Businesses are capturing growing amounts of data about their operations, but too often it’s not being properly leveraged. Executives can enhance execution and productivity by using analytics to align an organization’s strategies, goals, and plans. Corporate Performance Management (CPM) is the key that can unlock all of these benefits.
CPM is an umbrella term that describes the methodologies, metrics, processes, and systems used to monitor and manage the business performance of an enterprise. Applications that enable Corporate Performance Management translate strategically focused information to operational plans and send aggregated results that managers can track to evaluate progress toward goals.
The stakes are high for companies that haven’t adopted this approach. Their competitors are likely building data-driven cultures that make them more efficient. That data quantifies operations in a way that makes it faster and easier to make decisions and adjustments.
To make the most of CPM (Corporate Performance Management), companies need to begin by establishing an objective that is ambitious but measurable such as, “Improve customer service this quarter” or “Improve budgeting processes.” That creates a framework to identify goals that can be quantified through key performance indicators (KPIs). These KPIs should be data-driven indicators that show progress toward that broader objective. These can be data points such as revenue growth, return on investment (ROI), or customer acquisition.
These objectives and KPIs can extend to just about any aspect of a business, including budgeting and forecasting, consolidation and close, and financial reporting and compliance. However, for this CPM system to be useful, organizations must adopt a suite of analytical applications that can support the defining of goals, creation of KPIs, and tracking the metrics.
To get started with CPM (Corporate Performance Management),
there are a few important steps to follow
Create a data-driven culture across the business so all team members understand the value and embrace this approach as a valid one.
When establishing objectives and KPIs, make the process collaborative. Setting metrics that are unrealistic or that don’t align with job descriptions can risk employee support for the goals.
Ensure there is alignment across the companies around these goals.
Identify the CPM tools that will capture the data and analytics across all key departments to track KPI progress.
Make sure all employees have the right training and support to use these tools and use the insights to make faster, better decisions.
Beyond the bottom line improvements that CPMs can achieve, they offer another benefit that shouldn’t be overlooked. Each employee will have a clear sense of their priorities and how that is helping the company succeed. That kind of transparency can foster a deeper commitment and sense of unity that reinforces the company’s mission and culture in ways that pay big dividends over the long run.