Business Performance Management
Value proposition and efficiency are important aspects of modern business management. They have to be understood and respected in every business function and each position within the enterprise.
The prime goal of any Business responsible is to optimize the overall assets of his area of accountability. To do so, several methodologies exist, varying from industry and subject specific to global approaches.
A management system (not only a measurement system) is required that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the system transforms strategic planning from an academic exercise into the nerve centre of your enterprise.
You can't improve what you can't measure. So metrics must be developed based on the priorities of the strategic plan, which provides the key business drivers and criteria for metrics that managers most desire to watch. Processes are then to be designed to collect information relevant to these metrics and reduce it to numerical form for storage, display, and analysis. Decision makers have to examine the outcomes of various measured processes and strategies and track the results to guide the company and provide feedback.
So the value of metrics is in their ability to provide a factual basis for defining:
- Strategic feedback to show the present status of the organization from many perspectives for decision makers
- Diagnostic feedback into various processes to guide improvements on a continuous basis
- Trends in performance over time as the metrics are tracked
- Feedback around the measurement methods themselves, and which metrics should be tracked
- Quantitative inputs to forecasting methods and models for decision support systems
Selecting a Management Approach
One of the reasons why managers are having such difficulty in applying management methods to day-to-day problems is this:
There are many different schools of thought on management approaches, and each of these schools has its own proponents.
Generally, an original proponent makes his or her name in that particular concept, and becomes an 'expert' and a 'guru' of it. There is little incentive to integrate this one approach with others.
That job is left to the poor managers who have to figure out how to apply what theory to their business problems. They have heard something about MBO, TQM, BPR, ISO-9000, CMM, ABC, BSC, SixSigma, Baldridge, and all the other buzz words and acronyms of management, but they have received precious little guidance as to what to select that best fits their business needs. Usually, however, managers will tend to use the approach with which they are most familiar, which is probably project management or program management.
A manager who only has experience in one approach, such as project management, may have difficulty in adapting to changing demands. A manager can be much more effective if he or she is able to select a management approach that is most appropriate to the desired need or goal.
There is no good reason why managers must follow the latest school of management thought. On the other hand, just because an idea is new does not mean that it should be dismissed. There are reasons why one particular approach is better than another depending on the strategic goal or need.
The balanced scorecard, for instance, appears to be a very appropriate technique for meeting the urgent management needs of many complex Management processes. On the other hand Six Sigma provides a good statistical approach for production processes. However, this need should not blind managers to other, perhaps even more pressing goals of their organization that may require a different approach.
The balanced scorecard methodology builds on some key concepts of previous management ideas such as Total Quality Management (TQM), including customer-defined quality, continuous improvement, employee empowerment, and primarily measurement-based management and feedback.
The balanced scorecard incorporates feedback around internal business process outputs, as in TQM, but also adds a feedback loop around the outcomes of business strategies. This creates a "double-loop feedback" process in the balanced scorecard.
Six Sigma is a process improvement methodology using data and statistical analysis to identify and fix problem/opportunity areas. Six Sigma also refers to a deployment model that aligns employees with a series of high-impact projects.
The BeauTec Solution
BeauTec provides an integrated Information Platform and business-modelling tool to verify existing structures and workflows and to present integrated key information based on approved indicators to everyone in the company.
Creating graphically an integrated hierarchical business model having already key information available allows the identification, measurement, improvement, and verification or adaptation of existing processes to the agreed business vision. Having the validated business model in place, indicators can be agreed and defined to measure the performance of the business process on every level.
Using this key information, the global optimisation by increasing quality of existing processes or by changing individual workflow chains is made easy and transparent to everyone.
Each employee in the enterprise is able to understand the status of his business function and is able to contribute to the overall success. New business and workflow ideas can be created and simulated to secure existing structures.
The quality of data and efficiency of communication is increased by providing identical and high quality information instantly to everyone.
The BeauTec Business Pilot is the ideal software solution to support the full scope of functions required to implement any Business Performance Management methodology. There is no better tool to jointly:
- Gather information from various sources in real-time without duplication
- Define indicators and set up, control, and modify limits including Audit Trail
- Measure constantly indicator results and notify in urgent cases with escalation
- Build unlimited hierarchies of indicators
- Apply statistical analysis on measured data
- Report on any time wise and structural aggregation level
- Historize results for long-term evaluation and extrapolation
Our solution provides the following features to support the above functions:
- Global Information Integration
- Unlimited historization of information
- Flexible definition of indicators, hierarchies and aggregations
- Intuitive visualization of indicators, definitions, and history
- Interactive intervention including commenting and problem classification
- Sophisticated trending including extrapolation and statistical analysis
- Automatic notification and related escalation in case of issues
- Open Excel based reporting providing access to any measured data
- and many more
A new version of BeauTec CMDB is available since march 2011.
A new version of BeauTec Business Pilot is available since January 2011.