In today’s ever-changing business environment, risks can come from all directions: markets, supply chains, financial fluctuations, and even policy changes. Today’s CFOs and executives need to not only detect risks in a timely manner, but also measure, simulate, and control the impact of risks before they affect financial results.
And that's when systems come in. Enterprise Performance Management (EPM) leverage. Going beyond planning and forecasting, EPM is becoming a strategic tool that helps businesses proactively identify risks, simulate “what-if” scenarios, and build the ability to respond quickly to change.
In this article, we’ll explore how EPM helps businesses detect risks early, model their impact, and implement proactive controls—enabling finance and operations teams to not only “react,” but also “lead” in modern risk management.
Why is risk management by EPM necessary?
While ERP transaction storage and BI provides historical reporting, EPM Risk Management plays a role in connecting data, planning and strategy – helping businesses “look ahead” instead of just reacting passively.
EPM (Enterprise Performance Management) is a business performance management platform that integrates data from multiple systems (ERP, CRM, HRM, BI) for planning, forecasting, and analysis. In the management ecosystem, EPM is the bridge between FP&A (Financial Planning & Analysis), ERP, Business Intelligence and Risk Management.
In a distributed data landscape, financial – operational – supply chain risks can spread rapidly without a unified data source.
When implementing EPM, businesses can:
- Reduce forecast variance
- Shorten financial closing time
- Reduce DSO (Days Sales Outstanding
- Early detection of deviations for timely action
4 Types of Enterprise Risk and How EPM Helps
Business risks are not isolated. A small change in cash flow can spill over into operations, supply chains, and even brand reputation. Here are four common risk groups and how to manage them. EPM helps to control them effectively.
Financial Risk
Problem: Cash flow discrepancies, bad debt, exchange rate fluctuations, or consolidation reporting errors.
EPM Solution: EPM provides rolling cash forecast, Consolidate P&L and Cash Flow, sensitivity analysis (what-if) and Automatic variance drill-down.
This allows CFOs to quickly identify why cash flows deviate from plans and simulate different financial scenarios.
Illustration: A manufacturing company using EPM’s rolling forecast module detected a 15-day cash flow gap from its target. The finance department promptly initiated collections and renegotiated payment terms – avoiding a cash flow disruption.
Related tools:
- Module consolidation & alerts
- AR/AP integration for automatic DSO calculation
- Real life example: Bizzi ARM – automatic debt reminder, debt age analysis and early warning of debt maturity.
Operational Risk
Problem: Data entry errors, internal fraud, expenditure approval errors.
EPM Solution: EPM helps to establish expense approval workflow, audit trail, exception reporting and repetitive process automation (RPA).
Illustration: A multi-branch company used over 30 Excel files to compile expenses. After implementing EPM, they reduced 70% data entry errors thanks to automated workflows and centralized approval controls.
Bizzi Solution: Bizzi provided Workflow and audit trail systems Helps businesses control the entire lifecycle of documents and spending approvals – significantly reducing operational risks.
Compliance Risk
Problem: False tax reporting, non-standard invoices, improper document storage.
EPM Solution: Integration master data, automate standard document storage, and provide audit-ready reports audit services
Illustration: An FMCG business uses Bizzi B-invoice to authenticate invoices, securely store them for 10 years, help reduce the risk of tax violations and improve audit readiness.
Supply Chain / Strategic Risk
Problem: Supply disruptions, raw material price fluctuations, lack of response scenarios.
EPM Solution: Through scenario planning and what-if analysis, EPM helps simulate the impact when raw material prices increase by 10-30% or when suppliers are 2 weeks late.
Illustration: A metal manufacturing plant using EPM simulates a scenario where raw material prices increase by 15%, finds that its profit margin decreases by 8%, and adjusts its purchasing plan and optimizes inventory to maintain profit margins.
How EPM Turns Data into a Risk Alert System
For EPM to truly support risk management, businesses need to move from “looking at reports” to Early Warning System.
EPM achieves this by:
- Data consolidation & master data: create a single source of truth.
- Rolling forecasts & continuous planning: reduce information gaps compared to the annual fixed budget.
- Scenario & sensitivity modeling: Stress test simulation for finance and operations.
- KPI / KRI dashboards: warning when index exceeds threshold (eg: DSO > 45 days, Inventory Days increase > 20%).
- Drill-down & root-cause analysis: from overall alerting, tracing down to individual invoices or POs.
- Workflows & controls: Automatically approve spending, set policy limits.
Roadmap for implementing EPM in risk management
Assess Current State
- Audit and map existing systems: ERP, Excel, BI, other data sources.
- Identify data gaps and weaknesses in the risk management process.
- Analyze how data is currently collected, stored, and reported.
Define Risk Taxonomy & KRIs
- Establish a risk classification system: financial, operational, legal, strategic…
- Identify Key Risk Indicators (KRIs) corresponding to each type of risk.
- Ensure KRIs can measure, track and provide early warning of risks.
Integrate Data Sources
- Connect ERP, AR/AP, data warehouse and other internal systems to build master data.
- Apply API or ETL integration to automate data collection and ensure consistency.
- Standardize data to serve predictive models and risk reporting.
Develop Models & Dashboards
- Establish rolling forecasts and scenario models to assess risk impact.
- Develop a dashboard that tracks KRIs, helping management see risks in real time.
- Make sure the dashboard is intuitive, easy to understand, and capable of detailed drill-down.
Pilot & Validate
- Select 1-2 key processes (e.g., cash forecasting, consolidation reporting) to pilot.
- Assess accuracy, operability and suitability for risk management needs.
- Collect feedback from users to refine models and processes.
Scale & Embed Governance
- Expand enterprise-wide deployment based on pilot results.
- Establish clear RACI, periodic review process and link to internal audit.
- Ensure EPM becomes an integral part of risk management, not just a supporting tool.
Continuous Improvement
- Set up feedback loops to improve models, dashboards, and processes.
- Conduct periodic stress tests to check risk tolerance.
- Update KRIs, forecasting models and data systems according to actual needs and changing business environment.
Sample KPI/KRI Set for Risk Management through EPM
The EPM system helps businesses set up, monitor and provide early warning of key risk indicators (KRIs) and performance indicators (KPIs), ensuring decisions are made based on continuously updated data.
| Target group | Monitoring objectives | KPI / KRI Index | Warning Threshold / Monitoring Frequency |
| Liquidity | Ensure the business has enough cash to operate and meet short-term financial obligations. | – Cash runway (number of days that can operate with the current amount of cash) – Forecast error (% difference between forecast and reality) | - Monitor daily / weekly – Warning if cash runway < 30 days or forecast error > 10% |
| Receivables | Control debt collection speed and overdue invoice rate. | – DSO (Days Sales Outstanding) – % Overdue invoices | - Monitor weekly / monthly – Warning if DSO > 45 days or % overdue > 15% |
| Profitability | Monitor variances between actual and planned to identify performance risks early. | – Variance % (Actual vs Plan) | - Monitor monthly – Warning if deviation > ±5% compared to plan |
| Inventory | Effectively manage inventory, reduce the risk of capital congestion and supply chain disruption. | – Days Inventory Outstanding (DIO) | - Monitor weekly – Warning if DIO exceeds industry average or increases for 3 consecutive periods |
| Operations | Monitor operational risks and errors in approval and processing procedures. | – Exception count (number of erroneous transactions) – Failed approvals (number of failed approvals) | - Monitor real-time – Warning when exception count increases suddenly or exceeds preset threshold |
| Compliance | Ensure compliance with internal policies and audit requirements. | – % Invoices validated (percentage of validated invoices) – Audit exceptions (number of exceptions in audit) | - Monitor monthly – Warn if valid invoice ratio < 95% or there is a serious audit exception |
Best Practices & Pitfalls when implementing EPM in Risk Management
For the EPM system to truly play its role in controlling and forecasting risks, businesses need to pay attention to parallel Best Practices and Pitfalls in the process of implementation.
Best Practices
Start with a use-case that has a clear ROI
- Deploy first in clear value-creating processes such as cash forecasting or consolidated report.
- Helps demonstrate early effectiveness, increasing internal trust and support.
Set up specific KRIs for each type of risk
- Build key risk indicators (KRI) for groups: finance, operations, compliance, strategy.
- Ensure each KRI has clear alert thresholds and monitoring frequencies.
Establish clear governance and implement it step by step
- Identify the mechanism ownership – Who is responsible for updating, monitoring, and approving the data?
- Gradually integrate processes and systems, avoiding massive deployments that overload users.
Linking EPM to real-world decision-making
- Ensure EPM data and dashboards are used in executive meetings, budget forecasting, and periodic risk assessments.
- When the user actually data-driven decision making, the new system brings value.
Pitfalls – Common Mistakes
Unclean, inconsistent input data
- Discrepancies from ERP systems, Excel, or other data sources make EPM dashboards unreliable.
- Lack of standardization master data or data version control is not available.
Too broad deployment, lack of buy-in from departments
- Without specific metrics, departments can easily view EPM as an “IT project” instead of an operational tool.
- Should choose a small scope to prove effectiveness, then gradually expand.
Not fully testing stress scenarios before go-live
- Many projects skip this step. stress test So the forecasting model does not react in time when fluctuations occur.
- Need to simulate situations like Revenue decreased by 20%, cost increase 15% to verify the system's responsiveness.
Checklist before operating the EPM system
| Category | Status to be ensured |
| Master data | Reviewed, standardized and approved before being loaded into the system |
| Connection API | Stable, with logs to periodically check data |
| User Training | All key users have been trained and have documentation. |
| Audit trail & backup | There is a mechanism for tracking and periodic backup to ensure transparency and data recovery when an incident occurs. |
Case studies & proof points
The pioneering enterprises implementing EPM have clearly demonstrated the value of this system in Improve financial performance, reduce risk and speed up decision making.
Case 1: Panasonic – Speed up financial forecasting with EPM
Challenge: Before adopting EPM, Panasonic's data aggregation and financial forecasting process took days and relied on Excel files from multiple departments, delaying decision making.
Solution: Panasonic deploys system EPM integrates data from ERP and BI, and apply models rolling forecast and scenario modeling for different business units.
Result:
- Forecasting time reduced by more than 10 days down to 5.5 days.
- Forecast accuracy is significantly increased thanks to automatically standardized and consolidated data.
- CFOs and FP&A can update “what-if” scenarios in real time.
Case 2: Monex Group, Sigmaxyz & LIXIL – Increasing Flexibility in FP&A
Challenge: Financial and manufacturing corporations like Monex, Sigmaxyz, LIXIL face huge volumes of data, manual FP&A processes, and slow response to market changes.
Solution: Deployment Multidimensional EPM, allowing direct integration of accounting, operations and sales data. The system supports automatic report consolidation, simulate multiple profit and cost scenarios.
Result:
- Reduce 40-60% of planning time and report consolidation.
- Significantly reduces manual errors by using a unified data source.
- Enhanced responsiveness, helping CFOs make real-time, data-driven decisions.
Risk management with EPM solution exclusively distributed by Bizzi – Sactona
In many businesses, EPM is often understood as a financial planning tool. However, in reality, EPM is also the central platform in risk management (EPM risk management). – where Plan and Actual data are merged, Scenario models are simulated and Key Risk Indicators (KRIs) are continuously monitored.
Sactona – EPM platform is Bizzi Distributed in Vietnam – specially designed to help businesses:
- Data consolidation from multiple systems (ERP, CRM, accounting…) into a single source of truth.
- Variance Analysis (Plan vs Actual) to detect financial irregularities.
- Scenario modeling Helps assess the impact of changes in costs, cash flows, or revenues.
- Set up KPI/KRI dashboards Helps management teams monitor financial, operational, and compliance risks in real time.
Sactona's outstanding strengths in risk management
- Friendly Excel interface – easy to use, reduces dependence on IT, helps departments operate proactively.
- Highly configurable – flexible according to each enterprise's risk management model (e.g. DSO management, cash forecast, variance analysis).
- Open Integration (API) – quick connection to existing accounting, ERP, CRM or BI systems.
- Fast deployment – clear ROI – Implementation time is only in weeks, suitable for Vietnamese businesses that need quick results and reasonable costs.
Specialized features for risk management
- AR/AP Automation (Bizzi ARM): Automatic debt reminders, bill due warnings, debt aging reports → reduce liquidity risk.
- Invoice Verification (Bizzi B-invoice): authenticate electronic invoices, store securely and make them audit-ready → reduce compliance risks.
- Drill-down Reporting: From key performance indicators (KRI) can be traced back to specific transactions (invoice, PO) → support root cause analysis.
- Scenario Planning: Simulate fluctuations in raw material costs, interest rates or exchange rates to assess financial risks before making decisions.
Thanks to the above features, Sactona Not only does it help businesses build proactive risk management processes, it also turns financial data into an early warning system – helping CFOs and Boards of Directors control the “full risk landscape” in real time.
Conclude
To effectively manage financial risks, businesses cannot rely solely on manual spreadsheets or disjointed reports. Centralized, accurate, and real-time data source, together clear key risk indicators (KRIs) system help detect unusual fluctuations early.
One Scenario Planning flexibility and mechanism transparent governance is the foundation for businesses to make timely decisions, minimizing negative impacts when risks occur. And EPM (Enterprise Performance Management) is the piece that makes this whole process possible – from data, to analysis, to action.
In the context of Vietnamese enterprises increasingly moving towards international management standards, investing in EPM is not only a trend, but also a necessity. Strategic moves to strengthen resilience and accelerate sustainable growth.
👉 Vietnamese businesses can refer to Bizzi's Sactona – EPM platform optimized for the Vietnamese market, with reasonable cost, quick deployment, clear ROI and friendly interface.
Sactona help businesses gradually build data-driven risk management capabilities, integrate plans and reality, and forecast the future with high accuracy.
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