Corporate performance management (CPM), also known as enterprise performance management (EPM), is a term/concept coined by Gartner almost 20 years ago (2001). As we approach 2020, times have changed, and the original principles behind CPM (top-down driven strategy and management of performance) are less relevant. The need for agile enterprise planning to break down silos, connect everyone, and improve business outcomes has become a strategic imperative in today’s hyper-competitive business climate.
In fact, one can argue that CPM never took hold, as most investments in CPM platforms (or “suites”) were entrenched in the office of the CFO and centered around either financial planning or financial consolidation. Recognizing this, Gartner officially retired the term, “corporate performance management” back in 2017, and refocused around financial planning and analysis (FP&A), and the financial close (FC)¹.
Collaborative enterprise planning evolves
Unlike CPM, which never made it beyond the finance function, collaborative enterprise planning spans the organization, connecting strategic, financial, and operational plans on a common planning platform. Everyone and every function are involved in some form of planning and need to collaborate and align towards common goals based one version of the truth to improve organizational agility and results.
Today, modern enterprise planning platforms need to be designed from their inception for financial and functional plans to provide one connected plan across the organization. They also need to have embedded advanced analytical capabilities so everyone has what they need to make decisions with confidence. (Analysis is inherent in the planning and decision-making process.) At the same time, financial consolidation, as part of the financial close process, should be tightly coupled with the underlying financial management suite to support real-time consolidations and a faster, more accurate close. This aligns with Gartner’s strategic planning assumption:
Through 2020, at least 70% of large and global organizations will purchase separate FP&A and FC solutions, rather than CPM suites¹.
While it’s the end of CPM as we know it, the need for agile enterprise planning and a faster, more accurate close remains. SAP Analytics Cloud uniquely supports collaborative enterprise planning with the ability to build and connect all plans across the enterprise. Inherent business intelligence and augmented analytics give you everything you need to make decisions quickly and confidently.
Visit our collaborative enterprise planning page for more information.
And read more on the topic: New Study Shows Leaders Adopting Collaborative Enterprise Planning.
¹Gartner, “Back to Basics: The Refocusing of Corporate Performance Management,” John E. Van Decker, Nigel Rayner, Christopher Iervolino, 31 October 2017.
This article originally appeared on the SAP Analytics blog and is republished by permission.