Week 2 Business Performance Management

Business Performance Management (BPM) is an umberlla term covering the business methodologies, metrics, processes and systems used to drive the overall performance of an enterprise.

So What is BPM all about?

BPM encompasses a closed-loop set of processes that link strategy to execution in order to optimize business performance, which is achieved by

1. Strategize
2. Plan
3. Monitoring
4. Act & Adjust

Linking Strategies to Execution
BPM Closed-Loop Process

Step 1 Strategizes
The first step in BPM Closed-Loop Process is Strategizes
This is to designs a process according to its business objectives and strategy. Common task will be completed

1. Conduct a current situation analysis
2. Determine the planning horizon
3. Conduct an environment scan
4. Identify critical success factor
5. Complete a gap analysis
6. Create a strategic vision
7. Develop a business
8. Identify strategic objectives and goals

Step 2 Operational Planning

Executes a process in exact accordance with designs.
An organization’s strategic objectives and key metrics should serve as top-down drivers for the allocation of an organization’s tangible and intangible assets

Step 3 Monitoring

Monitors its business activities closely in real-time.

Step 4 Act & Adjust

Improves processes and analyzes feedback on a continuous basis.

I like to remind all that BPM Closed-Loop Process is a continuous process improvement.

In lecture 2, Ms Phyllis Chong went though in detail of the activities under Monitoring

The tool we are going to use is the balance scorecard.

The 4 Perspectives of Balanced Scorecard

Balanced Scorecard (BSC) methodology is a holistic measurement system for aligning strategies with actions based on four perspectives:

1. Financial perspective
   
2. Customer perspective
3. Internal (process) perspective
4. Learning and Growth perspective

The "financial perspective" encourages the identification of a few relevant high-level financial measures. In particular, designers were encouraged to choose measures that helped inform the answer to the question "How do we look to shareholders?"

The "customer perspective" encourages the identification of measures that answer the question "How do customers see us?"

The "internal business perspective" encourages the identification of measures that answer the question "What must we excel at?"

The "innovation and learning perspective" encourages the identification of measures that answer the question "Can we continue to improve and create value?".

You may like to read out more of Balanced scorecard on this article

Balanced Scorecard contain 5 column and 4 perspective. Before creating a Balanced Scorecard, a Corporate Strategy Map must be done.

Corporate Strategy Map



Before creating a Strategy Map and Balanced Scorecard we must fully understand the organization and the internal process.

First we need to develop a strategic foundation which consisting of

1. Mission
2. Vision
3. Values

Then assess the internal and external environment by using

PESTEL
A scan of the external macro-environment in which the firm operates can be expressed in terms of the following factors:

1. Political
2. Economic
3. Social
4. Technological

You may read this article to have a detail understanding of PESTEL

Porter's 5 forces

Five Forces Analysis helps the marketer to contrast a competitive environment. It has similarities with other tools for environmental audit, such as PEST analysis, but tends to focus on the single, stand alone, business or SBU (Strategic Business Unit) rather than a single product or range of products. For example, Dell would analyse the market for Business Computers i.e. one of its SBUs.

Go here for a more detail explanation

SWOT

SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. It is applicable to either the corporate level or the business unit level and frequently appears in marketing plans. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

Interested in finding out more? This link will gave you detail explanation

And finally come out with a Strategic Themes

To sum up for this week's lecture. I have learned about BPM and the development of Balanced Scorecard.

Cheers~