I have been educating business and IT professionals on the importance and implementation of performance management for nearly 20 years. Even now, I see organizations continue to struggle to operate efficiently and effectively from an executive’s strategic perspective or the close-up tactical views of the lines of business. But, I have also seen many successful organizations take the subtle but important step to make performance management a business process, not just a management process. By that I mean performance management should be an integral part of how the organization functions, not only a tool for evaluating the quality of work after the fact.

I admit that in starting out I looked at it as a management process, but then I noticed that organizations did not take it as seriously as their business processes. Performance management should be a part of every worker’s daily and weekly responsibilities to do what they can to improve the efficiency and effectiveness of their activities and ultimately further the strategic objectives of the organization. To do that, though, they need assistance from the right business applications that can be used throughout the organization.

I presented recently at the Global Strategic Management Institute (GSMI), Global Performance Forum on innovation in performance management applications for business and operations, and preparing for it reminded me how far the IT industry has advanced in providing easy-to-use tools and practices for managing performance at every-level of an organization. It is true that most organizations have not made this class of applications a priority over the last five years, but recently I have seen increased interest and discovered some enlightening facts in our performance management benchmark research.

It indicates a lack of satisfaction with performance management, as only 9 percent of research participants are very satisfied with existing efforts, and 55 percent said they lack confidence in their current technologies for this purpose. Yet other findings indicate organizations making a positive change to examine applications that can help them manage performance, and address in our terms the three steps to align, optimize and understand performance across their people and processes. There’s good news that applications have been advancing significantly, as noted in my analysis of Actuate’s new release and my colleague’s analysis of Information Builders’ latest release (See: "IBI’s Eye Popping New Performance Management Software"). These and some other vendors have been working to advance their applications even during the economic downturn and decreased interest from potential customers while the largest application providers generally have not been as progressive in their dedication and efforts to this specific application.

To return to my point about performance management being a regular business process, that requires vendors to dedicate applications to this market segment. While many technology providers have spent time and resources on business intelligence (BI) to serve the IT organization, conventional BI will not be sufficient to meet the usability and functionality needs of business. I am looking forward to our firm’s full assessment of all of the vendors and products in this space for the 2010 Value Index for Performance Management; the 2009 version did not include vendors that did not want to participate, but this year we will assess all major vendors regardless of cooperation.

It was great to see the success in organizations that attended the GSMI forum; I was not surprised to find that they realize it requires dedicated applications and support of performance management as a business process. They compare awfully well to the many organizations still using reporting, spreadsheets, presentations and e-mail (and the intensive time and labor they require) to try to guide performance in their organizations. With success in this approach comes a responsibility to collaborate with peers in the industry to advance the practices of performance management. I hope to see you at the next Global Performance Forum, meeting with your peers and learning more of what is possible with performance management, which I think is the most valuable business process. Thanks to the GSMI team for continuing to provide the venue for independent and objective education on this critical topic.

Mark also blogs at VentanaResearch.com/blog.