Synchrotech Group

Performance management must be an integrated part of the business lifecycle that helps an organization to mature through evolving and changing performance measures, from their definition through to monitoring and review. In addition, by including the IS/IT component throughout this lifecycle, rather than just considering it as a 'downstream' cost of measurement provision, there will be enhanced benefits from an increased and more effective contribution from investments made in IS/IT.

In order for this to happen, organizations must have adopted sound practices in commissioning and acquiring IS/IT services to achieve performance improvement. Performance management identifies opportunities for maximizing improvements in managing service delivery. Performance management helps you to make decisions about investment routes, affordability and setting investment priorities in the face of competing demands for resources.

Managing for results

Managing for results requires the organization to focus on the outputs of the processes and activities undertaken by the organization at varying levels. Together these outputs will contribute to the achievement of the outcomes desired by the organization..

Levels of performance management

The effective performance of your organization depends on the contribution of activities at all levels - from top management policy development through to efficiently run operations. There are three or four levels of performance management in the model framework below, some organizations may combine the strategic level with the organization’s priorities level.

Organization’s priorities: at the highest level performance management is rooted in the organization’s long term business strategy.

1. Measures at this level are of impact, resource utilization and service/product improvement.
2. Strategic level performance management: at this level the management concern is from an "outside in" as well as an internal perspective. Measures are of outcome, such as volume and value of service/prodcut up-take, upward trends for inclusion, staff and users' satisfaction.
3. Tactical or operational service level performance management: here the management focus is concerned with service delivery and outputs, using conventional service level agreement approaches and related measures of aspects such as volumes and quality.

Although performance measures and indicators may be different at each level, they will need to be:

• quantitative and relative- to show what has been achieved and how much more is to be done and to enable benchmarking
• worthwhile - adding more value to the business than they cost to collect and use.

Value for money

You must be able to demonstrate that you have achieved value for money in your operations. Value for money is taken to cover three measures of performance:

• efficiency - the relationship between outputs, in terms of goods, services or other results and the resources used to produce them
• effectiveness - the extent to which objectives have been achieved, and the relationship between the intended impacts and actual impacts of an activity.
• economy - minimizing the cost of resources used for an activity, having regard to appropriate quality

Measures and metrics

You should use these evaluation criteria for measures and metrics:

• are you measuring the right thing?
• do you have the right measures?
• are the measures used in the right ways?
• do you determine the quality of a particular performance metric using the SMART test (Specific, Measurable, Attainable, Relevant, Timely)?

The procedures and measures used in performance management will depend, among other factors, on the type of business process which is being measured. A business process is assumed to be made up of a number of activities which transform inputs into outputs and contribute to the realization of outcomes. The customers for a process may be external (for example, members of the public) or internal, within the same organization or elsewhere in the public sector.

Business processes can be distinguished by:

• the extent to which the activities involved are people-oriented as opposed to automated
• whether the activities are primarily 'front-office' or 'back-office' - that is, the amount of direct contact which the staff have with the customers or recipients of the process
• whether the process itself is the important feature of the activity - for example, in delivering consultancy - or whether the activities are concerned primarily with the generation of defined outputs
• the extent to which the activity is customized or tailored to the needs of each customer, as opposed to being routine and procedural
• the amount of discretion which needs to be exercised in the activities the duration of the contact with the customer.