The corporate performance management (CPM) software system at The Bonita Bay Group Inc. has become a tool that users can't live without -- but it wasn't always that way.
When the Bonita Springs, Fla.-based real estate development company first rolled out its tool for CPM , also called business or enterprise performance management (BPM or EPM), users were reluctant to use it, according to Phil Guido, business analyst. If Bonita Bay's CPM system displayed data that didn't look right to them, users would blame the tool rather than question the data source -- and this did nothing to help adoption, he said. That was in 1998, when Bonita Bay first began using Infor MPC, a CPM tool originally developed by Geac, which was acquired in 2005 by Alpharetta, Ga.-based Infor Global Solutions Inc.
Today, Bonita Bay relies on the CPM system to accurately plan, budget and forecast business, Guido said. It's reduced the time and labor needed for financial planning, a critical function for the company, which develops golf courses, gated communities and real estate in Southwest Florida. After years of training end users, upgrading and managing the system, Guido has learned firsthand how to make a CPM tool go from untrustworthy to indispensable.
Keep corporate performance management software data current and correct
At Bonita Bay, getting the right data in the CPM system was a long project, but it's ultimately what made the tool an indispensable part of employees' daily work process, Guido said. The company has gone from uploading data six months at a time to nightly uploads. Guido also had to work with the owners of the different source systems to fix reporting differences and data discrepancies uncovered by the CPM tool. It helped to take small steps, he said, integrating one new data source at a time.
"Take baby steps to get the right data into the system," Guido said. "Get data in there that's right and that people trust, because if it's bad data, people will question the tool, not the data."
Once people trust the data, they are more likely to use the system, which in turn helps drive adoption throughout the organization.
Executive sponsorship is required, not optional, for corporate performance management software deployments
Getting senior-level sponsors on board isn't easy, but it's critical for CPM success, according to Craig Schiff, president and CEO of New York-based BPM Partners, a professional services firm specializing in performance management. When midlevel managers in finance or IT drive projects, CPM can end up being useful to one department or function but not to the company as a whole. Schiff said that executives must determine the most important key performance indicators (KPIs) and ensure that what is strategically important to the company is reflected in the CPM project -- and that's not all.
"There are going to be tough decisions to make," Schiff said. "You may have to change or standardize the way something is reported across the company. Someone has to be the tiebreaker. If you have peers trying to decide, you may just hit a stalemate."
Don't just automate existing processes; think strategically
Companies need to avoid simply automating and streamlining current activities, Schiff said. Effective CPM requires a top-down evaluation of what the company is trying to accomplish strategically with technology tools. CPM projects often require realigning enterprise focus and reconsidering how success is measured, he said. This doesn't need to be a time-consuming effort, though. The senior-level people often have all of the answers to these questions, so it's just a matter of getting the right people together to determine the most important KPIs for a CPM project, Schiff said.
Formally train employees with the actual corporate performance management software
Training users in a formal, consistent manner is critical for effective CPM, Guido said. Without training, employees don't use the system because they don't understand it or how it will help them do their job, he said. Inconsistent or informal training can also be a problem if people end up with different impressions of how to use a CPM tool.
Having people use the actual tool -- not just look at a demo -- during the training class is critical, Guido said. Bonita Bay's finance staff get two-hour training courses. Every person in training has a computer with the CPM system running, which has helped training become more effective.
Pick the right mix of KPIs (not too many)
Companies often have hundreds of performance metrics -- but that's too many for a CPM project. Pick 12 to 25 key measures, Guido said, and be sure to have a mix of financial and non-financial metrics. Financial metrics, such as revenue, are trailing indicators, he explained, while non-financial metrics, such as customer satisfaction, are often leading indicators. For example, if customer satisfaction drops, revenues might drop after that. So tracking satisfaction may give companies an early warning of a potential problem -- before it has an impact on revenue.
It's critical to pick actionable KPIs, Schiff said. If a company can't make changes that could potentially affect the KPI, it shouldn't be part of the CPM strategy. All KPIs should have owners, he said.
"Identify KPI owners before you start tracking performance," he added. "No one wants to stand up and take responsibility for a [poorly performing] measure."
Don't focus on methodologies
The concept of tracking financial and non-financial metrics is from the balanced scorecard methodology, Schiff explained, but he recommends cherry-picking best practices from established methodologies. Integrating a complete methodology, like the balanced scorecard approach, requires time and money. "The jury's still out" on the value of investing in a specific methodology.