4 Major Dimensions of a CPM Application

Measurement

Without measuring results it’s impossible to know whether the Strategic Plan is reaching its goals or not.

However, most business organizations limit themselves to traditional financial measurements like year-over-year losses or gains. But are those really the best indicators of an organization’s value-added activity?

For example, if you are a tutoring organization, which should be a more crucial measurement of business success: the year-over-year increase in income/profits, or the change in the number of students admitted to the top 20 universities?

CPM brings clarity to the nature of the measurements process itself and helps managers select the right kinds of performance measurements.

Processes

Most organizations operate with traditional processes like annual planning, budgeting, performance measurement, forecasting, reporting and analysis, etc.

However, more often than not, such processes are linked to general financial metrics and not to specific performance targets that really matter for the organization.

A process, for example, which “makes money” is deemed a good process whether it leads to (just to give just two random examples) more healthy patients and shorter hospital stay, or, higher consumer satisfaction and less kitchen accidents.

Without a clear idea as to how each process contributes to specific performance targets, market performance becomes almost an incidental outcome of “better financials.” CPM aims to bring the focus back to the processes that would serve the strategic goals of the organization the best.

Incentives

Sometimes people are rewarded for meeting targets that are not directly related to strategic goals, with adverse implications for the organization’s future growth.
For example, if a manager gets a year-end “resource utilization” bonus, she will try to spend all her allocated budget before the year’s end whether such expenditure contributes to the company’s top strategic goal (e.g., market share) or not. The chances are she will also try to maximize the projected costs and minimize the projected revenues for the year ahead to hedge her bets.

CPM emphasizes the importance of providing management incentives for satisfying not the traditional budgetary targets but specific goals defined by the Strategic Plan.

Data Integration

Some organizations use different technologies at different levels to implement and measure different processes. The result can be a total lack of coordination, confusion, and erosion of morale.

For example, the Strategic Plan might be delivered as a PDF document. The budgeting might be presented in Excel sheets. Process management might use MS Project. A statistics package like SPSS might be used for multi-variate analysis of the results.

But when it comes to deciding whether the goals of the Strategic Plan have been met or not, no manager might be able to make any sense of the overall situation due to the different data platforms used at each step.

CPM aims to eliminate such variance by streamlining and integrating the technologies used by different departments for different processes.

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