I spend a lot of time investigating and writing about just exactly what enterprise performance management is and how to define it. I am concluding there is no exact way to summarize it. Everyone has a different spin on it.
What I do like is that in the last couple of years most everyone writing about this subject has realized that earlier definitions have been far too narrow. It is no longer described as some vague sort of CFO financial initiative about dashboard measures and better budgeting. It is so much broader. I recently read an article authored by I4cp, a human resources management research firm, that swings to the other extreme and includes just about everything covered in a MBA university curriculum. The article is titled Ten Critical Performance Issues for 2010. My initial reaction is that this article covers so much that we lose focus that the topic is mainly the integration of performance management methodologies with each one imbedded with analytics of all flavors. But I do like the five domains referenced in the article: leadership, talent, strategy, market focus and culture.
The article reports on a survey of how critical and important each domain is plus how effective organizations judge themselves at applying them. All five domains are important, but I always lean to strategy alignment and execution as the cornerstone or linchpin domain that draws in the other four. A quote in the article reinforces this in the subheading “Focus on strategy execution.” It says:
It isn’t enough to formulate great plans. You’ve got to execute on them, and that requires getting everyone on the same page. Sounds easy, but most managers know it’s tough to do well. Four out of five respondents said strategy execution and alignment are important, but less than a third said their firms are very effective at it. That’s disturbing, and companies need to get a lot better in 2010 if they want to prosper.
We can debate definitions until we are blue in the face, but unless organizations progress with integrating the systems to realize the benefits of enterprise performance management, then they cannot optimize their performance. It is not just monitoring the dials on a scorecard or dashboard, but on moving the dials!