Corporate Performance Management (CPM) is a critical tool for businesses in every sector. It enables executives to roll out tried and tested strategies and measure the success of an organization. Although CPM is beneficial at the executive level and often indistinguishable from business planning (we’ll get to that later), it is particularly valid for finance leaders. CFOs use Financial Corporate Performance Management (FCPM) to ensure their organization maintains financial standards and other crucial metrics.
CFOs measure and track these milestones and use them to improve revenue and develop more efficient teams. And ultimately, improved revenue will lead to greater profits for a company.
The concept of FCPM is quite simple, but to maximize the output, you need a bespoke strategy. This strategy will focus on the core drivers for your organization. It will also utilize business data from multiple sources, such as income statements.
Strategizing for Success
FCPM tools are critical at the close of the financial year. At this time, finance officers evaluate many items such as balance sheets, cash flow statements, forecasting data, expense claims, and other reports.
Using this information, a CFO can effectively plan and strategize for the year ahead. In short, FCPM is a means of increasing profits by optimizing financial processes.
However, as we will cover later in this article, the line between FCPM and other business intelligence tasks is blurring. This development means not only can other operations benefit, but the insights gained are critical year-round.
Organizations use FCPM methods to integrate financial measures and provide an overview that finance officers and other business leaders can use to make better management decisions. The strategic choices that CFOs are required to make surround the core frameworks they adopt.
These frameworks could include balanced scorecards, the European Foundation for Quality Management (EFQM) Excellence Model, Six Sigma (6σ) techniques, and various other methods. KPIs measure the success of the framework.
FCPM vs. Business Planning
In many respects, it’s impossible to pit the terms FCPM and business planning against one another. While business planning has been around since the first companies appeared, FCPM is a later development.
However, today, in the era of business intelligence, both terms refer to similar processes. Although FCPM is a critical tool in the finance office, the annual output can guide vital corporate decisions too.
CFOs use FCPM to increase the bottom line, and these insights will inform other business decisions. Beyond revenue generation, corporate leaders may use the findings to build more insightful collaborations, invest in specific departments or innovations, or commit to a host of other strategic decisions.
Finding the Right Tool
The best way to ensure that you are engaged in the most effective FCPM is to use a dedicated tool. Using an FCPM software platform, you can benefit from several extras. Firstly, your team can get feedback on demand. This means you can analyze metrics and make critical decisions more regularly.
When users consolidate data, it is much easier to access and manage using FCPM software. Information is grouped and not dispersed across your organization, or in the case of a conglomerate, multiple companies. This makes it easier to collaborate. And, when users are connected, with access to a wider breadth of data, they can make better business decisions.
The best FCPM platforms provide users with backend reports, making testing quality and effectiveness easy. They also make suggestions on risk mitigation. The following software platforms will help you to achieve your goals effectively.
deFacto Global is a highly respected corporate project management software. Many large corporations use the software, including AT&T, Fila, Hulu, and more.
deFacto Power Planning is deFacto Global’s core FCPM platform. As well as financial, it covers many other operational areas too. Because the software synchronizes across an organization, it enables both business leaders and CFOs to manage performance.
As we mentioned earlier in this article, FCPM has merged with business planning. deFacto Power Planning echoes this shift in use case by enabling strategic planning and company-wide analysis and financial obligations such as forecasting and budgeting. The platform operates as an easy-to-use interface that integrates Excel, Power BI, and other document types.
Solver is an easy-to-operate FCPM platform that enables CFOs and other business leaders to compete in an increasingly competitive market. The platform is cloud-based and automates key FCPM metrics like reporting, budgeting, forecasting, and consolidation.
The platform has several key benefits to CFOs and other business users. Like deFacto Power Planning, the Solver has multiple operational use cases within and out of the finance office. It is also highly scalable and capable of managing vast data sets and hundreds of individual users.
The platform is secure and, as a cloud service, very accessible. Users can log on from anywhere at any time with just a device and internet connection. The lack of on-prem hardware also makes the technology very affordable.
FCPM platforms may not be new, but they are evolving rapidly. If you want to ensure your company aligns with the latest developments, you must be aware of the crossover between FCPM and strategic business planning.
Collaborative efforts lead to more significant business gains. And, as the breadth of CPM grows, so do the opportunities. However, it’s impossible to realize their full potential without a dedicated tool to enable these processes.
Today, CFOs must be willing to collaborate and share financial metrics with other business leaders. This collaborative effort will turn financial data and statistics into a driver for growth company-wide.