CPM - Corporate Performance Management
Business performance management is a set of performance management and analytic processes that enables the management of an organization's performance to achieve one or more pre-selected goals. Synonyms for "business performance management" include "corporate performance management (CPM)" and "enterprise performance management". Gartner has officially retired the concept of, “CPM” and reclassified into, “financial planning and analysis (FP&A)” and, “financial close” to reflect two significant trends - increased focus on planning, and the emergence of a new category of solutions supporting the management of the financial close.
Business performance management is contained within approaches to business process management.
Business performance management has three main activities:
- selection of goals
- consolidation of measurement information relevant to an organization’s progress against these goals
- interventions made by managers in light of this information with a view to improving future performance against these goals
Although presented here sequentially, typically all three activities will run concurrently, with interventions by managers affecting the choice of goals, the measurement information monitored, and the activities being undertaken by the organization.
Because business performance management activities in large organizations often involve the collection and reporting of large volumes of data, many software vendors, particularly those offering business intelligence tools, market products intended to assist in this process. As a result of this marketing effort, business performance management is often incorrectly understood as an activity that necessarily relies on software systems to work, and many definitions of business performance management explicitly suggest software as being a definitive component of the approach.
This interest in business performance management from the software community is sales-driven - "The biggest growth area in operational BI analysis is in the area of business performance management."
Since 1992, business performance management has been strongly influenced by the rise of the balanced scorecard framework. It is common for managers to use the balanced scorecard framework to clarify the goals of an organization, to identify how to track them, and to structure the mechanisms by which interventions will be triggered. These steps are the same as those that are found in BPM, and as a result, balanced scorecard is often used as the basis for business performance management activity with organizations.
In the past, owners have sought to drive strategy down and across their organizations, transform these strategies into actionable metrics, and use analytics to expose the cause-and-effect relationships that, if understood, could give insight into decision-making.
Suppliers CPM - Corporate Performance Management
F.A.Q about CPM - Corporate Performance Management
How to Avoid Corporate Performance Management Pitfalls?
When a company communicates effective performance management across the organization, it must draw critical expectations, as well as expected results. However, it does not always happen smoothly. As a result, CPM faces significant challenges that need remedies in the initial stage as outlined below.
1. Strategic alignment of major elements
This refers to ensuring that every part of the organization processes and all vital elements are aligned with the primary objective such as budgets, project and program management, risk management, etc.
2. Smart automation
A poorly executed CPM will mean absolute failure. That’s why a corporation should put an accessible, elaborate, and appropriate ICT infrastructure to ensure information is easily integrated, processed and reported as per proposed standards.
3. Goals synchronization
Companies should not just use existing strategies without even focusing on their unique strategies. They should instead focus on articulating their primary goals across the corporations so that CPM and all stakeholders are in line with the set strategies.
4. Collection of Key Performance Questions (KPQ)
Though derived from KPIs, KPQ is about collecting meaningful, relevant, and usable data by asking the right questions to the proper departments and sources.
5. Fostering a positive learning environment
Once data has been collected, analyzed, and interpreted, the next course of action is using the information in meaningful ways. That is, ensuring that organizations have empowered relevant departments to use, correct, and improve areas suggested by CPM metrics.
Importance of Corporate Performance Management Software
In the era of business management intelligence, it’s important that corporations embrace processes automation. Here are some of the benefits of adopting a CPM solution.
1. Real-time feedback
Performance management software has smart dashboards which contain every measurable metric a management team may need to use in its decision-making. However, the detail is not in the variety. It’s in the ability to read and use data as changes happen in real-time across all parts of the organization.
2. Data consolidation for easy management
The tools have the intelligence to gather, group, and combine data from multiple sources, be it departments, spreadsheets, or even companies.
3. Provide ease of risk management
One significant advantage of CPM is the integration of tools like what-if models. For instance, the model empowers managers to mitigate risks and make informed decisions based on the simulation of the best-worst case scenarios.
4. Provide simple data feedback and access
Performance management tools enable managers to have ease of access to information while still fostering accuracy and quality.
5. Ease of collaboration
CPM tools are not only locally integrated but also cloud connected to allows all users to stay in sync across all departments.
How to Choose an Effective CPM Software Solution?
With the wide range of options in the market, it can be difficult to choose a high performing CPM software. Therefore, below are two fundamental elements to consider when shopping for a CPM solution.
1. High rating
A good product must have positive feedback because it drives satisfaction. The opposite is also true for an average product. However, there is an exception to this rule. Some companies may have a great product, but they are relatively new in the market and are yet to receive some feedback. The best way forward, in this case, is to use their trial version before committing to purchasing the full package.
2. A product from a reputable organization
Even though it’s not always true that reputable businesses will attract excellent ratings, these providers have the resources, significant market share, and a wide range of options. Meaning, their CPM solutions will probably make the grade.