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What Is Corporate Performance Management?
You may have heard of corporate performance management, but do you actually know what it is? We’ve defined it for you here.
There are a lot of industry-specific terms to keep up with when it comes to business intelligence and strategy management. One of those concepts is corporate performance management, or CPM. Albeit a mouthful, the idea behind CPM is simple enough. Today, I’m breaking down what CPM actually is and why it’s important in today’s business landscape.
What Is Corporate Performance Management (CPM)?
Corporate performance management (CPM), also called business performance management (or sometimes enterprise performance management), is an “umbrella term” used to described the methodologies and processes that help you manage the success of an organization. You can think of corporate performance as the collaborative accomplishments, successes, and failures of an organization. CPM is important for every company, but especially those looking to:
- Remodel their budget.
- Reduce costs.
- Better align KPIs.
- Upgrade their organizational strategy.
- Improve the financial planning process.
It’s important to note that CPM is a subsect of business intelligence—and it’s not a strategy in and of itself. In order to be successful with CPM, companies must implement a framework to see that their corporate performance is actually being managed.
In order to do this, different strategic frameworks and management methodologies are employed. One of the most notable is the Balanced Scorecard—which, as you may know, is a strategic planning and management system that takes several organizational viewpoints (aside from only the financial angle) into account. Organizations are also using EFQM Excellence Model, MPO, and Six Sigma. Key performance indicators (KPIs) are typically used to measure the success of these frameworks in action.
Corporate Performance Management Vs. Human Performance Management
These two concepts are often compared and confused, so I’ll do my best to mitigate some of the uncertainty.
Human performance management (HPM) is subset of human resources. It seeks to improve employee productivity, satisfaction, and operational capability. To measure your success with HPM, you might look at employee reviews or turnover rates.
Corporate performance management, on the other hand, has nothing to do with employee reviews—it deals entirely with how you communicate, align around, and execute your organization strategy. You’re able to do this through frameworks that support CPM, which are most often subsets and of approaches to business intelligence as a whole (like the Balanced Scorecard, which we talked about above).
When you hear the term “performance management,” it is important to ask if someone is speaking about corporate performance management or human (individual, employee, staff, etc) performance management.
Why Is CPM Important?
Recent studies have shown that strategy execution is the number one area of focus for senior executives today. And CPM is a way to help ensure your strategies get executed. By integrating organizational goals, metrics, and projects, your company is aligned around strategic priorities and can focus on the key drivers of the business.
Because this is so critical to the C-suite, many organizations now have a department dedicated solely to strategy or performance management (occasionally merged with project management). These offices, sometimes called the Office of Strategy Management (OSM) or Project Management Offices (PMO), handle measures, reporting, strategic projects, alignment, communications, and strategic planning...all under the guise of CPM.
In fact, this is becoming such a popular and well-received concept that performance management is becoming a true profession. There are even certification programs to help individuals become true experts in performance management.
Questions About CPM?
We’re all ears, and happy to help! Drop us a line @clearpointstrat on Twitter to start a conversation.