Key directions

 

 

Future perspectives

Performance management is no longer just about financial management and employee evaluation, but instead it is taking on a new meaning. As executives look to create operational efficiencies, they will seek methods to understand the value that departmental activities add to the organization. Therefore, instead of implementing only singular cost-cutting initiatives, operational managers will make decisions using information that helps determine where best to make the cuts or to invest.

 

Performance management throughout the organization will reach a large spread through at every departmental, functional, tactical level, as well as project, team and business unit’s management. More people are involved and an increasing number of tools is used in performance management, this making the processes more complex. Because it does not reside in one department, accountability for performance management must rest with multiple parties; therefore cross-departmental collaboration is essential to success.

 

Operational managers are held accountable for results, therefore they must have mechanisms to monitor and manage the operations beyond the budget and balance sheet, reaching a higher level of maturity of business performance management initiatives (SAS, 2007).

 

Process improvement as a focus

More than resource or output considerations, a high priority for the future for operational managers is process improvement, as this will generate higher productivity and qualitative level (BARC, 2010). Most of the performance management initiatives for process improvement aim to deliver a high quality of data, strategy alignment and minimizing complexity.

 

Better internal performance management processes allow managers to focus on what matters the most and enables them to react to pressures of cost-cutting and efficiency improvements by streamlining and optimizing their operations.

 

The challenges of a globalized economy require that faster reaction to changing environments is a key to success, this becoming increasingly prevalent.

 

Business Intelligence -  a new trend

The Business Intelligence and Performance Management for the 21st Century - the Ventana Research Report - concludes that  BI solutions set a new trend regarding technology usage in performance management. According to the report:

  • ” …the most growth in BI [Business Intelligence] tools to support performance management has been in operations (51%), finance (50%) and customer management (49%) ” (Ventana Research, 2010)
  • ” …more than  half of participants (53%) said that they are only somewhat confident or not confident at all that their BI [Business intelligence] technology meets the needs of the organization”…. with only 9% being “very satisfied with their organization’s BI efforts.” (Ventana Research, 2010)
  • “…lack of resources (60%) and lack of a budget (43%) are the two most common barriers to improving BI and performance management…. The top two people issues are lack of awareness (36%) and lack of executive support (26%)” (Ventana Research, 2010)
  • “…41% of participating organizations evaluate performance data and 29% are assessing metrics or measures to do so.” (Ventana Research, 2010)
  • “…two thirds (66%) of organizations are planning to evaluate new technologies for BI and performance management.” (Ventana Research, 2010)

Often replacing Spreadsheet and ERP application, the implementation of business intelligence software in organizations has provided access and analysis capabilities to a greater number of employees. However, this requires careful integration within different operations, in order to create synergy instead of dysfunctional usage.

References:

 

 

Operational : Analysis

 

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