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How BI Drives a Culture of Accountability


Corporate performance management (CPM), also called Performance management (PM), business
performance management (BPM), and enterprise performance management (EPM) – is a set of methodologies, metrics, processes, and technology used to drive both top-down and bottom-up accountability and visibility. It achieves this by generating tactical processes and metrics throughout the organization that roll up to directly execute the strategic goals.

The measuring system allows immediate and constant review of key metrics against goals. It fosters communication and continuously maps action back to corporate strategy, keeping everyone focused on the game plan.

 

How CPM Differs from Financial Reporting

A commonly held misconception is that financial reporting is an appropriate performance reporting mechanism. Unfortunately, that view does not support today’s business realities. Financial
measurements look backward, rather than forward, thereby limiting attention to the current quarter or fiscal year, rather than the longer, ongoing view. Most financial measurement is extracted from processes and technical silos where the perspective is very much from the financial standpoint. This fails to deliver the complete picture about the performance of the organization.

Performance management and accompanying methodology such as balanced scorecard (BSC) extend the performance viewpoint beyond financial control and planning to measure customer satisfaction, internal business processes, employee performance and satisfaction, and innovation and learning etc.

PM brings visibility to every dimension of the organization in a timely fashion, integrating more tightly forecasting, scenario analysis and historical reporting.

 

Driving Cultural Change

PM systems help to unblock political, personal and cultural barriers to performance, purely by making performance visible to all. Insecure managers can no longer hold back highly contributing members of their teams in fear of being out performed. Laggers can no longer hide behind the collective performance of their team. And innovation is no longer constrained to the product management team.

Generally, most people know their job better than anyone else. But they know it from the perspective of delivering to the needs of the business today. Performance management at a personal level helps to indicate subtle and ongoing changes that are needed to ensure that roles are continuously evolving to meet the needs of tomorrow. Using personal dashboards and business unit scorecards, any change in corporate strategy can be quickly and effectively cascaded down through the enterprise to indicate where change is needed, and how well that change is being implemented.

For this reason, everyone needs to be involved in performance management, and in setting appropriate measures and targets for their roles. Once users engage with PM tools, they find them highly motivating and job satisfaction levels can rise significantly. Users have a direct link between their personal accountability and the goals of their business unit, and the organization at large.

The psychological impact of an individual’s performance, good or bad, being visible to the team also helps to foster collaboration – helping individuals through tough patches and seeking learning on how to emulate higher performance.

Naturally, there are some roles that should not be privy to detailed information about the company. For this reason, PM systems operate on a user access role and group criteria, ensuring that users have access to sufficient information to provide motivating context to their own role, but protecting the IP and competitively sensitive information until the appropriate time.

 

BI Tools and CPM

To date, CPM tools have been largely constrained to supporting strategy map implementation and linking existing financial and operational data to scorecards. CPM was very much seen as a planning and monitoring function, rather than a fully integrated operational toolset. BI adds that operational layer to CPM, more tightly integrating the methodologies with the daily tasks and processes. It reduces time delays between action and measurement, acting more as a driving force for individuals, teams, business units and the company as a whole. BI connects CPM, to BPM, to EII.

 

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