The new era of AI for EPM

Recently after the reorg in Capgemini , EPM is now part of “AI&A” ( Artificial Intelligence and Analytics). So thought to spin the thinking towards interconnection of EPM n AI.

 Oracle Hyperion EPM has been the leading EPM vendor in last 5 years and I guess it still continues in 2022. Apologies, being Oracle EPM consultant for over a decade, I feel a bit inclined towards Oracle Hyperion EPM 😊
However, An effective business strategy (along with pricing) targeted to get hold of existing potential customers is absolutely necessary and many new EPM vendors are coming up with a business strategy to get hold of these potential customers. Onestream, Anaplan and Tagetik are growing very fast and acquiring some big clients using different vendor for EPM.

Further, many of the EPM implementations serve the purpose of a central tool to capture user inputs and thereafter consolidate the data. Such implementations does help the organizations to avoid the pain of maintaining and synchronizing discrete excel sheets but these EPM implementation neither provide any intelligence nor does it changes the manual nature of arriving at various assumptions.

Artificial Intelligence is one such capability which if imbibed thoughtfully into EPM products can enrich the capabilities of the EPM product and at the same time make the tasks easy for planners.

With Machine Learning algorithms, various assumptions such as interest rate, runoff rate, growth% etc can be methodically derived. Artificial Intelligence can help further by learning from the past predictions and continuously improve the predictions accuracy.

With these advanced technologies, Finance organizations are now at a pilotable place in the lifecycle of budgeting, planning, and corporate performance management (CPM) tools.  Much like when spreadsheets “ruled the Earth” on small disks, and when we went from linked spreadsheets to Essbase, learning new software and predictive analytics will place immense power into the hands of the high performers and decision makers of your company.

Artificial Intelligence (AI): Thinking of the things we generally miss…

OK – what is AI?  At its core, Artificial Intelligence (AI) replicates how humans think at a rate of speed and with quality and consistency humans cannot match.   Embedded into AI are algorithms that recognize patterns, correlations, and which can then predict trends, events, etc.  The promise of AI is that it makes the technology layer perceptively “less technical” to the end users.  AI adds transparency to the data and automates tasks that previously required human interaction – and thus opened up the chances of errors.

 Often, artificial intelligence technology is presented through the use of “bots.”  These bots ask questions.  Using lexical technologies, bots are able to understand how people in different professions, such as Finance, talk and write.  Various bots are embedded at different points to ask the user what they want to do or where they want to go.  This is used from the point the installation has begun and drives how the application will be laid out.  It drives how the data will interrelate for meeting the specific needs of the enterprise.  It helps define reports, alerts, rules, etc.

 How AI Is Changing Finance

Artificial Intelligence offers an incredible functional jump forward for Enterprise Performance Management (EPM).  AI functionality means that the finance model can warehouse all our legacy institutional knowledge, and use it to learn more institutional knowledge.  It can do this more efficiently and much faster than we ever could. 

In theory, one could staff to a level where every transaction is reviewed individually.  Realistically, this is highly unlikely – and it’s cost prohibitive.  AI can review every financial transaction in fractions of a second.  What’s more, AI can examine the relationships between these millions of transactions.

 AI and Predictive Analytics

In addition to AI, we now have very powerful predictive analytics tools.  The proliferation of R (a language and environment for computing and graphics) and its different flavors has turned IT report writers into financial analysts.  Period over period corporate performance in relation to the variables that effect this performance creates true, event-based predictive analytics.  Using trending functions (linear, polynomial, etc.) is like throwing rocks at the moon, compared to a robust and well thought out R-based analytics package.

 The power of these new tools greatly shrinks the effort of gathering data.  We now have the real tools to shrink the work that goes into the true value-add effort of analyzing the data.  AI sees the cuts of the data that highlight questions to be asked, so now we’ve got the technology to truly cut what we held aside as human value-add.

So, AI will be the new Era of EPM irrespective of vendor.