A much more serious confusion is that many people give performance management a meaning that’s far too narrow. It’s often regarded as a CFO initiative that provides a bunch of measurement dashboards for feedback and better financial reporting. In fact, though, the scope of a performance management initiative is nbajerseys's Blog, or should be, much broader than that, as I’ll explain in a moment.
A similar, but more recent, confusion arises from the term being narrowly applied to a single function or department, as in marketing performance management or IT performance management.
The good news is that performance management is not a new methodology that everyone now has to learn; rather, it tightly integrates business improvement and analytic methodologies that executives and employee teams are already familiar with.
Here’s an example: blogger Ann All recently posted this article titled “BPM + CRM = Improved (not Perfect) Customer Service.” In it, she advocates integrating a company’s customer relationship management (CRM) system with business process management (BPM) tools.
Think of it as an umbrella concept: It integrates operational and financial information into a single decision-support and planning framework. Its capabilities include strategy mapping, a strategic balanced scorecard, operational dashboards, costing (including activity-based cost management), budgeting cheap oakley sunglasses for sale, forecasting, and resource capacity requirements planning.
These methodologies fuel other core solutions such as CRM, supply chain management (SCM) nbajerseys's Blog, risk management, business process management, and human capital management systems cheap oakley sunglasses for sale, as well as Lean management and Six Sigma quality initiatives. It’s quite a stew, but they all blend together.
Performance management increases in power the better these managerial methodologies are integrated cheap oakley sunglasses for sale, unified, and spiced with all flavors of analytics, such as segmentation and correlation analysis. But its ultimate power comes from including predictive analytics. Predictive analytics are important because organizations are shifting away from managing by control and reacting to after-the-fact data; they’re moving toward managing with anticipatory planning. The goal is to be proactive and make adjustments before problems occur.
Then there’s the historical baggage that the term carries. In the past, performance management most commonly referred to the job performance of individual employees and the methods used by the personnel and human resources functions for processes such as employee appraisals. But today, the term is widely accepted as covering enterprisewide performance — the performance of an organization as a whole. Clearly, employees’ performance is an important element in an organization’s success, but in the broad framework of performance management, human capital management is just one component.
In All’s article, the P in BPM refers to “process,” not “performance,” and indeed this acronym is in common usage with two distinct meanings. The former is a subset of the latter. Performance management should not be confused with the more mechanical business process management tools that automate the tasks of creating, revising, and managing workflow processes, such as customer order entry and accounts receivable.
The confusion begins with the alphabet soup of acronyms. We often see in the press and media the acronyms BPM for business performance management, CPM for corporate performance management, and EPM for enterprise performance management. But just as, in their various languages, the words merci, gracias, and danke all mean the same thing, so do these acronyms. Fortunately, IT research firms like IDC and Gartner are accepting the short version, and simply calling it PM — performance management.
Performance management provides that missing picture of integration, both technologically and socially. It makes executing the strategy everyone’s Number 1 job; it makes employees behave as if they are the business owners.
Many organizations jump from one improvement program to the next, hoping that each new effort will be the magic pill that provides that elusive competitive edge. However, most managers acknowledge that pulling just one lever for improvement rarely results in substantial change — particularly long-term, sustained change. The key is to integrate and balance multiple improvement methodologies while blending them with analytics of all kinds, particularly predictive analytics.
In the end, organizations need top-down guidance with bottom-up execution. The way to get there is through integrating methodologies and applying analytics to complete the full vision of the analytics-based performance management framework.
One reason for this myopia is because there’s still some confusion in the marketplace about the meaning of the term “performance management.” Just Google it and you’ll see what I mean.
The article is a solid piece. However, when it comes to integration, why stop with just those two components? Why limit what information and solutions can be combined and integrated?
Let me try to clear up the confusion.
Unfortunately, at most organizations performance management’s methodologies are typically implemented in a silo-like sequence and operate in isolation from each other. It’s as if the project teams and managers responsible for each methodology live in parallel universes. But we all know that there are linkages and inter-dependencies, so we know that they should all somehow be integrated. It’s like a jigsaw puzzle — everyone knows that the pieces should fit together. But, too often, the picture on the puzzle’s box is missing!
I keep coming across evidence that there are still serious misunderstandings about the potential scope and power of performance management initiatives.
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