Corporate Performance Management: The Role of Managers, Stakeholders, and Software

 

 

In this blog post, I will lay out the basic processes involved in corporate performance management and document how an effective CPM solution can help a company’s managers and stakeholders develop a continual performance mindset. In my experience, one of the most important benefits of a CPM solution is to show how daily activities and decisions impact a company’s performance plan. With CPM software, managers and other stakeholders can easily see the up-to-the-moment status of performance goals, identify positive and negative trends as they’re taking place, and pinpoint relevant factors that can influence outcomes.

 

Corporate Performance Management: the role of managers, stakeholders and software

 

Performance planning

A comprehensive CPM solution provides managers and stakeholders up-to-date financial and non-financial data to help them create performance goals, performance requirements, and performance plans. For example, a finance manager might create a plan with the goal of using a single dataset for reports with the requirement of meeting both EIOPA (Solvency II) and Dutch GAAP standards without transforming the data.

 

Performance implementation

CPM software helps managers efficiently record and collect performance-related data and guide the business throughout the performance cycle. The CPM solution should also facilitate and promote communication between managers and other stakeholders. For instance, in the example above, managers can use the solution to get a financial preview of projected performance in order to determine whether this matches the EIOPA and Dutch GAAP standards. Such advance insight helps managers and stakeholders to take early actions.

 

Performance evaluation

At the end of a performance cycle, it is important to evaluate performance by using the relevant performance drivers. With a CPM solution, managers can identify the best, most appropriate drivers using financial and non-financial data. If needed, they can also change the weight of these drivers in future cycles, depending on various business factors.

Regulatory changes in the EIOPA and/or Dutch GAAP standards will have a big impact on financial data. Therefore, managers should evaluate drivers based on the regulatory changes and modify them when needed. For instance, the solvency driver provides different results when reporting according to EIOPA and Dutch GAAP standards. Regulatory changes from EIOPA might mean that some asset accounts should not be incorporated when calculating solvency. Having such a preview will help managers in their decision making.

 

Performance improvement

The performance process should be considered a continual process – one that invites feedback, collaboration, and analysis at any of the above stages. A CPM solution adds value by continuously providing relevant data and tools for ongoing analyses that can help managers and other stakeholders make and adjust decisions to improve performance management based on different scenarios. Performance improvements can both functional, such as those obtained through training or workflow improvements, and technical, such as those gained through process automation.

 

2017-06-07 blog cpm Arshak 

The three performance processes are intertwined. Therefore it is important to have the ability to continually change, adapt, and improve on all elements as needed.  


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