Performance Management Business Processes
The key processes of performance management are:
Operational review or Monthly management reporting
Every organization go through the above exercise of reviewing and developing their long term strategy, resulting in projects or initiatives to walk out with. These strategies are tied against the business goals the CEO or the Top management wanted to achieve. The initiatives could be things like creating a new product, focusing on a new market segment opportunity, adopting to some quality processes to beat competition etc. These strategies and the initiatives are reviewed and accepted formally.
The next process in the performance management area is to cascade these initiatives into detailed plans. This is done in the form of periodic operating plan, usually annual. This involves participation and commitment from the entire organization from Top Management, Sales & Marketing, Human Resources, Operations (Supply chain, Service chain, Financial services operations depending on the industry the organization is part of) and offcourse Finance to develop an integrated operating plan that results in clear direction and financial budgets. This whole process is also well known as Bottoms up planning. The annual operating plans are committed, signed up and approved across the organization.
Now comes the actual execution cycle. The various functions execute on the strategies and detailed plans. The actual scenario in real life could vary from the planned scenario. To understand the variation and take corrective action, organizations sit together at various levels to run Operational review process. Here these teams try to understand the Leveraging Variance Analysis in CPM , review the various key performance indicators and decide on action items to correct the situation. This is one of the most important process in performance management.
Organization wide solutions
As you see in the above processes, the organization wide effort is required to ensure best results from performance management. The underlying solutions to support the above processes should also have capabilities that extends to Organization wide.
SAP is building comprehensive solutions for these processes, that can extend to entire organization. These offerings will complement the SAP gets serious about EPM offerings. The chart reflects how the performance management solutions would like:
As you see in the chart, the solution offerings would be organization wide and would support the performance management process very effectively. With tight and Why EPM solution with integration to ERP and built in GRC are critical? , all the data required is going to be available for the decision makers to take right decisions in their operation reviews, as the information available is going to be available at the right time and they can rely on the same as it is accurate. The underlying solutions are going to empower the Empowering the business user to implement business change with CPM to own and manage these business processes, and therefore implement business change rapidly.