Corporate Performance Management: An essential component for a thriving organization, but not necessarily an easy initiative to execute. While it may seem like corporate performance management is a standard practice that goes hand-in-hand with business operational planning, it is actually quite a complex practice that deserves discussion.
So how do you ensure that your corporate performance management efforts are being met? By having clear practices and corporate strategies for an entire organization to follow. This article will cover the ins and outs of effective performance management strategies.
By the end of this blog, you will have all the tools needed to adapt your business process and improve strategic planning from start to finish to reach your financial goals.
What is CPM in Finance?
Corporate performance management (CPM), also known as business performance management and enterprise performance management, is a term used to describe the methodology, metrics, systems, and processes used to monitor business performance and key finance processes.
This integrated approach to business intelligence aligns a company’s different management teams on proven strategies to help support more informed decisions and drive growth at all levels of an organization. By setting clear strategic objectives, companies can improve their performance management process and drive organizational growth at a deeper level.
Whether identifying corporate goals, incorporating a financial planning and analysis strategy, or setting guidelines for people planning initiatives, business performance management is the vessel that can bring a wide range of ideas to life. Through metrics and performance data, professionals can use these analytics to support strategic decision-making and gain more valuable insight.
It should also be mentioned that CPM is not a strategy in and of itself. A series of strategic frameworks can be used to support CPM initiatives and track progress to ensure strategic goals are met. A balanced scorecard, the EFQM model, and a strategic planning system are all examples of helpful frameworks that companies can follow.
While all organizations tracking CPM will use metrics to track progress, these indicators may differ depending on the goals set by the company. What is most important is that these key metrics are easy to define and track so that the entire organization can align on a unified path to success.
Common goals of corporate performance management:
Reduce costs
Improve budgeting and forecasting
Support strategic decision-making
Align finance KPIs
Improve organizational strategy
Revamp an organization’s financial planning process
Corporate performance management vs. employee performance management
Another common buzzword that is often associated with CPM is employee performance management. While both topics involve improving performance within an organization, the methodologies and strategies are quite different.
Corporate performance management tends to revolve around the overall health of an organization. In contrast, employee performance management is more centered around human resources and tracks the performance and impact of each employee.
In a perfect world, both these strategic planning business activities would work in unison to support overall growth.
Learn more: Ranking the best Corporate Performance Management Software: our top picks for 2023
How to measure success with your CPM strategy
Your team can develop a million innovative ideas to spark organizational growth, but you will never be able to gain valuable insight to instill change if your initiatives are not being measured. So which success factors should be top-of-mind for your team? Below are a few of the most critical components to consider.
Strong strategy alignment
First things first, think about how you will align an entire organization on shared goals and objectives. To create this unified corporate strategy, each employee must have a clear idea of how every team operates, their goals, and how these goals align with the overall CPM strategy.
Effective communication
Communication is a pivotal factor that should be a top priority for targeting strategic objectives. Improved communication across all teams makes it easier for goals to be presented and supports stronger collaboration across departments.
Senior management involvement
The only way a new strategy will be successfully adopted is if senior executives show their support. Once all leading decision-makers align on the outlined objectives, that is when strategic changes can take shape and come to fruition.
Goal setting
Has your team outlined clear targets? By taking a data-driven approach to organizational goals, team members will be able to align more fluidly and improve performance. A clear action plan acts as a roadmap, and the incremental benchmarks serve as the building blocks to get there.
Platform implementation
You have your team aligned, goals in place, and now it is time for the implementation phase. So how do you drive data-driven results and support organizational growth? By empowering your team with the right corporate performance management systems to get the job done. Whether your finance team incorporates an FP&A software into their processes or a CRM system, creating a robust tech stack can help automate crucial processes.
How can Finance support business performance management?
One of the most impactful components of corporate performance management is Finance. At its core, the Finance team analyzes financial data and metrics to better support strategic decision-making and business planning. By backing organizational goals and projects with financial metrics, a company can be more strategic in the key performance indicators that will drive the organization forward.
If your finance team is looking to automate financial reporting and forecasting by incorporating a CPM software, Abacum is the perfect solution. Our platform combines both organizational and financial data to provide senior management with greater insight into the intricacies of their operations. By taking a more data-driven approach to budgeting and forecasting, finance teams can better improve future organizational performance across the entire company.
If you’re looking to take the first step in improving your team’s financial processes, Abacum is here to help.
To learn how your finance team can support your CPM strategy and hit greater strategic objectives, reach out to our experts and request a demo today.
