The Performance Management Revolution

Continued

DRESNER: If IT is driving the efforts around performance management, typically you don't get performance management. You get enterprise reporting—the one size fits all, "let's deliver data warehousing and some reporting tools to the end users," to reduce the numbers of user requests for reports. It's well intentioned, but it doesn't really meet the users' needs and it's not really going to move the organization forward.

Conversely, if you have the users or the business driving the performance management initiatives, you might actually get some near-term benefit, and it may meet the needs of that particular function or department, but they create bigger problems downstream. They really don't help the enterprise as a whole. Ultimately, you want to have that alignment of purpose between finance, operations, and IT—everybody really needs to come together to drive performance management successfully within an organization. If the entire senior management team has a vision for performance management, that's probably 50 percent of the battle.

KOPCKE: What tools or technologies do you think are vital to the success of performance management?

DRESNER: You need to have coherent ERP and operational systems in place, because that's where we get the key information that's going to support performance management. But in order to support the management processes, you've got to support the strategy formulation, the goal-setting process, and the execution of that. Then you must be able to evaluate it, which means that you do need some key business intelligence technologies—the classic dashboarding and reporting capabilities—but you also need modeling capabilities. You need enterprise-planning capabilities and in-depth analytics to support those various management functions. It builds on what we already understand as business intelligence and leverages those key ERP and operational systems, but it's taking it a step beyond that.

KOPCKE: Do you believe that standardization of technologies or tools is important to being successful in performance management?

DRESNER: Sure. The problem is that organizations have too many overlapping tools, and unfortunately, every tool out there has a slightly different way of representing data. They have different user interfaces, semantics, et cetera. If you standardize and consolidate, you'll save a lot of money, and certainly that's important, but the greatest benefit is being able to strategically deploy with a core set of tools and technologies. But it's not easy, and consolidation is the really thorny part, because nobody wants to give up their tool. That's why even though many organizations do standardize, they continue to expand the numbers of tools out there. They really need to have the conviction and a process in place to winnow it down to a manageable number. It's a painful process, but when you get through the end of it, life really is much better for the enterprise as a whole.

KOPCKE: What should business leaders who are interested in joining this revolution be doing?

DRESNER: To start off with, find some allies—the folks out there that are like-minded. It would be even better if they are outside of your function. The other thing you need to do is a self-assessment to figure out where you are within the continuum of performance management so that you can begin to identify what needs to be done. That's a step in the right direction.