Transforming a threat into an opportunity through Fintech
FinanceNovember 02, 2022

CPM trend breakdown: new challenges and complexity in performance management

Read this blog to learn more

The latest world crisis proved how critical financial and operational processes are to business continuity. As business operations were reduced, supply chains dried up, and demand plunged, companies had to lean on their processes to circumvent risks to operations, liquidity, covenants, and re-financing. It was a stress test for all processes, but companies that had automated financial processes fared far better.

As the acute impacts of the current situation abate, businesses should reflect on areas of friction and inefficiency before the next cycle of disruption diverts focus. 

Why reflect on inadequate business processes?

This period of relative steadiness is the ideal time to revisit and revise corporate performance management (CPM) processes and software.

That’s precisely why we interviewed 1,320 finance and business leaders across North America, Europe, and APAC about their priorities in our 2022 Global CPM Trend Report. We wanted to get a sense of how finance leaders felt about financial processes, determine the areas they experienced as vulnerable or inadequate, and if they intended to take steps to remedy these deficiencies.

Top financial and business process vulnerabilities

CPM trends impact how businesses plan, operate, and execute short- and long-term strategies, and CPM mastery is critical to business agility in times of disruption. When CPM processes run smoothly, success is felt everywhere, from performance to job satisfaction. But when sudden market events stretch processes, everything starts to fail, including budgets, plans, and strategy.

In our survey, two out of three leaders pointed to increased challenges in the following processes:

  • Budgeting, planning, and forecasting
  • Operational planning & analysis
  • Advanced analytics and reporting
  • Profitability management
  • Compliance & regulatory

This indicates that for most finance leaders, corporate performance management processes are in dire need of enhancement. Performance management processes are the control center of the business. Just like the brain subconsciously tells the legs to walk, plans dictate action, analytics indicate how to move forward, and operational analysis results in cost effectiveness and efficiency. When these processes are compromised, performance buckles.

And performance did buckle when crisis pushed processes to their limits.

As financial processes were forced to scale and increase in complexity, over 60% of surveyed finance and business leaders indicated that:

  • Operational costs increased
  • Teams had trouble delivering strategy-guiding insights
  • Companies became more exposed to risk
  • Teams felt vulnerable to disruptive market forces
  • They couldn’t identify performance drivers
  • Productivity and efficiency fell
  • Morale plummeted
  • Delays to the financial close

While healthy performance management processes beget good results, the opposite is also true. Weak analytics shape weak decision-making. Insufficient operational planning compromises budgets. Burnt out employees cause company morale to plunge. And so on. While we can handle process inadequacies during peace times, small inefficiencies consume valuable resources during significant periods of disruption, and finance leaders agree that the end of Covid does not signal the end of uncertainty.

Financial process disruption on the horizon

Three out of four executives indicated that the potential for economic, supply chain, and regulatory disruption are causing them anxiety, among other risks, including workforce, technology, competition, and M&A disruption.

Our research also indicates a clear through-line between the probability of disruption and the need for business-steering insights. When asked, in comparison to two years ago, how important it is for finance to anticipate disruption and provide insights to steer the business, 95% said it’s more important now.

More disruption triggers the need for more business insights. This makes sense to me, especially as many of finance’s worries are already becoming a reality.

Since polling these executives, new disruptions have already played out: the war in Europe, dire and depressing UN climate reports, advancements in ESG reporting rules, the Colorado wildfires, persistent worldwide inflation, and global supply chain constraints. For these reasons, finance mustn’t lose sight of the deficiencies experienced during the height of the current uncertainty.

The way forward

The best time to replace outdated performance management processes was yesterday, the second-best time is today. Best-in-class CPM processes directly correlate to financial performance, cost management, strategy, resilience, productivity, morale, and efficiency. Our research shows that leaders recognize this and are taking steps to re-evaluate CPM software and technology the next global event.

To learn what near-term steps your peers are taking to prepare processes and tech, read the 2022 global CPM trend report.


Alessio Lolli
Vice President, Global New Client Engagements

Alessio has over 10 years experience implementing and enhancing the CCH Tagetik solutions based on customer’s specific needs.  Alessio’s experience encompasses a wide range of activities including  helping the consulting team secure the best application design to meet customer’s specific requirements and helping the development team deliver best of breed functionality.

Alessio is now Vice President, Global New Client Engagements.

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