Controlling today

Corporate Performance Management

What is it and Who Needs it?

Gartner, the respected information providers, recently introduced a new term, Corporate Performance Management (CPM), which has set the business world buzzing. Effectively, this is simply a term covering the many processes, methodologies and metrics used to monitor and manage the business performance of an organisation. Gaining credence as a mechanism for improving business performance.

CPM incorporates

• Processes used to manage corporate performance, such as strategy formulation, budgeting and forecasting,
• Methodologies that drive some of the processes, including the balanced scorecard (BSC)
• Metrics used to measure performance against strategic and operational performance goals

In today’s competitive, fast moving marketplace, it is vital for a company to fully understand it’s business strengths and weaknesses and today smart businesses using an integrated CPM strategy are driving performance through comprehensive planning, monitoring performance through scorecarding, and understanding that performance through reporting and analysis.

What is the right solution for a business?

Budgeting and forecasting. Performance Management? Financial Reporting? Management Scorecards?....Taken separately, these are only partial solutions. True business planning is achieved when planning, business intelligence and business analytics intersect.
With demand on the rise, an increasing number of financial software developers are adopting the CPM label in a desperate attempt to position themselves in the CPM space. We have already seen vendors rebadging legacy applications and business intelligence tools under the CPM banner, while others have been acquiring smaller planning and budgeting or business modelling applications in isolation, without considering if they can be integrated.
As a result, many current solutions being marketed for CPM are only partially complete – different companies provide different pieces of the puzzle but may well lack the complete picture. Organisations therefore need to be aware that the success of CPM hinges on sharing data across a whole suite of applications used to monitor and manage business performance. Until standalone products can be integrated into these suites, the individual applications will provide little advantage.

Integration, rather than patchwork soltution

To support this, Gartner Group states that, “To implement CPM, a business needs to find ways to integrate several of these methodologies, instead of deploying each in isolation.” Integration, rather than a patchwork solution, is essential to success.

Corporate Planning is a rare breed

In this respect, CP is a rare breed, having Planning, Analysis and Reporting Solutions together with Strategy Planning and Balanced Scorecard Modules, all fully integrated. The ability to take data from any ERP/Accounting Solution means we have the means to help any business in any industry.
Until recently, CPM has only been the domain of Large Corporations. This is not because only large corporations need CPM. The biggest barrier to CPM has always been cost, with the CPM providers charging huge sums for Software and Consultancy, neglecting the SME marketplace in the UK. CP, however, has developed a powerful flexible and intuitive suite of software aimed specifically at the SME marketplace. This means the solutions are quick to implement, simple to use and require minimal consultancy allowing SME businesses of all sizes to take advantage of CPM, with quick return on investment. Indeed, to date there are some 2,300 SME business of all sizes, in all industries, using CP solutions to improve the control, reporting and planning of their organisations.

So why should an SME consider investing in such solutions?

Many UK organisations will have already spent large sums on the latest Accounting/ERP solutions, giving end-to-end solutions for transaction processing however most do not fully address the informational requirements of a business.
For too many companies, planning and performance management are an overcomplicated, inflexible combination of spreadsheets which are inherently unable to offer the control, security and structured approach required.
The manual overhead required by this process is vast, from extracting the data from the transaction processing system, getting it into the spreadsheet models designed, and managing the formulas and structures to ensure accuracies. Much time is spent reporting numbers and not enough time analysing what the numbers are saying.

Shift the focus from generating numbers to understanding them

With solutions like those available from Corporate Planning, you are able to shift the focus from generating the numbers to trying to understand what these numbers mean. You can instantly analyse variances in your business, find the causes and resolve any problems. Business critical decisions are much easier to make. The ability to instantly understand what products are selling well, and are profitable, which department has excessive costs, produce instant Reports and Graphs confirming the results, are vital time-saving functions. Managers can also run 'what if?’ analyses to consider multiple scenarios and quickly predict the likely utilisation of resources, or business performance based on performance targets, capacity constraints and historical pattern consumption.
Please find an overview of the CP Software suite on the [back] page of this issue.
If you would like to find out more about CPM, or CP’s Planning, Analysis and Reporting modules, simply contact me and I will be happy to answer your queries or visit you at your premises for a presentation.

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