The Best-Run Businesses Run SAP

Applications that help organizations perform better make sense but sometimes can be hard to justify. Will they really make a difference? After all, performance improvement also depends on best practices and organizational alignment or focus on the things that will make the most difference – and we don’t necessarily need to buy software to improve these things.

Business intelligence (BI) is usually a more straightforward proposition and logical starting point. It’s fairly obvious that with accurate, complete, and timely information, we can make better decisions. Add targets to this data, and we have the beginnings of performance management.

Performance management applications that associate KPIs with specific business processes are broadly available. These are desired extensions to an application set for well-defined, core business functions – once the organization is mature enough and can make the required investment. Understandably, applications to improve the efficiency of financial planning or supply chain management processes are very popular. After all, purpose-built software that’s easier to use than Excel and can reduce the time and cost of these processes is reasonably easy to cost justify.

What about more general purpose performance management applications? If we agree the key tenet in performance improvement is to identify best practices and replicate them across the organization – and we could quantify the value of incremental performance improvements by simply working better across the board – then using purpose-built software vs. Excel and Project would be desirable and justifiable for improving organizational practices overall.

This is, of course, justifiable; and the approach organizations take is to regularly invest in their BI infrastructure and tool sets with the intention of making performance improvements through better decision making. But this only addresses half the issue. We make decisions all the time, hopefully, good ones. Where we fall short is in the follow through or the actions necessary to effect the decisions. This is a management problem – one requiring a different kind of decision making, and one that BI alone won’t resolve.

We need tools that provide visibility into the status of projects, allocated budgets, spend to-date, team members, supported objectives (and why they’re important), and the issues involved and what’s being done to address them. This is initiative management – and the crux of improving performance. Do a good job here, and you’ll get your performance indicators moving in the right direction.

To sum up, performance management requires two things: metrics management and initiative management – exactly what SAP Strategy Management helps you do better.