We still see confusion at client sites, in the press, on the web, and from vendors and consultants as to just what is EPM, CPM, BPM, IPM… or as we call it xPM (no wonder there’s confusion, we still can’t even agree on what to call it!). There are too many solutions that don’t tie-back to the vision and definition of xPM. There are a number of good working definitions, let’s look at two of them:
Lee Geishecker’s original definition in 2001 (when she was with Gartner) was that CPM “is an umbrella term describing the methodologies, metrics, processes and systems used to monitor and manage an enterprise's business performance."
To me, “monitor” is clearly in the domain of business intelligence. It’s the “manage” which has been open to interpretation. So let’s look at an updated definition from David Axson's book 'Best Practices in Planning and Performance Management: From Data to Decisions (Wiley Best Practices) '
“BPM encompasses all the processes, information, and systems used by managers to set strategy, develop plans, monitor execution, forecast performance, and report results with a view to achieving sustainable success no matter how success may be defined.”
More encompassing, but still missing the point. The real point of xPM is to INTERCONNECT each of those areas (and a couple more) that David points out in order to align strategy with sustainable execution. So xPM answers the questions: “What should we do, and how should we do it,” and “How did we do and why did it happen?” AND it INTERCONNECTS those answers.
Let’s have a quick look at what EPM (CPM, BPM, IPM) is NOT:
- It’s not Balanced Scorecards. Bob Paladino’s book ‘Five Key Principles of Corporate Performance Management’ is essentially a scorecard book. Although scorecards are certainly an ingredient of EPM. (And there is some good stuff in that book, it’s just not really a book about CPM principles).
- It’s not Enterprise Budgeting, Planning & Forecasting. As most E/C/BPM case studies will have you believe. Yet Enterprise Planning is considered the cornerstone of EPM, it alone is not EPM.
- It is not Business Intelligence 2.0.
- It’s not Business Process Management. Just an unfortunate collision of acronyms.
- It’s not KPIs. But, of course, there are KPIs in EPM.
- It’s not Management Reporting. Just another ingredient. Same for financial consolidation and statutory reporting.
- It is not the HR process of performance reviews and compensation, they just got the “PM” acronym first.
We’ll talk more about the key INTERCONNECTS that truly deliver on the promise of EPM. In the meantime, please share what it means to you.