Organizations are trying to make people and processes move faster and faster, instead of smarter and more effectively. Unfortunately, the notion of being more efficient has led many organizations to make investments that have not delivered the business benefits required to move them forward. This is no surprise as you step back and examine the massive investments into your IT infrastructure for transactional automation and legacy systems. Only a small share of these investments are focused on the business and IT aspects of business intelligence for improving performance.
The mindshare and purchasing has begun to change as we have seen many organizations making new BI investments. But most of these investments are still not delivering on management expectations. While organizations have learned a lot from data warehouse and BI endeavors, these systems have yet to provide access and delivery of relevant and timely information that can be used to drive actions and decisions more effectively. Many BI investments made in the last 10 years have been important evolutionary steps but will not likely be the foundation for managing the performance of your business moving forward. This is a hard fact to accept, but simply, many BI deployments are not aligned to management requirements.
Performance Management is not just adopting and deploying the information technology of business intelligence, but understanding the process and methodology for performance improvement. Performance Management has become an important mandate over the last three years and it is critical to educate everyone in business and IT on the goals of this management and operations methodology.
We look at Performance Management as tying business and IT to a methodical process to ensure efficient performance improvement throughout an organization. Our own methodology defines a three-step process cycle of aligning, optimizing and understanding performance. This holistic view of Performance Management should be embraced as Management 101 in organizations of all sizes and focus areas. This performance improvement process can also be used as your guide to assessing your existing management processes and systems.
There are compartmentalized views of what the term Performance Management means. Finance views Performance Management as a way to move beyond budgeting processes and tie corporate goals to a plan. HR views employee appraisals as Performance Management for employees' goals and objectives. Neither of these organizations can take complete ownership of Performance Management as it is clearly a management discipline critical for an entire organization. This extends from employees and the workforce all the way to the operating units and processes of finance and operational areas like sales, marketing, call center, R&D, manufacturing and the entire supply chain.
As you look to take on Performance Management in a serious and methodical manner, realize that the people in your organization may be resistant to change. The level of change required in most organizations can vary. Typically you will find groups of interconnected VPs and directors in the organization looking to be the business innovator for Performance Management. These individuals (and maybe even you) are willing to put their neck on the line to ensure progress is made towards this goal. The key to successfully implementing Performance Management is to have a clearly defined plan so everyone can see what you are trying to accomplish and how they will benefit.
There are things you can do to apply the principles of BI and enable Performance Management in your organization. As you get started on the recommendations shown in the box below, be sure to avoid the promise of quick paths to success. The road to achieving Performance Management requires patience, perseverance and most of all a key team of people who want to drive positive change. There is a little bit of a gold rush mentality among technology vendors, but their role is just one piece of the challenge in your organization.
Your opportunity is to be a business and IT innovator and take on the number one priority for every organization, Performance Management. The focus on operationalizing Performance Management down and throughout your organization is part of the secrets to success. If you use the Performance Management methodology - understand, optimize and align - you can build a better place to work, foster a higher level of competency in your management and improve your business and operational performance.
Three things you can do to apply the principles of BI and enable Performance Management in your organization:
- Perform a Performance Management Audit, which includes assessing the business and IT systems in your organization so you can build a baseline for improvement
- Start a cross-functional business and IT team (Performance Management Office) who build the Performance Management program and plan across your organization.
- Set a priority for the Automation of Performance Management to ensure a high level of interaction between people and processes.
Mark Smith is CEO and SVP of research and advisory services at Ventana Research. He can be contacted at firstname.lastname@example.org.
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