An overview of performance management
The past decades have produced a range of models, tools and techniques, some more widely used than others and some more successful than others. Mapping back to the 1960s, overcapacities in production became widespread in industry and the successive oil crises (1973) and European legislations have led to complex trading environments and even more business models.
More recently optimising logistics (supply chain management); concepts borne through the infamous, “machine that changed the world” (Womack, Jones and Roos, 1984) demands a more integrated, systems approach for organisations, if they are to be competitive.In order to gain competitive advantage, organisations must learn how to control their processes; be lean with good planning and stock management; have transparent costs business wide; know and manage potential strategic and operational risks and so on so forth (Chan etc al, 2002). On the basis of this, there are reasonable grounds to assume that there is a business model for each and every one of these concepts, each completely separate to one another.
Moreover, in the quest for competitive advantage, organisations are continuously searching for the next big idea, that business methodology, model, or unique way of using a technology that will propel them ahead of their competitors and deliver increased profits and streamline operational efficiencies. Corporate Performance Management is an umbrella term, first coined by Gartner (Geishecker and Rayner, 2001), to describe the methodologies, processes and systems used to monitor and manage business performance. In summary, a Performance Management System is a corporate wide strategy that seeks to align departmental objectives, and is designed to facilitate and deliver a cross functional, transparent business tool.
Consequently interest in performance measurement and management has excelled during the last few years. Frameworks and methodologies such as the Balanced Scorecard, and the Business Excellence Model [EFQM] (which are discussed within this report) amongst many have each generated vast interest, yet subsequent attempts at company wide implementation, have not always been successful. It should therefore be noted that making a Performance Management System work is not easy because design and implementation strategies affect its’ success. In other words, there are gaps between the strategy and the theory behind such strategy and its ultimate execution. This report demonstrates that systems that looked right in the beginning can decay and become irrelevant, and that fundamentally Performance Management System integration requires specific integration and can not be applied using the same principles adopted by others. It must be completely bespoke to the organisation in question.
This report is written to provide you with a brief guide on Performance Management Systems, their application, successes and issues; including barriers to implementation, drawing from business examples. It concludes with a checklist bringing together the issues to form a brief and concise implementation and management guide in the view that a Performance Management System demands careful and accurate strategy before it is deployed in your organisation.
Tags: business excellence model, business models, corporate performance management, legislations, logistics supply chain management, performance management system, performance measurement, stock management
