10 reasons to adopt dynamic performance management (DPM) – Reasons 4-7
We recently shared three important reasons that dynamic performance management, or DPM, should be considered for your organization. They were: the actualization of real customer value, the ability to convert data overload into information power, and the creation of a culture and business climate comprised of action and empowerment. In this second instalment, we share reasons 4-7 with you.
- Improved process controls
All organizational operations are essentially run as a set of various processes that operate in sequence and/or concurrently so that the organization is able to achieve its objectives. An effective DPM system can maximize the likelihood that all processes (and the tasks and sub-tasks within them) are all driving the organization toward objectives achievement.
Because they can be done on a small scale and remain focused on the weakest areas, process improvements as part of a DPM initiative are often the single best opportunity for managers in any organization to make minor changes and see major results.
- An enhanced internal business framework
Dynamic performance management provides insights and direction that allows an organization to quickly identify and remedy the lowest performing areas of the organization. In addition to processes, business enhancements fall into areas such as creativity, internal operations excellence, and a continuous customer focus.
Most organizations could benefit from a customized DPM program to continuously take incremental improvement steps that boost overall performance and put the organization on a path to a business climate that places strong performance at the fore. Outcomes of this type of initiative include better and more disciplined processes, streamlined procedures, improved creativity and morale, and a climate for positive action.
- Strengthened ability to deliver on the value proposition
You have made certain promises to your customers – it’s your way of making the customer say “Wow!”. The arrangement of these promises, when delivered on, comprise your value proposition. These promises distinguish you from the competition – but only if they are actually provided! Unless organizations properly plan for, focus on, and deliver on the value proposition, customers will experience a lacklustre offering that offers “more bark than bite”. For organizations without a dynamic performance management system, the likelihood of failure to deliver on the value proposition is higher than it should be.
The variety of positive outcomes realized within the organization from a dynamic performance management initiative maximizes the likelihood of realizing a host of impressive downstream results. The accomplishment of strategic objectives, and the associated financial results, await organizations that make the investment in dynamic performance management.
- A much more accurate understanding of costs
A fundamental understanding of costs – what drives them and where they are trending – can give an organization a plethora of advantages over the competition. Pricing can be more strategic, projections can be forecasted more accurately, savings can be realized, and profits can be maximized. Mastering cost knowledge puts any organization on a path to vastly improved performance.
Comprehensive DPM programs include a close look at costs, resulting in far better understanding and the ability to achieve the results discussed here. Costs are a major variable of performance success – gaining full insight of them is an excellent way to improve performance.
Part 3 coming soon!
You now have seven reasons to adopt a dynamic performance management system. In case you are not yet convinced, next week we will share three more that should put you well beyond the decision-making tipping point. Dynamic performance awaits!
Cam Scholey, MBA, FCPA, FCMA, has been a speaker, author and innovator for the past two decades, focusing mainly on the strategic concepts of balanced scorecard and strategy mapping. Specific areas of interest are performance management, accounting, management controls and finance. Cam also teaches (both in-class and online) at Royal Military College of Canada (in English and French).
Cam is an experienced writer and is the author of the book entitled A Practical Guide to the Balanced Scorecard (CCH Canadian). A writer for CPA Canada, he has written several management accounting guidelines and guidance documents on strategy mapping and the balanced scorecard. Cam is also a session leader in the new CPA Professional Education Program (PEP), and has written content for PEP.
Cam’s two newest undertakings are the certificate program on performance management for CPA Canada (just launched February 2017), and Spanish fluency. He enjoys playing hockey and practicing hot yoga when not immersed in all the intellectual matters.
Feel free to contact us with any questions at cscholey @ outlook.com or 416.209.0704.