Software // Information Management
Commentary
7/18/2008
11:05 AM
Neil Raden
Neil Raden
Commentary
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What's the Difference between Decision Management and Performance Management?

Gary Cokins of SAS and James Taylor, my partner at Smart (enough) Systems, in an admirable attempt to disambiguate the terms Enterprise Decision Management (EDM) and Performance Management (PM) have, unfortunately, both gotten it wrong... PM performs the meta-business... EDM does what the company does for a living.

Gary Cokins of SAS and James Taylor, my partner at Smart (enough) Systems, in an admirable attempt to disambiguate the terms Enterprise Decision Management (EDM) and Performance Management have, unfortunately, both gotten it wrong.

Gary claims that James "marginalizes Performance Management as being too narrow." Instead, he (Gary) suggests that "Performance Management and EDM are arguably very similar." James claims that EDM "goes one step further."Performance Management, in Gary's words, "links an executive team's strategy formulation to operations for strategy execution," but it does this by preparing plans and measuring results. It is, still, a management exercise. EDM, on the other hand, is technology that is part of the operation. It performs the business. If you want to get cute, you could say that PM performs the meta-business - it does perform, but not what the company does for a living. EDM does what the company does for a living.

If you think of EDM as the continuum from analytics to hypothesis formation and testing, through model building, through execution of decision services then I can see some Performance Management efforts at either end of the process, but that does not make them the same, nor does it mean EDM goes "one step further."

Being the polite person that he is, James responded to Gary's comments and attempted to find a middle ground. It didn't work. He said that Performance Management may be the transcendent idea that Gary describes, but that most implementations he's seen are far less than that. I have to agree with that, but it is a rhetorical argument. It doesn't end the discussion.

EDM is operational at the detail level of the business. Performance Management is a collection of disciplines for executing strategy and continuously monitoring the results. There should be a nice synergy between them, but either one could do fine without the other.Gary Cokins of SAS and James Taylor, my partner at Smart (enough) Systems, in an admirable attempt to disambiguate the terms Enterprise Decision Management (EDM) and Performance Management (PM) have, unfortunately, both gotten it wrong... PM performs the meta-business... EDM does what the company does for a living.

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