HP would have benefited from strong CPM

As I am sure you have heard today, HP, the world’s largest technology company, has decided to split into two companies - one focused on Business applications (Hewlett-Packard Enterprise) and one focused on selling PCs and Printers (HP Inc.)

 

Corporate Performance management solution

 

It reminded me that when a company embarks on a major change to its business, either through acquisition, or in this case splitting up, a strong CPM solution is vital to facilitate the discussions prior to the final decision being made.

 

Having the ability to run multiple scenarios simultaneously, comparing results, is at the heart of making good business decisions. And the resulting analysis should be not focus just at the P&L level, but full Balance Sheet, Cash Flow, and whatever profitability modeling you run. Changing the parameters, such as timing, percent ownership, or even changing HQ location, and analyzing the results saves time, money and risk.

 

But how long does all that take? Days, weeks? How about near real-time. We have a customer who was ecstatic how a few months ago their CFO asked if they could do a pro-forma set of reports for their company if they divested of a specific division. The CFO said they could provide just the P&L as he “knew it would take days” to get done. Our customer returned - 2 hours later - with a full set of reports including P&L, Balance Sheet and Cash Flow. He also had created some comparative reports to provide deeper insight. The CFO was floored. As all good deeds go, he then asked for more detailed comparative reports, for which our customer was able to deliver in near real-time. Because of his experience with other systems, this CFO was used to being able to make a decision based on just high-level P&L numbers. How do you measure the value brought to this company by being able to make a much more informed decision?

 

Let’s take it one step further. What if they could then flow all these changes into his forecasts and long term planning - all based on the same changes that were made for these reports? That’s the power of a unified platform. With the one change in structure, a whole scenario, past,  present and future - can be analyzed - without switching products. Without running convoluted meta data ‘integration’ between systems. The WHOLE picture based on the same scenario. That’s the power a strong CPM product brings to the table.

With businesses there is only one certainty - change. Having a strong CPM that can adapt to change, and give insight into how best to deal with change, is a critical tool that you must have at your disposal.

What are your thoughts? What are your experiences with organizational changes? Were you able to get the insight needed to help with decisions made?

 

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