The EPM Squeeze: Five Forces Pressuring Every Platform in the Market

I've spent the last several months briefing with vendors across the FP&A and EPM space. Gen-3 startups, established enterprise platforms, niche point solutions, AI-native newcomers and a few that don't fit cleanly into any category. What I'm seeing is a market being compressed from multiple directions simultaneously — and it's putting unprecedented innovation pressure on the platform play that most mid-market finance teams have defaulted to for the last decade.

1. Established Platforms Going Wider

The multi-product EPM players are expanding aggressively into adjacent territory. An FP&A platform that started with budgeting and forecasting is now pushing into sales performance management. A consolidation-first platform is building deeper into financial close and reconciliation. Another is layering in workforce planning, operational planning and supply chain.

The logic makes sense from the vendor side. I lived this for 13 years: you grow TAM by going wider. But going wider means spreading R&D across more product surface area. Every new module is a bet that the platform can build something competitive enough to hold its ground against companies whose entire existence is dedicated to that one problem.

Sometimes that bet pays off. Sometimes you end up with a module that checks a box in a demo but doesn't survive contact with a real finance team's workflows. And the buyer sitting across the table has no way to tell the difference without serious due diligence.

2. AI-Native ERPs Pushing Up

A wave of tools is entering the market from below — starting with accounting, general ledger and financial close, then building upward into planning and consolidation. Their pitch: why buy two platforms when ours does both? They're targeting multi-entity businesses where consolidation complexity starts on day one and the traditional "buy an ERP then bolt on EPM" approach feels like overhead.

These tools are younger, AI-first and not carrying years of architectural decisions. The pitch is compelling: real-time data, no integration layer, continuous close.

For the established platforms, this is a different kind of threat. It's not a competitor with a slightly better feature set — it's a company questioning whether the category boundary between accounting and planning should exist at all. That forces a strategic response, and strategic responses take time that unburdened entrants don't need.

3. AI-Native FP&A Tools Going Deeper

This is arguably the most interesting pressure vector. A new generation of AI-native FP&A tools is going deep on planning — and they're getting really good at it. They're not trying to be platforms. They're not building consolidation or close. They're laser-focused on modeling, forecasting, scenario analysis and collaboration, and their innovation cycle is fast because planning is the only thing they're investing in.

Some are specializing by industry — building purpose-built planning experiences for SaaS-based startups or specific verticals. Others are going deep on process — focused entirely on revenue modeling, or capex and project investment lifecycle management. Their depth in a single domain is hard for a multi-product platform to match when that platform is simultaneously trying to innovate across eight product lines.

The consequence is that these tools are raising the bar on what "good planning" looks like. When a buyer sees what a purpose-built AI-native planning tool can do and then compares it to the planning module inside a broader EPM platform, the gap is noticeable. That creates a real pull — buyers start questioning whether they need the full platform at all, or whether they'd be better served by a best-in-class planning tool paired with something else for close and consolidation.

4. Niche Point Solutions Carving Off Use Cases

While the platforms are going wider and the AI-native tools are coming in from above and below, a fourth wave is attacking from the sides. These are focused, single-use-case tools — dedicated SPM platforms, standalone close management and reconciliation, purpose-built workforce planning, specialized reporting and analytics.

They're not trying to be platforms. They're trying to be the best at one thing. And in many cases they are. A dedicated SPM tool from a company that only does incentive compensation will almost always be deeper, more opinionated and faster to innovate than an SPM module that's one of eight product lines competing for engineering resources inside a platform vendor. Same goes for close management, where dedicated tools have been refining that single workflow for years.

This is where the innovation pressure becomes most visible. Two years ago, a platform module being 60% as capable as a dedicated tool was an acceptable tradeoff because you got the integration benefit. But integration is getting easier. APIs are better. Data infrastructure has matured. That 60% starts looking less like a reasonable compromise and more like a gap that a purpose-built tool would close on day one.

5. The Data + AI Agent Layer

This one is early — but it's worth watching. A very new wave of companies isn't trying to build a "platform" or a "tool" in the traditional sense at all. They're building data layers with AI agents on top — designed to sit across your existing tech stack and automate task execution workflows with minimal human involvement.

The idea is that instead of buying a monolithic platform or assembling a best-of-breed stack, you let intelligent agents orchestrate work across whatever systems you already have. They're less about UI and more about autonomous workflow execution — pulling data, running analyses, surfacing exceptions and triggering actions without requiring a human to click through screens.

It's early. Very early. But the implication is significant: if this approach matures, the "platform vs. best of breed" question might evolve into something else entirely. The value might shift from the application layer to the intelligence layer — and that would reshape how every vendor in the EPM space thinks about their product roadmap.

What This Means for Buyers

I'm not arguing that the platform play is dead. For many organizations — especially those dealing with consolidation complexity, multi-entity structures and tight regulatory timelines — a unified platform still makes a lot of sense. There's real value in having your planning, close and consolidation data in one place with one vendor, one support team and one upgrade cycle.

But the innovation pressure on platforms has never been higher. The squeeze from all five directions means that "good enough" modules are competing against tools that are purpose-built, AI-native, industry-specific or architecturally unburdened. The bar for what counts as competitive in each layer is rising fast — and it's being set by companies that only have to be great at one thing.

So the question for buyers isn't simply "platform or best of breed?" That framing is too simple for what's actually happening in the market. The real question is: can this platform innovate fast enough, across every layer it claims to cover, to stay ahead of the specialists that are laser-focused on just one?

Some can. Some will. But buyers need to evaluate that with eyes wide open — not by taking the vendor's word for it, but by stress-testing each layer against the best available alternative. If the platform holds up, great. You get the integration benefit and the simplified vendor relationship. If it doesn't hold up in a critical area, you need to know that before you sign a three-year contract, not after.

The market is evolving fast. The evaluation frameworks most finance teams are using haven't caught up yet. That's the gap we're working to close at CFO Shortlist.

Continue Your Evaluation Journey

Understanding market forces is just the beginning. These reports will help you navigate the evolving EPM landscape: