A.3.2. Performance Management¶
Measure business processes to manage performance.
The capability Performance Management (A.3.2) is part of the capability area Business Enablers in the Business Pillar.
Measure business processes to manage performance.
Enterprise Performance Management (EPM) --- The process of monitoring performance across the enterprise with the goal of improving business performance. An EPM system integrates and analyzes data from many sources, including e-commerce systems, front- and back-office applications, data warehouses, and external data sources. Advanced EPM systems can support many performance methodologies, such as the balanced scorecard.
Note
Making a distinction between strategy and execution can do great damage to a corporation.
Performance Management at enterprises, for various reasons of convenience and expediency, has operated at (at-least!) three different levels:
- Periodic reporting cycles used by the executive leadership in evaluating progress on strategic goals
These have been traditionally dominated by lag indicators such as receivables, payables, market share with intuition and judgment driven evaluation of lead indicators such as outages, downtimes, revenue pipeline, attrition etc. The Business Intelligence movement and the rapid digitalisation of key activities has improved the ability of most enterprises to collate, aggregate and report on various metrics of interest in such review cycles. - Operations and Delivery management reporting used by front-line and operations staff to identify, analyse and fix problems and deviations
Improvements in the planning and scheduling activities, through multiple generations of resource planning and workflow management, have helped most enterprises to rapidly configure chains of activities, optimise resource capital and monitor in near real-time the fulfilment and deviations in operations. - Personnel evaluation and reporting towards role management for career and aspirations management of staff
Performance appraisal has received a lot of attention in recent years, with shifts from intuition and heuristics based once-a-year activity to statistical profiling mechanisms and of late, continuous conversations focused on metrics such as productivity, retention and capability development.
While the Operating Model can address many of the disconnects that arise between these levels, enterprises still struggle with bridging the gap in aligning performance management for reasons such as:
- Differences in focus between governance and operating procedures:
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Metrics in governance focus on enforcement whereas metrics in operations focus on output and progress. The feedback mechanisms which aim to align the two are dominated by subjective assessments resulting in high exception workloads.
- Fulfilment focused integration leaving significant silos between information technology and operations
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Most use of information technology is focused on information flows and aggregation whereas operations technology is focused on individual units of activity. The relative prioritization is dominated by committee-based subjective assessments resulting in high backlogs, long wish lists of technology enablement and proliferation of tactical approaches in operations.
- Unclear alignment of incentives, especially between operations and role performance
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While performance appraisals and role management have become increasingly automated in evidence management with links to operations and competency development, work assignment and activities seldom remain aligned to start-of-period goals, leading to subjective adjustments through mechanisms such as continuous conversations. The key challenge of mapping enterprise strategy to role specific goals remains mostly a subjective and judgmental exercise.
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Work in progress, this is just the results of an initial brainstorm session, needs to be worked out
- Are your key performance indicators (KPI’s) linked to
tactical activities and business goals?
- Do people make decisions based on the KPI measurements?
- Are all your KGIs linked to KPI dimensions?
- Is there a base-line benchmark for your KPIs?
- Are there well-communicated periods of decision-making?
- Are your KPIs measured using high-quality data?
- Do you use KPIs to measure the success of your strategy, fulfillment of goals and improvements of business capability? Scale 1-5
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Work in progress, describe the 5 maturity levels of this capability
Contribution to the Enterprise¶
While practices around Performance Management might vary across enterprises, we highlight below a few focus areas where EKGs can act as effective enablers:
Business Identities can act as the common contexts for aligning strategic and operational performance management. Highly engaged senior executives practice these links to drive effective alignment with feedback through their own mental models of linkage. EKG-driven feedback mechanisms, based on business identities, can then replicate such links and operate with more objectivity by enabling decision-making through links of operational activities and their metrics to the associated business goals, values and customer propositions.
Contracts can act as common contexts for aligning operations and role performance management. Employee contracts can be the most concrete form of expectation specification and management and their linkage to operations and the associated propositions of the enterprise to its customers and other stakeholders can help in aligning appraisals more objectively to operations and enterprise performance.
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Work in progress, describe how this capability is possibly being delivered today in a non-EKG context and optionally what the issues are that EKG could or should improve
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Work in progress, describe how this capability would be delivered or supported using an EKG approach, making the link to the "how" i.e. the EKG/Method.
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Work in progress, list examples of use cases that contribute to this capability, making the link to use cases in the catalog at https://catalog.ekgf.org/use-case/..