Today's business performance management (BPM) software enables organizations to incorporate strategy and key performance indicators (KPIs) into management processes, and improve the effectiveness of performance monitoring, measurement, and management. One might think that the biggest implementation challenge would simply be technical in nature. However, many organizations ultimately find this to be a myth.

According to a Geac survey of 100 finance executives and business professionals, "organizational issues" -- defined as "politics, mind-set, no strategy, bad processes" -- will be the biggest obstacle companies face in implementing enterprisewide planning, budgeting, and reporting systems within the next two years (see exhibit 1). Three organizational issues in particular form the biggest pitfalls to any BPM initiative. The first is the myth that performance management is technology driven. The second is that organizational resistance will be minimal and ineffective. The third is that once technology is installed, the project is finished. Let's take a closer look at these myths.

Myth 1: BPM Initiatives Are Technology Driven

A frustrated technical trainer recently came back from talking with midlevel managers at a company and asked, "How can an organization implement a system designed to answer the strategic questions that will help it run its business better when the organization doesn't even have a strategic plan?" Effective performance management is about linking strategies to operational budgets and aligning the organization to effectively implement these initiatives. It's supported with technology but is driven by processes -- not the other way around.

Typically, organizations fall into one of four types relative to their approach to the front-office processes of strategy management, budgeting, forecasting, financial consolidation, reporting, and analysis. The first, as noted, is an organization in which processes are missing. Strategic planning in particular may be absent. Many organizations, especially those arising out of the dot-com era, moved away from formal planning, thinking erroneously that the pace and instability of business today made it irrelevant. If a strategic destination has not been set, however, how will the organization know when it has arrived?

Rather than carefully crafting a route to long-term value and profitability, these organizations seize opportunities in the here and now using a handful of rules and few, if any, control mechanisms. They may chase customers indiscriminately, offer every conceivable product or service, and pursue noncore business activities without regard to profits, value, and competitive trade-offs. To assess performance, these managers likely rely on a few data points, inconsistent measures, spreadsheets, and text documents rather than an integrated BPM system. Data often isn't shared freely and processes are performed manually. Of course, all of this is time consuming and promotes a culture of individual or departmental performance vs. company performance.