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Project planning for a new corporate performance management system

A corporate performance management system touches most aspects of any business. You need a carefully thought-out plan to ensure a positive ROI from the software.

There are numerous steps to making a corporate performance management system successful, and, over the next few...

months, I will explore many of them in detail. But, to start, it is valuable to begin with a broad overview of implementing a corporate performance management system.

CPM addresses both horizontal and vertical functions

Corporate performance management (CPM) software provides capabilities in a wide number of functional areas including budgeting, planning, forecasting, strategy, consolidation, financial reporting and disclosure. Most companies begin with budgeting and use that feature to plan out the next calendar year. Some plan further into the future -- to year two and beyond.

You have to decide which of these broad functional areas of CPM are relevant to your first corporate performance management system.

CPM software vendors often have targeted expertise in specific verticals, such as financial services, consumer packaged goods, aerospace and defense, or can show customer success stories in a given vertical. Vertical models may provide a quicker start to your CPM project.

Decide where to implement CPM

Some companies want to improve results for the entire corporation, while another CPM project might focus on a specific line of business or geography. Suppose, for example, that your company manufactured, sold and repaired items in each of three geographies. It is then likely that you would implement CPM in at least one of these geographies and across all three functions.

Determine the benefits of your CPM project

It is particularly important to understand why you are undertaking the project. On a simple level, your budgeting techniques may be poor and you want to get budgeting under control. Or you may need to report consolidated financial results. The best CPM projects are profitable and allow the company to compute a positive ROI. For example, you might want to cut costs by 10% without impacting revenue or quality. Give serious thought to how a corporate performance management system can improve your bottom line.

Decide where and how work gets done

Let's use budgeting as a common example. First, determine which departments will participate in the budgeting process, starting, for example, with human resources. You will want to know which individuals participate in preparing the HR budget and which ones review, revise and finalize it. Finally, do the same for the companywide budgeting process. Establish a budgeting calendar to help manage the process throughout the year.

A CPM software package with a strong workflow tool can be helpful here.

CPM software selection

Before undertaking a serious selection process for CPM software, take time to develop a working knowledge of the software category. Strive to review between six and eight packages at a cursory level. Good lists are available from the Gartner Magic Quadrant and numerous TechTarget articles. At this stage, you are mainly interested in overall features and functions.

Business software's interoperability with CPM software

The organization's software may need to be integrated with the new corporate performance management system. You should catalog relevant software and see how software like the following might overlap with CPM:

ERP software: Prominent vendors include SAP, Oracle and Infor. These packages offer functionality in finance, HR, manufacturing and logistics, as well as business intelligence software for reporting and analytics. Many ERP vendors also offer CPM software.

Sales software: This can include sales management, sales performance management, and sales and operations planning software.

Other "horizontal" software for accounting, HR, manufacturing, and logistics. For example, HR talent management software would likely deal with attrition levels and hiring costs, both of which are relevant to CPM budgeting.

Integrate data stores with CPM software

Data in files, databases, data warehouses and spreadsheets may need to be integrated with the CPM software package. Suppose, for example, you maintained a file keyed to each major territory. By territory, the file would show your market share, the market potential and the share held by major competitors. Such data is critical to revenue planning in CPM software.

Identify project leadership

Senior leadership should include one IT executive and one finance executive. Finance is responsible for how and where work gets done that improves overall performance. IT has numerous roles in the corporate performance management system, including implementation, software interoperability and data integration.

Hire a consultant

Many companies involve outside consulting support, both for overall project strategy and management as well as implementation services. The latter are commonly offered by the vendor.

Choose a CPM software package

With all the knowledge obtained, you can move to final package selection. Consider asking vendors for detailed demos and using a trial period to test software. Talk to the vendors' customer references, but talking to third parties (e.g., industry analysts) is even better.

CPM implementation

It may be prudent to do a small test first -- say, in one or two business units in a single region -- but don't let a test distract you from key dates, such as drafting a full budget by the end of a calendar year. Deploying project management software can help you sequence critical events and create a critical path for your CPM project and other processes affected by it.

Next Steps

Read a Q&A with a Gartner CPM analyst

Use CPM for analytics

Understand budgeting best practices

This was last published in December 2016

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