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Performance management meets changing needs

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In an age when we are expected to do more in less time, we are also faced with a conundrum of sorts: our jobs are becoming less linear and more interactive, less rule-based and more collaborative. And yes, while technology has done its part to help us overcome this challenge, it has not entirely achieved its full potential, writes David McWilliam, MD of Cognos SA.

Our working environments have changed to give way to cognitive, interactive and collaborative processes, and technology plays an important role in this change. However, the reality is that business is not providing its workforce with information systems that are flexible enough to accommodate interactive and collaborative environments.
Research by McKinsey Quarterly echoes this sentiment and has taken it one step further by distinguishing three primary forms of work and business activity:
1 – Transformational work: Extracting raw materials and/or converting it into finished goods. (Taking wood and making a chair.)
2 – Transactional work: Interactions that unfold in a rule-based manner and can be scripted or automated. (Taking precut wood and building chairs on an assembly line.)
3 – Tacit work: More complex interactions requiring a higher level of judgment involving ambiguity and drawing on tacit or experiential knowledge. (Managing the sales of wooden chairs for a specific region.)
According to McKinsey, tacit work has, in the last nine years, grown to more than 70% of all new jobs in the US and 40% of total employment.
However, and importantly, technology has not kept pace with this shift in work. On the other hand, technology spending on transactional work was more than six times greater than spending on tacit work.
The above undoubtedly reflects the past decade's efforts to improve transactional work's process automation, outsourcing and re-engineering. Indeed, linear, rule-based transactional processing is just so much easier to improve.
Lastly, McKinsey found that a competitive advantage is harder to sustain when it is based on gains in productivity and cost efficiency in transactional work.
Industries with high proportions of tacit work also have 50% greater variability in company performance than those in which work is more transaction-based.
Thus, if we consider the above, it is quite apparent that in order to become more competitive, companies must leverage their information assets; implementing the right information-enabling technology while at the same time preparing their workforce to become performance managers.
This requires taking business intelligence (BI) to a new level by coupling it with metrics, planning and forecasting to create a platform for Performance Management (PM).
Establishing a decision-making cycle that answers the following three important questions is a good place to start:
How are we doing? Reporting and analysis provides the ability to look at historic data and understand trends; to look at anomalies and understand them. Why? Planning and forecasting can help you establish a reliable view of the future and answer: What should we be doing? Integrating these capabilities allows you to respond to changes happening in your business.
These are only the first steps to establishing a competitive, tactic work organisation. The decision making cycle extends itself to fundamental business decision areas that drive organizations such as marketing, sales, finance and the supply chain.
Thus, for businesses to move successfully into a new era of collaboration, it is crucial they progress beyond BI. Including components from the PM agenda delivers a magnifying glass into the current performance of a company and provides a 'crystal ball' that allows them to glimpse the future more accurately.