Mixed-Up Mess: CPM and EPM
Have you ever struggled to understand or explain the labels CPM and EPM? What do they mean? Are they synonymous or is there enough difference that anyone should even care?
A Quick History:
- CPM stands for Corporate Performance Management – it was coined by Gartner in the end of the 90’s
- EPM stands for Enterprise Performance management – it was first publicized by Oracle in 2008, but used by others before that
So, what’s the difference? Simply stated, these are both all-encompassing labels – to represent all functional disciplines of an organization’s performance management. So yes, CPM and EPM have become synonymous. For the sake of simplicity, we will use the Gartner label of “CPM” in the remainder of this blog.
But some big questions remain: Does CPM live up to its all-encompassing name? Do true CPM Software Suites even exist?
Let’s break it down by asking three more fundamental questions:
1. How much of the business functional domain is covered by CPM?
Gartner has assigned CPM to the Financial domain and by definition, a CPM solution in this Magic Quadrant should be able to deal with profitability, budgeting, financial planning and extended/ integrated business planning.
But what about the other functional business domains? There are separate Magic Quadrants for PPM, GRC, Quality, Sales, HR, Operations, etc. As a result, most CPM Suites have been shaped (and limited) by the Gartner definition to be financially oriented tools primarily focusing on the financial domain of business.
2. What processes do CPM tools, as defined by Gartner, support?
Most CPM tools focus on enabling the planning process – such as demand planning, production planning and HR workforce planning – with the objective that these plans will become financial figures in the Profit and Loss statement. So, not only is CPM restricted to the financial domain view of planning, but these tools are typically limited to only the planning process. But it takes more than just planning to achieve business outcomes.
The full formula is: Analyze + Plan + Execute = Business Outcomes.
Shouldn’t something labeled as “Corporate Performance Management” go beyond simply planning and encompass the full set of Planning, Analytics and Execution processes to achieve business outcomes? Based on this, most (if not all) CPM suites today do not live up to the definition of what one would expect to see in CPM. CPM has been narrowed to only represent a Financial oriented planning domain, not a corporate-wide analyze-plan-execute domain.
3. Does CPM support the standard Corporate Performance Management model frameworks?
A ‘corporate’ tool should be able to support a variety of business performance frameworks used in the various business domains. What about support for business frameworks for Strategy, Governance, Risk, Compliance, PPM, Quality, HR, Operations, etc.? Aren’t these management domains also represented by the ‘Corporate” label?
So, wouldn’t a true CPM tool support multiple business performance frameworks, not just financial planning frameworks? No wonder it’s confusing! The name doesn’t match definition!
So, what have you concluded? Do true all-encompassing CPM Software Suites exist?
The answer may surprise you: Yes! Corporater Business Management Platform meets all the above characteristics – It supports a full business domain, a full set of processes, and a full set of business frameworks – which means it is a true CPM platform.
You may be wondering why we chose to not label our software as a CPM platform – we call it a Business Management Platform. The reason is that it is difficult for us to convince the world what a true Corporate Performance Management Platform should contain when, for so many years, the label has been applied in such a limited manner and has been so misunderstood. It seems no one recalls what the letters in CPM originally stood for. So instead of trying to re-educate the world, we thought it best to create a new label for “True CPM” – we chose “Business Management Platform”. Feel free to take a look at our video to see how clients are building their business applications with the Corporater Business Management Platform.