EPM vs. BI: Differences & How They Work Together

Good business decisions were once considered more art than science, but with the advent of digital information — and technologies to make sense of it all — the pendulum has swung in the direction of data-informed decision-making. In fact, in today’s dynamic and highly competitive market, data-derived insights are more important than ever to business planning and management. And modern business leaders have two complementary tools at their disposal to make the most of business data and drive their strategic decision-making: business intelligence (BI) and enterprise performance management (EPM).

EPM and BI work together to provide a comprehensive framework to help companies optimize performance. EPM focuses on aligning business processes and activities with strategic objectives, using planning, budgeting, forecasting, account reconciliation, financial consolidation, and tax reporting functionality. BI complements EPM by offering analytics and reporting capabilities, enabling companies to derive actionable insights from large data sets. Together, EPM and BI create a synergistic approach whereby strategic planning and execution are informed by a deep understanding of historical and real-time data. The integration of EPM and BI enhances decision-making by ensuring that performance metrics are not only aligned with strategic goals, but also continuously analyzed and refined based on evolving business intelligence.

What Is EPM?

EPM is more than just software. It’s the overarching process of measuring the financial and operational performance of a business with the intent to improve it over time. An EPM system is designed to support that process, integrating data and insight from systems across the enterprise, such as enterprise resource planning (ERP), customer relationship management (CRM), human capital management (HCM), ecommerce and data warehouses. Used primarily by financial and operations leaders, an EPM system empowers users to develop business plans, monitor results against business goals and forecasts, identify patterns and trends, respond to emerging challenges and opportunities and continually enhance business performance.

“The economic volatility of the past few years has created a greater need for small to midsize businesses to have an integrated suite of financial management and planning tools that can help them make more informed, data-driven decisions,” said Kevin Permenter, research director, financial applications at IDC . “EPM tools give businesses the ability to plan for different economic and performance scenarios, build detailed forecasts, and leverage automation and AI/ML capabilities for more efficient and accurate financial and operational planning and reporting.” It’s no surprise, then, that the EPM market is predicted to increase from $7.5 billion in 2024 to $11.9 billion in 2029, according to Mordor Intelligence.

An EPM system operates at a more strategic level than an ERP system , which is designed to capture and optimize day-to-day activity in the business. When EPM is integrated with ERP, it enables seamless data and process integration to drive more accurate and effective EPM processes, such as planning, budgeting and forecasting; performance reporting and analysis; and financial close management and consolidation.

What Is BI?

BI provides the data and analytics that fuel EPM. BI tools are designed to perform data analysis, data manipulation and reporting and can be used across a wide array of business use cases. One of those use cases is EPM. In fact, most EPM systems are built upon or ingest the data and insights that BI software generates. BI software is designed to collect or map data from a variety of sources, organize that data within the context of the business, perform analysis and deliver insights in a variety of user-friendly formats, including data visualizations, dashboards, summaries, reports and maps.

Key Takeaways

• While EPM and BI have some overlapping functionality, they aren’t interchangeable.
• EPM is designed specifically to enable strategic planning, budgeting and forecasting to optimize business performance.
• BI tools collect and analyze data to generate insights and inform decision-making more broadly.
• BI software provides the data and analytics that fuel EPM systems and processes.

EPM vs. BI Explained

To better understand the differences between EPM and BI and how they work together, it’s helpful to consider how business leaders manage enterprise performance. The process typically involves planning (setting direction, goals and budget), analysis (seeking insights from data) and forecasting (making future decisions based on initial plans and analysis). BI software is great at one aspect of EPM: analyzing data. But business leaders benefit even further from a system purpose-built to help them apply that analysis to make financial and operational plans, monitor performance and make changes to improve business outcomes over time. That’s where EPM systems come into the picture. They’re tailor-made to support business processes, including planning, budgeting and forecasting; account reconciliation; tax reporting; performance reporting and analysis; and financial close management and consolidation. EPM systems often track key performance indicators (KPIs), such as sales, operating costs and return on investment (ROI).

Unlike other enterprise software — such as ERP and CRM, which are designed to optimize and capture data from day-to-day transactions and processes — an EPM system provides a view into overall business performance based on data captured by ERP, CRM HCM, and other systems. Therefore, an EPM system will include some predesigned tools and capabilities to support key business planning and performance monitoring activities.

BI software, meanwhile, provides data collection, integration, analysis, reporting, visualization and dashboards. As such, it offers some of the same functionality as an EPM system and may provide data and insight to an EPM system. However, these two types of solutions aren’t interchangeable. For example, BI software doesn’t offer any planning functionality. And an EPM system wouldn’t be an effective replacement for BI software because it lacks robust data analytics capabilities.

EPM vs. BI: Which Comes First?

Both EPM and BI are designed to help companies better understand business performance. BI software does this broadly across business functions; for example, a marketing team may use BI data to segment customers into different personas, and HR may turn to BI to analyze employee engagement. An EPM system, on the other hand, is focused specifically on financial and operational planning and monitoring. BI forms the basis of EPM. First comes BI; then comes EPM. And then (hopefully) comes improved business performance.

Taken a step further, BI software contains all the tools and capabilities necessary to harness raw data from across the business, and sometimes from beyond its borders, and turn it into contextualized insight. As such, BI can provide intelligence on how the business is performing and where there may be opportunities to improve performance. But BI software isn’t configured to support strategic planning and forecasting. An EPM system takes advantage of the data collected, organized and analyzed by BI and packages it in a way that supports a range of EPM processes.

How EPM and BI Work Together

Ultimately, businesses see the most value when they integrate BI and EPM. BI is used to gather data, analyze trends and track important KPIs and can be applied broadly across the business for a variety of use cases. BI on its own, however, doesn’t help business leaders generate strategic actions or outcomes. But EPM, integrated with BI functionality, can provide business leaders with relevant data and insights to plan, operationalize and improve performance. Working together, EPM and BI enable:

• Data Collection and Integration

  BI software takes on the task of data collection and integration, bringing together data from disparate sources, including internal ERP and CRM systems, suppliers, partners and others. Without this crucial step, no analytics could take place. An EPM solution can then integrate that data and its analysis to help business leaders make informed decisions.

• Enhanced Analysis

  An EPM system with a BI foundation enables more enhanced analysis of data related to business performance. Together, EPM and BI can deliver an enterprise-level view of how the business is performing to allow finance leaders and other executives to develop more agile forecasting, respond faster and more effectively to changes and analyze dimensions of cost and profitability with the goal of boosting business results.

• Informed Strategic Planning

  In the pre-EPM days, finance and operational leaders struggled to create effective strategies due to disconnected systems across their planning, budgeting, forecasting and reporting processes. Today, BI tools analyze historical and current data from across the company, offering a detailed understanding of business operations and trends. EPM extends this by incorporating performance metrics, financial planning and forecasting, thereby aligning the insights gained through BI with strategic goals. While companies may be able to stitch together EPM functionality using multiple tools, there’s clear business value in an EPM system that integrates these capabilities. In fact, the vast majority of financial decision-makers (82%) surveyed for Oracle’s “2022 Value of EPM Report” said it was important to have all aspects of EPM from one vendor.

• Performance Monitoring and Reporting

  Business performance monitoring and reporting are at the core of an EPM system, which supports the complete and continuous cycle of planning, monitoring, analyzing and adjusting performance. Defining and monitoring the right KPIs and using BI capabilities to obtain real-time data about them are essential to understanding whether the business is headed in the right direction and meeting its goals. BI tools make it possible to analyze the business data that underlies KPIs to determine when it might be time to change course or tactics.

• Enhanced Forecasting

  A financial forecast projects how a business is likely to perform during a future reporting period. EPM and BI collaborate to enhance financial forecasting by using BI’s analytical tools to assess historical and current financial data. EPM extends this analysis by integrating forecasting models, scenario planning and performance metrics, allowing companies to project future financial outcomes with a comprehensive understanding of past and present trends.

• Operational Efficiency

  Another benefit of an EPM system is that it helps to communicate goals to all relevant stakeholders to drive improved performance across the business. Getting everyone on the same page ensures that EPM objectives are integrated into the plans and budgets of various functions and business units. It’s much more efficient than the historical approach in which various functions and departments developed their plans and budgets independently. And when BI is integrated into an EPM system, everyone is working off the same real-time data and analysis. This synergy enables informed decision-making, process optimization and continuous improvement, fostering heightened operational efficiency across the enterprise.

Key Differences Between EPM and BI

While EPM and BI can come together to improve business performance, they are fundamentally different technologies. Understanding how each is built and used is important to their effective application in business analytics and performance management.

• Tactical vs. Strategic

  BI software is essentially a technological means to a data analytics end. It provides the capabilities required to analyze and report on data for a variety of business use cases. EPM, on the other hand, is more strategic and encompasses a broader set of functions, including budgeting, planning, consolidation and performance measurement. It focuses on managing and improving organizational performance across the business.

• Reactive vs. Proactive

  BI software focuses on collecting and analyzing relevant historical and real-time data so that managers can react and make decisions based on a specific business opportunity or risk in daily operations. The goal of EPM systems is to enhance business processes using specialized tools that formulate strategies and gauge business process outcomes against predefined objectives. This proactive approach enables companies to measure performance and then take corrective action if necessary. Another way to think of it is that BI tools are often used to support day-to-day management and decision-making while EPM systems support long-term operational planning and strategic decision-making.

• Broad Applicability vs. Specific Processes

  BI, which handles a broad range of data types and sources with a focus on data analysis, can be used by a broad swath of users for different purposes. Some BI users are highly skilled business analysts and data scientists. But others with varying skill levels also use BI to help them do their jobs, such as marketers who use BI to track campaign metrics, sales managers who use it to monitor revenue targets and supply chain managers who look to BI to help them optimize processes. EPM, which looks at financial and operational data from a more strategic point of view, has a much more specific user base of finance and operations leaders and managers.

Combine Financial Statements and Data With NetSuite EPM

Some companies use siloed systems for business planning and EPM and rely heavily on spreadsheets for data collection and validation, budgeting, forecasting and reporting activities. This approach, however, is error-prone and labor-intensive, leaving little time and energy for analysis and strategic decision-making.

Modern EPM processes benefit from software designed to increase efficiency and elevate effectiveness. NetSuite Enterprise Performance Management is an integrated suite of EPM applications, backed by robust BI capabilities for reporting and analysis to boost productivity, reduce risk and support proactive performance management. Consolidating planning, budgeting, forecasting, account reconciliation, financial close and reporting processes from across the enterprise boosts the speed and accuracy of financial processes and drives informed decision-making. Because it integrates seamlessly with NetSuite ERP, NetSuite EPM always has the most up-to-date financial and operational data, providing a unified and up-to-date view of your business.

In today’s uncertain, dynamic and competitive marketplace, effective EPM is a necessity for businesses of all sizes, enabling business leaders to more effectively plan, monitor and improve performance. Well-conceived EPM processes, supported by purpose-built technology for strategic modeling, financial consolidation and close, analytics and reporting, empower companies to better understand their data and make informed decisions. An EPM system that integrates BI capabilities helps business leaders translate their goals into plans, monitor their performance and get valuable insight to improve financial and operational outcomes.

EPM vs. BI FAQs

Is performance management the same as business intelligence?

Enterprise performance management (EPM) and business intelligence (BI) are not the same, but they are related. When it comes to improving business performance over time, both BI and EPM play a role. BI software provides capabilities in the areas of data collection and integration, data analysis and reporting and data visualization and dashboards. An EPM system can integrate some of that BI functionality specifically for the purpose of managing business performance with functionality for planning, budgeting and forecasting; performance reporting and analysis; and financial consolidation and close management.

What does EPM stand for?

EPM stands for enterprise performance management, which is how an organization plans, tracks results and improves business performance over time. EPM can refer to the processes involved in enterprise performance management as well as the technology implemented to support those processes.

What is EPM methodology?

Enterprise performance management (EPM) includes all the processes a business’s financial and operational leaders use to plan, measure results and improve performance. Some businesses may use a specific strategic planning and management methodology as a framework for EPM, such as the Balanced Scorecard, which considers four factors — financial, customer, processes and learning/growth — to assess performance.

What is the difference between EPM and BI?

Enterprise performance management (EPM) systems are built to support business processes, such as planning, budgeting and forecasting; performance reporting and analysis; and financial close management and consolidation. BI software is designed to collect data from a variety of sources, organize that data within the context of the business, perform analysis and deliver insights in user-friendly formats, such as data visualizations and dashboards. BI tools are used across a wide array of business use cases and functions, one of which is EPM. But EPM goes beyond BI capabilities to monitor performance and improve business outcomes.