Why strategy-driven performance management?

As more and more companies focus to increase their productivity and the overall performance of their organization, it is important for them to realize that performance management is at the heart of their success. This means ensuring alignment of the entire organization with the strategic objectives of the organization and implementing a strategic performance management system fully supported by the leadership team.

Why strategy-driven performance management?

Any execution, or tasks to achieve a specific outcome, that is not based on the strategy of your enterprise, in all probability may be counter-productive. You need to stop all such activities and ask questions. Your vision gives the direction. Mission drives priorities. Priorities drive strategy. Strategy drives execution. Execution is enabled by business process. These processes are executed by functional departments. Choosing the rightperformance management software helps you bridge them.

Ensure strategic alignment and performance improvement

In many of my conversations with customers, I have seen that business strategy is not translated into the metrics that matter, allowing you to effectively manage the performance of the business. To ensure this, you need to have tight alignment between your business strategy and the KPIs used to set goals. That way you can keep the business focused on its strategic objectives vs. the individual functions.

In addition to this, it is important to understand that the environment in which you operate is frequently changing. So your performance management software needs to be adapting to the real-time scenarios, so that you promote collaborative and integrated working practices, thereby improving the decision making.

Integrate your budgeting and planning across the organization

Integration of planning and forecasting across sales, marketing, operations and finance has always been a concern for most organizations. Further, when they are set to improve components of their planning process, it mostly happens in silos leading to misalignment and ambiguity around the overall structure and hand off points.

The planning and budgeting process needs to be transformed into strategic resource allocation. You need to be capturing the processes and supporting information and needs to be re-evaluated continuously.

Enterprise wide reporting

Many organizations spend much time and resources in manually compiling reports for management and other meetings. It is key to have defined metrics at each of the business levels. This helps directly in monitoring performance and delivering on your strategy with a ‘single version’ of the truth.

An enterprise wide reporting solution is the most effective way to consolidate your management information. It will provide your organization with dashboards and scorecards along with costing and profitability management solutions to help you effectively manage product and customer portfolios. This approach can lead to a 50%reduction in cost and time.

Whether it’s managing and reducing costs, reviewing market risks, growing revenue and product, customer or market profitability – having the right information at all levels will help you make tough decisions quickly and confidently to outpace your competitors.

This post Why Strategy-Driven Performance Management originally appeared on Linkedin

Renee Sanders is a PhD candidate in business at Capella University, where her specialization is strategy and innovation. Renee holds an BBA and MBA from the University of Maryland University College. Renee currently works in for a defense contractor as the Director of Strategic Pricing and Price to Win.

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