Sanjeev Aggarwal's Blog

November 8, 2009

Increasing interest for Corporate Performance Management (CPM) in Mid-Market Enterprises

In today’s world overloaded with buzzwords, terms such as “Business Intelligence (BI)”, “predictive analytics” and “Corporate Performance Management (CPM)” are confusing to mid-market enterprises.

BI technologies provide historical views of a company’s business operation. Some of the enterprise –class BI solutions now include predictive analytical capabilities also. BI is a term used to describe the technology used to access, analyze and report on data relevant to an enterprise. It includes ad-hoc query, reporting, on-line analytical processing (OLAP), dashboards, scorecards, search, visualization, etc. Initially, most BI vendors lacked the ability to build models that can project in the future. However, in the past 3-4 years, the enterprise-class BI vendors have added some of these capabilities to replicate functionality offered by CPM vendors. BI and CPM are complementary solutions, and the BI platform provides a natural-basis to build a CPM solution. BI solutions are usually very complex and expensive for most mid-market companies. However, some of the more focused and template/wizards driven “Express” or “Fast-start” solutions, which are more affordable (especially if they are available in a online or appliance) and can be implemented in a reasonable amount of time – are becoming interesting for the mid-market if the vendors can show measurable benefits and short-term ROI.

In the CPM world, “predictive analytics” is generally used to refer to software solutions that automate and manage process related to corporate performance – financial forecasts, budgets, financial strategies, financial consolidation, scorecarding, and reporting. Another term used to identify CMP is BPM (Business Performance Management but this is sometimes confused with Business Process Management – two very different areas). Some CPM solutions regularly monitor some key performance indicators (KPI) in terms of actual vs. budget and, whenever a significant discrepancy is identified, help perform root causes to identify sources that could be causing this.

The BI and CPM solutions do not need to come from the same solution provider, as the two technologies are complementary and could co-exist. However, there may be economies and synergies related to getting them from the same vendor (if offered). In some instances, mid-market ERP solution vendors are now developing deeper integration to some CPM solutions (like NetSuite with Adaptive Planning).

In the current tough economic conditions, this segment is under tremendous pressures to improve financial processes, measurements and management of the mid-market enterprises. To adress the above, mid-market businesses are increasingly deploying CPM solutions to improve planning (forecasts and budgets), manage costs/optimize profits and more importantly risk and compliance.

The following companies provide enterprise and mid-market CPM solutions:

Increasing interest and deployment of these solutions by mid-market enterprises is demonstrated by the double-digit growth rates most of these mid-market solution companies are experiencing. The CPM applications are targeted at the mid-market company CFOs, C-level executives, finance team and corporate strategy teams.

How were majority of these mid-market companies addressing the financial planning issues until now? Majority of these companies are using Excel spreadsheets. Using Excel, has significant accuracy limitations and  the amount of time spend on the planning process. It also denies the organization a collaborative, connected and productive planning process. Mid-market organizations need to take a more objective view to replace Excel based planning and replace them with CMP solutions. Some basic analysis on time (and accuracy achieved) spent on Excel planning and the results achieved will quickly show the benefits and ROI that can be achieved by CPM solutions – these can be split into the “hard” benefits quantifiable by replacing Excel and the many potential “soft” benefits derived from using a CPM solution.

2 Comments »

  1. Great post, Saneev. With CPM, BPM, BI and OLAP, it really does start to taste like alphabet soup.

    PROPHIX recently sponsored a report from Aberdeen that serves as a roadmap to efficient planning, budgeting and forecasting for improved agility, accuracy and corporate performance.

    Comment by Mike — November 8, 2009 @ 11:56 pm

  2. […] Increasing interest for Corporate Performance Management (CPM) in Mid-Market Enterprises […]

    Pingback by Sanjeev Aggarwal's Blog — January 28, 2010 @ 12:09 am


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