Chief Executive Officer
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Business performance management, what is it and how can it help? Business performance management is part of Business Intelligence (BI) and, to explain it in a nutshell, it can be used by your company to assess both employees and the overall health of your business . Where does the concept of business performance management come from? The term Business Performance Management was coined by Gartner in 2001 and since then, the concept has evolved with changing workplace practices and technologies.
Business Performance Management for CEOs – Overview
The chart above, where the outer ring represents the end goal, shows how business performance management can give managers and entrepreneurs valuable information and so is a sure-fire way to get everything you need to make necessary and useful changes your business.
How do you put effective business performance management in place? Through both formal and informal processes, in a way that ensures employees, resources and systems are aligned to achieve strategic goals. The practice also works as a dashboard providing early warnings of potential problems, so decision-makers know exactly when it’s time to make changes.
Most companies have access to essential data on operational performance, but how can your organisation make the best use of its data? An answer to this is instant feedback loops, daily performance dialogue and routine performance reviews.
Business performance management is based on various factors involving employees and key performance indicators (KPIs) such as revenue, return on investment (ROI), overheads and operating costs. It is important to understand that business performance management is not a specific strategy, but that your organisation needs to have a suite of analytical applications that can support the processes, methods and metrics used in business performance management.
The aim is to provide meaningful information through appropriate software tools and big data analysis. This is done through processes such as budgeting planning, scenario analysis, financial planning, forecasting and data reporting. Supply chain management and risk management should also be aligned with your company’s performance management.
Here are some examples of specific metrics to include in performance management:
Business information comes in the form of data (structured and unstructured, i.e. stored without any structure, e.g. text documents). To prepare for the data for analysis, it is cleaned (to remove any errors), organised and continuously updated, in a process called data warehousing. Information in the data warehouse can be divided into sub-categories (data marts) organised by business sector, making it more user-friendly. Here, with Business Intelligence, your company’s performance becomes easy to interpret, manage and share, letting you authorise users to access and view it.
Specific software is used for business performance management, often running alongside business intelligence systems . It typically includes forecasting and expenditure planning features, as well as graphical scorecards and dashboards to visualise and provide business information . The user interface generally displays KPIs so employees can track individual and project performance against your company’s targets and strategies.
These features of business performance management software offer a number of advantages, including:
Finally, business performance management software based in the cloud can offer your company an additional advantage, making tools easier and faster to implement, increasing innovation speed, reducing costs and improving global collaboration.
As we have seen, business performance management can be useful for managing your company with analysis software tools that provide you with results on your key performance indicators (KPIs) and employee satisfaction.