Pros and Cons of Corporate Performance Management

Corporate management system comprises statistical forecasting methodologies, data mining techniques and optimization approaches. It helps in marketing, sales planning and operational activities. CPM identifies causes of performance issues, analyzes emerging trends and tracks business solutions. The marketing department in a business applies corporate performance management to develop better products, assess the results and understand the targets. The credit department applies CPM for reporting and analysis in creative ways. Human resource departments use CPM for analyzing workforce and adopting salary decisions.

CPM provides a collaborative planning process that connects business strategies and business measures. Individual performance can be measured through CPM. CPM identifies areas of opportunity in a business through goal seeking methodologies. It combines all corporate data across multiple departments and business units. Efficient reporting minimizes problems associated with reporting financial and operational data. Financial reporting in CPM gives up-to-date reports on plans, budgets and forecasts. This can optimize profitability and cash flow. Strategic planning and budgeting facilitated by corporate performance management system improves the predictability of an organization. Analytics in CPM provides facts and figures from different business levels. Reporting and analyzing tools enable business managers to meet their reporting needs and find the causes of problems. Collaborative management in CPM synchronizes the goals, strategies and metrics of an organization.

Coming to the cons involved in CPM, these systems are based on real time concepts. Most organizations disperse operational data across different corporate systems and manage it with a group of applications. This may result in inconsistent and unnecessary data. Poor data quality and lack of integration may lead to poor decision making.

If there is a lack of technical expertise in CPM, it may affect the organization process. The security and privacy of CPM systems is another matter to consider. In a CPM system, analysis and forecasting are limited by the data available. CPM systems need to be upgraded according to the technological development, which may be very expensive. Different organizations have to communicate in a corporate performance management system, and organizations with multiple technologies might fail to communicate with each other.