Guide To Business Performance Management


There should be creation and proper execution of a strong business strategy in the modern world. Business performance management (BPM) is there to offer the corporates with an IT-enabled ideology to formulate and execute a flawless business strategy. In the article to follow, we shall have a look at various aspects of Business performance management and we shall brief upon a framework for the same and discuss the factors such as drivers, blocks and successes for a BPM implementation in the corporate environment.

In this hypercompetitive marketplace, the successful implementation of a business strategy is the need for the day. Most organizations are known to struggle a lot when it comes to the implementation of their business strategies in the real world scenario. There should be a simple but systematic approach towards controlling and monitoring of business strategies. BPM comes to the rescue when the large organizations like these struggles while implementing their business strategies in the marketplace. Business performance management is one of the current topics of discussion when it comes to corporate environment these days. It is a well-known fact that the 70 percent of the companies that are listed on the fortune 500 list have already implemented their own business performance management solutions.

What comprises of BPM?

BPM has its series of process that are integrated with each other and analytical in nature. These processes comprise of two main tasks. First, strategic goals are created by keeping in mind the key objectives and key performance indicators that serve some meaning to the organization. Second, it supports and caters for the management of subsequent performance of these goals. These factors are then linked to the operational metrics and incentives that are based upon the performance. This can facilitate effective execution of strategy throughout the organization.

History of evolution of decision support

Decision Support Systems (DSS)

Management decisions that derive support from computer-based software when it comes to scenarios related to semi structured problems.

Executive Information Systems (EIS)

Information for the top executives of the company that are provided by the computer based systems

Data Warehouse

An integrated and subjected oriented collection of data is involved in making decisions. Other features include the database being non-volatile and support time variance.

Business Intelligence (BI)

It brings about an approach to make sensible and right business decisions by the provision of a broad category of applications and technologies that are in involved in gathering, analyzing, storage and providing access to information.

Business Performance Management (BPM)

Optimization of development and the execution of business strategies through a series of well-defined business processes and applications. BPM has evolved over a number of decades just like the legacy followed by the other aspects of information system described above.

BI and BPM are the terms that are used synonymously. BPM includes the process of business that has leverage over BI. BPM is focused on the entire enterprise and hence is defined in the much broader sense. BPM facilitates for operational decision making.

The BPM framework

Four core processes comprise of the BPM. These four processes facilitate for design, implementation and management of BPM. They are as follows:

1. Strategize
2. Plan
3. Monitor and Analyze
4. Make improvement decisions

The first two core processes explain how to go after formulating the business strategy while the others are oriented towards modifying and execution of the strategies. These four processes together form the closed loop. It captures the business strategy which is then analyzed and translated into strategic business operations. We shall describe each of the four processes below:


We identify the goals of our organization in the strategize step. It makes its way to a course of action that is taken to identify the business strategy. The key value drivers are discovered in this step. For example, high customer satisfaction index may be a business? key driver and business value. The business performance management will be assessed and evaluated based upon customer satisfaction index in this case. This step is often called the ?breakthrough? step towards the management of the performance. To implement, it may be challenging. KPIs or the Key Performance Indicators are the drivers that are identified for a business. Strategizing provides a shape to all the further activities and plans that shall be implemented towards business performance management. It is by far the most honored and most important step in the management of business performance.


A program of action is developed in the planning step. It constitutes on how to carry out the business strategies. This allows managers to set their own share of goals, develop budgets for the projects and design the project. The resources allocation for carry out business goals and initiatives takes place in this step. Plans describe as to how each step in the process will affect the next one. This will ultimately lead to optimized performance of attainment of the objectives. This helps the businesses to focus on the enterprises. Units must be capable of working together in the areas where they overlap with each other.

Monitor and Analyze

It is the third step of the BPM framework. The implementation and manifestation of BPM becomes more prominent and obvious in this step. In this step, constant monitoring of performance parameters versus the goals of the businesses takes place. This step is a key factor to determine as to how a business unit and individuals in business are performing. The users can take appropriate action based upon this step. Data warehouse technologies are used to consolidate the multiple transaction processing systems which contain historic and real time data. Comparing of measures against actual performance takes place in this very step. The BPM space currently has the biggest and perhaps the fastest growth that is encountered in the BI infrastructure.

Make improvement decisions

In this step, it is very essential to take timely and appropriate actions to changes that are encountered in the performance during the process of monitoring and analysis. Alerting the users about potential problems takes place in this step. Strategic goals are created by keeping in mind the key objectives and key performance indicators that serve some meaning to the organization. It caters for the management of subsequent performance of these goals and achievements in the organization. Corrective actions when taken in a timely manner enable the users to avoid the problems that shoot up and are out of control and ultimately need to be escalated.

To provide you with a summary of all these processes, it can be said that the gap between the strategy and execution is overcome and these two sides of the coin are brought more and more closely. The last two steps stress more on the action and the execution part whereas the first two focus on how things are going to be planned, strategized and implemented ultimately. The framework is capable of making everyone moving forward and in the same direction through the core processes that are described above. In this way, the organization is now very much capable of disregarding the many processes that engage in mere generation of activity but fail to provide a scope and vision for long-term health of the company. In this way, many companies who implement proper and appropriate BPM strategies are able to easily outperform their peers with management of performance in their organizations. BPM has its series of process that are integrated with each other and analytical in nature.

Challenges involved in business performance management

It can be measure as to how a company is doing towards moving closer to its goals that are predefined over a certain amount of time in the execution process. The alignment of the operations in accordance with the business strategy can be measured for a company. In this way, we can keep a track of how far we have been successful in the translation of business strategies of the companies into the results. They fail to capture accurately the true nature and the extent of the organization?s progress. For e.g. the CEO of a company may come on a weekend to calculate the number of vehicles in the parking lot of the company in order to get a measure of the company?s employees? commitment towards work. But there is a way to bypass these kinds of measurement techniques. Consider the same example as above. But in this case, the employees may purposefully leave their vehicles in the parking lots of the companies in order to deceive the CEO. Hence it is necessary and absolutely essential to tally the present workforce of the company along with the vehicles that are present in the parking lot at that point of time. Many organizations make a measure of only what is available information readily accessible and simple to be measured. Over a certain amount of time these kind of measure if done will hamper the growth of the company owing to the false sense of security and the progress that is made by the company.

Thus in this article, we have explored the various aspects and steps involved in Business Process Management which constitute the BPM framework and we have also analyzed the challenges faced in BPM implementation.

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Disclaimer: The suggestions in the article(wherever applicable) are for informational purposes only. They are not intended as medical or any other type of advice