Corporate Performance Management: Why CPM is Critical to Running Your Business
Corporate performance management (CPM) refers to the methodologies, processes, and systems the enterprises use to monitor and manage business performance.
At its core, corporate performance management is about strategic planning based on the information from the various departments and components of your organization.
Effective corporate performance management systems rely on information input and consolidation from across the organization. This data is used to model forecasts and make business decisions based on a holistic picture of the business across each department.
CPM finance systems often consist of multiple applications that feed a unified dashboard to display information in custom formats, depending on the specific Financial Planning & Analysis decisions being made.
Why is Corporate Performance Management important?
Corporate performance management is key to a successful enterprise for many reasons. The following are some of the most important benefits of effective CPM within your organization.
Creating a Clear Understanding of the Company’s Positioning
The consolidation of data across your organization gives decision makers and stakeholders a clear understanding of your company's position both internally and in the wider marketplace.
While individual data from each department can be useful, the broader picture of your enterprise depends on consolidating and analyzing multiple streams of data including marketing, sales, operations, customer feedback, human resources, external market conditions, and any other information relevant to your organization.
Giving Decision Makers Timely and Accurate Information
To make effective decisions at the strategic level, your company's decision makers need timely and accurate information. Effective CPM allows this decision making to occur in real time based on up to date information.
Making decisions based on outdated data means you are constantly playing catch up to the current conditions. The speed of processing and ability to quickly generate forecasts means that your CPM platform will allow proactive rather than reactive decision making.
Streamlining Data Collection and Reporting
Your team should spend as little time and energy on the process of gathering information and generating reports to be as competitive as possible. Streamlining this data collection and reporting is a key feature of modern CPM solutions.
Providing greater transparency and visibility
Understanding the sources and validity is important when it comes to making accurate decisions. CPM platforms ensure you can quickly check the sources of data. Additionally, you can customize access on the user level to enhance data security.
Reducing Operational Risk
As a rule, risk reduction depends on gathering as much information as possible. The less you know, the greater the risk that comes with any decision. As such, speed, transparency, and rapid modeling from effective CPM helps reduce your operational risk.
Reducing Time Spent Planning Forecasting and Reporting
Traditional spreadsheet based modeling is an incredibly time intensive and error prone process. Modern corporate performance solutions eliminate this altogether, saving time, reducing Corporate Performance Management cost, and reducing risk within a single platform.
Increasing Enterprise Effectiveness
Collectively, the benefits of proper corporate performance management increase your enterprise’s effectiveness and competitiveness in the marketplace, resulting in more company value, higher profits, and a greater legacy for your organization.
What Metrics Should You Be Tracking?
An excellent system for corporate performance management depends on tracking the right metrics to quantify your ROI on migration. Your organization's specific business model will determine the exact metrics you should track, however the following are some of the more common informational areas that your CPM platform integrates.
Financial metrics your CPM should track include profits, operational expenses, capital expenditures, taxes, and every other line item that goes into closing your books.
Internal data you should track includes the days to close your books each quarter end at year end, the time it takes to create an annual budget, the time it takes to successfully model and forecast, and the productivity of each team member. This includes sales data, human resources data, and any other information that originates from within your company.
Customer metrics to track include the cost of acquiring a new customer and the average lifetime value of each customer you acquire. Additionally, data such as customer satisfaction, loyalty, and retention can also help inform your strategic planning.
Compliance metrics include the quantifiable measures for how well your compliance team is performing. This includes data like total number of incidents, risk indicators, and the average cost of compliance. This data allows you to determine how effectively you can abide by rules and regulations for your industry.
Strategic data is a broad category that can include operational data from your organization but also includes industry statistics, external market and economic conditions, political data, technological advances, and social statistics such as consumer attitudes and beliefs.
Strategic data is important to consider since your enterprise operates within the broader marketplace and is subject to conditions beyond your direct control.
Effective CPM ultimately depends on the software platforms you are using to consolidate and model your data.
Although in prior eras, CPM would have necessarily been performed with ink and paper, in the modern landscape, corporate performance management reporting depends on software platforms to perform the key functions outlined above.
The following are three of the top CPM software solutions commonly employed at the enterprise level.
System Application and Products in Data Processing, abbreviated as SAP, is a market leader in various enterprise software solutions.
Their CPM offering consists of their enterprise performance management software stack that incorporates financial planning and analysis. For organizations that already utilize the SAP lines of software, utilizing their CPM can make sense.
However, SAP is among the most expensive platforms, tends to have a long onboarding cycle, and is not a dedicated CPM system.
To implement CPM using the SAP software requires bundling multiple applications, each of which were acquired by SAP and can lead to various inconsistencies and operational challenges.
Nevertheless, SAP is still a very commonly used company for CPM software.
Oracle EPM, formerly known as Hyperion, has a modular ePBCS for managing corporate performance (however it is not a Hyperion Replacement). With a large user base of consultants and experts, organizations can typically find competitive pricing for implementation and support.
However, since it is not a dedicated CPM solution and is primarily focused on enterprise resource planning, some of the cloud solutions don't scale as effectively when faced with massive amounts of corporate performance management data.
OneStream is a leading unified CPM platform that is specifically made to meet modern corporate performance management needs, serving as an excellent Oracle EPM Replacement.
Unlike other systems, where CPM functionality is secondary to many of the primary features, OneStream prioritizes corporate performance management tools, including data consolidation, financial planning and analysis, and accurate real time modeling.
Additionally, the OneStream software is particularly effective at removing data silos and ensuring decision makers have the complete picture when doing real time strategic planning.
Implementing a CPM
Once you've decided to migrate from excel spreadsheets or a legacy system, you are faced with the challenge of implementing a dedicated CPM platform.
The biggest challenge revolves around data. Understanding where your data resides and how to import it into your CPM platform is critical. The biggest project risk stems from this data hygiene and consolidation process.
The most effective way to reduce risk and speed up implementation time is hiring a Corporate Performance Management consulting company such as CompIntelligence with extensive experience onboarding organizations to the OneStream platform.
If you opt for OneStream as your CPM, CompIntelligence can ensure you have a smooth onboarding process. As an original OneStream training partner with over 12 years’ experience, 70 enterprise level clients, and over 275 completed projects, we have had an exceptional track record maintaining OneStream’s 100% customer success rate. We also provide managed services beyond go-live.
Contact CompIntelligence today to find out how we can help you upgrade your CPM and take your organization’s performance to the next level.