Synchrotech Group

Organizations’ biggest struggle is often with how to implement performance management. The vast majority of companies has a company strategy and has defined operational and tactical plans on how to execute strategy. Similarly companies have streamlined their processes, automating wherever possible and outsourcing non-core manual processes to cheaper locations. Much fat has been removed from the supply chain and customer relationship management has been reduced wherever possible to an intelligent web interface. Despite all these improvements in efficiency, efficacy and productivity companies still do, on balance, a poor job on measuring and managing performance despite the widespread availability of management tools such as the Balanced Scorecard and IT tools such as OLAP, Data Warehousing and Multidimensional Data Bases. Why?

There are powerful cultural, organizational, financial, data and technological reasons for the lack of successful adoption of performance management which we can discuss in another article in more detail.

The key to unleashing the full value of performance management is first of all to understand that your company is confronted to an issue that includes hard factors (data, information systems, statutory financial reporting, regulatory environment etc.) as well as softer factors (strategy execution, leadership, social environment, company culture, change management, employee skills and remuneration). The second important realization is that you cannot let either IT/IS or its Business partners implement performance management, but that it must be a joint effort. The third realization is that the Finance Department is the natural partner to spearhead the Performance Management effort given Finance’s experience with Financial planning, budgeting and reporting and numerical analysis. However, finance must be willing to take on a broader non-financial measurement mandate to be successful in its OPM venture. So the take home messages are as follows:

• Performance management includes soft and hard factors
• Performance management is a joint venture between Business and IT/IS
• Finance is the natural leader of an OPM venture