ICAEW.com works better with JavaScript enabled.

Business performance management – approaches and tensions

Effective business performance management (BPM) is central to the success of all organisations. On the face of it, it sounds simple. Determine and implement the organisation’s strategy, measure how well it has met those objectives, and then adapt its performance accordingly.

However, speak to any accountant in business and it becomes clear that in practice things are never so easy. Inevitably the conversation will include experiences such as those of fragmented IT systems, inaccurate data, and information being ignored by decision makers.

"BPM
Figure 1

With these challenges in mind this report provides you with an opportunity to stand back and examine your own approach to performance management. Firstly, we set out the component parts of BPM in a framework against which you can map your current processes (see figure 1). However, in practice, it is where this framework interacts with real-world tensions that an organisation needs to focus its energy, and so secondly, we consider where such problems commonly occur and help provide a focus for any improvements you may need to make.

Click to see full size of figure 1

While there is no one size fits all approach, a framework can be a useful tool

Each organisation and its operating environment are unique. However, following our research, we believe that it is still possible to identify component parts of BPM which are commonly accepted. We have used these elements to construct a framework. As one of our members recently told us, ‘CFOs are caught in the headlights. They know they have a problem, but don’t know how to react. A model can be a revelation as they can’t see the wood for the trees.’ We hope that the framework will help you to: clarify your thinking on BPM, map your current approach against our model and in doing so identify areas of concern, and explain BPM to others in your organisation.

Tensions interact with and disrupt the framework

Organisations are complex and BPM can be messy. This is the case even if an organisation has considered all of the key elements of BPM and carried out the important task of tailoring them to its own circumstances. Tensions will occur and their consequences will need to be responded to. During our conversations with members there were some tensions that frequently cropped up. We have categorised these tensions and mapped them against the BPM framework

While the BPM in all organisations will inevitably have weaknesses, decisions need to be made based on ‘the best information available on Monday morning’. The aim of this report is to help you identify areas of focus – particularly the common tensions - so that performance management within your organisation can continuously improve while you also deliver the day job.

We are looking for feedback on the framework and tensions, with the intention of providing further resources at a later stage. Is this how BPM operates in your organisation? Are these tensions ones that you commonly face? Please contact emma.riddell@icaew.com with your thoughts.

Webinar

Further resources: BPM tensions case studies