This content is part of the Essential Guide: Your essential guide to CPM tools, tips and vendors

CPM consulting services: Tips for choosing wisely

If you're buying CPM software, consider getting CPM consulting services as well. Consultants can help to ensure a successful software implementation.

Companies that are implementing corporate performance management (CPM) software would do well to consider hiring consultants to ensure a successful implementation. Consulting projects can range from the straightforward, such as helping to build all the data interfaces to CPM, to the quite complex, including helping to implement a critical strategy that provides a sustainable competitive advantage.

Therefore, just as it is important to understand the features and benefits of CPM products, companies must take the time to understand the breadth of CPM consulting services offered by the vendor or its business partners. These consulting services can be expensive. As an example, if a company spends $250,000 acquiring CPM software, it would not be unusual to spend an additional $80,000 to $100,000 on CPM consulting. Consulting fees often are a large factor in a CPM project's total cost of ownership.

The different levels of consulting

A CPM software vendor must offer consulting services. With the advantage of knowing its software best, the vendor is in a strong position to offer effective consulting. Most software vendors deliver at least 20% of consulting projects, with business partners delivering the remaining projects.

A 20% level of consulting represents a reasonable target for a variety of reasons. First, consulting is profitable for CPM vendors. Second, by having consulting experience, CPM vendors can define a level of excellence for their consulting business partners. Third, the software vendor can help determine what new CPM features are needed. But consulting should not be the main goal for CPM software vendors -- developing and delivering excellent software is the key goal, and too much consulting can be a distraction.

I call the first type of CPM consulting "getting started." In this scenario, the consulting firm assists with software implementation, then ensures that all the business people are familiar with the software and that the IT staff understands the application's architecture.

Vendors that offer CPM consulting services

Large consulting firms that offer CPM consulting services include:

These firms offer a wide variety of services, and often are retained when companies want to implement involved budgets, plans and strategies.

Midsize consulting firms often have allegiances to one CPM software vendor, and can be quite capable in managing deployments. Examples of these consulting firms and their CPM software business partners include:

--Barry Wilderman

The next level of consulting is technical consulting. Although CPM applications may seem relatively straightforward,  significant technical issues often need to be solved. Data from CPM software must be integrated with other applications, which may require some type of bulk data transfer. The data from CPM software may be combined with other financial applications to form a data warehouse. Then, all this data must be accessed by report writers and other business intelligence applications. Finally, the issues of security and workflow must be considered.

The third level of consulting revolves around teaching best practices. I have written about best practices for budgeting automation and CPM in a previous article. In fact, adopting CPM best practices helps a financial team to be competent. It would include team building, workflow for budget development, an approach to finalizing a budget, driver-based planning and budget revisions.

You might also ask the CPM vendor for management consulting services. Whereas the best practices approach was about creating core competency, the management consulting approach aims for what is strategic. For example, on the budgeting side, the consultants might help the CFO understand different strategies for cash management, or help to lower interest expense by 1% to 2% per year. On the strategy side, management consultants would guide the client toward implementing a transformational strategy, such as a new product or market strategy, or a differentiable approach to customer service.

Being a smart shopper

Here are some questions you should pose to the CPM vendor and its consulting business partners:

  • "Now that I understand the software charges, what are the average consulting charges for projects in general? I understand they may vary widely, depending on the type of consulting I need."
  • "Of all the projects done in the past calendar year, tell me the percentage done by your software firm, and the percentage done by partners."
  • "Who are your consultants -- specifically their titles, per diem charges and availability?"
  • "What project management methodology do you use?"
  • "Tell me about fixed price consulting versus time and materials pricing."
  • "As we work on a project with you, there should be a clear level of accountability. Tell me how my staff and your consultants will be accountable on a blended team."

When you buy CPM software, you also need to understand how to buy CPM consulting services. CPM software vendors should invest -- but not overinvest -- in consulting services, and they must take a leading role in defining the quality of services to be delivered.

Next Steps

Read more on strategic CPM software

Learn about integrating operational data

Take a CPM quiz

Cloud-based BI tools

Dig Deeper on CPM software