How BI Drives a Culture of Accountability
Corporate performance management (CPM), also called Performance
management (PM), business
performance management (BPM), and enterprise performance management
(EPM) – is a set of methodologies, metrics, processes, and
technology used to drive both top-down and bottom-up accountability
and visibility. It achieves this by generating tactical processes
and metrics throughout the organization that roll up to directly
execute the strategic goals.
The measuring system allows immediate and constant review of key
metrics against goals. It fosters communication and continuously
maps action back to corporate strategy, keeping everyone focused
on the game plan.
How CPM Differs from Financial Reporting
A commonly held misconception is that financial reporting is an
appropriate performance reporting mechanism. Unfortunately, that
view does not support today’s business realities. Financial
measurements look backward, rather than forward, thereby limiting
attention to the current quarter or fiscal year, rather than the
longer, ongoing view. Most financial measurement is extracted from
processes and technical silos where the perspective is very much
from the financial standpoint. This fails to deliver the complete
picture about the performance of the organization.
Performance management and accompanying methodology such as balanced
scorecard (BSC) extend the performance viewpoint beyond financial
control and planning to measure customer satisfaction, internal
business processes, employee performance and satisfaction, and innovation
and learning etc.
PM brings visibility to every dimension of the organization in
a timely fashion, integrating more tightly forecasting, scenario
analysis and historical reporting.
Driving Cultural Change
PM systems help to unblock political, personal and cultural barriers
to performance, purely by making performance visible to all. Insecure
managers can no longer hold back highly contributing members of
their teams in fear of being out performed. Laggers can no longer
hide behind the collective performance of their team. And innovation
is no longer constrained to the product management team.
Generally, most people know their job better than anyone else.
But they know it from the perspective of delivering to the needs
of the business today. Performance management at a personal level
helps to indicate subtle and ongoing changes that are needed to
ensure that roles are continuously evolving to meet the needs of
tomorrow. Using personal dashboards and business unit scorecards,
any change in corporate strategy can be quickly and effectively
cascaded down through the enterprise to indicate where change is
needed, and how well that change is being implemented.
For this reason, everyone needs to be involved in performance management,
and in setting appropriate measures and targets for their roles.
Once users engage with PM tools, they find them highly motivating
and job satisfaction levels can rise significantly. Users have a
direct link between their personal accountability and the goals
of their business unit, and the organization at large.
The psychological impact of an individual’s performance,
good or bad, being visible to the team also helps to foster collaboration
– helping individuals through tough patches and seeking learning
on how to emulate higher performance.
Naturally, there are some roles that should not be privy to detailed
information about the company. For this reason, PM systems operate
on a user access role and group criteria, ensuring that users have
access to sufficient information to provide motivating context to
their own role, but protecting the IP and competitively sensitive
information until the appropriate time.
BI Tools and CPM
To date, CPM tools have been largely constrained to supporting
strategy map implementation and linking existing financial and operational
data to scorecards. CPM was very much seen as a planning and monitoring
function, rather than a fully integrated operational toolset. BI
adds that operational layer to CPM, more tightly integrating the
methodologies with the daily tasks and processes. It reduces time
delays between action and measurement, acting more as a driving
force for individuals, teams, business units and the company as
a whole. BI connects CPM, to BPM, to EII.
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