Jun 19, 2024

Why Traditional EPM Software Fails in Cost and Profitability Analysis

Samuel Akinwunmi

In my experience as a data scientist collaborating with finance teams, I have observed significant limitations in traditional Enterprise Performance Management (EPM) systems when conducting cost and profitability analysis. These systems, often outdated, struggle to meet the dynamic needs of modern businesses. Here’s a deeper look at why traditional methods fall short and how innovative solutions like Bilanc are bridging these gaps.

Inadequate Real-Time Data Utilisation

Traditional EPM software typically relies on static, retrospective analysis which fails to capture the dynamic nature of business operations. In an era where rapid decision-making is crucial, these systems do not provide the real-time data that businesses require. They are often slow to update and cannot adapt quickly to continuous data streams, leading to decisions made on outdated or irrelevant information.

Limited Insight from Cost Accounting

While traditional systems are proficient at documenting costs in detail, they often fail to contextualise these costs in terms of overall value creation. Businesses today need more than just expense tracking; they require analytics that link expenditures to specific business outcomes and profitability. This is not just about counting costs but understanding how each cost contributes to operational efficiency and market positioning.

Challenges with Unstructured Data

Similar to how CRM systems struggle with unstructured data, traditional financial systems are not designed to effectively capture and utilise unstructured financial data. Vital insights remain locked in emails, meeting notes, or casual conversations, under-utilised in financial analysis. Bilanc confronts this issue by seamlessly integrating both structured and unstructured data, providing a comprehensive view of a company’s financial landscape and revealing actionable insights.

Over-dependence on Manual Processes

Updating traditional EPM systems can be labor-intensive and disconnected from daily business operations. This often results in data that is either outdated or inaccurate, negatively impacting decision-making processes. Bilanc automates the data collection and integration from diverse sources, ensuring that financial insights are consistently current and reflective of the latest operational realities.

From Transactional to Decision-Driving

Traditional EPM systems typically serve as repositories of transactional data rather than as active tools that drive strategic decisions. Bilanc redefines this model by offering actionable insights that inform critical business decisions such as budget allocation, pricing strategies, and profitability optimisation.

Dissatisfied with existing traditional financial tools, we developed Bilanc to empower businesses not just to manage their costs, but to understand and optimise them effectively. Our platform transforms raw data into intelligent, actionable insights, enhancing business performance and profitability.

Traditional EPM systems often do not suffice for modern businesses that require agile, insightful, and proactive financial management. The inability of these systems to provide real-time actionable insights, handle unstructured data, and empower decision-making across an organisation are significant drawbacks. Bilanc was conceived as a response to these challenges, offering a sophisticated yet intuitive platform that revolutionises financial management, enabling businesses to flourish in today’s fast-paced economic environment.

Samuel Akinwunmi