Just as your Enterprise Resource Planning (ERP) journey is never done, your CPM implementation (Corporate Performance Management) is also a journey that never ends.  Both solutions are different.  As new external and internal events occur, the way you want to look at your data will evolve.  Plus, with your ERP you are generally deploying the solution to additional locations, upgrading or expanding the overall transactional capabilities.  With a CPM system you are adapting it to your current business needs and expanding the analytical capabilities.  If you successfully embrace a CPM, each expansion of capability drives a new round of questions and another round of expansion thus establishing a nimbler and more efficient corporate decision-making structure.

CPM Implementation

By implementing your CPM first you can ensure the business processes and data designed with your future ERP do not impact your high-level management reporting and analytical requirements. Implementing the CPM first provides three primary benefits:

  • Business Stakeholders – during the design of a CPM system the primary decision makers are senior leaders of the organization with a focus on higher level strategic needs and wants. With an ERP, decision makers are usually subject matter experts working shoulder to shoulder with front line business partners across the enterprise to drive insights that improve performance.
  • Longer-term thinking – CPM design sessions are generally focused on where you are going and not where you are. The modern ERP is all about “why won’t this work for you?” from a process perspective.
  • Time to value – you do not need to “boil the ocean” with a CPM as you do with an ERP. Within 6 months you can typically be rolling out your first critical functionalities, whether that be budgeting, forecasting or financial reporting.  A CPM is flexible in terms of where data comes from, so even without the new ERP you can move to your future state and begin driving value from your overall investment.
Requirement Definition

Once at a senior level you have clearly defined the management reporting and analytical requirements future state, you can turn those into business process and data requirements.  These requirements can be rolled into ERP program success criteria for your subject matter experts and even your implementation partners.  This ensures critical components not usually included in an ERP project, are clearly discussed and part of the overall measurements of success.

However, even if you implement the CPM first you should go into it knowing it will be imperfect.  Until the ERP design and pilots are complete, the overall source data will be incomplete.  If you must create new master data, in order to achieve your long-term objectives until that data exists, you can roll it into a CPM.  You may have to make certain compromises on the initial CPM based on what data is available.  Then as the data becomes accessible you may need to modify or change the CPM.  With this approach since you had not yet begun the ERP design you were not necessarily aware of what data would need to be created or modified to fit the long-term vision.

As such, depending on the overall understanding of your master data you may have small modifications to make.  Or potentially a significant re-implementation.  The good news with that is it can typically be done in less than 6 months since most of the data is already in the solution and the user population is already familiar with the tool.

Client Story

A global manufacturing company was committed to implementing a new ERP, but understood the value associated with a CPM and took the time to implement it first.  During the design processes, they developed the global standards for P&L and Cash Flow reporting, completely restructured their forecasting and budgeting process, thereby standardizing variance and trend reporting.  However, they also wanted product line reporting.  With the current transactional data available they could not calculate margin at the level desired but could generate sales information.  The design in this area stalled as they couldn’t agree on a standard global product line hierarchy.  They elected to continue forward with a “hole” in the CPM that could be easily filled once the hierarchy was defined.

The CPM successful deployed and the desired objectives achieved.  The overall CPM project took 12 months to deploy, 4 more than anticipated – however the company had multiple acquisitions and went through an IPO during this period as well.  Within months, the ERP project began with a product line hierarchy defined.  Unfortunately, the hierarchy was specific to the pilot location with no global agreement reached.  3 years later there remains no global standard for the product line hierarchy, there continues to be a hole in the CPM and unfortunately, no easy way to view this data at a consolidated corporate level.

The lesson: if you can’t reach consensus or a decision regarding reporting during the development of a CPM, it is unlikely to happen during the design of an ERP.

Solution Value

As with any investment, you want to get to value as fast as possible.  And given the time and cost, you can’t afford to mess up your ERP implementation.  

Standard Out of the Box

Almost every ERP implementation starts out with a common commitment to “keep it standard” or “use it out of the box”.  Customization increases the cost and duration of a project, plus impacts the cost and potentially the viability of future upgrades.  A lot of thought should be spent on what differentiates you from your competition.  Is it innovation, price, customer experience, etc.?  Whatever these key areas are, don’t compromise based on what an ERP calls a best practice.  If everyone is running “best practice” then it becomes nothing more than average.

Reporting Metrics

Unfortunately, the pressure to keep on schedule and budget very rapidly narrows the focus to transactional execution.  Build corporate level reporting requirements into the success criteria upfront with a solid governance structure that allows the steering committee to keep these requirements as part of the conversation.

Quick Implementation

In contrast, the modern CPM solution is implemented quickly compared to an ERP. It is not hampered with the concept of a best practice.  It is designed to be configured to your specific requirements.  Quite frankly the concept of customization does not exist.  Since it is not focused on transaction level detail this does not create the same impact from a cost or length of a project.  Generally, the cost and length are dependent on the overall scope of the project (actual reporting, forecasting, planning, account reconciliation, etc.) and not the design of any one piece.  With the right level of engagement, you can be done in 6 months.

Proper Design is Key

During the design of a CPM the discussions should focus on what information is critical for managing the company. Essentially, higher level reporting requirements. What market and operational information is required?  How should it be accumulated, reported, and analyzed?  Do we want to report on sales by region, product line, market segment, customer?  How do we want to measure profitability or overall efficiencies?  This is not just about the information currently available, but all the information you want, need, and should have.  Design the solution for the future state.  As you back into your current state, you will probably have to make some compromises within the design. But, where you want to get to will be clearly defined.   Completing the CPM implementation cements these reporting expectations.  As an organization you have established the new corporate language for talking about the business.

Data Elements Defined

As you move forward with your ERP implementation this will have a profound impact on your design sessions.  Your subject matter experts will be aware of the data elements required as a part of customer, vendor, material, employee master information.  Hierarchies must be defined to simplify other parts of the configuration.  If you have not defined these requirements prior to entering in the ERP design sessions it will most likely not happen at all.  ERP design or blueprinting sessions focus on specific end to end business processes and their associated transactions, creation of sales orders, issuance of purchase orders, etc.  Leading to invoicing and vouchering, and finally to cash application and cash disbursements.  Then ultimately to what account each of these transactions will land on the Chart of Accounts.

The focus through build and testing takes these “end to end” processes to validate each set of scenarios works.  This is very detailed work and appropriately requires a lot of very specific functional expertise to meet unique business requirements.  Generally, reporting & analytics are a second thought through this process.  If you are going through an ERP implementation, make sure you don’t just recreate the same old stuff.  Understandably, you are not familiar enough with the transactional data you need and how to take advantage of it. Therefore, a CPM implementation first can be incredibly valuable.  The whole purpose of these tools is to create a consistent way of communicating information and reporting on results.


The reality is you won’t get everything right the first time with the CPM implementation.  After ERP implementation you can  eliminate the compromises made based on the old system’s limitations. Then, you can leverage your ERP data knowledge to bring the ERP and CPM together and maximize both investments.

Enabled by OneStream

While there are various EPM solution in the marketplace, OneStream has developed core functionality and features within it’s Extensible Finance (XF) Unified Platform that integrates process and data across consolidations, planning, analytics, data management and reporting.

The solution has a user interface that is intuitive to many stakeholders and can be accessed via an Excel interface as well to further align with processes as improvements evolve.

In addition, the OneStream XF solution provides a variety of robust, transparent management reporting outputs allowing slicing and dicing to various levels of detail.   Stakeholders and power users are able to customize and optimize how they interact with the data so they keep focused on their areas of domain while maintaining a view of the overall impact to the enterprise.

Blending improvements to process, data, organization and change management with an enabling technology such as OneStream allows our clients the flexibility, velocity and scale needed to make the driver based budgeting, forecasting and ZBB journey knowing they have opportunities to pivot and adapt based on industry, economic and academic impacts.

Getting Started

FP&A continues to have an opportunity within the enterprise to be a trusted advisory providing proactive insights to help manage enterprise performance.  FP&A teams continue to be absorbed by process, data and organizational struggles to pivot their focus to these value-added areas.

Getting started with driver based budgeting takes many forms and is impacted by many factors from our client’s culture to catalyst events such as acquisition, new technologies and organizational changes.

Start Small & Scale:  We have clients who start small with one business or region and one area of their planning domain (eg Sales Planning) and then build a driver based planning and forecast process using owned technology or even Excel to learn the data challenges, pressure test the drivers, metrics, KPIs and outputs.  Then then use this pilot to begin the requirements for a system enabled solution to better automate and scale data using consistent, standard processes that can be leveraged enterprise wide with transparency.  This approach also can help with selection of new cloud EPM solutions, aligning processes and data and beginning the adoption and change journey.

Go Big & Adapt:  We have other clients who have made the decision to move to Cloud EPM and they want the catalyst for change at a high velocity.  Driver Based Budgeting & Forecasting is an area where you can move fast, start with available data and processes in early use cases and releases and then iterate accordingly as you scale to other businesses, regions and functions while doing it all in the new EPM tool.