Currently, the performance management software market is cluttered with terminology. Analysts and vendors seem to use a variety of different terms to explain a category and define what capabilities a solution has within that category. Doing so has put us at a point where we don’t really know what is what. Well, it’s time to clear things up a bit. Though we are not the almighty gods of business acronyms, we do know a little bit about the business performance management (BPM) space because we play in it. Here, we are going to lay out what we believe to be the best guide to business performance management. You may want to continue this reading with a notepad and pencil or a cold brewski – whichever you prefer.
What is Business Performance Management?
At the highest level, business performance management is anything that we do that measures performance results against a predefined goal. The purpose of business performance management is to understand outcomes across an entire organization in an effort to streamline processes and improve desired results. BPM software helps to transform slow, expensive, disconnected processes into more dynamic, efficient and integrated experiences. Though there are tools on the market that define themselves as BPM solutions, this term serves more as an umbrella that has multiple categories stemming from it. Here, we will outline what categories exist within BPM and provide further reading to better understand the market. We are going to keep this blog pretty short and sweet and provide further reading for those that want to better understand each category and the future of the market. Let’s carry on!
Financial Performance Management is used to describe practices and procedures specific to determining the financial health of an organization or entity. FPM software consists of tools and solutions that finance uses to complete processes required for financial measuring financial KPIs, reporting, consolidations, account reconciliations, forecasting, and financial close.
What is Enterprise Performance Management (EPM)?
FPM and EPM are very similar, yet different. Enterprise Performance Management combines financial performance management with operational performance evaluation and optimization. Solutions in this category expand functionality beyond finance to provide the entire organization with management and analysis to facilitate improved efficiency. Though seemingly synonymous with Corporate Performance Management, the term EPM is a bit less prevalent in use. Why so? We aren’t quite sure on that one…
What is Corporate Performance Management (CPM)?
CPM is the newest terminology under business performance management. Like EPM, CPM enables organizations to manage business performance across the entire enterprise. CPM software solutions tend to combine aspects of FPM and EPM, alongside analytic capabilities found in business intelligence tools. Coined by Gartner, CPM is making a name for itself in and out of the finance department.
Before we move along, we bet you are thinking, "but wait, what about BI?" Not to fret. We wouldn't leave that out. Business Intelligence has been used as a catch-all term for a variety of software solutions used to analyze an organization's raw data. Such democratization of data has led to the development of BI tools. Business intelligence solutions provide you with the ability to interpret information by way of dashboards and data analytics. These tools have been heavily adopted across various industries and are beloved by the C-suite and end-user alike. However beautiful as these tools may seem, they are not as robust as an FPM solution, nor do they provide much functionality outside of visual analytics. Not to mention their potential to provide inaccurate information due to lack of integration…
Familiarizing yourself further around your performance management needs in your own organization. We recommend further reading on our, What is FPM eBook.