There is a clear need for CPM software in the market. This is because basic CPM applications such as budgeting, consolidation or monthly reporting are not transactional and hence not addressed by most ERP or accounting systems. Although they involve multi-user processes (such as budget approvals or report distribution), they are often consigned to the “Finance can do that with Spreadsheets” bucket; but in most companies, it is not a viable solution to have finance staff developing multi-user systems using spreadsheet products.

The problems with this approach include:

• Productivity issues – Finance staff spend too much of their time laboriously and repetitiously developing, copying and formatting formulas and data in spreadsheets. Using spreadsheets can be an ineffective use of the time of finance staff who can be better used analyzing and understanding the company’s business.
• Maintenance issues – Finance is not set up to develop, support and maintain multi-user systems. Developing multi-user applications with spreadsheets can be inefficient and costly. There is also potential for data security to be compromised when spreadsheets need to be shared among many users.
• Accuracy issues – Large spreadsheets are rarely error-free but it can be very difficult not only to be aware of but also to find errors in a spreadsheet.

Because of this, there is a clear demand for software that addresses the CPM needs of the marketplace. PROPHIX is an example of a software that is dedicated to meeting this need.

Simply using a spreadsheet as a front-end tool for users to enter data into a budgeting or planning system is not an “industrial strength” solution. While some budget suppliers may be content with simple spreadsheets for data entry, to minimize development and maintenance costs, a true multi-user planning system requires Data Entry functionality such as:

• Automatic user-initiated data spreading across time periods or organizational entities
• Driver based planning where data in General Ledger accounts is automatically calculated
• Line Item Schedules, where users choose to build up data in General Ledger accounts from constituent parts
• Delta Analysis, which enables users to compare plans with historical data (and other plans) and to automatically generate plans based on desired variances
• Automatic distribution of data entry templates
• Workflow for submission and approval of budgets and plans

The Benefits of Using Corporate Performance Management Software

The original benefits associated with CPM software, such as the ability to make better business decisions with more accurate data and better analysis, were typically not easily measurable. These benefits are still relevant, but now other more quantifiable benefits are being recognized, such as better employee productivity in the Finance Department and faster month-end closes. Giving staff better analytical tools is often simply asking for more work from people who are already very busy; making them more productive gives them the time to perform and interpret the analysis.

One irony of the business use of computer technology is that the Finance department was usually the first to automate, by using accounting systems to process and store transactions. But now, whereas departments like Production, Manufacturing, Services, Design, and Sales & Marketing are becoming progressively more automated, most ERPs don’t address the modern needs of a Finance department.

What CPM really does is automate processes that otherwise are performed with spreadsheets. With CPM software, Finance departments are embarking on their second wave of process automation. This time, the processes are not accounting processes but analytical processes.

CPM products like PROPHIX are helping the Finance departments become organizational leaders by:

• Automating multi-departmental financial processes such as budgeting so the whole company becomes more efficient and productive
• Analyzing and understanding the company’s business better, having relevant information available at the relevant time and gaining greater insight into historical business performance
• Acting as agents of change by providing a forward-looking view of corporate performance and enabling the company to react to changing market conditions

Although historically CPM applications have mainly benefitted Fortune 500 companies, the most active part of the market for CPM software is currently the upper mid-market (companies with revenues between $250 million and $1 billion). Like transactional accounting software before, the benefits of using CPM is becoming available to the mid-market and will eventually percolate down to all companies with revenues of $10 million and above. CPM, especially Budgeting and Financial Reporting, will become essential to running the Finance department of a mid-sized company.

To download an in-depth informative white paper which offers a complete look at CPM Software, including a comparison with Business Intelligence, a comprehensive definition of CPM Software,  types of CPM Products, CPM Calculations, Workflow and Data Analysis with CPM and more please click here.

PROPHIX is an easy-to-use product that offers CPAs and financial professionals in the industry the flexibility of enterprise systems coupled with an ease of implementation that makes it much more cost effective. Yet PROPHIX uses an industry-standard OLAP database which gives it the same reporting and calculation flexibility as higher end systems. Watch the NEW eight-minute PROPHIX Autodemo to see why thousands of finance leaders around the world use PROPHIX to empower their organizations and gain greater insight into business performance.

For more information, visit Prophix Software.