What is Business Performance Management?

Posted on: Monday, 2nd October 2006

Business Performance Management (BPM)¹ is a set of integrated closed-loop management and analytical processes, supported by technology, that address financial as well as operational activities. It is an enabler for business in defining strategic goals, and then measuring and managing performance against those goals.

To ensure performance, BPM must be an integrated solution approach consisting of analytical applications providing key performance indicators that are cascaded through the enterprise, business plans that are designed to achieve those metrics and actual reporting and forecasting to ensure performance. Although most firms have not yet embraced the full potential of BPM, progressive organisations are looking at it with a sense of urgency.

The core BPM processes include financial and operational planning, consolidation and reporting, modelling, analysis, and monitoring of key performance indicators (KPIs) linked to the organisation’s strategy.

Performance management projects are highly visible because they involve both strategic and tactical issues, and mix together business and technical concerns. They typically span multiple departments or divisions, engage diverse sets of users and link with multiple systems. It is for these reasons that most BPM projects require outside assistance, and it is little surprise to find that a key ingredient for success is to have members of a team who have implemented BPM solutions before.

Footnotes

BPM is also known by other acronyms: Corporate Performance Management (CPM) most often (used by Gartner so as not to be confused with their definition of BPM as the related Business Process Management). Some vendors and consultants do use other names, however, the BPM Standards Group (http://www.bpmstandardsgroup.org), the cross industry association whose membership includes many of the software vendors and consultants who lead this space, has adopted BPM.