Learn More About Corporate Performance Management (CPM) Software
Who Uses Corporate Performance Management (CPM) Software?
Accounting professionals: Accountants use CPM software to monitor and improve financial performance. It helps accountants compare budgets with actual expenses and revenues at different levels of the company. Accountants also use CPM software to create forecasts for future revenues and corporate expenses and identify opportunities to reduce costs and improve profitability.
Department managers: Managers of any department benefit from using CPM software by tracking the business performance of their own departments. Each department has specific goals and metrics that need to be aligned with the other departments and the overall objectives of the company. CPM software allows managers to budget for future expenses, identify discrepancies between expected and actual revenues, and understand how their operations impact the efficiency of the other departments.
Executives: Executives use CPM software for strategic planning and to oversee performance at the company or group level. When required, executives also need to be able to drill down to find details on metrics and transactions, that had an impact on corporate performance.
Software Related to Corporate Performance Management (CPM) Software
CPM software often complement or are often used in conjunction with the following tools:
ERP systems: Enterprise resource planning (ERP) software provides a lot of the information used by CPM systems but also uses performance analysis data to optimize operations managed by the system. For instance, forecasts generated using CPM are used in ERP to determine the production capacity or the quantity of raw materials needed to supply the demand. ERP also helps compare estimates with actuals and identify discrepancies between forecasts and outputs. These discrepancies will be used in CPM to optimize forecasting and create performance objectives with increased accuracy.
Accounting software: Accounting and finance software provides the financial information required to monitor the profitability of the company. It also helps create and manage budgets, which need to be aligned with corporate objectives. This is particularly important because companies can only function within the confines of their financial limitations. Executives and managers may have ambitious plans to improve performance, but may not have sufficient funds to implement them.
Business intelligence software: BI software can be used to replace CPM software for companies with basic needs. It can also be used to gather, clean, and prepare all the data used to monitor and improve performance. Most CPM vendors provide features for integration with BI and data management software to provide a high level of data accuracy.
Financial consulting providers: Financial consulting service providers can help companies define and implement performance metrics and KPIs that are specific to their operations or their industry. Consultants can also assist companies with determining strategic and contingency plans or improve their forecasting and budgeting processes. Large financial consulting firms also provide benchmarking services based on consolidated data from thousands of customers. Benchmarking can be very useful for companies to compare their performance with their peers or competitors.
How to Buy Corporate Performance Management (CPM) Software
Requirements Gathering (RFI/RFP) for Corporate Performance Management (CPM) Software
When selecting CPM software, it is important to look at how a business operates, and familiarize oneself with the different types of software available. Users should make sure the CPM vendors in their list have prebuilt integrations to their ERP system. Ideally, one which provides connectivity to the general ledger tables so users can report, drill down, and budget according to their requirements.
Compare Corporate Performance Management (CPM) Software Products
Create a long list
The buyer is advised to create a long list of software that is designed to help businesses in their industry. For example, there might be platforms specifically built for businesses in retail, manufacturers, restaurants, as well as for many other types of commercial organizations. Another factor to consider when creating this list is whether the software is cloud based. CPM solutions are generally easier to manage in the cloud, with automated reporting tools upgrades, frequent releases, and user-friendly interfaces.
Create a short list
After reviewing and researching the software on the buyer’s long list, they can cut down the list based on their budget. CPM software is available to suit all budgets and some general CPM applications may be downloaded for free or bought at a low price. However, more specialized software is generally more expensive. It’s because the user base for specialized software is relatively small. If the buyer wants something specific to their industry or customized for their company, they would have to pay more.
Conduct demos
Companies should make sure to demo all of the products that end up on their short list. During demos, buyers should ask specific questions related to the functionalities according to their priorities. They should also communicate key objectives and critical needs to vendors and demand that these be covered in software demonstrations.
Selection of Corporate Performance Management (CPM) Software
Choose a selection team
The employees who will be using this software must be involved in the selection process. It may be preferred that the software chosen is compatible with the ones they currently use. Every business is different and the end users are most likely in the best position to offer an educated opinion about which one is the best choice for their particular needs. They may even be able to help the buyer install and set up the software of choice.
Even after purchasing software, most platforms allow for addons or modifications. However, choosing the right software is still important as it is still a big commitment of time and money. To see solid ROI, buyer’s can’t change their minds a few months later and switch software again.
Negotiation
Negotiating a software contract is important to minimize risk, whether it is in terms of performance protection, security protection, or simply making sure that both parties are in complete agreement on their expectations. The buyer has the option to ask for a discount in return for annual upfront payment, and many software providers are usually happy to make that deal. Usually, some implementation services will be included in a software provider's first offer. The buyer can ask for these services to be removed. Also, if the company will use the software for a long time; they can negotiate longer terms, which often results in more favorable pricing.
Final decision
The final decision should be based on all the information gathered previously. Buyers must prioritize their needs and select a solution that meets most of their requirements. It is recommended to run a pilot program to test adoption with a small sample size of users. If the tool is well-used and well-received, the buyer can be confident that the selection was correct. If not, it might be time to go back to the drawing board.
