Dresner reports on the potential of AI use in EPM applications
Artificial Intelligence, Machine Learning, and Automation are independent but parallel concepts that have become vogue in almost every aspect of modern life – including Enterprise Performance Management (EPM) and Enterprise Resource Planning (ERP).
Dresner Advisory Services reflects this growing interest in AI in their EPM market study 2024, highlighting how and why AI-related technology is being used to optimize and reimagine how we analyze performance and the tools used to do so.
In this blog, we will explore the impact of AI and related technologies on EPM/FP&A products and Dresner’s findings and thoughts about AI in EPM.
What is EPM?
Enterprise Performance Management (EPM) tools allow an organization to “plan for the impact of various internal and external factors on its future performance and business outcomes. This includes strategic, operational, and financial planning and forecasting.”
Put simply, they are tools that allow organizations to understand and form strategies based on the analysis of performance, in many different areas. This includes tools such as Financial Planning and Analysis (FP&A) software.
Naturally, there is a clear use case for AI-related capabilities within performance analysis. Whether that’s simply automating data consolidation, enabling machine learning to enhance the efficiency of common processes, or even allow AI to form its own understanding and analysis of performance trends.
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What are the use cases of AI in EPM?
It’s a useful practice to ground conversations about AI in realistic use cases, Dresner notes “Despite skepticism about the use case of AI and machine learning in EPM, users are more convinced of its potential when it is applied to specific use cases.”
Usefully, Dresner surveyed real users of EPM systems about potential AI capabilities and their value. Some of the prospective AI use cases within EPM are:
- Automated anomaly detection
- AI-based extraction of information from documents
- Use of generative AI to create narrative reports and analysis of EPM data
- AD-hoc natural language querying of finance and other EPM data
- Guided assistance to recommend items for action based on a user's job role
- Chatbot to help casual users perform tasks and access data
Of all these use cases Dresner notes that predictive forecasting and automation of routine accounting tasks are the use cases identified as having the highest potential benefits, with over 50% of respondents viewing these use cases as highly beneficial.
Click to read Finance, AI, and the future of decision making with FP&A (Gated)
What is the current market outlook for AI tools in EPM?
In their market study, Dresner anticipates that “machine learning has the potential to significantly improve forecast accuracy in planning applications, and it is necessary to envisage a new generation of enterprise performance management applications that seamlessly incorporate AI capabilities.”
Interestingly 91% of organizations don’t believe they would encounter resistance in the adoption of AI and machine learning capabilities. This perhaps speaks to finance teams who lack modern tools and welcome capabilities that may reduce routine and error-prone manual tasks.
39%
of respondents
report that AI will have a positive impact on EPM processes
Yet, while 39% of respondents report that AI will have a positive impact on EPM processes, 52% remain undecided. This shows that the realization and execution of AI within EPM practices is perhaps still lacking and that with demonstrable efficiency gains and use cases, this balance may move positively in favor of AI tools.
Final Thoughts
It seems those implementing AI-related capabilities in their EPM or FP&A process will face little resistance from accounting teams, many of which are currently starved of modern tools, and face overwhelming workloads that can be relieved by AI.
Yet, those who remain sceptical and undecided need assurance that AI capabilities are not just a reality but can actually enhance and bring value to performance analysis processes.
You can learn how Unit4 performed in Dresner’s 2024 EPM market study by viewing our highlights. Or if you are interested in learning about Unit4’s approach to AI in our FP&A product, consult our webpage dedicated to AI Innovation at Unit4, or experience it yourself with a tailored demo.
Further reading & resources
