The implementation of corporate performance management (CPM) solutions is a high priority in the enterprise, according to a survey by Comshare Inc., a company that sells CPM products.
Comshare surveyed 250 financial executives in November 2002 from 250 different companies across the United States. Sixty-one per cent said their companies were planning to implement a new corporate performance management (CPM) solution within the next 18 months.
The other 41 per cent indicated that CPM solutions were important, but were not looking to implement during that time period, according to Rod Radojevic, director of product marketing at Comshare in Ann Arbor, Mich.
“There is the need for better visibility into current [financial results],” he said. “That’s being driven from both external and internal sources to get better quality, detail, and timeliness of financial performance reports.”
He said the interest in CPM has been fuelled by the need for companies to comply with regulations such as Sarbanes-Oxley, an American tax law implemented to provide stockholders with a more transparent view of financial operations, and the International Financial Reporting Standard (IFRS) designed by the International Accounting Standards Board (IASB), based in London, U.K.
“The number two reason for changing performance management was the need to better understand future performance trends [and to make] forecasts and projections that are used for internal planning purposes,” he said.
As such, Radojevic said over the past few years Comshare has noticed a difference in the types of CPM applications that are selling. Several years ago he said buyers were typically more interested in standalone functionality such as one budgeting applications or one strategic planning applications.
Now companies are taking a more holistic approach, and are looking for solutions with multiple functionalities including budgeting, strategic planning, forecasting, consolidation, and reporting capabilities within a single application.
Comshare recommends that users go after a CPM application that can provide them with a holistic picture of the enterprises financial reports.
“Everybody, effectively, is going to be looking at the same information through this management system,” Radojevic said. “In a lot of cases you would have a lot of siloed applications out there that aren’t necessarily synched up from an end-user standpoint. For instance if someone wanted to report on a specific number and get some information behind it, they could potentially go into three or four source systems to get that data or information.”
Comshare recommends users purchase a CPM application with an open architecture – one that can sit on top of these other transactional applications and databases and tap the information when needed.
Another key component to a CPM solution is enabling users to access information in real-time, or at the right time, Radojevic said.
He explained that it is difficult to have all financial data available as soon as it is generated, but that the CFO should be able to access information quickly if something unusual had happened the day earlier, or earlier the same day.
Comshare competes in the CPM market with its Comshare MPC product that provides budgeting, planning, forecasting, financial consolidation, reporting and analysis against the likes of Hyperion Solutions Corp. and Cognos Inc.
Hyperion’s Business Performance Management Suite includes performance scorecarding, modeling, planning and forecasting, budgeting, consolidation and reporting and business intelligence (BI) applications.
Cognos also offers a similar suite of products that include planning, budgeting and forecasting, consolidation and financial reporting, BI solutions, scorecarding, and plan collaboration and control.