How to build an effective corporate performance management strategy

More CPM software resources CPM software moves beyond mere dashboards CPM software helps bank conquer its budget woes

The goal is to track corporate performance in the here and now, as a means to increase profitability moving forward. To achieve this goal, experts recommend taking the following steps to build a solid foundation for a corporate performance management strategy:

1. Establish who's in charge. Has your company's corporate performance management project fallen in the lap of the IT department? If so, the project is destined to fail, said Boris Evelson, an analyst at Forrester Research Inc. in Cambridge, Mass. A CPM project should be owned by the business side or a C-level executive and have corporate sponsorship. IT and business representatives should both conduct due diligence and work together to choose the right corporate performance management software for the company's needs. IT should be listening in the background, ready to test, build and/or configure a system when a software choice is made.
2. Make sure there's buy-in not only on the metrics you track, but also on what they mean. In order to figure out something as complex as customer profitability, for example, there has to be agreement as to what customer profitability is. The head of operations and the vice president of sales probably have very different ideas of what this metric means or the data points it includes. Bringing together all of the business and operations people to define key performance metrics is a must.

IT and business representatives should work together to choose the right software for the company's needs.

3. Seek a flexible solution. Work with the product selection team and/or your developers to make sure the products they buy or build can accommodate new business scenarios. Mergers, acquisitions and downsizing often lead to new product lines, departments and corporate performance definitions. Will the chief financial officer be stuck waiting weeks for IT to build a way to query and view this new information? Flexibility is crucial when building or selecting a CPM system's querying capabilities.
4. Know thy user and his interface. What tools are employees using to gather data? If you slap a new interface in front of querying and reporting screens, will they use it? Try out new interfaces, such as an online reporting tool or an interactive dashboard, with a test group. A familiar interface such as Excel can also be tacked on to a sophisticated system to ease the transition.
5. Learn from the mistakes of others with an outsider perspective. If you can afford it, bring in a consultancy that specializes in corporate performance management. Even if you have someone on staff who has led CPM projects before, it is better to rely on an outside party that has developed and installed such systems hundreds, if not thousands, of times.