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Business Performance Management: Assessing Your Organization’s Cultural Readiness for BPM

Originally published July 11, 2005

Most organizations getting ready for a business performance management (BPM) initiative know that they need to assess their business needs, audit their existing technology solutions and identify the gaps that need to be addressed. What many fail to realize, however, is that business performance management has a strong cultural component that needs to be managed as well. There are at least two perspectives that must be considered to determine your organization’s cultural readiness.

Let’s start at the top. Senior management needs to step up to the plate and take an active role in the BPM project. This point is non-negotiable for a successful BPM project. Senior executives may need to make some tough decisions and change long-established ways of doing things. Lastly, they need to be ready to share more data with more people than ever before. Here is a checklist to determine if your senior team is ready for the challenges of business performance management:

  1. Has an executive sponsor been identified? This individual will have the vision for business performance management, drive the overall process, and be the tie-breaker on any BPM-related conflicts.
  2. Is the organization willing to standardize on a single chart of accounts and organization structure to enable BPM?
  3. Is the team comfortable with the concept of all of its key management data residing in a single, central, BPM data repository? Are they comfortable with the security surrounding that data?
  4. Does the organization have a set of known and accepted key performance indicators (KPIs)? If not, are the executives ready and able to participate in strategy-related discussions to develop the company’s KPIs?
  5. Is the management team ready to provide more information to the employees to enable them to better understand and manage their performance? Business performance management usually involves distributing more information to more people than was previously shared.
  6. Is management ready to share key data via the BPM system with relevant third parties such as shareholders, directors, suppliers, customers? This is an optional element for most companies, but it expands the value of business performance management.

Now let’s look at the employees. As mentioned earlier, the staff is going to be given access to more detailed data about the company’s performance and their own performance. Are they comfortable with how this data will be used by management to assess them? Do they understand when and where not to use and share this data? Let’s continue our cultural readiness checklist at the staff level:

  1. Do the employees understand the nature of confidential data and the company’s rules governing its use? Is management confident they will adhere to these rules?
  2. Have the employees been advised regarding the impact and sensitivity of this data and their ability to purchase company stock?
  3. Are the employees aware of how this data will be used (or not used) in their evaluations and compensation package? Do they readily accept this?
  4. Are the employees ready to take on accountability and ownership of their performance and the accuracy of the related data supplied by them?
  5. Can the relevant employees contribute meaningful planning/budgeting data for their areas?
  6. Are the employees ready and willing to transition to a new system? Have they been educated on the benefits to them?

This checklist is intended to give you a general idea of the areas to assess for cultural readiness for business performance management. If you identify significant gaps in readiness you need to put together action plans to address these gaps. In some cases your organization may just not be ready for full-blown business performance management. In those situations you shouldn’t abandon the project, just scale it back to fit within your current cultural realities. As your organization evolves over time business performance management can evolve with it. The important thing to note is that business performance management can have a positive impact on all companies—the key to success is to determine how to rollout your BPM initiatives while both respecting company culture and maximizing impact.

  • Craig SchiffCraig Schiff

    Craig, President and CEO of BPM Partners, is a pioneer in business performance management (BPM). Craig helped create and define the field as it evolved from business intelligence and analytic applications into BPM. He has worked with BPM and related technologies for more than 20 years, first as a founding member at IMRS/Hyperion Software (now Hyperion Solutions) and later cofounded OutlookSoft where he was President and CEO.

    Craig is a frequent author on BPM topics and monthly columnist for the BeyeNETWORK. He has led several jointly produced webcasts with Business Finance Magazine including "Beyond the Hype: The Truth about BPM Vendors," the three-part vendor review entitled "BPM Xpo" and "BPM 101: Navigating the Treacherous Waters of Business Performance Management." He is a recipient of the prestigious Ernst & Young Entrepreneur of the Year award. BPM Partners is a vendor-independent professional services firm focused exclusively on BPM, providing expertise that helps companies successfully evaluate and deploy BPM systems. Craig can be reached at cschiff@bpmpartners.com.

    Editor's Note: More articles and resources are available in Craig's BeyeNETWORK Expert Channel. Be sure to visit today!

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