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John O'Rourke | Apr 03, 2024

Why Buyers Should Question the Value of Free EPM Software

The transition from on-premise deployments of enterprise software to the cloud has been in process for the past 10+ years, and now many organizations are embarking on moving their ERP and EPM systems to the latest cloud-based offerings.  To sweeten the offer, several of the mega-ERP vendors, including SAP and Oracle, are often bundling their cloud enterprise performance management (EPM) applications for free as part of the ERP upgrade. 

While this may sound attractive on the surface, there are several issues to consider here, including the hidden costs associated with “free EPM software.” 

Business Value vs. Vendor Lock-In for Free EPM Software

Let’s face it, ERP upgrades are an expensive and risky proposition when you consider the time, resources and costs involved in such an undertaking.  So to entice existing customers to stay the course and migrate to their cloud ERP offerings, it seems like a nice gesture for an ERP vendor like SAP or Oracle to bundle in their EPM applications for no charge, effectively discounting them to zero. 

What applications am I referring to?  I’m referring to EPM software products that handle complex tasks such as financial close and consolidation, budgeting, planning, forecasting, financial and management reporting, and operational analytics. 

These EPM modules support critical Finance processes, so buyers should really question the value these free offerings may provide.  Here are some questions buyers should be asking about this type of offer:

  • Does the free EPM software meet my business requirements? Are all the modules and capabilities you’ll need part of the “free” offering?  How many user licenses are included?
  • How do the ERP vendors’ EPM software products compare to best of breed solutions that are available in the market?
  • Can the Finance team support and maintain these applications or will IT need to support them?  
  • What will be the time, effort and costs for implementation and support of the EPM applications?  What level of value will this deliver to the enterprise?
  • Does the implementation of the EPM modules need to wait until after the ERP upgrade is complete, or can they be implemented in advance? 
  • Does the bundled EPM software integrate with multiple ERPs and other operational systems that are running across the enterprise?
  • Is the ERP vendor willing to offer up live reference customers who are using its EPM applications? Do these references have the same business requirements as your organization?

EPM Software Sourcing Preferences

This practice of ERP vendors bundling EPM applications into an ERP purchase or upgrade isn’t something that’s entirely new, this practice has been positioned by the mega-vendors for several years.  However, recent surveys of EPM software buyers reveal a strong preference for best of breed EPM solutions vs. those that are provided by ERP vendors.  In fact, according to the 2023 Dresner Advisory Wisdom of Crowds™ EPM Market Study, 56% of buyers prefer to source their EPM solutions from a “specialist vendor open to working with any ERP/finance system” and roughly 23% said they had no preference; will consider all potential vendors.

As you can see in the chart below, this preference towards sourcing EPM solutions from specialist EPM vendors has grown since 2019, while the preference to sourcing EPM solutions from the same vendor as the primary ERP/Financial system has shrunk to less than 7% in 2023.  

OneStream Extends ERP Investments

At OneStream we work with Finance and IT buyers every day, around the globe, who are evaluating their EPM software options as they contemplate or work through ERP upgrades.  And in most of these evaluations, organizations are opting to select OneStream as their EPM software platform of choice.  The main reasons for selecting OneStream over their ERP vendor include the following:

  • Market-leading EPM functionality in a unified platform.
  • High scalability and performance designed to address the world’s largest, and complex global enterprises.
  • Ability to integrate data from multiple ERP, HCM, CRM and other source systems including direct integration with over 250 systems including SAP ECC, S/4 HANA, Oracle Fusion, Oracle EBS, PeopleSoft, JD Edwards, Netsuite, Microsoft Dynamics, Infor, Salesforce, Workday and many others.
  • Finance ownership for maintenance and support, less dependance on IT.
  • Rapid time to value and lower cost of ownership vs. fragmented, multi-product EPM solutions.
  • Single source of the truth and improved insights into financial and operational data across the enterprise.
  • Flexibility and agility to support the integration of new data sources based on mergers, acquisitions, and divestitures.

Here’s one example of an organization that has adopted OneStream to extend their ERP investments and the value they have achieved.

Costco Wholesale – As a global retailer with over 800 warehouses around the world, Costco was running their financial consolidation, reporting and budgeting processes using multiple SAP and I-Series ERPs, Oracle Hyperion Financial Management (HFM), Excel, and Cognos BI. 

Their outdated HFM application and reliance on Excel and complex data movements made it increasingly difficult to maintain the organization’s 1.5-day financial close process. Reporting was highly manual and Excel-based, with over 40 Excel sheets for internal reporting and another 50 for external reporting, creating layers of complexity and painful review and analysis processes.  So, the Business and Finance teams began looking at their alternatives and landed on OneStream.

While there was initial preference for selecting an SAP-based reporting and planning solution, stakeholders evaluated OneStream vs. SAP BPC and felt that OneStream better met our business requirements and offered more flexibility.”

With the OneStream project completed, Costco now has a single system of record for close and consolidation, P&L reporting, variance commentary, budgeting, task management and workflow for warehouse and corporate users. The accounting and finance teams now have one place to see all their financial data, spending more time on financial statement review and less time on manual creation and review work.

Learn More

Costco is just one example among many customers who have selected OneStream to extend their ERP investments.  In fact, over 400 SAP ERP customers have selected OneStream for EPM, as well as almost 500 Oracle ERP customers.  If your organization is considering an ERP upgrade and the mega-vendor is proposing to provide their EPM solution at no cost, make sure to fully evaluate the offering vs. alternatives that may be available in the market and make an informed decision.  To learn more  check out our OneStream for SAP Customers e-book or contact OneStream for an overview and demonstration of our Intelligent Finance Platform.

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