Often pieces of business software enter the market with a fanfare, some three letter acronyms and a few highly dubious claims about productivity but the latest genre appears to be much more than mere hype.
Corporate performance management or CPM systems promise the benefits of integration of different, disparate systems, simplified reporting and easy budgeting and forecasting. Given that these have only been available in top end systems until now the question remains; as a small business what things do you need to consider before investing in them?
A CPM system (sometimes known as EPM or Enterprise Performance Management) is a method of collating, analysing, forecasting and reporting information. Typically it will sit outside a company’s accounting or operational systems and will bring together information from a variety of sources.
CPM software isn’t about information processing the aim is to analyse and help to make predictions; consequently they tend to be used for budgeting, forecasting and consolidation of results.
There are few finance professionals and executives in the world that wouldn’t want a good system with better information presentations so what exactly constitutes a ‘good’ system?
In the same way as a good accounting system can mean different things to different people, a good CPM system will be similarly varied. There are however a number of things you can look at to see if it matches your requirements.
The first thing you need to think about is whether you need a new system at all.
Sometimes it is tempting to hope that introducing new software will solve all the company’s problems and it’s true to say that this is an impression that is fostered by some sales people.
Sit down and take some time to work out what the pain points are that you are experiencing, then ask yourself whether new software will actually help or if it is simply a case of introducing proper procedures and controls. New software won’t help you with staff problems or change an awful chart of accounts.
Next you need to decide at a high level what things you want your CPM to do and rate them in order. It is also helpful to rate them as ‘essential’ or ‘nice to have’.
Realism is important when you are specifying your system. With the growth of APIs and intersystem connectivity you should always think about whether you are better trying to get one system to do everything or several interlinked apps that will each be best in class.
Another item to consider is who your end user is going to be. Will they be highly technically minded accounting staff or will less computer literate employees be accessing it? Usability and an intuitive interface will be important in the latter case.
As well as thinking about who will use it you’ll also need to consider how and where they will use the system. If all of your data and reporting is in one office then your requirements will be very different to the company that needs to deliver information to a director who is frequently overseas or that has several offices.
Alongside your list of essential features you’ll need to consider what information you have, where it is and how you want it to get into the CPM software. Most modern systems have the ability to link directly into accounting and operational systems but there may be sounds reasons why you don’t want this. It may also be the case that it isn’t possible so think about how you would get the data you want into the system you need.
Think about where the CPM system will live. As an organisation do you prefer cloud based SaaS** or an on premise installation? Some CPMs can do both, some only one or the other. It’s also important to consider how people will access the system.
Some companies are purely desk based using desktop machines locked down to a single environment. Some businesses are much more widespread across many locations, may have field agents and consequently a variety of methods of access including desktop, laptop, phone and tablet.
Understanding how people will access the system will therefore inform your final decision as to the architecture of the final piece of work.
A common mistake people make when buying software is to purchase a system that does what they need now rather than thinking about the future of the business. Your company may have extensive development plans in which case you’ll need to ensure that the new system is flexible enough to take these plans into account. Alternatively if your business is divesting itself of parts of the organisation then you may over spec the new CPM.
Another aspect of systems is the maintenance and upkeep. Do you have high level internal IT skills onboard or will you need something that is essentially ‘fire and forget’? Often software can seem very reasonably priced until you factor in the cost of a system administrator.
While we’re on the subject of installation you will also need to assess the time it will take to get up and running and who will actually implement the software. Do you have the necessary time and expertise in-house to implement or will you need to buy in resources?
Although it might be the first question most people ask we finally come to price. You’ll need to set a reasonable budget for the project. Include items such as the software, implementation costs, any server upgrades needed and any extra resource you need to bring in to get it online.
Bear in mind the project management golden triangle at this point – Cost, Quality and Speed. You are allowed two out of three.
Once you have all of these in place then you can go and take a look at the market. Having answers to these questions will save you a massive amount of time. If you find a CPM system that doesn’t match one of your essentials then you can discount it straight away without spending valuable time looking into the product.
You’ll also find that when you actually make contact with the software vendor they will ask these sorts of questions so having your answers to hand already will not only make you look a lot more professional it will also save you more time.
A great CPM system can be a game changer for a business. It can reduce the time and effort taken to produce budgets, can make consolidating companies a doddle and can make the production of board packs and management accounts incredibly swift.
Buying a CPM solution can massively help a business that needs to get on top of its information, budgeting and forecasting and going about the acquisition process in a structured and methodical way will save time, effort and money
* SaaS – Software as a Service. Where the software lives on a server away in the cloud and you access it through a browser or an app.