With a plethora of Corporate Performance Management (CPM) tools in the marketplace offering and promoting competitive functionalities and extensive service lines, anyone looking to implement a new solution needs a robust selection criteria to identify the ideal application for their requirements.
There are several application providers with similar but competing functionalities and claims and it can often be a challenge for decision makers to identify & segregate the subtle differences between respective product offerings to match the organisation’s needs.
Most large and medium sized enterprises already have suitable or working core financials and reporting systems to manage finance and other corporate records and reports. Selection of such applications between large ERP tools and functional finance applications no longer deliver strategic advantages to customers. The real game changer, regards to applications, are the agile tools such as CPM tools because of their ability to simplify the strategic data output from core systems and deliver critical business information to key decision makers through business analytics in a controlled and efficient manner. This marks out CPM selection as a strategic competitive business decision with a potential for the correct decision to give the organisation a competitive edge.
In this paper, we lay out the essential selection considerations to achieve the desired objectives, when selecting a CPM tool, following a determined decision path.
This simple decision “path” can be used by decision makers to evaluate their CPM selection process
Determine the Trigger for a CPM Tool
It is important for the organisation to understand and assess the triggers that drive the need for a CPM tool, as these triggers will make up the building blocks for the CPM selection criteria. In assessing the triggers, some of the questions that the organisation needs to find answers for, include, but are not limited to, the following:
- What are the business problems that have prompted investigations for a CPM solution? e.g. Quality, time and cost issues due to lack of available information, accessibility of information/data for key operating or strategic decisions.
- How best can the business overcome business problems that require a CPM solution? e.g. do the problems require high level solutions with associated deliverables such as audit trail, speed of delivery, data accuracy, controlled user access, robust shared platform etc.?
- Where in the CPM evolution is the organisation. e.g. are simple spreadsheets and other MS applications currently the basis of the organisation analytics? Is the organisation increasingly relying on complex spreadsheets and database models to deliver critical business solutions?
- Where in the information evolution is the firm? E.g. Are the firm reporting results, analysing why the results are as they are or are they using information to make and take strategic decisions and actions.
Assess the Importance & Relevance of Tool’s Functionalities
Under the banner of CPM there are a number of functions that are covered. A broad definition according to Gartner Research publications is a tool that covers one or more of the following areas of business solutions, from a strategic perspective:
- Financial Reporting
- Performance Reporting
- Disclosure Management
- Financial Budgeting & Planning
- Integrated Financial Planning (IFP)
- Strategy Management
- Profitability Modelling
The key question here is this. What are the MUST have features for the stakeholders, and to what extent are these matched by an application’s features? Is there a match between the unique selling points (USP) of the application and the MUST have requirement of the stakeholders? Whilst a perfect match is the ideal, in reality a sliding scale of capability is essential to line up solutions that should be shortlisted for the next stage of the evaluation process. Below is a general list of unique or prominent features that are associated with a number of CPM products in the market.
- Cloud vs On premises
- Data Security
- Low TOC (Total Operating Costs)
- “Plug and Play” – Short Implementation cycle.
- Usage capacity (No of users )
- Processing speed
- Scalability
- After Sales Support
- Geographic Spread of User Base
- IT development need versus Ownership by the function – super users.
The functional claims (and the impacts of each functionality) of each application under review needs to be thoroughly evaluated especially if the MUST have requirements of stakeholders are functional dependent. Questions to be considered under these criteria should include the following:
- How intuitive are the functionalities?
- Time saving capabilities of the functions?
- Level of automation of the functions?
- Frequency of usage by potential users?
- Scope of the functions. Does it cover outliers that are critical to the stakeholders?
Range of Functionalities that should be evaluated, depending on user requirements include:
- Multi Currency Usage
- Inter Company Matching
- Consolidation Eliminations
- Dashboard Management
- Graphical User Interface (GUI)
- Compatibility with other tools e.g. PowerPoint, Word etc.
Impact Assessment of Tools Implementation on Organisation & People
A critically important selection criteria is the impact assessment of the tool on the organisation’s processes and roles within Finance and possibly multi-disciplinary functions. A few of the questions that should be considered are as follows:
- Is the introduction of the tool likely to result into wider organisational impact?
- Is the CPM tool going to deliver multi functional services? If so what level of sign-off is required from impacting functional areas of the organisation?
- What level of training and up skilling is required to fully harness the benefits of the tool?
- What system and process changes will be required?
- Is required data clearly defined and accessible?
- What level of internal resource requirements will be required during the tools implementation phase?
Implementation
The implementation of the tool needs to consider different implementation approaches to fit the profile of the organisation and to deliver minimum disruption to the business’ “business as usual” (BAU) process. Failure to consider and assess the implementation approach might result in typical implementation traps, including cost overruns, poor quality delivery that threatens effective adoption and Go Live, and delayed or postponed to Go Live date, which is counterproductive to management objectives for the tools selection and implementation. The table below, highlights the considerations of three implementation approaches.
| Implementation Approach | Management Considerations | Risks/Benefits |
| Modular Implementation (Deployment of Selected Product Modules in Phases) | Focused phased and immediate roll out prior to critical reporting period. | Benefits: Immediate deployment of product module functionalities within a defined time.
Risk: Delayed user access to synergy functionalities of product modules. |
| Total Implementation (Deployment of all product modules during one-off or phased roll out | End to End full product roll-out across multiple geographies within the same time scale. | Benefits: Full product deployment across identified geographies within project plan.
Risk: Increased potential for project and/or cost overruns. |
| Geographic Roll-Out in Waves | Embedding early adopter regions as testing grounds. Decision to manage disruptions to global business processes. |
Benefits: Effective management control over the roll out, from a business readiness perspective. Risks: An extended product roll out period, further complicated by new releases or versions of the product between the 1st phase and the final phase. |
Regardless of the approach adopted, it is key within the implementation to adhere to core project management principles and governance by understanding and engaging different stakeholder groups and their involvement, defining and revisiting the expected benefits, aligning requirements and defining the scope of the implementation and planning and tracking resource, dependencies, progress, issues and risks in a structured way.
Final Notes
This paper has highlighted the strategic importance of CPM product selection due to the nature of their competitive advantage. It has also provided a roadmap to an effective product selection to optimise management objectives and highlights the importance of a structured implementation to embed a sustainable benefit.
Finally, it is important to understand that a CPM tool is not the panacea to management or business problems in itself, rather it should be part of an holistic approach to Corporate or Enterprise performance management that aims to achieve a number of objectives for the organisation.
