Key directions

Performance Management Analysis

Business directions


With business processes highly accelerated nowadays such as faster reporting, shorter planning cycles, fast close, the pressure on organizations increases in order to provide more than just financial transparency and meeting compliance regulations.

 

More and more people are involved in performance management processes, these making the procedures and projects more complex, requiring an accurate management. The development of better links between strategy management and other performance management processes and initiatives, will become a future priority at strategic level.

 

Smaller companies are starting to implement performance management processes while medium and large firms started to focus on some of the gaps and current priorities such as strategy management, compliance and planning. For the future, it is expected that further expansion of performance management processes will be a characteristic in particular in medium sized companies. A larger group of people will become end-users of analytics and performance management, while a smaller more focused team could control the overall processes (SAS, 2007).

 

Technology usage

There is an increasing need for integrated technology platforms that allow companies to manage performance at strategic level.

 

An increasingly number of companies will use more specialized software tools to automate performance management for decision making, data visualization and review, as opposed to using basic spreadsheet tools such as Excel (BARC, 2010). Though Excel still is widely used for all PM processes, usage of PM software has surpassed Excel in financial and other reporting, as shown in the figure bellow. Enterprise Resource Planning (ERP) Systems are mostly used for performance management processes in financial consolidation and reporting (27%).

 Software for Performance Management Processes

Source: BARC (2010)

 

Systems Thinking – future approach

 

Analysing the history of performance management illustrates that its evolution for most of the 20th century was driven by command and control and mechanistic thinking. Command and control and mechanistic thinking emerged as simple solutions to respond to the needs of the social, technological and economical environment of those times.

 

However, environmental conditions today are very much different. Customer needs are more diverse and the work is more complex. The workforce is more educated, more mobile and has different aspirations. Also, the concept of organisation/corporation has matured beyond the initial presentation of the concept in mid 1950's by Peter Drucker.

 

An alternative to command and control/mechanistic thinking is Systems Thinking which became popularised by Peter Senge's starting with 1990, in the "The Fifth Discipline". Systems Thinking promotes a holistic approach to managing organizations as systems and not as functional hierarchies put people at the heart of the enterprise, enabling them to contribute (Brudan, 2010).

 

References

Strategic : Analysis

 

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