The Future of Enterprise Performance Management is Dynamic Making AI Real (Part 3)
The latest edition of our blog series “Making AI Real” lays out a vision for how new capabilities in FP&A systems can support Enterprise Performance Management of the future with much of the required functionality already available today.
From Static to Dynamic EPM
New technologies in financial planning & analysis systems like machine learning and artificial intelligence offer businesses the chance to move beyond static performance management is characterized by historic, user-defined business rules and drivers. The dynamic Enterprise Performance Management approach is driven by new insights, detects patterns, responds to data in real-time and incorporates predictions for future developments.
Discover the Value in Your Data
In this new world, massive data in your enterprise systems is analyzed to find hidden patterns and rules automatically. Data from your CRM, ERP and other systems is brought together and intelligently connected for analysis. It is also possible to search external data such as economic indicators, weather or social indexes for potential impacts and drivers of your business.
More Accuracy and Automation in Forecasts
Once the key internal and external drivers are identified, the AI-enabled system develops a forecast or predictions about the future using machine learning and advanced algorithms. This allows experts in your company to validate user input or even automate individual forecasting steps altogether. Predictions for business indicators help increase planning accuracy and allow decision-makers to understand risk and upsides. For example, a more accurate sales forecast drives better planning for headcount, financial budgets, sales incentives, etc. It is also possible to make predictions about the impact of certain irregular events such as a new product introduction or market disruption on the future performance of your business and develop scenarios respectively.
How can AI augment Planning and Enterprise Performance Management?
Integrated and Actionable Enterprise Performance Management
Next, all these forecasts and predictions are integrated. See how operational drivers and financial targets are connected. Imagine, for example, if you could predict customer churn more accurately. You could understand implications for the financial plan as well as develop an operational plan for sales, marketing and customer service that reduces churn. This dynamic Enterprise Performance Management process can drive more agility and efficiency through continuous forecasting and integrated planning across finance and the business.
Finally, the system develops guidance and recommendations on how to best achieve desired goals for different functions within the organization. These AI-driven insights and recommendations can help experts make better decisions faster.
In a nutshell, dynamic Enterprise Performance Management helps discover new insights, increases the accuracy and grade of automation for forecasts, dynamically integrates plans across the business, and provides guidance and recommendation for users to improve performance.
Do you think this is the distant future of EPM?
Not at all. FP&A can already leverage AI, machine learning and predictive planning technologies today without a data science degree. Jedox EPM software integrates these technologies and provides the AIssisted™ Planning engine to augment planning and performance management for finance, sales and other functions across the business. Stay tuned for the next articles in this blog series, when we’ll talk in-depth about specific applications and customer cases.
More of the AI blog series
Learn how people are already using new technologies like AI and drive the digital transformation in Part 1 of this blog series. In Part 2 we explore trending technologies for BI & Financial Planning and Analysis in more detail. Watch one of our AI webinar recordings
Would you like to know how you can apply AI in Planning and Enterprise Performance Management? See why it is relevant and what is possible today. Get tips on how to choose your first project and what to consider before getting started.
Benefit from the knowledge of our AI experts Dr. Carsten Bange, founder and managing director of the Business Application Research Center (BARC) and member of the executive board of the CXP Groupand Peter Strohm, Senior Manager AI & Innovation at Jedox.
Watch the webinar recordings now: