Are performance management systems—CPM, EPM, BI, BPM, Balanced Scorecard, Dashboards, etc.—failing?
I’ve been saying this for quite some time, and I’m now hearing it from others as well. It feels ok to be somewhat vindicated in my opinion. I’d much rather have organizations grow stronger and build value again.
I recently wrote: You are not getting answers…yet…
Did you know that your transactions-focused business intelligence and performance management systems are likely doomed to fail you? That’s right: as sophisticated as they might be, an inherent gap in your own systems is putting your business at risk.
It’s not your fault. Your systems simply don’t add up to a complete performance management solution—they can’t give you a full picture of what’s going on in your business.
Just a couple days ago I received a webinar invite from David Parmenter, and he says:
Around the world there has been carnage in performance management. Well-meaning balanced scorecard initiatives have resulted in seven figure consultancy bills and much cost in measuring performance—with no obvious benefit. Frustrated CEOs are throwing them out. This would be a grave mistake. The Balanced Scorecard concept will see the century out. We simply put garbage in and hence have garbage coming out.
So there you have it. Let’s share some answers.
I looked at this problem a couple of years ago and undertook a Masters research project to investigate why the BSC outcomes are so widely variable. My project dissertation was entitled: “a systematic approach to balanced scorecard evaluation.”
Twelve years on and four books later, Kaplan and Norton’s Balanced Scorecard is probably the single-most successful business methodology, based on global adoption. And yet results appear to be disappointing, despite the plethora of documentation, consultancy and training available to adopters.
From my research, and from direct experience with BSC adopters, I believe that there are still fundamental weaknesses in the methodology and I have identified ways of significantly improving BSC evaluation. So there is no need to throw the baby out with the bathwater, maybe adopters just need to add the right mix of complementary solutions.
Thanks Colin for the comment. Just to clarify …I am not stating that BSC should be thrown out. In fact, our company, Abrige Corp., did not build a BSC because everyone else was…we built a BSC because it is, even semi-automated, the most manageable and meaningful executive info “high level view” system I have found. But most BSCs launched are not balanced; they are simply a presentation layer of the data captured in transactional systems. And as you say, some BSCs are expected to be more than they are.