ERP vs. EPM: How Are They Different?

Last Updated: August 29th, 2024
Researched and Written by: Lexi Wood

Enterprise resource planning (ERP) and enterprise performance management (EPM) solutions help companies automate and improve business processes. More specifically, ERP solutions streamline the management of day-to-day business processes and transactions. EPM solutions analyze, report, and optimize business key performance indicators (KPIs).

Discover how ERP and EPM differ and how to utilize them to improve business operations. Then, explore examples of popular solutions to help automate your operational and management processes.

What Is ERP?

ERP refers to a modular and integrated suite of business applications from financials to human resources. These solutions originated from the inventory control and material requirements planning systems of the 1960s. Today all-in-one ERP software automates the essential processes for inter-departmental collaboration in businesses of all sizes.

These systems also offer visibility into workflows by keeping all data in a single, connected database. Whether deployed on-premises or in the cloud, they also improve data security. In recent years, cloud-hosted ERP systems have increased in popularity.

Key Features

The following features make it possible to streamline back-office processes:

  • Accounting: Track company revenue and expenses with modules for a general ledger, payroll, and accounts payable and receivable.
  • Budgeting and forecasting: Create detailed financial plans and manage departmentalized budgets.
  • Customer relationship management (CRM): Build relationships with customers using tools for contact management, conversation history, and invoice generation.
  • Human resources (HR): Manage current employees and streamline the new hire onboarding process.
  • Inventory and supply chain management: Manage the flow of inventory from raw materials to finished goods.
Acumatica ERP
Acumatica is a popular ERP with an easy-to-use project dashboard.

What Is EPM?

EPM solutions monitor select KPIs to measure a company’s progress toward its business goals. Also known as corporate performance management (CPM), EPM helps develop business strategies by analyzing what worked in the past and attempting to replicate that success. These reporting processes were done manually in the past, usually through in-person meetings or shared spreadsheets. However, since the 1970s, EPM software has automated most of this work.

Successful EPM depends on selecting the right KPIs based on the specific industry and market share. By knowing which goals matter the most, businesses can develop effective strategies. They can make plans by using the following methodologies, depending on the one that best suits the business:

  • Balanced scorecard
  • Strategy map
  • Six Sigma
  • SWOT analysis

Like ERP solutions, EPM solutions can create financial reports. They can also create visuals, like dashboards and scorecards, to show relevant KPIs for sales, marketing, operations, and HR departments in an easy-to-understand way.

Key Features

The following features help improve company strategies for long-term success by using proven data analysis to inform better decision-making:

  • Budgeting and forecasting: Plan efficient budgets using accurate forecasting methods.
  • Performance management: Monitor KPIs to ensure the company is on track to meet business goals.
  • Modeling: Use strategic and tactical planning methods that allow companies to create detailed models.
  • Risk management: Forecast and plan for “what-if” scenarios to minimize potential risk.
Adaptive Planning
Expense Variance Analysis of Adaptive Planning.

How Are ERP and EPM Different?

ERP and EPM solutions overlap in both budgeting and forecasting. However, ERP solutions focus on actual business processes, while EPM analyzes the results. The relationship between the two systems is cause and effect: how your company uses an ERP determines the metrics your EPM measures.

Key differences include:

  • Focus area: ERP solutions focus on the back-end business processes. EPM solutions focus on measuring current or past KPIs to find better processes in the future.
  • Operating scope: ERP solutions have a broader scope than EPM solutions, which are limited to analysis and planning. Where management-level workers in finance departments use EPM solutions, employees in multiple departments within a company use ERP solutions.
  • Complexity: ERP solutions might seem more complex than EPM solutions because they involve in-depth collaboration between different business departments. However, the complexity of EPM solutions is in how they perform large-scale data analysis, with a primary emphasis on finances.
  • Implementation timeline: A full ERP system can take 6–24 months to implement, depending on the company’s size, deployment method, and required add-ons. In contrast, a standalone EPM software can run in under 3 months.

Despite these differences, ERP and EPM solutions work well together. Both focus on improving efficiency, minimizing risk, and increasing performance. Many businesses implement software to automate ERP and EPM functions further.

Notable Examples of ERP Software

★★★★★
★★★★★
(24)
Acumatica Cloud ERP
Acumatica Cloud ERP Screenshot
Price Range
   $     $     $     $     $   
   $     $     $     $     $   
Starting Price
$1,800/month
Client OS
iOS, Android, Web
Deployment
Cloud or On-Premises
What We Like
Open architecture for rapid integrations
Multi-entity support
Mobile accessibility
What We Don’t Like
Must schedule a consult for pricing calls
High learning curve
Tedious setup
★★★★★
★★★★★
(11)
Dynamics 365 Business Central
Dynamics 365 Business Central Screenshot
Price Range
   $     $     $     $     $   
   $     $     $     $     $   
Starting Price
$70/user/month
Client OS
Web
Deployment
Cloud or On-Premises
What We Like
Combined ERP and CRM
Similar interface to MS Word and Outlook
Integrations with Microsoft applications
What We Don’t Like
Not ideal for complex manufacturing needs
May require extensive training
No free version
★★★★★
★★★★★
(29)
NetSuite ERP
NetSuite ERP Screenshot
Price Range
   $     $     $     $     $   
   $     $     $     $     $   
Starting Price
$99/user/month
Client OS
Web
Deployment
Cloud Hosted
What We Like
Hundreds of third-party add-ons available
Feature sets for multiple industries
Highly customizable
What We Don’t Like
Must schedule a consult for pricing details
Tedious setup
Difficult to build reports
★★★★★
★★★★★
(9)
Epicor Kinetic
Epicor Kinetic Screenshot
Price Range
   $     $     $     $     $   
   $     $     $     $     $   
Starting Price
$175/user/month
Client OS
Windows, macOS, iOS, Android, Web
Deployment
Cloud or On-Premises
What We Like
Built for manufacturers
Collects real-time shop floor data
Built-in artificial intelligence support
What We Don’t Like
Not ideal for multinational organizations
High learning curve
★★★★★
★★★★★
(21)
Odoo
Odoo Screenshot
Price Range
   $     $     $     $     $   
   $     $     $     $     $   
Starting Price
Free
Client OS
Web
Deployment
Cloud or On-Premises
What We Like
Community version is free
Heavy customization options
Double entry inventory system
What We Don’t Like
May have to build specific modules yourself
No centralized support
Upgrades not free
★★★★★
★★★★★
(3)
Workday Adaptive Planning
Workday Adaptive Planning Screenshot
Price Range
   $     $     $     $     $   
   $     $     $     $     $   
Starting Price
$25,000/year
Client OS
Web
Deployment
Cloud Hosted
What We Like
Customizable dashboards
In-memory data model for faster and more scalable processing
Supports multiple forecasting models
What We Don’t Like
Hard to modify existing reports without creating new ones
Not intended for small business
Setup is difficult
★★★★★
★★★★★
(1)
Planful
Planful Screenshot
Price Range
   $     $     $     $     $   
   $     $     $     $     $   
Client OS
Web
Deployment
Cloud Hosted
What We Like
Automates planning, reporting, and consolidation
Integrates with QuickBooks, Sage Intacct, etc.
What We Don’t Like
Steep learning curve due to dense feature set
Pricing requires consultation call
★★★★★
★★★★★
(3)
Prophix One
Prophix One Screenshot
Price Range
   $     $     $     $     $   
   $     $     $     $     $   
Client OS
Windows, macOS, iOS, Android, Web
Deployment
Cloud or On-Premises
What We Like
Cloud and on-premise implementation
Spreadsheet-style interface
Supports all types of financial and non-financial budgeting
What We Don’t Like
Could be more user-friendly for non-admins
Free trial is limited
Pricing details not readily available
★★★★★
★★★★★
(1)
IBM Planning Analytics
IBM Planning Analytics Screenshot
Price Range
   $     $     $     $     $   
   $     $     $     $     $   
Starting Price
$825/month
Client OS
Windows, macOS, Web
Deployment
Cloud Hosted
What We Like
Strong data analysis tools
No coding knowledge needed

“What-if” scenario modeling tools

What We Don’t Like
Limited training
Steep learning curve for new users
Flexible processes may be used incorrectly
Oracle Hyperion Planning
Oracle Hyperion Planning Screenshot
Price Range
   $     $     $     $     $   
   $     $     $     $     $   
Starting Price
$9,995 (perpetual license)
Client OS
Windows, Web
Deployment
Cloud or On-Premises
What We Like
Easy to learn and use with Microsoft Office-based interface
Effective for complex organizational planning across various levels
Provides multidimentional data analysis
What We Don’t Like
Lacks direct data transfer from external applications like Excel
No mobile application availability

Streamline Your Business Processes

Because ERP and EPM systems complement each other, businesses often integrate both solutions to cover full planning and execution. Some ERP software includes EPM functionality as an optional add-on.

Check out our software recommendations as you seek ways to automate and improve your business processes. Find the best ERP and EPM solutions for your business needs.

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