Organizations benefit when they use an effective performance management system that provides a vehicle for creating predictive organizational measurements. With such a system, management gets a truer picture of how its key performance indicators (KPIs) are performing and what be done to make improvements in these metrics, if appropriate.
With this enhanced-methodology approach, metrics are established and tracked through the Integrated Enterprise Excellence (IEE) value chain, which is part of the Integrated Enterprise Excellence (IEE) business process management system. The IEE system addresses the common-place business management performance measures and improvement issues that are described in a 1-minute video:
Effective Performance Management System Value Chain
The IEE value chain illustrated in the Figure 1 is a business fundamental performance map with metrics described from the viewpoint of the business and customers:
- Operational processes, designated as rectangles.
- Performance measurements, designated as ovals.
As a description of organizational procedures, the portions of the IEE value chain where functions are connected by arrows describe the primary operations of the organization. Each of these functions can have process drill downs (shaded rectangles in the figure), where documents can be attached. In this performance management system, measurements for each of these functional process steps can be listed by clicking the ovals.
IEE Value Chain
(Shaded areas designate processes that have drill downs.)
Performance Management System Value Chain Benefits
With this performance management system, the IEE value chain remains consistent through organizational chart changes. When there are re-organizations, process and related performance metric ownership may change but the basic structure for doing business would remain constant.
The IEE value chain with its described function and its high-level 30,000-foot-level operational metric and satellite-level financial metrics dashboard is step 2 of the overall 9-step IEE system, as shown in Figure 2, noting that strategy creation is step 5 in this overall process.
Highlighting Creation of Organizationally Performance Management System Scorecards in IEE System
With this performance management system approach, metrics in this value chain are to be consistent with the business’ operations. This is unlike many traditional approaches where measurements are created around an organizational-chart structure or objectives from a strategic planning session. Both strategic plans and organizational charts can change over time but the basic operations of an organization don’t. When utilizing this performance management approach, one needs also to keep in mind the importance of how metrics are reported so that the business as a whole benefits.
The second item in the list below addresses creation of a performance measurement system. Additional topics that need to be addressed are listed as one, three, and four:
- Developing performance metrics
- Performance management system
- Performance dashboard
- Enterprise performance management software
For integrating performance measurements into a business management system, as part of a performance management system, see:
Performance Measurement System Application Assessment to Your Situation
Does your measurement reporting lead to the best behaviors? If you call us to discuss, we could create (at no charge) a report of one of your KPIs using the IEE predictive performance measurement system. A comparison of this report-out to your current method of reporting could lead to very revealing insight!