Business performance management is a set of management and analytic processes that enable the management of an organization's performance to achieve one or more pre-selected goals. Synonyms for "business performance management" include "corporate performance management (CPM)" and "enterprise performance management".
Business performance management is contained within approaches to business process management.
Business performance management has three main activities:
- selection of goals,
- consolidation of measurement information relevant to an organization’s progress against these goals, and
- interventions made by managers in light of this information with a view to improving future performance against these goals.
Although presented here sequentially, typically all three activities will run concurrently, with interventions by managers affecting the choice of goals, the measurement information monitored, and the activities being undertaken by the organization.
Because business performance management activities in large organizations often involve the collation and reporting of large volumes of data, many software vendors, particularly those offering business intelligence tools, market products intended to assist in this process. As a result of this marketing effort, business performance management is often incorrectly understood as an activity that necessarily relies on software systems to work, and many definitions of business performance management explicitly suggest software as being a definitive component of the approach.
This interest in business performance management from the software community is sales-driven - "The biggest growth area in operational BI analysis is in the area of business performance management."
Since 1992, business performance management has been strongly influenced by the rise of the balanced scorecard framework. It is common for managers to use the balanced scorecard framework to clarify the goals of an organization, to identify how to track them, and to structure the mechanisms by which interventions will be triggered. These steps are the same as those that are found in BPM, and as a result balanced scorecard is often used as the basis for business performance management activity with organizations.
In the past, owners have sought to drive strategy down and across their organizations, transform these strategies into actionable metrics and use analytics to expose the cause-and-effect relationships that, if understood, could give insight into decision-making.
Read more about Business Performance Management: History, Definition and Scope, Methodologies, Metrics and Key Performance Indicators, Application Software Types, Design and Implementation
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