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What’s In a Name? CPM vs. BPM vs. EPM

Published
  • August 01 2005, 1:00am EDT
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Craig wishes to thank John Van Decker, former Meta Group analyst and now vice president, Strategy at Longview Solutions, for his contribution to sections of this column.

What's in a name? More than you might think. In the performance management world, most consultants, analysts and vendors have settled on calling the category business performance management (BPM), corporate performance management (CPM) or enterprise performance management (EPM). They basically mean the same thing - processes, content and technologies that support budgeting and planning, consolidation, reporting, KPIs, scorecards/dashboards and operational analytics. Although there are perceived subtle differences between the three acronyms, the more important point is that there are significant problems resulting from different acronyms which address the same business issues.

First, the different nomenclature sows confusion. There are certainly prospects out there who believe CPM is dramatically different from BPM. It's not. It's basically another name for the same thing. That's why the BPM Standards Group (www.bpmstandardsgroup.org) started its work by agreeing on the use of the term BPM. They also agreed not to shoot anyone using CPM, but the intent was to help bring clarity to the space for the benefit of the end user. Therefore, it would be desirable to have everyone using the same term. The BPM Standards Group counts among its members some of the biggest names in the performance management space: Hyperion, Cognos, IBM BCS, SAP, IDC, Applix, Longview, TDWI and others, including BPM Partners. You would think that would seal the deal, but it hasn't quite worked out that way because the largest analyst firm that didn't join the standards group uses the CPM term exclusively. As you would expect, a number of vendors follow their lead without hesitation. Other vendors may use CPM because their name begins with the letter C. Maybe its just coincidence, but I'm pretty sure somebody in marketing said, "Hey, our name begins with C, CPM begins with C; what better way to help prospects link us together?" One of the more creative vendors even named their product MPC. Get it? CPM spelled backwards. You may think all of this is jokingly trivial, but it is not to BPM/CPM prospects or to the vendors. One of them, following a change in leadership, actually went through the trouble to change all of its marketing material from using BPM to CPM. We have also seen changes in the other direction, from CPM to BPM.


Figure 1: Sample List of Vendors and Acronym Used

What about the "other BPM"? One of the arguments against using the BPM acronym for performance management is that it is already taken: business process management has the same initials. Isn't that confusing in and of itself? Maybe. However, there are two ways to think about it. One solution is to give another name to the "other BPM." IDC has chosen to use the accurate and descriptive term business process automation. If you go along with that line of thinking, then the BPM acronym is available to be used by business performance management. The other thing to consider is that business process management and business performance management are related, complementary disciplines, and they grow closer every day. Process management was originally intended to automate and streamline a process, with the primary goal being cost reduction. Today, process management has evolved into a way to make a company become more competitive, perform better and ultimately improve the bottom line. Those goals are very similar to the goals of performance management. Process management tends to be more operational and performance management is more strategic, but essentially they have many similarities and are mutually supportive. As a matter of fact, we see many projects today where both BPMs are woven together into the solution. Wouldn't it then be convenient to unite these areas under a common acronym, BPM?

Now, back to those subtle differences we mentioned earlier. The name corporate performance management implies that performance management is for large corporations. Maybe that's who the vendors would like to sell to, but that is not the only place we see performance management being used. Today many mid-sized businesses, government agencies and even not-for-profits are moving forward with performance projects. Any business is really a candidate for some level of performance management, and that is a key reason we prefer the BPM name. Sometimes CPM can be interpreted as too theoretical. For example, at a recent analyst sponsored conference, a presentation was given on tying the seven Covey management principles to the balanced scorecard. This is far too theoretical for most companies. Most need to fix planning and reporting as a first performance management step.

The CPM name can also suggest that the project needs to be coordinated first at the enterprise-level, not taking into account pockets of performance management within the organization. When an opportunity to improve a specific business area with a performance management tool arises, a firm should not hold up those projects because it does not yet have a corporate or enterprise strategy (the CPM vision). Sometimes these projects are temporary and may have a limited life span (e.g., firms may want to eventually transition into a target application suite when those features are available). If there can be a compelling return on investment and an enterprise project is years away, IT must reconcile its position to allow business benefits to be realized in the absence of a formal enterprise-wide approach.

We could be accused of bias because our company name is BPM Partners. However, we selected our name for the very reasons highlighted in this article. As suggested earlier, we also believe that "business" is more accurate than "corporate" because we see these systems being successfully implemented at the departmental level for sales, R&D, marketing, services and IT. For those users, "corporate" means headquarters, and they find more value in their use of performance management within their business unit than they do in the corporate system.

Maybe it's unrealistic at this point in time to have all of these major competitors adopt the same term, and there are certainly more important issues to be dealt with to make performance management the success we all want it to be; however, wouldn't it be nice if there was just a little less confusion to deal with? 

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