SAS, a leader in business intelligence, has learned that while performance management is seeing much broader use throughout the organization, many companies are still not fully achieving their desired results. Cultural and technological issues often hold companies back from deriving the most out of their performance management efforts. However, companies that use predictive analytics, and those that align efforts across the organization achieve more of their desired benefits from performance management efforts than those who do not. The new insights are uncovered in a recent survey among 1,100 cross-industry business professionals from around the globe.
Spending for performance management technology - both build and buy - is growing. This spending is fueled, in part, by the spread of performance management beyond the finance department, traditionally the hub of such activity. According to the SAS survey, multiple departments within the organization have implemented performance management initiatives. Yet, enterprise-wide efforts only account for a third of the deployments and most other multidepartmental efforts are not aligned.
Despite companies rushing to implement dashboards and scorecards, large investments in performance management do not always yield desired results, the survey shows. Companies face cultural resistance and lack of collaboration across departments, as well as technological barriers such as lack of integration between systems from multiple vendors.
More than one in four companies surveyed cited data inaccuracy as a major obstacle to performance improvement. Yet, among those, only 47 percent perform data cleansing and rationalization. Some firms also expressed concern about being able to deliver a full view of the company's information.
Respondents who have implemented analytics technologies such as data mining and forecasting have achieved greater success than those who have not, specifically in the areas of innovation, competitive advantage, and agility. In fact, success in these areas nearly doubled when predictive analytics were employed.
The most common performance management activities the companies surveyed performed included:
- Measuring performance against goals (83 percent)
- Summarizing financial and performance information at the department level (80 percent)
- Tracking key performance indicators (78 percent)
Findings showed that companies with successful programs didn't employ the activities listed above in isolation but applied a sequential, three-step process: 1) building a solid foundation of reporting information, 2) managing the information by tracking performance against metrics, and 3) applying the information to improve the business.
In addition, in those companies where performance management efforts are aligned, the investments are much more likely to yield the desired results. To view the full results of the survey, "Moving Beyond the Metrics: Improving the Results of Performance Management Initiatives," please access this white paper. SAS provides the industry's broadest, deepest range of offerings for performance management helping businesses go beyond managing to improving performance.
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