Friday, 6 November 2015

How to Define the Right Metrics Using Three Steps? Part 2

Step Two – Isolate the Underlying Causes

Business Needs Mismatch with Performance Management

Business is increasingly competitive, it’s global and it makes use of advanced technology. These are three trends that have resulted in competitive markets, increased uncertainty risks and made the business worked more volatile. The business cycles have also increased and management practices have not been able to keep up. These days it is not enough to produce quarterly forecasts and expect budgets to remain valid throughout the entire year. Things move and change daily, sometimes hourly. It’s not possible for monthly reports to be accurate or reflect real time activities.

Planning and Reporting Wrong Information

Often performance management processes a re focus on things that they don’t need to be focused on. The plans fail to describe initiatives that are going to be performed and the financial plans fail to show expected costs or the total investments that are being made in the critical areas of the business.  Planning and reporting is being focused on more than vital things that are required in the business.

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