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Benefits of a Performance Management System

By May 6, 2014Article

“You can’t manage what you don’t measure” may be an old business adage but, given a variety of technology advancements, companies today have a significantly greater opportunity to track and improve their business processes than ever before. In fact, a performance management system that provides near-real-time updates can provide numerous meaningful benefits including driving efficiencies, ensuring compliance, advancing sales goals and capturing lost revenue. 

Hiring talented employees and having good intentions of improving internal processes are no longer enough. For starters, setting success metrics with service providers, such as contractual-based Service-Level Agreements (SLAs), and internal performance metrics including Key Performance Indicators (KPIs) are an important start. 

The next step is investing in the technology necessary to provide frequent status updates on these valuable metrics and acting swiftly and proactively when these metrics fall short of their goals. Companies can improve their business performance by tracking, recalibrating and improving business processes in near real time thanks to advancements in monitoring and reporting technologies. 

In this article, I’ll share recommended performance management practices that have been integral to our clients’ success, as well as ways to emulate proven performance management methods within your organization. While improving business process management practices does require an investment in new technology, the benefits should far outweigh the costs, including levels of monitoring capabilities, transparency and access to data that are simply not possible otherwise. 

Step one: set baseline and goals 

The first step is to identify your baseline performance indicators and clearly define success metrics in order to quantify progress and adjust processes to achieve the desired outcome. A lack of clear, measureable performance indicators results in far too much guesswork than is acceptable in today’s competitive business environment. 

At the core of any business process engagement should be a system for creating a baseline assessment and measuring the program’s progress throughout its implementation. SLAs and KPIs must be fully leveraged in order for companies to thrive. Further, an implementation that hinges on Six Sigma quality management methodologies, which aim for 99.99966% reliability, will keep the program rooted in improvement. 

A robust performance management reporting system can enhance both sides of a business relationship by keeping the focus on improving operational efficiency, maximizing employee productivity and pinpointing potential cost savings. Near-real-time performance data allows companies to act quickly to correct problems that may arise, as well as more effectively manage and continuously improve business processes. 

The SLAs we create with our clients typically include a percentage of work to be completed by a certain time. For example, a global leader in providing consumer, commercial and workforce information solutions recently hired us to provide a range of document management services. One of the SLAs we created required us to complete 60 percent of the document volume processed each day by midnight of the day of receipt, and 99.5 percent of that volume by 5:00 in the morning on the next business day. 

Specific and detailed performance metrics are critical for keeping everyone committed to meeting and exceeding goals, and for mapping a plan for their success. 

Step two: process map 

After identifying SLAs and KPIs, the next step is to map out a plan for accomplishing them. Of course, it is important to take into account any compliance concerns, which are especially pertinent to companies within the government, healthcare, finance and legal industries. 

For example, the company mentioned above is mandated by government regulations to meet strict deadlines when responding to consumer inquiries such as credit score requests. Our SLAs took these deadlines into account so the company could be confident we are always conscientious of supporting not only their business goals but also their compliance requirements. 

Next, develop process maps that clarify the desired workflow and data capture points and import the information into a performance management system. 

Once the performance management system is up and running, we recommend continuing reporting on progress as closely to real time as your organization allows. Fortunately, many business process and automation technologies now come equipped with detailed reporting capabilities. 

Additional tips for maximum value       

Best practices we’ve determined over the years that can be applied to any organization include: 

  • Offer immediate and bigger-picture slices of data from both a time and organizational perspective. Many companies are better able to identify and predict trends from daily, weekly and month-to-date performance metrics. The ability to review key metrics at a specific location as well as at regional and enterprise levels allows organizations to more quickly identify and implement performance improvement initiatives.
  • Use color coding to instantaneously communicate performance. For example, our color legend uses green to indicate that the actual work done met or exceeded expectations, blue to signify that actual volume exceeded forecasted volume and red to show that the performance fell short of the SLA target.
  • Monitor performance by gathering and analyzing both qualitative and quantitative data. Supplement this by seeking and leveraging valuable employee insight to better understand what the data indicates. This will help clarify current challenges and potential adjustments that should be made to improve results. 

Creating an effective performance management system may be a daunting task, but it offers three tremendous benefits:

  1. Capability to measure performance beyond a basic volume of work
  2. Unprecedented transparency with business processes that are vital to the company
  3. Access to centralized, near-real-time data that is not only detailed, but also actionable. 

Given the competitive and fast-paced state of business today, companies must not only set detailed SLAs and KPIs, but also monitor and report on their performance as quickly as possible to ensure that those valuable metrics are being met.  

You can manage what you measure, enabling your organization to continuously improve operations, exceed industry benchmarks and change business paradigms. These results are at the heart of breakthrough performance. 

F. Stephen Olson is director, best practices for Canon Business Process Services. He is responsible for MAX, the outsourcing industry’s first Web-based business performance management solution, the development and implementation of Canon’s Foundations of Six Sigma Program and is a champion for Canon’s national standardization objectives. He has 24+ years of outsourcing experience and is a recognized leader in implementation of quality tools, metrics and service level management. Contact him at 












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