what is corporate performance management (cpm)?

CPM Defined

CPM is often defined differently depending upon who you ask.   Gartner, the world’s leading IT research company, defines CPM as "... an umbrella term that describes the methodologies, metrics, processes and systems used to monitor and manage the business performance of an enterprise. Applications that enable CPM translate strategically focused information to operational plans and send aggregated results. These applications are also integrated into many elements of the planning and control cycle, or they address BAM (business activity monitoring) or customer relationship optimization needs".

CPM is often confused with BI (business intelligence).  Once again, let's look to Gartner for a widely accepted definition.   Gartner defines BI as "... an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance. Commonly used functionalities include data discovery, data visualization, and big data".

The term BI originated in the late 1950s, a term coined by a computer science researcher for IBM. This researcher, Hans Peter Luhn, described BI as  “the ability to apprehend the interrelationships of presented facts in such a way as to guide action toward a desired goal.”  

CPM, on the other hand, is widely viewed as a concept originating in the early 1990s with the development of technologies, processes, and tools to support data storage, report creation, data warehouses, data marts and everything data related. 

BI and CPM are often used synonymously.  It is true that there is considerable overlap in terms of the technology employed to gain access to and analyze  the wealth of data stored in corporate transaction processing systems.  There are also significant differences:

  • BI essentially provides real-time access to information that informs management as to what is happening now - patterns and trends and data visualization capabilities that help management make informed decisions.

  • CPM, with it's financial reporting, budgeting, forecasting and data analysis capabilities, provides management the means to understand results (historical) and to evaluate the decisions made based the BI application.