Corporate Performance Management (CPM)

VIEWS: 2,302 PAGES: 8

More Info
									A Corporate Performance Management consists of a set of management and analytical
processes that are supported by technology which enable businesses to define strategic
goals and then measure, and manage performance against those goals. Some of the
Corporate Management Processes include financial planning, operational planning,
business modeling, consolidation and reporting, analysis, and monitoring of key
performance indicators. The form contains standard language; however, additional
terms and conditions may be added to it, making it fully customizable to fit the needs of
the user. Use this form when trying to measure a corporation’s performance against the
goals it has set for itself.
Corporate Performance
Corporate Performance Management (CPM):

“Corporate” Performance Management (CPM) involves Process, Information, and Technology
for enterprises of all dimensions and structure to steer sustainable performance growth. CPM
includes tactical planning, forecasting, budgeting, workflow, modelling, reporting, scenario
planning, KPI monitoring, profitability analysis and consolidation. CPM tackles both procedural
and financial presentation to be included in the process of data collection, data analysis and
reporting in a combined way for business executives, administrators, and employees throughout
all the levels of an organization.

Business performance management

(BPM) - Business performance management is a set of managing and analytical procedures that
facilitate the performance of an organization so that it can be managed with a vision to achieve
one or more perceived goals. Terms used to denote BPM comprise "CPM - corporate
performance management" and "EPM - enterprise performance management". However, if we
observe BPM and CPM as similar terms, BPM would be used as the more comprehensive term.

The acronym "BPM" can also be confused with the term "business process management".
Hence, the use of terminologies like "corporate performance management" or "enterprise
performance management" should be done in order to avoid confusion (Frolick, 2009).

BPM has 3 major actions:

    1. Selection of objectives.
    2. Measurement of information pertinent to an administration’s development against these
    3. Taking note of the interferences made by administrators in the light of this information in
         order to improve further performance as per these objectives.

© Copyright 2010 Docstoc Inc. registered document proprietary, copy not               3
Corporate Performance Analysis (In Brief):

To endure modern competitive environment, enterprises need proper service, application,
business tactics and exclusive ways of utilizing technology in order to be ahead of their
opponents and be rewarded with bigger revenues. In an unpredictable business setting where
product lifecycles are contracting and international markets make it easier for new opponents to
capture markets, it becomes significant for the organization to carry on without being
competitive. (Michael Comshare /Coveney, 2003)

In this field one more business name which is known as "Corporate Performance Management"
or CPM which is its acronym . CPM means "the process, methodology, metric and procedure
utilized to supervise and handle the growth of a venture.” But in various areas CPM doesn't
appear to be new. After all, enterprises are constantly required to supervise and advance their
growth. So in reality what makes CPM different from conventional routes of management is that
traditionally, corporate growth study has determined on an enterprise’s monetary growth -
generally known as its “lagging” indicator. This is a “rear-view mirror” process of study which is
dependent on truthful monetary statements - hence about 20% of CFOs say that they undergo
more stress to exercise aggressive book-keeping than they did in the past. Even with serious
illegal penalties which are imposed at Sarbanes-Oxley, about 56% CFOs report that deliberate
miss-statement of financial reports are possible. Over 2 years after the channel of Sarbanes-
Oxley, additional 1,300 people daily call the SEC to complain about 30% monetary and security
frauds which lead to enforcement conducts. As monetary re statements prolong to climb,
investors now understand that the “lagging” signs alone are not enough to determine corporate
performance level. With monetary statements in query and 70% of the worth of S&P 500 now
established as “intangible” asset (up to 20% in the year 1980), we look up to the “leading”
indicator in order to idealize the discipline of commercial performance investigation reported by
the media as “proof that is just too strong to not be embraced by normal investors”.

Although the significance of “leading” indicators is distinguished, no widespread resolution
exists at present, departure shareholders and market analysts place stress on enterprises to answer
the crisis. Even 75% of board of the directors feel stress to calculate the “non-monetary”
performance or the “leading” indicators, and 67% of them report that they are uncertain whether

© Copyright 2010 Docstoc Inc. registered document proprietary, copy not                4
Sarbanes-Oxley (SOX) was normal to “resolve the dilemma”, by creating better clearness to
eliminate danger; however, it is only confirmed as being onerous and expensive.

Front-end overheads of SOX are approximate as high as $20 billion, where as $5 to $10 billion
in yearly follow-on over-heads. Organizations are now re-evaluating outstanding public which
has caused the SEC and USA exchanges to find re-solutions, or as distinguished by the CEO of
NASDAQ - 90% of international businesses list their organizations on international stock
exchanges. Also, incorporation of both “leading” indicator and “lagging” indicator generates the
initial holistic outlook of an enterprise’s structural honour; as long as they maintain greater
clearness, reduced overheads of observance, superior shareholder value and strategic
improvement (Collin, 2005)


CPM creates worth to the company by targeting how an enterprise creates, implements and
supervises its strategic plans. This strategic target is kept all over executive and processes
straight down to the involvement of individual budget holders. CPM is more about the
implementation of the strategic plans.

Driven by trade and sustained by technology, CPM merges executive styles that target on growth
and logical reporting. A detailed and incorporated growth management solution presents several
key advantages to the management which are: Accuracy, Agility, Control, Clearness,
spontaneous structure plan for organization users, smaller planning cycles and immediate
observing & reporting (Concept, n.d).

CPM: What's Involved?

CPM’s approach to the execution and scrutinizing the strategy is quite holistic. It unites business
methodologies like economic value added (EVA), scorecards and activity related management;
specific measures used within these methodologies (metrics); processes, i.e the procedures that
are followed in order to execute and scrutinize corporate performance; and system, i.e the
technological solutions which unite methodologies, metric, and process into a sole enterprise-

© Copyright 2010 Docstoc Inc. registered document proprietary, copy not                5
wide management system. Other than a single application, a CPM system is different from other
approaches to performance administration as it controls both technology and expert business
customs so that the management can answer the important questions around the formation and
execution of a plan. CPM system also allows a closed-loop system that begins with the
perception of where the organization is at present, where it would be in future, what goals should
be set up, and how reserves should be assigned in order to fulfil these goals. Once an
arrangement has been organized, the system then checks the performance of these plans,
underlines exceptions, and then gives insight on their occurance. The system maintains the
assessment of options from which can be used to make conclusions and then shuts the loop by
deciding in which direction the organization wants to move. To maintain the formation and
execution of strategy, CPM starts by relating enterprise-wide planning, forecasting, budgeting,
consolidation, analysis and reporting. It also supports methodologies to link plan to the allotment
of benefits (financial and non-financial) which can transform the strategy into action. CPM
application also enables managements to correspond and run the strategy all through the
complete organization so that it helps staff perform and make choices which maintain the
strategic targets. Lastly, it also helps members of the association focus on important matters and
crucial data, rather than on every bit of the data and event that is possible. It also distributes the
correct information to the correct persons at the correct instance in the correct background.
Gartner forecasts that associations that successfully position CPM solutions will surpass their
business peers, and all businesses should recognize the effects of CPM and instantly start
forming their strategy.

© Copyright 2010 Docstoc Inc. registered document proprietary, copy not                   6
        Frolick, Mark N., Thilini R. Ariyachandra ,2006. "Business performance management:
         one truth" (PDF). Information Systems Management ( Retrieved
         April 2, 2010 from. Retrieved
        Concept, n.d. Technology-enabled Business Performance Management: Concept,
         Framework, and Technology. 3rd International Management Conference. Retrieved
         April 2, 2010 from.
        Colin 2005. The Next Generation of Business Intelligence: Operational BI White,. "The
         Next Generation of Business Intelligence: Operational BI". Information Management
         Magazine. Retrieved April 2, 2010 from http://www.information-

© Copyright 2010 Docstoc Inc. registered document proprietary, copy not               7

To top