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Deploying a corporate performance management system: tips and advice

Get guidance on designing and installing a corporate performance management system, including project management issues to watch out for on CPM software and CPM system deployments.

One of the key things to keep in mind about implementing a corporate performance management (CPM) system is that the challenges organizations face may have more to do with data semantics than with technical issues such as fast performance or ensuring that business users have access to clean data.

Another is the fact that, as with deployments of other types of enterprise applications, CPM software projects typically require joint efforts between IT and the business side in order to be successful. That’s particularly the case on rollouts of financial performance management tools; the financial business processes and terminology at the heart of such efforts can be dizzying for IT professionals to try to make sense of on their own.

IT managers should get business stakeholders involved in CPM initiatives from the beginning “and make them responsible for deliverables throughout the project,” said Matthew Maxson, vice president of IT at Coherent Inc., a Santa Clara, Calif.-based maker of lasers and other photonics-based products.

He added that Coherent, which uses Oracle’s Hyperion CPM software, assigned a strong business leader from within the company to serve as its business project manager on the rollout. “She successfully led the business members [of the CPM team] through the implementation,” Maxson said. “IT’s role was more of a technical and functional enabler – and that worked well since we were not driving the project per se.”

By the same token, Gartner Inc. analyst Neil Chandler said that the finance department and other business operations involved in CPM system deployments need to rely on IT “to do what IT is good at: implementing technology, supporting information infrastructure, providing strong project management capabilities [and] helping with the technology selection.”

Chandler also recommended that organizations create a single team to be responsible for all of its business intelligence, analytics and CPM initiatives – for instance, a business intelligence competency center (BICC) with a mix of IT staffers and business users, ideally working off of a formal BI strategy and a set of overall performance management metrics.

Creating a ‘transformational’ corporate performance management system
“It’s not a case of just thinking of CPM in isolation,” Chandler said. “It’s thinking about a framework and how within that framework all of those components fit together.” Doing so, he added, can help an organization implement a CPM system that supports “transformational” uses of the technology, not just short-term business fixes.

Another important item on the CPM project checklist is to make sure your IT infrastructure plans are in order before starting the deployment, according to Chandler. One consideration is whether to use traditional on-premise applications or Software as a Service (SaaS) CPM tools, he noted. Other possible questions include whether a new data warehouse or data marts will be required and whether the organization needs to implement or expand a master data management program to ensure that it has accurate and high-quality data in the CPM system.

The data itself also can present some issues. During a deployment of IBM’s Cognos TM1 financial performance management software at logistics services provider DHL Global Forwarding North America, “one of the bigger problems was coming up with standard terminology” for the data going into the system, said Anand Saxena, manager of financial reporting at the division of DHL International GmbH.

Initially, for example, overlapping data definitions would lead to situations such as a report incorrectly indicating that a particular product was being sent to a freight-forwarding station. “And the station manager would look at the numbers and say, ‘These are not my numbers,’” Saxena said.

The data in a CPM system also needs to be precise, he added: “One of the things I learned is that we have to have very distinct terminology.” That even applies to basic financial metrics such as gross profit, Saxena said, noting that at the freight station level, gross profit is an operational figure that doesn’t include various costs that get tacked on at the end of the accounting cycle.

CPM system deployment priority: getting the data details right
Another lesson Saxena learned is that it’s best to put the data into the CPM system “at the smallest level you can,” even if end users usually will be looking at the information only at a higher level of detail. DHL Global Forwarding’s compliance department has become much stricter about audits over the past few years, “and they wanted a [data] trail all the way from the top to the bottom,” Saxena said. Now, with the way that the data is structured in the CPM system, the financial reporting team can comply with the audit requests “even though we’re not looking at the numbers all the way down to that level of detail.”

Paul Hamerman, an enterprise applications analyst at Forrester Research Inc., said internal cultural issues are another potential pitfall on CPM deployments, especially if the new system involves changes to existing business processes. “If you change a process, you can often get major cultural resistance, particularly if people are suddenly being held accountable to new measures,” Hamerman said. “You may have to tweak the measurement process.”

And then there’s the thorny question of what to do about all the Excel spreadsheets that business users have created. Hamerman said that CPM software typically is well integrated with Excel, enabling spreadsheets to function as the front-end user interface for CPM applications.

Letting finance staffers and other workers continue to use embedded spreadsheets can help with the transition to a new CPM system, Hamerman said. “Your opportunity, though, is to wean the company off of spreadsheets,” he added, noting that continued reliance on spreadsheets also can stifle new approaches to using data that are made possible by financial performance management tools and other CPM software.

Chris Maxcer is a freelance writer.

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