Let’s get one thing straight right from the start. Corporate Performance Management (CPM) is not a software solution. Instead it describes a management approach that should help organizations to better execute corporate strategy. Gartner initially defined the term as “the methodologies, metrics, processes and systems used to monitor and manage an enterprise’s business performance.’
In looking at each of these terms:
Methodologies relate to the relationship between the different component parts of a strategic and operational plan and how they are defined. These typically include organizational objectives, the initiatives required to achieve them and the roles and responsibilities of different departments.
Metrics refers to how the plan will be measured and will typically relate the achievement of corporate goals with the implementation of supporting activities.
Processes are the management tasks that are required to formulate strategic and operational plans, how those plans are resourced via budgets, the way in which plans are monitored via forecasts and actual reporting, and the way in which they are adjusted to cope with changing circumstances. These processes bring the whole organisation together around the topic of corporate strategy and operate as a continuous, closed-loop activity.
Systems are the technology applications designed to support the methodologies, metrics and processes required to achieve strategic goals.
CPM cannot be defined by any one of these – it requires all four areas to be combined in a way that helps an organization to navigate its way through a changing business environment that will lead it to accomplish its mission. Any other definition misses the point.
By Michael Coveney, EPM Channel Contributor, from: http://www.michaelcoveney.com/general/corporate-performance-management/
Michael Coveney, who is based in the UK, has more than 35 years of experience in the financial analytic software industry, helping enterprises combine ‘best management practices’ with technology to improve the efficiency and effectiveness of their performance management processes.His energetic style and insightful views has led him to become a regular speaker at international events, a course leader with the Antwerp Management School, and the author of many articles and books including his latest ‘Strategy to the Max’ – a down to earth look at all you need to know in setting up systems that support the implementation of corporate strategy. See Michael’s articles on EPM Channel here.