billy-russell

Billy Russell - FP&A Strategist

July 2022 - min to read

Corporate Performance Management: What is it and strategies to improve

Corporate Performance Management: What is it and strategies to improve

Corporate performance management (CPM) is a process that’s always changing to meet the ever-growing needs of a growing business.

And it’s essential for any successful organization to monitor its corporate performance in order to manage the health of an organization and help it scale.  

How do you do this successfully?  

Read our corporate performance management guide to learn exactly what corporate performance management is, and what strategies you can use to improve it.

Contents

  1. What is corporate performance management (CPM)?
  2. Why corporate performance management is important for businesses
  3. CPM metrics to track
  4. Strategies to improve corporate performance management
  5. Conclusion: businesses use corporate performance management to see success

What is corporate performance management (CPM)?

Corporate performance is an overall assessment of how successfully a corporation is performing. Typically, this means keeping an eye on its most important parameters like financial, market, and shareholder performance. 

In reality, “keeping an eye” on corporate performance isn’t enough to ensure business success. Enter: corporate performance management (CPM). CPM are the very intentional strategies, metrics, processes, and systems used to strive for a thriving organization.

Frequently, CPM operates as a subset of business intelligence that monitors corporate health according to key performance indicators (KPIs) such as revenue, return on investment (ROI), overhead, and operational costs.

Like all mission critical business strategies, CPM is a collaborative effort: you need metrics from every department in order to understand the accurate financial health of the organization. In order to collect data across departments, corporate performance management teams up with financial planning and analysis (FP&A).

FP&A is the set of strategic activities (planning, budgeting, forecasting, and financial analysis) that enable both a company's ongoing financial health and its ability to grow. It’s been said you can’t manage what you can’t measure, so partnering with FP&A to collect and analyze financial data is critical for CPM teams. FP&A enhances the finance department’s ability to manage performance through the integration of corporate strategy and decision-making — all part of CPM. 

Corporate performance management vs. human performance management vs. enterprise performance management

Though similar concepts, corporate performance management, human performance management, and enterprise performance management all have different priorities. For this post we’ll be covering CPM. 

Corporate Performance Management: As discussed, corporate performance management (CPM) utilizes metrics from all over an organization, it’s generally more focused on the financial health of the company.

Human Performance Management: Human performance management (HPM), on the other hand, is a subset of human resources that seeks to improve employee productivity, satisfaction, and operational capability. 

HPM is measured by employee reviews and turnover rates, and the overall employee “health” of the company.

Enterprise Performance Management: Finally, enterprise performance management (EPM) is the process of monitoring performance across the enterprise with the goal of improving business performance, extending from finance to include sales, marketing, supply chains, and other departments. In other words, CPM, HPM, FP&A and more roll up into Enterprise Performance Management. 

Why corporate performance management is important for businesses

When following CPM best practices, the core decision-makers in a company will gain the information required to make decisions needed to improve financial health. In order to complete this successfully, corporate performance managers use CPM software that allows for automation, collaboration, and quick decision making. 

Cube is the first spreadsheet-native CPM and FP&A platform that enables you to plan for the unexpected and stay ahead of changes quickly. Our cloud-based platform helps finance teams work anywhere and forecast, plan, and report more effectively. 

Plus, the combination of the familiarity and adaptability of spreadsheets with the control and speed of performance software is what makes Cube so attractive. 

In a world where a rapid pace of change is commonplace and systems need to accurately represent reality, manual methods don’t cut it when it comes to CPM anymore. We’ll cover some of the main advantages that organizations will experience with a corporate performance management system and tools in place. 

Real-time feedback

Instead of reviewing data weekly, monthly, or yearly, CPM software empowers organizations to view data—and the analysis of this data—in real time. This means more timely decisions and less opportunity for errors to become serious financial issues. 

Improved data management

Data collection, consolidation, reporting, close, and analysis can all be prone to human error—and can be extremely time consuming. 

Corporate performance managers utilize automation and integration of source systems to minimize opportunities for human error. 

Easier project management and collaboration

CPM software makes managing strategic projects easier with smart automation, advanced data consolidation, and seamless collaboration. With real-time feedback and company-wide cloud access, communications are streamlined and all teams can work off a single source of truth. 

With the stakes of unorganized data, inaccurate analysts and unreliable reporting being so high—namely, being blindsided with serious financial struggles, strong CPM is key.

Simpler planning

CPM requires input from all departments to create a sophisticated planning process. However, gaining access to data from across departments isn’t as easy as it may sound.

Sources of data on the financial health of the company might include the following teams and systems: 

  • Operations: Operational data is typically housed in an Enterprise Resource Planning (ERP) system, such as Oracle, SAP, and others. 
  • Sales: Sales, customer, and account data is managed through a CRM system, such as Salesforce, Netsuite, Microsoft Dynamics, and others.
  • Human Resources (HR): HR teams use Human Resources Information Management systems, such as Atlassian, Zenefits, and others.
  • Accounting and Finance: Accounting and Finance teams manage financial activities with tools such as Sage Intaact, Xero, QuickBooks, and others.
  • Payroll: HR and/or Accounting manage workforce payroll through systems such as ADP Payroll, Paychex, Quickbooks, and others.
  • IT: For broader or more detailed analysis, modeling, and scenario planning, FP&A may need to work with IT to gather data from business intelligence (BI), data warehouse, analytics, or other back-office systems. 

Add all these pieces together and it’s clear sophisticated CPM reigns supreme over manual methods. Beyond the aforementioned benefits, when using Cube as a CPM software solution, managers get the benefits of:  

  • Automated data consolidation: Connect data from numerous sources for automated rollups and drilldowns.
  • Multi-scenario analysis: Allows you to model how changes to key assumptions affect overall outputs seamlessly.
  • Endless integrations: Native integrations for spreadsheets (Google and Excel), accounting & finance, HR, ATS, billing & operations, sales & marketing, and business intelligence. 
  • Customizable dashboards: Gives you full ability to build and share customizable dashboards.
  • Spreadsheet integrations: Compatible and bi-directional with any spreadsheet
  • Multi-currency support: Evaluate your financials in both your local and reporting currencies.
  • User-based controls: User controls, validations, and an audit trail ensure that the right data goes to the right people at the right time.
  • Centralized formulas and KPIs: Store all your calculations in a central location and manage from a single source of truth.
  • Drilldown and audit trail: Get straight to the transactions and history behind a single cell of data in just one click.
  • And much more. 

CPM metrics to track 

CPM software solutions track key performance metrics that are needed for decision-making and financial planning. These metrics can include: 

These metrics (and more) provide managers with an overview of company-wide financial performance from which they can determine what changes need to be made for adjustments. 

Strategies to improve corporate performance management

The focus of corporate performance management isn’t just measuring and analyzing. It’s using the data and analysis to develop intentional strategies that can support – and save – the financial health of a company. 

Make clear goals across all teams

It's important for each department in the organization to work together on clear, personalized goals.

Goals allow employees to focus on what is important as opposed to getting distracted by less important issues. Clearly defined goals also help improve personal performance because when you have a specific goal to work towards you do so with full attention.

Use corporate performance management tools & software

Finding the right CPM tools and software is probably the most critical step of all. Not all software solutions are created equal and it's important to look at everything they offer prior to making a decision. 

Historically, finance teams at small and mid-sized businesses typically run on spreadsheets and dedicated accounting software solutions.

Unfortunately, many of these tools leave a room for errors and omissions. Sometimes they're not even entirely reliable. 

(Spoiler: that's why we built Cube.)

Conduct corporate performance management training

Corporate performance management is only as strong as manager implementation. Training managers in what metrics to look for and how to improve them allows for standardized CPM strategies across the organization.  

CPM training can cover the benefits of CPM implementation, communication strategies, how to use CPM software for peak performance, financial and operational modeling, conducting performance reviews, and what-if scenario planning

Because CPM integrates data from all departments before determining financial health, offering CPM training beyond your finance team can help break down silos and alert managers to key metrics in their own department. 

Plan more (and faster) 

CPM offers several features to make planning faster such as easy to read dashboards, faster insights, and more efficient data gathering. All of these not only save time up front, they also eliminate the need to go back and revisit something that may have been missed due to human error.

Plus, with the efficiency of great CPM software such as Cube, the FP&A process will be exponentially faster. Utilizing the organization-wide collaboration and automation gives the finance department the tools to perform optimally with minimal error.

Conclusion: Businesses Use CPM to See Success

CPM is a continuous, mission-driven process that enables businesses to understand their data, allocate the right resources, and make smarter decisions quickly – if they’re using the right software. 

Cube’s platform unifies all your data into a single source of truth while connecting to your existing tech stacks such as ERP, CRM, HRIS, and business intelligence. This allows corporate performance managers to streamline data collecting from multiple sources, seamlessly model how changes to key assumptions affect overall outputs, and store all calculations in a central location and manage from a single source of truth. All so they can plan confidently and make smarter business decisions in a fraction of the time. 

Ready to see more? Book a demo with Cube.