Buzzword: “CPM” and “BPM”

Corporate Performance Management (CPM) and Business Performance Management (BPM) have gained significant visibility in the past 5 years.  Although there are purists that would argue these are different, I’m lumping them together because from an consumer perspective I don’t think there are appreciable differences.  Dashboards have also gotten a lot of press recently, and often gets lumped into the CPM discussion.  But I see dashboards as an implementation option within a larger CPM initiative.

So what is CPM/BPM?  Essentially, it’s using metrics and KPIs to measure and improve the business.  A successful CPM solution must be driven from the executive ranks down through the business to technology.  It’s DOA if it starts in IT, and has little chance when germinating within a particular business unit such as Finance.  The reason for this is simple: the goal of CPM is to improve the business by taking measurements at various levels (starting at the top), setting thresholds, and managing to exceptions.   Now I don’t necessarily agree with this approach to running a business, particularly if this is presented as the silver bullet.  This approach often fosters a very reactive culture within the business, but coupled with executive direction and sponsorship, and properly defined non-punitive measures, CPM can provide significant visibility into the operations of the organization.

That being said, I can’t stress enough the importance of not driving this from the IT side of the house.  Particularly insidious is the temptation to follow vendor claims of implementing a CPM solution (usually just a tricked out dashboard).  If the executive suite doesn’t buy in and drive this, the technical solution is a moot point.

This entry was posted on 4. June 2008 at 17:56 and is filed under Industry Buzzwords, Business Focus. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.