The Best of BPM: Visionaries Set the Tone for the Future of Performance Management
This fall, Business Finance's Vision Awards will celebrate their 10th anniversary. The contest recognizes companies that have outpaced their peers in the area of business performance management (BPM), which we judge based on the impact their performance management processes have had on their organizations and people. Taking a fresh look at the achievements of these BPM leaders of the past decade makes clear how far BPM has come. At the same time, it draws our attention to areas of opportunity for innovation in the decade ahead.
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Access white papers, product demos, and presentations from companies whose reputations have been built on helping BPM practitioners get the most from initiatives.
- BPM 101: Selecting a Business Performance Management Vendor" -- new white paper from BPM Partners
- "The Finance Challenge of Aligning the Business With Strategic Goals," a podcast featuring Palladium Group's Phillip Peck
- Ventana Research white paper "Decision-Making and Performance: Improving Essential Business Analytics and Technologies"
- “XBRL at a Glance,” white paper from XBRL US
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When the Vision Awards were introduced, the term "business performance management" didn't exist. At first, the awards were presented to companies that achieved excellence in financial reporting. It was three years later, in 2000, when analysts, vendors, and consultants recognized that a market had been born and coined the terms "business performance management," "corporate performance management," and "enterprise performance management" to describe the integration of planning, budgeting, and reporting processes. Champions of BPM suggested that the finance department was the logical first stop for their initiatives but stressed that BPM's relevance to functions such as sales, marketing, operations, and human resources ultimately would also be integral to its value.
By evaluating Vision Awards entrants over the past 10 years, I've had the pleasure of seeing BPM systems and processes demonstrably improve the management of a wide variety of organizations. The winners have established leading approaches to performance management that many other businesses have been inspired to follow. Reflecting back on the successes displayed by the winning organizations, I'm struck by how performance management best practices have evolved and realize that we have witnessed a revolution in our expectations for what BPM can deliver.
Where It All Began: Reporting
A number of corporate pioneers worked throughout the 1990s to improve reporting. By the time the first three Vision Award winners were declared in 1997 (see Companies That Have Vision on page 9), the leading edge of performance oversight was defined by a clear set of best practices. The top companies were focusing on improving the quality of performance information by reducing their manual manipulation of data during the financial close cycle. They were linking their reporting frequency to the operational needs of the business, producing daily or weekly reports in fluid environments and monthly reports in more stable ones. They were also expanding the data sets they included in reports, adding relevant operational and external market metrics to the traditionally available financial results, and developing forward-looking measures to help managers anticipate future outcomes.
At the same time, the most advanced businesses were working to reduce the cycle time required to produce standard reports and were freeing up time within the finance department so that finance professionals could advise their business counterparts in areas that influenced business results. They eliminated formal reporting packages and the traditional reams of paper reports by implementing e-mail delivery of the numbers and by launching executive information systems. The 1997 Vision Awards contest reflected these trends.
Disney's Contemporary Resort, a hotel in the Disney World complex, won that year for its focus on reporting that enhanced the customer experience. The company considered daily and weekly reporting of operational measures to be critical to its success, and its electronic delivery of information about performance relative to key metrics enabled managers to take action in time to prevent major cost overruns and maintain profitability levels. Projections of room utilization drove better operational decisions, from staffing to food ordering, which sometimes meant the difference in the organization's ability to generate satisfactory operating margins while offering great service. The reporting tools and processes that we recognized with a Vision Award were later adopted by all of the Disney World premium resort properties.
As impressive as these practices were at the time, isn't it remarkable how unexceptional some of them seem now? They were cutting edge only nine years ago. Today they constitute the baseline requirements for any new reporting process. Still, many companies continue to struggle with the challenges Disney overcame. For example, Disney found that improving data quality required a process view of corporate reporting which stretched into core transactional systems and business-unit financials. Connecting efficiently to the right data sources continues to be an obstacle to successful implementation of BPM.
