for the wrong reasons. (1) Their Oracle Enterprise Resource Planning (ERP) project had gone over budget by £80 million. Along with a pay dispute, it helped effectively bankrupt the council, resulting in pictures of uncollected bins across the city. Whatever the underlying detail, the public perception of that digital transformation project became,
quite literally, rubbish.

I was advocating the value of Oracle Enterprise Performance Management (EPM) in enabling control of decision making during the uncertainty of government restructure, providing one version of the truth, and giving a credible answer to the question of “what are we doing with AI?” with its embedded AI and agents.

Perhaps the CFO was convinced, but he was nervous about the risk of a situation like Birmingham. That is a fair point, but much of the nervousness stems from a lack of understanding.

Critical distinction: EPM is not ERP

Firstly, let’s start with some fundamentals. EPM is not ERP. ERP – Enterprise Resource Planning – is the system that runs the organisation; it’s the system of record for how you buy and sell, manage staff, and run day-to-day operations in your company. Think of it like the operations of the ship. EPM – Enterprise Performance Management – is how you plan, forecast and navigate the business through geopolitical and business challenges. Think of it like the steering wheel of the ship, and quite often the map of where it needs to go.

Whilst connected, EPM and ERP serve fundamentally different purposes. The risk, cost, and implementation benefits of each also differ vastly. Because EPM is frequently bundled into large digital transformation contracts, it is generally little understood, both by the end customer and sometimes (more frighteningly) by the large system integrators that are implementing it.

Common EPM myths – busted

Secondly, let’s address a few myths. Myth 1: EPM is expensive. The reality is that a typical Oracle EPM project is a fraction of the cost of ERP. Licence entry points can be minimal. Myth 2: You must have an Oracle ERP to implement Oracle EPM. Reality: Oracle EPM is ledger agnostic, it will talk to any data source. A significant percentage of Oracle Planning customers sit on SAP ERP. Myth 3: EPM is a big undertaking, needing a large team of consultants, and ongoing managed support. Reality: a typical implementation involves three people, takes six months, and can transition to client hands-on go-live.

The blueprint for success

Now that we understand the key distinction, how do you set up for EPM project success? Rule number one: select the right implementation partner. It is human nature to be impressed with a big brand. The common approach is to bring in a large system integrator to do everything (ERP and EPM). The phrase I often hear is “one throat to choke”. Whilst this seems like a sensible approach, contractual accountability is not the same as delivery capability. EPM is a specialist skill. If your single provider lacks experienced EPM expertise, a legal safety net won’t save a failing project.

Look past the brand. Who is the exact team working on your project? Talk to their customers. Has that team delivered for those customers? Will you get that exact team through the project? Bear in mind, cheapest is not always best. Sometimes, buy cheap, pay twice. If the company cannot reassure you of the EPM capability, and you are undertaking a combined ERP and EPM implementation, consider giving the EPM part of the contract to a specialist.

Rule number two: as a client, you must have structures and leadership in place to drive the project and make decisions on the business process. A good consultancy partner will understand your requirements and recommend a path (instead of just asking what you want). However, you must provide empowered decision-makers and sufficient capacity to participate in design, testing and adoption for success. EPM is a team sport.

Rule number 3: think evolution, not revolution. EPM is modular; implement it as such. Typically, start with financial planning, then workforce, then projects. Create the business case for each step, deliver the results, move to the next stage. Following a phased roadmap is an effective way to deliver consistent value.

Looking ahead

How do you stop your EPM becoming another giant transformation programme (like Birmingham)? Don’t turn it into one. Treat it as the specialist, modular capability it is; choose expertise over scale, put strong client-side leadership in place and deliver value incrementally.

For CFOs, the objective should not be transformation for transformation’s sake, but better information, faster decisions, enabling AI with clear outcomes and a view of what comes next.

For specialist guidance, visit www.absoluteepm.com

References

1. Bankrupt Birmingham: Why the council went bust https://www.bbc.com/news/uk-england-birmingham-67053587

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