The world of business has never been more dynamic or challenging. Unfortunately, traditional business models are no match for current realities. We live in a world of continuous change, where competition is rigorous and financial pressures are unrelenting. Surprisingly, our business models are historically predictive, inflexible, and diffused with siloed thinking and limited partnering. The volatility of the current market environment and the emergence of new business models have made business performance management (BPM) more critical than ever. To ensure that BPM systems are sustainable and realize maximum benefit, leaders of BPM initiatives must focus on the most critical aspects of change management. At the same time, the change management strategy must be driven by evolving business models and the BPM system that supports these models. Managing this three-way interplay will ensure success.

To survive and gain competitive advantage in this new world requires a model that supports on-demand business; that is, an enterprise with business processes that -- integrated end-to-end across the company and with key partners, suppliers, and customers -- can respond with flexibility and speed to any customer demand, market opportunity, or threat. On-demand businesses focus on the competencies that matter most to their success, and maintain variable, responsive cost structures and business processes to adapt to emerging technology, industry shifts, and market volatility. To support this evolving business model, companies must embrace a rigorous approach to BPM. While many organizations have implemented specific aspects of BPM, very few have implemented a holistic approach to managing performance. Developing and driving to a holistic BPM vision requires focus on three key components: the right content, the right processes, and the right technology.

The right content. Ensuring the right content involves defining information needs for the BPM system. It includes choosing a framework, such as the Balanced Scorecard, and developing and cascading financial and operational measures down through the organization. Critical to success is focusing on where the business is going versus where it has been, and defining a data set that supports a dynamic and evolving strategy and business model.

The right processes. A set of integrated management processes that drive the desired business outcomes is essential to a fully evolved BPM system. These processes include investor relations, strategy development and evaluation, planning, scenario modeling, forecasting, external financial reporting, performance reporting, business analysis, and compensation/incentives. BPM's predictive analytics are embedded into the business processes. While all processes are not typically addressed at once, it is important to understand the relationship between processes so that a clear roadmap can be drawn for the BPM journey.

The right technology. The processing and delivery of information is critical to a successful BPM system. Without the right supporting applications and technology, it becomes difficult to sustain a fully integrated BPM environment. Significant advances in technology have made the implementation of BPM much more feasible than even five years ago.

As described, a holistic, fully integrated BPM system becomes the pulse of the organization and, as such, has significant cultural implications. Since business models must evolve simultaneously within the BPM system, proactively managing change is absolutely critical to a successful BPM journey.

By ignoring essential partnership coalitions, and short-cutting organizational change strategies and tactics, many organizations have experienced only moderate results from their BPM initiatives. In fact, a recent survey of 500 worldwide organizations found that nine of the 10 greatest change barriers were people related. Developing a change strategy must be part of any BPM initiative.

Introducing and Managing Change

Supporting the BPM journey with a tailored change management strategy requires adopting a formal methodology, such as IBM's change program framework illustrated in exhibit 1. It comprises integrated activities that transform an organization from today, its current reality state, to tomorrow, its desired future state.

One key characteristic to look for in other comparable methodologies is a central focus on benefits and outcomes. With that central focus articulated, constituencies embrace and understand the following change program components more quickly:

• Vision and commit
• Plan, align, and mobilize
• Design and implement
• Enhance and evolve

Additionally, change program frameworks should be comprehensive in nature, scalable to each situation, and flexible to accommodate multiple solutions. The framework should achieve the goals of the change and improve the capacity of the enterprise to handle more change, as future needs arise. The overall objective is to ensure that all key change levers are actively managed.

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