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 has considerable experience in the financial analytic software industry where he specialises in helping enterprises combine ‘best management practices’ with technology to improve the efficiency and effectiveness of their performance management processes. In recent years he has focused on conducting management workshops aimed at bringing senior executives and their management teams together around the topic of managing corporate performance and the role that technology can play. His energetic style and extensive experience has led him to become a regular speaker at many international events, a course leader with the Antwerp Management School, and the author of many articles and books. His latest, ‘Budgeting, Planning and Forecasting in Uncertain Times’ is published by the American Institute of Certified Public Accountants. Michael has a blog (www.BusinessPlanningFramework.com) where he discusses the latest developments and observations in performance management.
See Michael’s articles on EPM Channel here.