What is Corporate Performance Management “CPM”?

Corporate Performance Management, aka CPM, is the process of measuring and determining leading indicators of your business to improve revenue and overall profitability of your company. CPM is reporting such as Balance Sheets, Income Statements and Cash Flow Statements. It is also Budgeting and Forecasting of your revenue, expenses, cash flow, inventory and any other metrically measurable statistics that your business has. These statistics will be related, equated and analyzed to produce your Key Performance Indicators, “KPI”. KPI are used to help quickly measure your business in terms of health as well as leading indicators to assist in forecasting and trending how your business vertical is doing.

Is Business Intelligence different from CPM? There are certain analysis aspects of CPM that interrelate with BI, but what makes the biggest difference to users is that CPM and BI are traditionally viewed in different formats. CPM is oriented to numerical analysis and styled like a report or a spreadsheet model you would make in Microsoft Excel. Never, mistake CPM to be equivalent to Excel. CPM Software focus is on the ability to store data in a central repository collecting all inputted data as well as pull data from various sources. Microsoft Excel without Excel Services and Sharepoint is normally reduced to fragmented files and versioning nightmares. One common story that reverberates well with clients is: “You have a chain of Excel Workbooks linked together, time passes on someone deletes one of the Worksheets in between now you will spend days if not weeks looking at why your updated numbers are not carrying through properly.” This is one of the many major advantages of CPM and the software we use called Prophix 11.

CPM is much more than just your budget to actuals and planning out your fixed assets. You can build your amortization schedules with Prophix and spread the values across the proper months automatically based on how you amortize your assets. Building out cash flow models to understand when and where you would need the money can be calculated using Prophix. Prophix can be used to build exchange rate schedules and run consolidation process if you have multiple systems from different entities. Once all the data has been consolidated all that is left is entering in adjustment and elimination entries into Prophix as you see your trial balance and interact with it on the spot.

Corporate Performance Management is not just Reporting like products like Management Reporter or JetReport. It is a tool used to better understand the health of your business and provide you the ability to analyze that data in a centralized, versioned and simplified report. CPM is the stepping stone into Business Intelligence and understanding your business in ways your finance team could only imagine.