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Get with the Plan: Aligning Performance Goals With Corporate Strategy

Disjointed improvement initiatives can work at cross purposes and throw your company into chaos. Here's how to get operational performance management programs in sync with the strategic mission.

Finding Oneness

As the comments on software indicate, adopting OPM as a management process also requires the alignment of business and IT. Doing so will help you realize the value of IT investments and use resources more effectively. Furthermore, in place of manual processes for improving performance, information systems can automate repetitive tasks and track operational improvement.

Business and IT need to collaborate to determine the best course of action for implementing OPM. Initial and ongoing assessments should outline the correlations between performance and process improvements, and cost and profitability management.

IT organizations can be catalysts that drive change to support operational performance management. It's vital to link your integration technologies and information architecture to desired business benefits. Start small, perhaps by picking an operational process and evaluating the systems that impact operational performance goals. For example, you could assess the product introduction process and the supporting transactional and performance reporting systems. Are you measuring systems in terms of their ability to contribute to company strategy? Do these systems tell you how the process fits into the larger process of delivering value to the customer? If not, why not? What do you need to do to develop appropriate measures?

Fixing a Broken Company

The task of aligning performance goals shouldn't have to wait for a crisis. But it does involve a course of action similar to that taken by the leaders of the troubled network equipment company. Their approach started with an evaluation of planning processes. They established a benchmark for current levels of effectiveness and then identified areas for improvement. A key part of the effort was to find operational performance management software that brought together strategy mapping, scorecarding, operational planning and business intelligence in a unified technology platform.

The company's first deployment was an enterprise scorecard application that measured financial, operational, customer-service and employee-training goals. Deployment included change-management activities that made clear to every member of the organization, including IT, how their own goals and performance contributed to the top-level strategy.

This company's journey to sustained profitability was only beginning; it's learning that a working OPM system leads business managers to be proactive in their efforts to understand what needs to be measured and monitored to optimize business operations. That's essential. Passively waiting for operational reports in traditional review cycles is no longer enough.

Colin Snow is vice president and research director of Ventana Research's Operational Performance Management practice, which focuses on aligning business and IT in the areas of supply chain, operations and business process management. Write him at [email protected]