In the early scenes of the epic drama Master and Commander -- The Far Side of the World, Captain Jack Aubrey, played by Russell Crowe, is found on the quarterdeck making decision after decision to protect his ship and save the lives of his crew (as well as his own) while accomplishing his mission. Gale-force winds, dense fog, the unrelenting sea, and the sinister presence of an enemy ship threaten the captain's chances of survival, and he has to make constant course modifications, jettison a fallen mast (along with a deckhand), and demonstrate supreme confidence to his crew so that they can all survive to see another day of blue skies and calm seas.

Just like Captain Jack, business executives in 2009 confront mountainous challenges. But instead of the aggressive forces of nature, today's corporate leaders battle unrelenting pressures from investors, wildly fluctuating capital markets, and threats of new regulations, as well as the not-so-occasional broadside from a competitor. The good news is that many (though not all) executives who have adopted basic performance management and business intelligence capabilities are now standing on the deck looking forward and charting a course for the future in this turbulent environment. Their situation differs dramatically from that of leaders who preferred to hide belowdecks in the relative safety of the executive suite, poring over historical Excel spreadsheets and stagnant reports that may help them to understand where they've come from but don't do much to show where they should be going.

According to research conducted by the Corporate Executive Board entitled "Executive Guidance for 2009," companies that make it into the top quartile during a downturn sustain their market premium for an average of three years. With stakes this high, any failure to assertively identify performance improvement opportunities during the slowdown can spell trouble for less well-positioned companies. The principle of survival of the fittest is already being applied to the financial services, automotive manufacturing, and print media markets. Firms that wish to sustain a healthy future need to act now or risk becoming a casualty of market evolution.

Are Companies Still Investing in Performance Management?

Performance management is one of the few IT investments receiving heightened focus during this economic downturn. At a time when sales are down and earnings nearly nonexistent, you might think that companies would be well advised to cut back their spending on software. Yet when it comes to managing performance and profits, it actually might make sense to invest in systems that can help you to improve the bottom line, better analyze and forecast your business, and improve decision-making.

Companies that we at BPM Partners have talked to are not as concerned with mere survival as you might expect; rather, they're focused on how best to take advantage of current market conditions. For the 2009 Business Performance Management (BPM) Pulse survey, conducted from October 2008 to February 2009, we interviewed over 850 senior executives to assess their perspectives on this topic. It's heartening to note that investment in performance management improvements is a priority for many of these firms. Fifty-two percent of respondents said that they will increase their focus on performance management investments, although the majority of this group (28 percent of the overall sample) acknowledge that they need to do so more cost-effectively. Thirty-eight percent of respondents reported no change in their focus (Exhibit 1).

It's important to note that performance management improvements are not synonymous with technology investments. In 2005, the BPM Standards Group, a group of end users, vendors, analyst firms, and implementers, defined business performance management as solutions that enable an organization to define strategic goals and then plan, measure, and manage performance against those goals. These solutions require a set of integrated, closed-loop management and analytic processes, supported by technology, that address financial as well as operational activities. In sum, improved business processes, skilled people, and the right content (data) comprise the primary pillars of BPM, with technology as a supporting foundation.