A Market EvolvesPerformance management is more than what it appearsby Mark Smith Continued from Page 1 Vendors' entrance into the performance management market has resulted more from reaction than planning. ERP and niche scorecard vendors came to the market with scorecard and dashboard products by the year 2000. They were rapidly followed by BI tool vendors and, more recently, financial management vendors. Financial performance management vendors traditionally focused on the CFO, but scorecards and dashboards are aimed at the CEO and COO. Therefore many of these vendors are reclassifying themselves as "business" or "corporate" performance management software providers. Do we need more of these scorecard and dashboard products? No. What we need is a highly scalable platform that can provide collaboration on an integrated set of metrics from all areas of the organization that can link to a distributed set of hierarchical goals and objectives. Unfortunately, the focus on the sizzle of the end-user interface has pushed out consideration of the enterprise architecture and information integration required for adaptability and customization of this new breed of application platform. A BPM platform must support the management cycle, which consists of setting goals, tailoring objectives, and monitoring performance. But it must do more. It must help you build and adapt to a set of performance management applications. These apps must link with the strategy and central set of objectives for an organization to ensure consistency in actions and decisions throughout the business. The Next Critical StepThe next wave in the performance management market pertains to methodical change of workforce behavior. Niche application markets are emerging to this end: enterprise incentive management and enterprise learning management systems. Adding these capabilities to performance management helps an organization intelligently manage its workforce. The apps enable a system of rewards, incentives, and proper training. They thus fulfill a commitment to employees, which is actually a required component of true performance management. When you understand the behavior of your employees, you can optimize their contributions and align them to greater corporate goals through rewards and training. You have to link the responsible employee to business results, in the form of metrics relating to customers, financial data, and supply chain performance. In this way, you can measure the effectiveness of your rewards and training. This positive development better balances performance management, providing a larger perspective beyond the usual quantitative measurements of business results. Workforce management will become a major component of every major performance management project within the next two to three years. Mark Smith [mark.smith@ventanaresearch.com] is the CEO and senior vice president of research at Ventana Research, an advisory services and research firm providing insight and education on best practices and technology in performance management.
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