Where Next for Performance
Management?
Performance Management Fundamentals
Lecture 12
Where Next for Performance
Management?
Performance Management Fundamentals
Lecture 12
The Transformation Process
The Transformation Process, Slack, (2007:9)
2
The
Transformation
Process
Transformed
resources…
• Materials
• Information
• Customers
Transforming
resources
• Facilities
• Staff
Input
Resources
Output
products and
services
Customers
Performance Management
Customer needs and the organisation’s performance might both
change over time………
3
Cost
Flexibility
Dependability
Speed
Quality
Quality
Cost
Speed
Dependability
Speed
Adapted from Slack, (2007:583)
The 5 Laws of Operations
1. The law of variability
2. The law of bottlenecks
3. The law of scientific methods
4. The law of quality
5. The law of factory focus
4
R.W. Schmenner, M.L. Swink, Journal of Operations Management 17(1998)97
–113
The Ideal Performance
Measurement System
In a perfect world, managers would be able to
design an optimum PMS that would have:
• Few measures
• Non-financials that would predict financial
performance
• The same measures throughout the whole
organisation
• Clear connections to people performance, for
compensation purposes
• Stability
5
Enterprise Performance
Management
• Why is this a “good thing”?
• Why do organisations implement an Enterprise
Performance Management system?
6
“Providing real-time access to critical business
performance indicators to improve the performance &
effectiveness of the
business”
•
Real time visibility & control of business processes,
transactions, and IT operations across applications
and systems
•
Proactively detecting and acting upon business
threats & opportunities
SMV Data
App Performance Data
Process Data
KPI Data
Real time Data Collection
Real time visibility
IT Operations
Application Support
Process Manager
Business Analyst
Executive
What BAM can do
“Organizations can achieve significant benefits by
increasing
the accessibility, consistency and timeliness of delivery of
information
to key business consumers. Successful deployment
of data integration and business activity monitoring technologies
is critical in achieving that goal.”
“Operationally focused business intelligence applications provide
a
real-time information environment
that
— when linked with
historical context
— can help decision makers
improve daily
business operations
.”
Project Management
Reporting Features
• Immediacy
• Specificity
• Discrete
10
Structure Features
• Fluid
• Complex
• Proactive
A Project is………..
“… the allocation of resources directed
toward a specific objective following a
planned, organised approach.”
Project Management is……
“ concerned with planning, scheduling and
controlling project activities to achieve
timely project completion within budget
and meeting performance expectations.”
11
Fitzsimmons and Fitzsimmons, 2008:364)
Project Characteristics
• Purpose
• Life Cycle
• Interdependencies
• Uniqueness
• Conflict
12
Fitzsimmons and Fitzsimmons, 2008:364)
Sporting Analogies
• Competitiveness
• Openness
• Challenging and innovative
• Outcome not process based
13
Adcroft and Teckman, 2008
The 21
st
Century Organisation
• Top-down direction to motivate self-
directed, thinking-intensive professionals
to work with one another horizontally
across the company
14
Conclusion
• The important test of any Performance
Measurement System is its ability to
discriminate good from bad performance
• To be a balanced Performance
Measurement System it must combine
financial and non-financial measures into
an overall appraisal and compensation
system
15
Meyer, 2002:79