Reducing the Confusion about Performance Management

My day always gets a little brighter when I read an article or blog by someone who shares my feelings about performance management. I guess that is just human nature, isn’t it?

Here is a quote from a white paper titled Business Performance Management (The New BPM) by David Munaretto with PSC. He says:

“But what exactly is Business Performance Management (BPM)? Ask five people and you will get six answers. The COO will say it is Operational Perfor…

My day always gets a little brighter when I read an article or blog by someone who shares my feelings about performance management. I guess that is just human nature, isn’t it?

Here is a quote from a white paper titled Business Performance Management (The New BPM) by David Munaretto with PSC. He says:

“But what exactly is Business Performance Management (BPM)? Ask five people and you will get six answers. The COO will say it is Operational Performance Management (OPM) because it is used to manage activities associated with production and distribution. The CFO will say it is Corporate Performance Management (CPM) – running a business ‘by the numbers.’ Others will say it is the latest incarnation of analytics, dashboards, and Business Intelligence (BI). Then there are those that will confuse BPM with the other acronyms with the same letters – Business Process Management (which we are, for this paper, labeling as BPrM). The difference between them is more about the approach than the results. The more contemporary Business Performance Management is a broader top down approach while time honored Business Process Management assumes a more focused supporting role and is bottoms‐up.”

BPM is the combination of Business Intelligence (BI) and BPrM – an amalgamation of the various methodologies used to plan, measure, analyze, and run a business. It is about having all of the information you need in one place so you will know both the cause and the effect of a business action, when and where it occurred, and what to do to make timely adjustments. Thus, BPM provides the ability to identify performance deviations early and initiate corrective actions automatically.

Simply stated, today’s BPM is dashboards and metrics brought together in real time and in the business context to provide a basis for action.”

What I like is his recognition that performance management leverages process improvement, but it needs to be in the context of strategy setting. I discuss this in my earlier blog, Process Effectiveness or Strategy – Which has a Greater Performance Impact?

David does slip up a bit in his last sentence, sort of equating performance management (his BPM) with dashboards and metrics. It is so much more – including embedded analytics in each of its integrated methodologies. But it’s a minor complaint about a writer who is asking the right questions.

Gary Cokins