Friday, February 28, 2014

Corporate Performance Management

Performance Management methods embedded with business analytics provides perspectives of business capacity.

Corporate Performance Management (CPM) has many descriptors and understandings globally. However, there is universal agreement that best practice performance management frameworks should inform the board, management, staff and key stakeholders on the performance of the organization in delivering services/programs efficiently, its effectiveness in achieving organizational outcomes and its progression towards achieving sustainability. Therefore, a holistic CPM discipline can enforce the culture of execution and provide data-based business capability and capacity.

Corporate Performance Management facilitates the flow of the right information to the right people at the right time, to coordinate and execute STRATEGY, TACTICS, AND RISKS: This means to translate strategy into operational terms aligning the organization to create synergies in making strategy everyone’s everyday job and a continual process mobilizing change through executive leadership anticipate, monitor results and act. All company’s performance is directly related to the decisions your people make every day—from executives to the frontline, across functional areas and regions. 

Performances are not just numbers with metrics, they are numbers in context, results related to your GOALS: Managing performance means understanding results, setting metrics, fixing plans, and making decisions to ensure it happens. New competitive challenges and active market changes underscore the strategic imperative of managing performance more than ever. But the various activities needed to manage performance— STRATEGIC and OPERATIONAL plans, METRICS, day-to-day decisions.

Corporate Performance Management is part of the business culture: All industries must have a vision, strategy, and tactic for performance management. It is part of the development of a business culture. How formal or informal is also part of the culture. Too many organizations don't receive the true return on their software investment because they cannot or will not create a culture of CPM. This takes discipline at all levels of the organization to adopt such analytics and measurement culture. Many organizations believe that if they implement a CPM software package, that makes them a CPM organization. The software is a tool to accomplish this approach to provide information to people so that they can perform better both individually and collectively as well as holding them accountable for their performance.

Corporate Performance Management is needed for all organizations as a way of living, what is the reason of their existence and how and what: Performance Management is critical for all organizations, irrespective of headcount and structure. This is critical to employee and company growth. Objectives in line with the vision set out by management, KPIs an essential tool for performance management, for which all concerned are accountable. Achievement of target automatically perpetuates them towards rewards; thus, the reward for performance link is an impartial exercise. If you build KPIs at each level and cascade this upwards towards Corporate Performance and also add a fiscal marker wherever possible, this achieves the quickest take-up and understanding. Also in this way the discipline can be self-perpetuating because it affects everyone’s understanding of profit

Corporate Performance Management methods embedded with business analytics provides perspectives of business capacity: When assessing the current landscape, overcapacity is a challenge for many industries. This challenge is a symptom of an overall need to de-leverage in the global economy, and then it could be argued that CPM is critical for almost any industry. De-leveraging is a slow process and it may indicate sluggish growth at best for the near future. Not many industries are optimally situated for this macroeconomic environment. All companies have resource constraints, and that performance management, per definition, is “overhead”. This would imply that there exists a trade-off between the realization of value through formalizing and structuring performance management processes and practices and the attached costs. Surely, this trade-off should not be balanced equally by all companies.

In principle well managed companies will outperform badly managed companies. And "well managed" companies will include a thorough benefit or cost assessment of investments in supporting processes and systems. Therefore, corporate performance management is an important capability to help business navigate through the strategy execution. 


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