Choosing a Viable EP Center

EP is meant to track performance for a specific, properly defined business unit. This business unit must meet the criteria of a Viable EP Center, i.e., a reasonably stand-alone business unit that does not share too many collateral revenues or costs with other business units, or derive substantial business-specific benefits from unallocable costs of the overall company.

By definition, the whole company is a viable EP center. If a business unit within the company is not "viable," then a focus on growing EP over time for that unit could lead to sub-optimal business decisions, or to actions that compromise, rather than increase, the value of the company.