Tasks of Corporate Performance Management
Corporate Performance Management (CPM), also called Enterprise Performance Management or Business Performance Management, deals with the planning, control and measurement of corporate performance and profitability. CPM thus represents a central management task and provides indispensable information for decision-making processes in the company.
A multitude of processes from corporate management, controlling and accounting converge under this term. Budgeting, planning, consolidation and reporting are included in Corporate Performance Management, as is the monitoring of key performance indicators. It is up to performance management to harmonise the short-term with the medium and long-term goals of the company. The regular monitoring of corporate performance indicators allows management to recognise new business developments and react to them at short notice. Indispensable for these demanding tasks is a correspondingly powerful Corporate Performance Management software that supports the aforementioned processes in the best way possible.
Advantages of Corporate Performance Management
The implementation of a Corporate Performance Management system to support the associated processes offers companies valuable advantages. A slump in sales, an increasing demand for a certain product or increasing fluctuation in a department no longer must be accepted as circumstances with a time lag. Corporate Performance Management provides decision-makers with relevant information at an early stage so that they can act proactively to new circumstances if necessary.
The use of CPM software enables a decentralised planning process. Since the individual business units usually have more up-to-date and detailed information than the head office, the quality of the planning data is increased and changes in the business environment become visible earlier. Furthermore, a process-controlled and integrated reconciliation of data on a uniform database is made possible. The tedious manual consolidation of different planning sheets becomes obsolete.
Corporate Performance Management systems bring together actual data generated throughout the company and enable full consolidation, as well as optimised and automated preparation of management reports and external financial statements. The use of a CPM system accelerates the preparation, review and publication of monthly, quarterly and annual financial statements (Fast Close). Fast reporting shortens internal decision-making processes and enables rapid action. Moreover, external shareholders and stakeholders can also react positively to the timely provision of information on the company’s assets and financial situation.
One of CPM’s main tasks is to record and collect data. This data is stored in a uniform format in a central database and forms the single point of truth for the Finance Office. Analyses are then created from a corresponding consistent database, on the basis of which management can make well-founded and correct decisions.
Software for Corporate Performance Management
Due to the important and central role of Corporate Performance Management and the large number of associated processes, the demands on a CPM software solution are relatively high. Corporate Performance Management is not a one-off activity, but an ongoing, recurring process.
Performance Management software must support the following core processes in the best way possible:
- Budgeting, planning and forecasting
- Group consolidation
- Internal and external reporting
Numerous company locations, divisions and employees are involved in these Corporate Performance Management processes. As the amount of data in companies increases, the software solution must also be able to grow accordingly. Multi-client capability and scalability are therefore essential basic characteristics of a good CPM system.
We recommend CCH Tagetik as a fully comprehensive CPM software that masters the versatile requirements of Corporate Performance Management with flying colours. We would be happy to show you how CCH Tagetik can support you in optimising your financial workflows. With many years of experience in conception and best-practice approaches in implementation, we will help you to maximise the benefits of your future CPM solution.
Up into the Cloud
The trend in the software market is going skywards, and this is also the case in the Corporate Performance Management segment. Since systems ready for implementation can be provided via the cloud at the push of a button, the lead time until roll-out is shortened. This leads to less dependency of the business department on internal IT departments. If appropriate service agreements are in place, new releases and upgrades are installed directly by specialists from the software manufacturers, which can reduce costs.
Enterprise Performance Management, Business Performance Management, Corporate Performance Management?
EPM, BPM, CPM. There are hardly any significant differences between these systems. In terms of content, the terms are synonyms for each other. Nevertheless, software manufacturers may have reasons for naming their products in a certain way. For example, some providers avoid the term Financial Performance Management in order to avoid the implication that performance management is limited exclusively to the financial area of the company. The term Corporate Performance Management, on the other hand, could suggest through the term “corporate” that a CPM solution is only designed for corporations. However, CPM (or enterprise performance management) is no less important in the public sector and for non-governmental organisations (NGOs).