Corporate Performance Management (CPM)

Corporate Performance Management (CPM), also known as Enterprise Performance Management or Business Performance Management, is the set of methodologies, systems, business processes, and metrics used to manage and monitor business performance.

Its goal is to improve organizational effectiveness by providing senior executives with information that allows them to make better-informed decisions about the future of the company.

Why is CPM important?

Corporate Performance Management has become a primary focus of many business owners as it helps align the organization around its strategic goals. It enables companies to place a greater emphasis on the key drivers of business success, such as customer satisfaction, employee retention, productivity, innovation, and quality.

After linking the company’s priorities to strategic planning and the execution of business activities, the Corporate Performance Management practice can assess whether or not the organization is focusing on the real drivers of change to increase revenue and grow profits.

Which are the most common CPM metrics?

Corporate Performance Management is not a corporate strategy itself but a set of business intelligence tools to measure the operational success of a company to its organizational strategy and business planning.

To ensure that companies accurately track their actual business performance, the finance department needs to first analyze all the different data sources available. Once having determined which financial reports to look at, the management team needs to set viable performance metrics to monitor whether or not they are achieving their goals.

Most of the key metrics used in Enterprise Performance Management can be organized into the following five categories:

1. Financial: all financial performance metrics such as costs, sales, and profits. Some examples of specific financial metrics include sales revenue, net profit margin, gross margin, and sales growth.
2. Internal: employee experience can have a big impact on the long-term success of a business, and this set of metrics evaluates the quality of the company management. An example of one specific internal metric is employee happiness.
3. Customer: includes key performance indicators of business health such as customer satisfaction and loyalty. Some examples of specific customer metrics are customer retention rate and qualified leads per month.
4. Compliance: refers to the demonstration of legal compliance with existing regulations, environmental rules, and financial reporting.
5. Strategic: includes metrics that reveal how well strategies were implemented to achieve objectives and organizational goals.

Corporate Performance Management software: what to expect

CPM tools were traditionally used by Finance. However, today it serves the entire organization as it allows employees to track both individual and project performance to corporate goals and business strategies.

Some of the benefits of using CPM software include:

• Alignment of corporate objectives with management plans and operational processes
• Easy access to data
• Data consolidation across all departments
• Streamlined workflows
• The reduction of operational costs
• The automation of manual tasks
• Complete data analyses (DA) to make better business decisions
• Real-time information
• Easier risk management
• Cross-functional collaboration