EPM vs Excel: Which Solution Is Best Suited for Businesses?

Business development and technology Data analyst. business analytics dashboard Business Intelligence (BI) data visualization, metrics and KPI key performance indicators and reports management.

For the past several years, the economy has been turbulent, caught between the health crisis we have just emerged from, an ongoing energy crisis, and various geopolitical upheavals unfolding today and on the horizon. Companies are facing new challenges that call their long-held assumptions into question.

In this climate of uncertainty, organizations must adapt, transform and anticipate more quickly and more effectively to sustain high performance. They need to be more agile. To get there, performance management, the process owned by the finance function, must strengthen and evolve.

Performance Management: the key to business competitiveness

Performance management enables a company to measure, control and improve operational performance in alignment with its strategy and priorities. Its core capabilities include:

Defining KPIs and targets
Budget planning
Variance control and analysis
Performance control and analysis
Reporting and information distribution
Risk identification and remediation planning

Many projects fall under the performance management umbrella, and finance functions carry particular responsibility for the priority topics every company faces:

Monthly P&L
Workforce cost management and headcount planning
Cash management
Overhead cost management
Sales performance management and planning

New topics are also emerging in step with innovation and new legislation, particularly around corporate social responsibility (CSR), including quality of work life and environmental dimensions.

The rise of digitalization is multiplying business applications and increasing the complexity of the finance function. It requires collecting, managing and analyzing new data, both for building performance indicators and for reporting and forecasting.

This translates into a growing number of data exports, temporary files, consolidations, controls, budgets and reports, most of which are handled in Excel. This manual workload tends to grow over time, creating significant challenges:

Lost time and reduced efficiency (repetitive tasks, data entry errors, formula mistakes)
Security, confidentiality and collaboration issues
Technical limitations (performance, file size)
Increasing complexity (maintenance, multi-dependent dashboards, etc.)

Stakeholders are asking real questions: "Is there a technology solution for this?" "How can the company accelerate while giving the finance function enough autonomy?" "How can CSR requirements be built into this type of project?" "Will I save time — and help the company save time too?"

A solution is emerging: EPM tools

One category of digital tools stands out as a response to these challenges: EPM (Enterprise Performance Management) software. These tools are often associated solely with budgeting, but as we will see, their scope is far broader. They cover the full range of performance management topics, from P&L to S&OP.

What sets them apart is a fully integrated solution designed to help companies manage overall performance more effectively. EPM tools model business processes, create links between them, and, most importantly, simulate and plan activities. Actual data, forecast/simulation data and budget data all live in a single accessible database (with predefined access rights), enabling flexible reporting and analysis.

This type of tool is essential for any finance function looking to simplify its work and improve responsiveness.

What are the benefits of EPM tools?

Applications from other business functions are connected directly (no more file exports), and dedicated modules are built to reflect business processes (with shared, centralized data and business rules). These modules are interconnected to reflect overall company performance and accessible to authorized users through shared, centralized reports.

Excel files become a thing of the past. The finance function can then measure, simulate and forecast proactively, fully aligned with company strategy.

Consider a company that has implemented an EPM tool covering finance (P&L), sales forecasting, workforce costs, part of the supply chain (production means and costs) and CSRD reporting. On the basis of a forecast and reforecast process, it becomes possible to:

Compare progress against budget
Visualize the impact of sales forecasts on revenue
Determine the resources needed to deliver the estimated revenue
Estimate production capacity requirements
Derive associated costs (including workforce costs)
Automatically integrate the impact on sustainability commitments
Get a full intermediate management balance view

All of this in an industrialized and collaborative way, eliminating manual rework. The finance function gains agility, can focus on optimizing overall performance, and above all can deliver precise answers to top management.

Performance management in practice

1. Monthly management close

The monthly close is a non-negotiable exercise that the entire organization watches closely: it confirms whether last month's results matched the provisioned budget. With Excel as the only tool, this monthly exercise often stretches across several days (sometimes more than 15), monopolizing the management control team. Leadership is left waiting, corrective action is delayed, and so are the expected benefits. Unthinkable in today's environment.

On top of that, building results requires a multitude of Excel files to allocate and break down costs and revenues at the right level of granularity. Beyond the time involved and the risk of error, Excel is also limited in its allocation capabilities, which EPM tools handle with far greater precision and efficiency.

An EPM solution automates this close process, making it faster and more reliable: management control teams ultimately gain more time for analysis and deliver real added value when presenting results to leadership.

2. Budget forecasting

Still in a forward-looking mode and with the goal of providing visibility, budgeting exercises (N+1 budget, year-end landing, rolling forecast, medium/long-term outlook) too often come down to a pile of mismatched Excel files flooding the management control team's inbox. Seen as a burden by contributors who rarely see the final output, an EPM solution transforms this process:

Contributors can enter their data, compare it against prior periods, and take ownership of it
Data aggregation and consolidation happen natively within the EPM tool, eliminating the many errors that come with manual copy-pasting
"What-if" scenarios can be set up natively to vary parameters (exchange rates, inflation, etc.) and assess their impact

Digitizing this process delivers undeniable time savings in budget construction.

3. Cash management

Among other key topics, we can also highlight monthly and annual balance sheet preparation, as well as cash and treasury management. Having reliable, detailed cash forecasts is, in certain sectors, a matter of vital importance, whether to support growth or anticipate default risk.

An EPM solution enables short-, medium- and long-term cash planning and supports strategic decision-making. It also collects and centralizes data from multiple sources, feeding forecast data quickly to produce reliable projections. With Excel alone, this type of work is cumbersome to build and loses accuracy and reliability over time.

Performance management through EPM tools: a summary

The choice between an EPM tool and Excel depends on several key factors, including the company's specific needs (such as cash management), the complexity of its financial processes, and its available skills and budget.

In an increasingly volatile market environment (VUCA), the ability to adjust performance management models is becoming essential. Companies must not only assess their capacity to activate technology levers, but also integrate sustainability considerations.

In short, for companies that want not just to survive but to thrive in an uncertain economic environment, an EPM system represents a strategic asset. It provides a robust infrastructure for integrated performance management, supporting strategic alignment and a focus on growth.

Excel remains a powerful and flexible tool, particularly valued for its ease of use and its ability to quickly run ad hoc analyses. It is a cost-effective option, often already familiar to finance teams, which makes adoption straightforward. However, Excel reaches its limits when handling large data volumes, ensuring data security and integrity, or enabling collaboration across multiple users.

Looking ahead, companies will need to adapt to new technologies. EPM solutions in particular offer advanced capabilities including predictive analytics, operational planning (Supply Chain, HR, CSR, IT, Sales and Operations Planning, Marketing) and financial planning, as well as performance reporting and analysis, enabling a more complete and proactive view.

The final choice will depend on each company's ability to transform its practices and embrace new technologies to navigate effectively in a constantly evolving environment.

Talan can support you in selecting the solution best suited to your needs and integrating it into your organization.