Business Performance: Performance Management By Any Other Name Still Works The Same

8 Feb

When it comes to measuring business performance, we are presented with a vast amount of frameworks or systems abbreviated with three-lettered acronyms. Some of these include: Corporate Performance Management (CPM), Business Performance Management (BPM), Enterprise Performance Management (EPM), Total Quality Management (TQM), and the Balanced Scorecard (BSC) [1]. Essentially, each system or framework strives to deliver the same result; that is to manage and measure business performance. Following on from my previous post about Performance Management Systems, I will now try to incorporate a practical example to better understand the system.

This example is put forward by Mark Graham Brown in an article for Business Finance Mag. He uses the airline industry and in particular the role of the pilot for his example. Flying an aircraft is a nearly-perfect performance management system [2]. He then explains why, stating the idea that there is always a detailed flight plan so the pilots have a clear picture of the route, destination and are alerted to any weather or airport delays [2]. To become a pilot there are a number of high level tests and they receive excellent training. They are provided with sufficient fuel, a well maintained aircraft, and other resources like coffee and food [2]. Cockpits are designed with excellent metrics, additionally the gauges enable pilots to review and analyse performance in real-time so as to adjust their flight plan and strategy for arriving at the destination on time [2].

Accountability is an important aspect in the business world and mistakes can have tragic consequences. This is particularly true for a pilot; there are pretty severe and personal consequences to making a mistake. Bad performance could result in death and good performance means you get to fly another day [2]. Brown makes the point that, if organisations ran this way, they would see a lot better corporate performance [2].  Bringing this back to the measurement of business performance of IS investments, this idea of accountability and having clear goals and strategies in place are all applicable and by embracing this action organisations can benefit greatly.

References:

[1] http://searchdatamanagement.techtarget.com/definition/corporate-performance-management

[2] http://businessfinancemag.com/article/performance-management-any-other-name-still-works-same-1008

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