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What is Corporate Performance Management?

June 6, 2019 |

Every company can benefit from a corporate performance management (CPM) strategy, but it’s especially useful for those that want to modernize their financial planning and make more data-driven decisions for maximum future performance.

Corporate performance management (CPM) refers to software systems that increase efficiencies and data accuracy in finance and accounting processes, enabling companies to measure and analyze their past performance to make better business decisions that maximize future performance—both in bottom line financials and operational KPIs.

Software systems that measure and analyze financial data in order to inform strategic decisions go by several names—including business performance management (BPM) and enterprise performance management (EPM)—but in general, these terms are synonymous with CPM.

New enhancements in cloud financial solutions have bridged the gap between applications that merely process and track transactions, and those that manage the full spectrum of financial planning and analysis (FP&A). CPM has merged with FP&A, allowing finance teams to not only monitor and manage their companies’ past and present performance, but also to plan for future performance improvements using insights and analysis from both financial and operational data.

What is CPM Software?

CPM software is a set of tools and processes that include reporting, planning, budgeting and analysis. An organization’s CPM output is the first step towards facilitating revenue growth and managing expenses. As the industry pivots from CPM to incorporating FP&A practices into every area of the business, the associated software has evolved as well. Modern FP&A software incorporates these key CPM functions, providing more power and more opportunity to organizations that embrace full-spectrum FP&A.

Traditionally, CPM software has been segmented into:

Until recently, these were typically sold to different audiences with different value propositions:

The evolution from segmentation to “full-spectrum” FP&A is due to the fact that the two sides of CPM are symbiotic: modern finance leaders should look at FP&A as an all-encompassing term for measuring, managing and reporting on their company’s past, present and future performance. Actuals from accounting need to feed into budgets, forecasts and analysis to inform better business decisions for the best future performance possible.

The key differentiator between traditional CPM and full-spectrum FP&A is integrated business planning. Modern FP&A solutions and processes combine financial and non-financial data and KPIs to inform better departmental and business-wide decisions for the best future performance. Here’s a look at each of the key areas of performance management—what they are and how they’ve evolved.

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For an in depth comparison of CPM software solutions, check out the 2019 vendor landscape from analyst firm Nucleus Research.

CPM and FP&A by Process

Financial Close and Consolidation

Reporting

Budgeting, Planning and Forecasting

Modeling and Analysis


Learn how Nando's manages budgeting, forecasting and reporting for over 1,000 restaurants in 24 countries, with a single cloud-based solution.

CPM and Excel

While ERP modules and specialized CPM software abound, Excel still remains the most popular software tool for performing CPM, and it makes sense—it’s intuitive, familiar and everywhere in business, especially in finance and accounting departments. It’s only natural that Excel is the software users gravitate towards for any financial analysis or reporting need.

Excel is built with flexibility at the forefront, so users don’t need help from IT consultants to build budget reports or perform data analysis. At the same time, it has a powerful interface that includes hundreds of functions for data visualization and statistical analysis.

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Finance and accounting professionals have relied on Excel for their entire careers, and it remains a highly-sought skill among candidates. Plus, countless companies have invested in training employees and building customized Excel models, templates and report formats. In fact, Excel is so popular that if it was a language, it would be one of the world’s largest, with nearly a billion speakers.

To Excel or Not to Excel

Organizations rely on Excel for its power, flexibility, and because they know it inside and out. But it’s not perfect. Weaknesses include a lack of:

Excel Imitators

Many CPM software vendors are convincing their customers to abandon Excel-based approaches in favor of their proprietary emulations. These solutions are similar to Excel, but lack its flexibility and power, and require a long, continual and costly process of customizations to make the software fit the company’s unique needs.

What’s more, 84% of companies that buy proprietary CPM software to replace Excel end up exporting their data back to Excel anyway. Why? Because accounting and finance professionals prefer its flexibility and familiarity.

But exporting back to Excel defeats the purpose of a secure, controlled program in the first place. It also perpetuates the problem of “shadow systems,” additional software being used outside of company-approved solutions. In this scenario, you’re back at square one—facing the same challenges as using Excel on its own.

Integration: The Best of Both Worlds

The solution to this dilemma? Integrate advanced features with Excel’s flexible interface. By combining Excel’s familiar interface—not just emulating the look and feel, but real, actual Excel—with a cloud-based solution, organizations can fix inefficiencies without compromising the power of a tool they’re already familiar with.

Excel integration is more than just deploying an “Excel-like” solution—integration combines the powerful functions of the original software with the benefits of a modern, scalable cloud solution.

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Learn how to add workflow, audit and version control to Excel in this series of free financial technology webinars!

The Future of CPM

BPM Partners’ Next Generation of CPM report explains that the next generation of performance management solutions will have four core characteristics:

Focus on Usability

In addition to the four characteristics above, advanced CPM applications must focus on providing usability – not only to finance professionals, but especially to users without a finance background. In order for enterprise software to realize its value, it must be adopted by employees. Ease of use, or “employee-centered” design, is the first step toward better performance: The value chain for an optimal CPM solution starts with increased usability.

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Usability leads to quick adoption, and quicker adoption means the finance departments can see quicker time-to-value. By getting everyone on board more efficiently and generating ROI earlier, word’s going to spread – and that means more recognition for the department who led the charge, easier buy-in from decision makers, and, ultimately, better decisions and business performance.

“CPM isn’t just for accountants anymore. We’re seeing broader use throughout organizations which in turn is leading to greater adoption rates. This is making usability an important factor in current and future development trends. The end goal here is to achieve greater efficiency with analytics integration, more effectively empowering end-users.”

 Nucleus Research

Full-spectrum FP&A

Full-spectrum FP&A software incorporates all the competencies of CPM to deliver a diverse spectrum of effective features. From financial close and scenario modeling to improving planning strategies for future business performance, FP&A solutions deliver reliable data and instant access to forecasted numbers.

With a user-friendly cloud-based FP&A solution, finance teams don’t need to rely on vendors or IT consultants to get the most out of their software—they’ve got self-serve dashboards and drill-down reports to quickly get the information they need, and share it with others across the organization.

Full-spectrum FP&A is the logical next step of CPM, giving finance teams clarity and confidence in their numbers with a centralized single source of truth, with automation that frees up time for analysis. Executives and members of senior management can make better decisions when they have real-time data at their fingertips – and that’s better for everyone.

Ready to see for yourself why full-spectrum FP&A is the ultimate corporate performance management solution? See Vena in action with a personalized demo.

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