Submitted by: Submitted by icanvn
Views: 237
Words: 2847
Pages: 12
Category: Business and Industry
Date Submitted: 05/27/2012 01:39 AM
PREDICTIVE INTELLIGENCE
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Pa
ite
Wh
ers
Justifying Investment in Performance
Management Systems
It’s not just smoke and mirrors!
Common sense tells you that investing in performance management systems
is worthwhile, but how do you build a compelling business case? In an article
in the Wall Street Journal on 9/11/06 Carol Hymowitz commented that
“Many CEO’s who don’t want to step aside still rely on an antiquated strategic
planning process that often doesn’t help them make better decisions faster.”
For many managers the last four words, “make better decisions faster” are the
reason for investing in performance management. Today’s ultra competitive,
volatile and uncertain markets demand that managers are able to make high
quality decisions in real time. Traditional static budgeting and reporting
processes that rely on the general ledger or ERP system to drive monthly or
quarterly processes are increasingly seen as obsolete. Performance management
systems provide a set of tools that enables managers to structure their
performance management processes to the rhythm of their business not just
to the accounting calendar.
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Of course, few executives will green light a major investment in new technology
solely on the promise of potentially better decision making – though maybe
some should! So how do you put a value on better, faster decision making or
more accurate forecasts? The simple answer is you can’t in the traditional sense
of building a straight cost benefit analysis but as with many other types of
investment such as R&D, marketing, and training it is possible to build a
compelling case that combines real productivity gains with measurable
improvements in effectiveness. The good news is that performance management
investments can be justified in a more tangible way. The key is to build the
argument around both the objective: “better decisions” and the process:
“performance management”. Based upon my experience working...