Corporate performance management is garnering a lot of attention, as firms look to leverage technology to gain competitive advantage by focusing on critical financial and operational metrics.The standard guidance for success, such as top management sponsorship, end-user buy-in and careful scope definition, need no embellishment. This article offers some practical advice that can spell the difference between success and failure in a CPM implementation.

Unlike the implementation of an operational transactional system, CPM implementations have no hard and fast criteria for success. CPM encompasses planning and forecasting, analytical reporting, understanding historical trends, and anticipating problems and opportunities.

In planning applications, the process can matter as much as the result if it focuses managers on critical factors driving their results. Benefits are difficult to quantify, and may range from logistical - less time to create a plan or report - to behavioral - increased focus, foresight and ownership. In fact, the largest ultimate benefits of a CPM implementation may not even be defined at the outset of an implementation.

While success may be hard to define, failure is not. Failures seem to fall into these categories:

* You've solved the wrong problem.

* It doesn't work.

* It's too slow and cumbersome.

* No one understands it.

* No one likes it.

* The cost outweighs the value.

Based on years of experience and hundreds of implementations, let's take a look at my top five ways to run off the road, and some advice on how to stay on track.


Do you need to plan for and track sales on a daily basis? monthly? hourly? by sales rep? How about expenditures? Is the granularity the same for product costs as it is for travel? Too little detail renders the application trivial. Too much and it may collapse under its own weight.

Level-of-detail decisions drive technical considerations such as storage and processing requirements; data issues related to availability and quality; user workload in planning and forecasting, and the resulting precision; and the degree of such intangible benefits as timeliness and level of insight.

So what's the right answer? Sadly, this is where art meets science, and there is no universal truth. My suggested approach is to ask the following questions:

* Is there a threshold that matters? Do you care about one dollar? How about a million dollars? As an easy exercise, take the annual sales and divide by the number of data elements and see if it is reasonable.

* What would you do if you knew? Anticipate decisions or actions based on insights at the proposed detail level - if you can't think of any, or it would make no difference to have more summary data, then rethink the choice.

* Do you need to know all the time, or just on an exception basis? Some detail you only care about if it looks funky, and may be handled with seamless access to a data warehouse or ERP application.

* What does it cost in dollars, time (man-hours and elapsed) and inconvenience to get it, with the quality level you need?

One time a sporting goods manufacturer that was struggling with a cumbersome planning process and inflexible reporting from their general ledger insisted that their CPM application be built to the same level of detail as the GL, because they "may want to look at it." The implementation failed on the "too slow" and "cost exceeds value" metrics.


Many, if not all, CPM applications have a finite shelf life. Market and competitive circumstance, management, technology, customers, and priorities all change over time. A critical problem now may be solved a year from now, or may be replaced by a different problem.

The prescription here is virtually a restatement of the problem - be sensitive to time scales and the shifting landscape. Anticipate changes and build in the flexibility for the solution to adapt without major cost.


CPM applications are all about the interaction between people and data. Not all organizations possess the same degree of analytic sophistication, technical ability or focus. Planning models and sophisticated forecasting techniques can be powerful tools in the right hands - and dangerous in others.

Sensitivity to the organization's skill level is critical in both package selection and application design.


Good CPM applications tend to "lift up rocks" in terms of data quality, and expose what lurks beneath. They provide visibility into existing data, processes or other systems issues of which the organization may be blissfully unaware.

This can lead to two problems. First, since new systems and applications tend to be guilty until proven innocent, the onus falls on the implementation team to unravel and explain faulty or inconsistent data. This may be an arduous and time-consuming process.

Second, divergence from previously published and trusted results can greatly damage a new application's credibility. Awareness of this pitfall is the primary defense, as well as establishing early the benchmarks for consistency. Exercise caution before trumpeting success. Trust but verify.


For many organizations dealing with a new vendor product or their first CPM application, it is difficult to judge the cost of administration and maintenance. In this case, the benefits and short-term implementation costs are clear; the long-term burden is not.

These costs vary enormously among vendor products and application structures. Look carefully at what it takes to make the kind of administrative changes that you would expect over the life cycle of an application. Ask your vendor for references for similar applications and organizations in their second or third year of use. Ask about customers who have stopped using an application and find out why.


There are of course, many more than these five paths to a failed CPM implementation. This list reflects common themes from years of experience. However, let me offer some straightforward pointers to the road to success:

A Understand the pain points and critical factors in the issues that the CPM application is trying to address, be it easier logistics, better information access, improved communication and timeliness, or support for critical decisions. Stay focused on making the decisions that support the goals.

* Get on the scoreboard early to build credibility and momentum.

* Aim at the appropriate level - of detail and effort.

* Make sure that the delivered value and the perceived value exceed the costs.

* Build in the flexibility to adapt, enhance and expand, accepting that this is a fact in this dynamic environment.

Max Kay is the founder and chief executive of KCI Computing. Reach him at (310) 921-6222 or

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