Corporate Performance Management (CPM) was a term originally coined by Gartner in the early years 2000. Also Enterprise or Business Performance Management (EPM / BPM) are used as synonyms, depending on the vendors.
Performance management is focused on the common objective to link enterprise-wide strategy with enterprise-wide operations through the use of :
- Key Performance Indicators (KPIs) or Balanced Scorecarding,
- linking this to the core processes of Planning, Budgeting and Forecasting including Simulation and Scenario Modeling,
- integration with the Financial Consolidation & Management Reporting processes,
- Activity Based Management/Activity Based Costing or Profitability Analysis and
- Strategy Formulation and Strategic Planning.
Typically a broader framework is defined. Most definitions of Performance Management builds on the work from Gartner. According to Gartner, the framework consists out of :
- methodologies (Balanced Scorecarding, EFQM, Six Sigma, Beyond Budgeting, Time Driven ABC, ...),
- metrics (leading and lagging, financial and non-financial, short term & long term, quantitative and qualitative, aligned, ...),
- processes (Strategy Formulation, Goal Setting, Business Activity Monitoring, Performance, Feedback, ...) and
- systems (Business Intelligence & CPM / EPM software suites, data warehousing, advanced analytics ...).
Often the Office of Finance will take a leading role in the definition of the EPM / CPM strategy for the company. This makes that the role of Management Accounting evolves in to what has been coined as Performance Management Analytics (PMA) (Silvi, Moeller and Schlaefke).
element61 has a particular focus in assisting organizations in defining a roadmap, and executing on it, to automate Corporate\Enterprise\Business Performance Management processes in their company, whilst building on the data warehouse infrastructure that the company already has invested in.
Given the Mergers & Acquisitions of the last years, most CPM and BI Solutions now are owned by a few leading software companies, who focus on integrating both functionalities tightly into one suite and architecture. As such, companies need to develop an integrated vision on how Business Intelligence and CPM converge to support one single version of the truth and one single, iterative process for managing information on corporate performance, whether it is past, future or current management information.
Contact us for more information on Corporate Performance Management.