Market Definition & Description

Gartner defines the main application components of a CPM suite as follows:

bulletBudgeting, planning and forecasting These applications support the development of all aspects of budgets, plans and forecasts. They encompass short-term financially focused budgets, longer-term plans and high-level strategic plans. These applications should deliver workflow capabilities to manage budget/plan creation, submission and approval, and provide the facility to dynamically create forecasts and scenarios. They also should support the development of an enterprise-wide planning model that links operational plans to financial budgets. In addition, they must be capable of sharing data with domain-specific applications, such as supply chain planning.
bulletProfitability modeling and optimization This includes activity-based costing (ABC) applications that determine and allocate costs at a highly granular level, and activity-based management applications that provide capabilities to enable users to model the impact on profitability of different cost and resource allocation strategies. Some applications have moved beyond the "traditional" ABC focus to enable revenue to be allocated in addition to costs to model packaging, bundling, pricing and channel strategies.
bulletScorecard applications Scorecards are a generic BI capability that include the functionality of dashboards, but they also have the capability to link performance indicators to a strategy map with a hierarchical cause-and-effect relationship among the key performance indicators (KPIs). Scorecards are often used in conjunction with a particular methodology, such as balanced scorecard, European Foundation for Quality Management, value-based management or Six Sigma.
bulletFinancial consolidation this type of application enables organizations to reconcile, consolidate, summarize and aggregate financial data based on different accounting standards and federal regulations. These applications are a fundamental part of CPM because they create the audited, enterprise-level view of financial information that must be shared with other CPM applications to analyze variance from targets.
bulletStatutory and financial reporting CPM applications require specialized reporting tools that can format output as structured financial statements, and may also need to support specific generally accepted accounting principles (GAAP) presentation rules, such as U.S. GAAP or International Financial Reporting Standards. They also include visualization techniques that are specifically designed to support the analysis of variance from budgets or targets, such as hyperbolic trees.

Source: Gartner (October 2005)





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