Individuals refer to it as business performance management whereas others prefer calling it enterprise performance management or corporate performance management. The terms used are not as important as the meaning attached to the very entity. It basically refers to a framework of management aspects and analytical processes that enables the efficient and effective management of an organization’s performance (Devi, 2005, p.44). Achievement of certain set goals and missions is enhanced and enabled by the application of this vital aspect. Corporate performance management relatively relates to the ideas of enhancing the management styles of a given business entity. There is involvement and application of various inputs into ensuring that this vital undertaking is efficiently achieved.
Considering the importance of this activity to respective organizations, the whole system related to it has been evidently scrutinized. Achievement of specified organizational goals is a very vital aspect of any given business entity (Newman, 2010, p. 99). With this in mind, the business performance management has been given very high priority in not only its framework and setup but also its implementation process. There are three main activities involved in the aspect of business management performance. The activity of selecting relevant organizational goals presents the first action related with this aspect. The second activity is the consolidation of various measurement database related to the given business’s progress against the specified goals in the first step (Miranda, 2004, p. 58). This action is followed by the process of interventions usually made by managers in relation to this information with the main aim being the improvement of future performance against the specified goals.
The steps specified above do not necessarily imply that they are undertaken in that order. The activities regarding this undertaking are often run concurrently (Files & Abi, 2003, p. 66). Various interventions by managers and other officials affect the choice of goals, the activities being endorsed by the organization, and the measurement of database information monitored.
According to the research carried out by various scholars regarding this vital undertaking, executives can either make or break their respective organizations depending on their modes of operation regarding this issue. Organizations’ executives can even double their organization’s equity market returns, enhance higher stock price, attract larger dividends, and even lower operating profit volatility if they endorsed the best policies and programs regarding corporate performance management (Walker, 1996, p. 20). At the same time, some companies can suffer the exact negative of the specified business rewards if they failed to adopt working and viable policies and procedures regarding corporate performance management. If given planned functions fail to timely deliver relevant insights into the organization’s customers, market, and competitors, it negatively impacts on the setting and profitability of the given company.
TRENDS AND PRACTICES
There are various trends and activities that are associated with the aspect of corporate performance management. In the recent past years, not only various CRM systems, but also enterprise resource planning systems have come along (Eckerson, 2006, p. 76). There are other numerous intricate software applications that have come along as well. Supply chain management is one of this software. It was developed and released with the purpose of recording and processing every detail and transactions of given organizations. The software system described capture a wide set of data that contains important information to the business enterprise (McAdam & Galloway, 2005, p. 282). Some of the included information is customer preferences and purchasing patterns, mission vital business process information, and a wide range of other vital business data. The only problem related to all this data is that they are often not organized in a professional manner. Further, these data is often not synchronized and integrated in the organizational system (Gruman, 2004). This factor only serves to impair the effectiveness of this vital data in the case where they are properly applied. A given firm will therefore be at a crossroad in determining whether they are bound to fail or succeed in both the short and long run (Jr et al, 2000, p. 320). This hugely piled data often does not avail the owners of the business, managers, and executives the right indicators to measure and chart their business activities in a timely and efficient manner.
The best idea regarding the specified situation above is to tie the available operational data from enterprise wide systems to specific set goals. Further, the organizational managers should be provided with the integrated visibility into performance against the specified organizational goals. To ensure that each corporate is meeting its specified strategic goals, the executives need to give attention to business intelligence based corporate performance analytics. This will help in efficiently keeping tabs on enterprise undertakings and actions important for daily comparisons to budget targets and strategic goals (Schultz, 2004, p. 23). Further, the executives are provided with an efficient barometer regarding the position and state of their respective organization at any given time. The normal action is that the managers will be in touch with the position of their respective organization at the quarter. The fact that the barometer helps them achieve this aspect at any given time therefore implies better service delivery and consequently profit and revenue enhancement. Further, capturing the current trends and updates on company’s state is becoming critical by the day (Singh et al., 2000)
An efficient and successful data warehousing infrastructure provides decision makers with consistent, reliable, timely, and accessible data, without any negative implications on the operating systems from which the data is extracted. The specified system incorporates data from various channels to analyze trends in the operations of the respective organization and the milieu in which it relatively operates (Inmon et., al 1997). Online analytical processing refers to the technique of performing intricate data analysis over data stored in a given warehouse with the aim of providing current reports and other decision related activities (Chaudhuri & Dayal, 1997, p. 90). Online analytical processing is a framework of technologies and applications for specifically collecting, processing, managing, and presenting a diversified organizational data for analysis and other issues related with the vital aspect of management (Thomsen, 1997, p. 90).
There is evidently high demand for various practical approaches to corporate performance management. The process of automation seems to be fast gaining popularity among various concerned business heads. Computer system developers are getting more intricate, yet there evidently seem to be an increasing demand for less complex tools in managing the organization’s performance. Often, there is less in house expertise present as applications are largely based on standardized commercial packages. Nevertheless, there is need for more optimization by various experts.
The Information Technology industry is currently facing a modern capacity planning difficulty. This is the advent of respective commercial servers using parallel architecture in running databases. These servers are wholly capable of processing transactions in reduced cost. They will therefore become vital inputs of commercial systems and consequently displace numerous current conventional mainframes. This will therefore directly implicate itself in sectors such as online banking, command, retailing, and control.
Performance management is fast changing in a bid to meet the demands related to it by various distributed systems. The question that arises from this perspective is whether the changed demands are actually realistic or simply fantasy entities. The intricacies and diversity of the specified systems, and the seemingly rare skills involved in their respective comprehension makes the process and application of expert systems a favorable step and approach (Roley, 2004, p. 100). This should then make the analysis of various system performances accessible at higher levels to the common average user, a very important aspect.
What are the success factors in regard to corporate performance management? While business performance management is widely recognized as a mode of achieving strategic realignment and efficiency in approach to development and executions of ideas, it is a very challenging undertaking (Biehl, 2007, p. 14). There are numerous solutions, tools, and methodologies hawked by various vendors in the field. Further, there are many organizations out there that focus on the financial measures of performance management. This only serves to limit their general abilities in gaining a comprehensive view of strategy execution and development (Schiff, 2007, p. 77)
One of the essential factors highly held by industry experts and also largely stressed in the academic realm and literature is the presence of an energetic and committed personality. This personality actively promotes and supports the corporate performance management project (Luftman, 2003, p. 20). He is charged and trusted with the obligation of providing the necessary information and other material sources concerning the effective running of the policies attached to the activity of business performance management (Sage, 2000, p. 74). Often, a visionary and highly motivated individual suits this position. He can evangelize the aspect of business performance management solution by selling its true value to the respectful individuals making up the whole employee base in the given organization.
Evidently, adequate resources are need for the smooth and effective take off of a corporate performance management. Monetary resources, respective individuals in the organization, and sufficient and well utilized time are all vital requirements in regard to the corporate performance management (Politano, 2006, p. 28). Effective CPM solutions spur and span the whole organization and require therefore require the implementation of integrated data management infrastructure (Park, 2003, p. 100). Data warehouses as seen previously offer a good example of such infrastructure. These infrastructures can indeed be very demanding in terms of monetary resourcing and allocation. Time consumed during the implementation of such endeavors is also a huge determinant of overall success (Wixom & Watson, 2001, p. 50). Previous credible research links the issue of inadequate resources and long run failure in regard to this aspect.
However, the availability of enough resources such as money does not entirely and directly translate into a greater project success. Studies indicate that a group of individuals charged with the mission of delivering quick wins and wholly operating in a small budged can be more effective in CPM projects than a team that enjoys availability of plenty resources (Eckerson, 2006, p. 90). Therefore, managing a CPM project with the right mix of personal attributes and acquired values is relevant in ensuring the success of the project in the long run.
For a BPM project to be successful, it must have a clear connection to business strategy. The main purpose of a CPM implementation is the effective modification and execution of strategy (Frolick & Ariyachandra, 2006, p. 130). Sometimes given organizations may be implementing metrics that are convenient or easily reachable. This kind of metrics may not be wholly tied to business strategy. Therefore, an organization with such kind of a CPM initiative will not be monitoring its true performance (Clayton, 2006). As a result, effective decisions and actions regarding this perspective will not be reached at any time.
General experience suggests that a number of trends in the corporate performance management market that will exert and influence the decision making process regarding CPM (Whitnin, 2006). First, the general size of the corporate performance management market will evidently continue growing as CPM becomes endorsed by executives as a good and viable corporate input. Its adoption levels are expected to steadily increase in the coming years. Gartner, a research firm indicated that by 2008, more than 70% of public companies will have a formalized corporate performance management strategy (Hartlen, 2004).
Further, the CPM solutions marketplace is compacting, influenced by a purchaser’s market that calls for standardization and enhancement, by technological advancements that have relatively increased the efficiency in data harvesting modes.
The coming generation will be faced with numerous challenges in relation to this undertaking. As the CPM market evolves, various factors will not be susceptible to change. Line input and a proper and sustained C-level entity and sponsorship will remain vital influencers of ultimate success in regard to CPM.
Conclusion
Business entities have realized the importance of CPM in enhancing the achievement of strategic objectives. Recently, corporate are becoming more conscientious of the vitality of tracking and keeping records of how well the organization is proceeding towards achievement of various goals. As a result, the vitality and interest in various policies regarding CPM keeps on widening in scope in the industry (Schiff, 2007, p. 45).
CPM helps organizations to achieve strategic goals by availing modes and motivation avenues to all its employees to involve themselves in undertakings and tasks that steer the corporate in the right direction. The CPM infrastructure helps in creating metrics that accurately gauge the strategy execution and provides all concerned players with the necessary information and knowledge to ensure success in the long run. To ensure this, CPM implementation strategies can often take the form of corporate wide implementation efforts that evidently require the backing of various levels of operation within the organization. Further, a strong business and information technology alignment is very necessary in this respect.
Proper identification of the CSF’s that affect the corporate performance management implementations helps a given organization to focus on the contextual and important variables that affect implementation success. The bottom line is that this strategy of operation is indeed very vital in all aspects. By properly observing CSF’s corporate can efficiently and effectively manage vital contextual variables that will wholly affect the failure or success of a given corporate performance management.
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