Operating at peak performance is not a passive activity. In a global business, closely managing people and holding them accountable for results is no easy task. As corporations expand, merge and acquire other firms, communication and collaboration become more challenging.
The discipline of performance management can address these challenges. The goal is to align people and processes to ensure best-possible results, no matter the business activity. Although much of the buzz focuses on methodologies such as Balanced Scorecard or Six Sigma, it's really about assessing organizational and, more important, managerial maturity.
Performance management can't be adapted to weekly or daily operations without supporting information technology. Unfortunately, many organizations try to make do with tools that aren't suited for the task, such as e-mail, spreadsheets and office presentation software, all of which fall well short of an enterprise IT approach to performance management.
An effective initiative does not begin with IT, yet instead of striving to understand their organization's needs, IT practitioners turn back to what they know. Vendors encourage this, of course, by pumping technologies such as enterprise resource planning (ERP) or reporting that don't include a strategy for performance management.
It's an old and familiar tendency that has led organizations to overpurchase business intelligence (BI) technologies and overcommit to data-warehouse-centric methods that won't deliver what's truly needed. It's time to learn from the failed customer relationship management (CRM) and ERP initiatives of the 1990s and look beyond the silver-bullet approach.
I'm not talking about small missteps. A rep from a multibillion-dollar insurance company recently told me that the failed BI implementation on top of the firm's $30 million data warehouse could bankrupt it. The CFO of another large enterprise complained that a prominent BI vendor had over-promised while its software and services had underdelivered.
You can do a number of things to avoid such disasters. First, identify the management process that needs improvement. Next, operational and finance execs should appoint a program-management team to target specific people and process changes. Then and only then, with the goal clearly articulated, should IT investigate appropriate applications available for performance management and determine the most cost-effective, benefits-driven approaches that will satisfy your needs. The right choice won't necessarily be the current vendor of BI and reporting technologies — BI and analytics cannot guarantee successful performance management. Nor will it be new dashboard and reporting systems from Microsoft, Oracle or SAP; fresh promises from your BI vendor's consulting services organization; or new outsourcing initiatives with inexpensive offshore consulting companies such as TCS.
If guaranteeing peak performance is a priority, ask what capabilities your organization requires to manage, not just measure, performance. There are many new and savvy management approaches. For example, PlanView offers a tool to help assess your portfolio of business and IT assets and determine which strategies and initiatives can make best use of existing people, programs and projects.
Performance management is a complex undertaking. Management processes are fluid sets of analyses, decisions and reviews that interact across the organization and across business processes. Clarifying linkages among people, processes and performance targets requires input from relevant stakeholders. Pilot Software is addressing these needs in an innovative way, moving beyond basic scorecarding, goals and objectives to performance-management workflow and approval processes that help you gain insight into accountability and ownership.
Rethink what you're doing and focus on how your organization will realize these business benefits and deliver support to managers. There are performance-management applications available that go well beyond siloed spreadsheets or reports and dashboards, but that's not where the process starts. Business and IT together must first determine business needs and then look beyond the corporate BI standard to decide what applications will support those needs. This is just one key step to achieving breakthrough performance.
Mark Smith is CEO and Senior Vice President of Research at Ventana Research. Write to him at [email protected].