Technology Scorecards: Aligning IT Investments with Business Performance

Chapter 9. Performance Management

Introduction

In my practice, I had a number of meetings with "c"-level executives who had implemented large-scale business software initiatives. They all complained that their billion-dollar spendings did not give them actionable tools, triggers, and reports with which to better manage business performance. Upon closer examination of implementation strategies, we found some or all of these issues:

• The key performance indicators (KPIs) of interest had not been identified.

• The KPIs had not been configured to get up to the business warehouse.

• Scorcards had not been set up.

• Triggers and reports were not generated, or they could be generated only in roundabout ways.

In about the same time frame, large business software vendors were launching their offerings via the Strategic Enterprise Management (SEM) tool set. Recognizing this trend, John Van Decker at Meta Group wrote in 2002: "Companies should consider leading business performance management solutions that support a closed-loop life-cycle process and focus on metrics-based performance management. The goal should be developing actionable business plans to guide future results."^[26] This chapter covers the performance measurement, performance tracking, and performance control features that make up performance management.

Principles of Performance Management

To control, you must have an objective function, then measure the state of the variable, get the deviation between the objective value and the measured ...